Management, Binder Ready Version, 13th Edition Test Bank by Ace Test Banks

Management, Binder Ready Version, 13th Edition By Schermerhorn, Bachrach EditionMultinational Financial Management, 12th Edition

Schermerhorn & Bachrach Management, 13th edition

Test Bank

Ch01: Introducing Management

True/False

Intellectual capital is a personal asset for individuals. Answer: True Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Commitment represents one’s talents or job-relevant capabilities. Answer: False Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

Tech IQ is the ability to use technology and commitment to stay informed about the latest technological developments. Answer: True Learning Objective: 1.1 Difficulty: Easy AACSB: Information technology Bloom’s Taxonomy: Knowledge

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Schermerhorn & Bachrach Management, 13th edition

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National boundaries hardly count anymore in the world of business. Answer: True Learning Objective: 1.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

Minorities constitute less than one-third of the U.S. population. Answer: False Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

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

All organizations are open systems that interact with their environments. Answer: True Learning Objective: 1.2 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

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Schermerhorn & Bachrach Management, 13th edition

10.

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

11.

Any inefficiency in an organization reduces the cost of production. Answer: False Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12.

Performance efficiency is an output measure of resource cost associated with goal accomplishment. Answer: False Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

13.

In the context of present day organizational trends, organizations and their members are networked for intense, real-time communication and coordination. Answer: True Learning Objective: 1.2 Difficulty: Moderate AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

14.

A manager is a person who supports, activates, and is responsible for the work of others. Answer: True Learning Objective: 1.3 Difficulty: Easy

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

15.

Middle managers are in charge of overseeing the overall operations of an organization. Answer: False Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17.

Top managers are supposed to set strategy and lead an organization consistent with its purpose and mission. Answer: True Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18.

Typical job titles for middle managers include department head, team leader, and supervisor. Answer: False Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Schermerhorn & Bachrach Management, 13th edition

19.

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Line managers are responsible for work that makes a direct contribution to an organization’s outputs. Answer: True Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20.

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

21.

Effective managers successfully help others achieve both high performance and satisfaction in their work. Answer: True Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 1.4 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24.

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

25.

In the management process, if the planning is impeccable, then there is no need for controlling. Answer: False Learning Objective: 1.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

26.

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

27.

According to Mintzberg, as a monitor, a manager provides direction and instills enthusiasm. Answer: False Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

28.

Through agenda setting, good managers develop action priorities that include goals and plans spanning long and short time frames.

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Answer: True Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

30.

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

31.

A person high in emotional intelligence does not usually sense when another person’s emotions are negatively influencing a relationship. Answer: False Learning Objective: 1.5 Difficulty: Moderate AACSB: Written and oral communication Bloom’s Taxonomy: Comprehension

Multiple Choice

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

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D. Productivity E. Competency Answer: B Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

35.

Which of the following is a 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 creative minds, not just their physical capabilities. D. They are grouped together for a specific purpose and are disbanded when their task is completed. E. They are part of an unofficial group emerging from relationships and shared interests among members.

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Answer: C Learning Objective: 1.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 1.1 Difficulty: Easy AACSB: Information technology Bloom’s Taxonomy: Knowledge

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 Learning Objective: 1.1 Difficulty: Easy AACSB: Diverse and multicultural work environments 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. regional trade agreements D. globalization E. distributed leadership

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Schermerhorn & Bachrach Management, 13th edition

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Answer: D Learning Objective: 1.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

39.

Which of the following is a controversial outcome closely associated with globalization? A. Groupthink B. Functional chimneys problem C. Job migration D. National barriers E. Debt financing Answer: C Learning Objective: 1.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

40.

Job migration occurs primarily: A. when firms shift jobs from one country to another. B. due to an ecological fallacy. C. when workforce diversity increases. D. when workers refrain from moving from their home country to another country. E. due to an increase in the productivity of the workforce. Answer: A Learning Objective: 1.1 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

41.

What is an advantage of reshoring? A. It helps safeguard the intellectual property of a firm. B. It shifts jobs from home countries to the overseas outlets of a firm. C. It increases the cost of transportation. D. It increases globalization. E. It increases job migration. Answer: A Learning Objective: 1.1 Difficulty: Moderate

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

42.

Which of the following is defined as a 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 Learning Objective: 1.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

43.

_____ describes the differences among workers in terms of 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 Learning Objective: 1.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

44.

Jonas, an employee of Pluto Inc., thinks that business leaders should “be white.” Due to this, he holds a grudge against his manager, Asera, who is an Asian. Jonas often displays defiant behavior at the workplace. His behavior is an example of _____. A. prejudice B. whistleblowing C. subordination D. harassment E. bullying Answer: A Learning Objective: 1.1 Difficulty: Hard

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Test Bank

AACSB: Application of knowledge Bloom’s Taxonomy: Application

45.

_____ 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 Learning Objective: 1.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

46.

_____ actively denies minority members the full benefits of organizational membership. A. Discrimination B. Subordination C. Migration D. Free-riding E. Social loafing Answer: A Learning Objective: 1.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

47.

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 Learning Objective: 1.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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Schermerhorn & Bachrach Management, 13th edition

48.

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Nicola is the most qualified candidate for the job of marketing manager at Lean 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 Learning Objective: 1.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

49.

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 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

50.

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 while 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 their goals rather than 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.

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Test Bank

Answer: A Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

51.

Which of the following statements holds true for the term self-management? A. It is a skill that involves being able to recognize one’s own strengths. B. This skill involves ignoring one’s own shortcomings. C. It is a skill that involves taking help from others for assessing oneself realistically. D. It involves hiring managers to help improve one’s personal development. E. This skill does not require one to be responsible for his or her actions. Answer: A Learning Objective: 1.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

52.

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. 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 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53.

_____ helps in maintaining connectivity with people that in turn helps with job searches and career advancement. A. Commitment B. Self-management C. Social networking D. Performance efficiency E. Job migration

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Answer: C Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

54.

_____ 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 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55.

The annual productivity report of Papyrus Inc. states that it has achieved the targets it had set for the year 2013. 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. stagnant in terms of efficiency and effectiveness. Answer: D Learning Objective: 1.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

56.

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.

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Answer: A Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

57.

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 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

58.

_____ 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 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59.

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 resource utilization and the latter focuses on the quantity and quality of work performance. 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 leads to a decrease in customer satisfaction, while the latter reduces productivity.

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Answer: A Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

60.

Mathilda, who works for an insurance company, has the capacity to sell fifteen insurance policies a day. However, she sells only ten insurance policies a day. This is a typical example of _____. A. information asymmetry B. the glass ceiling effect C. inefficiency D. an ecological fallacy E. the functional chimneys problem Answer: C Learning Objective: 1.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

61.

_____ is an input measure of the resource costs associated with goal accomplishment. A. Productivity B. Profit C. Performance effectiveness D. Performance efficiency E. Revenue Answer: D Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

62.

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 Learning Objective: 1.2 Difficulty: Moderate

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

63.

In nonprofit organizations such as a hospital or university, a _____ is mainly responsible for the smooth running of the organization. A. team leader B. board of trustees C. middle manager D. chief executive officer E. department head Answer: B Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

64.

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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

65.

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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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66.

Test Bank

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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

67.

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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

68.

_____ are in charge of guiding the performance of an 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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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69.

Test Bank

The middle managers of an organization: A. are in charge of the organization as a whole. B. are appointed by the stockholders of an organization. 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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

70.

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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71.

_____ directly contribute to producing an organization’s goods or services. A. Line managers B. Staff managers C. Top managers D. Middle managers E. Trustees Answer: A Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

72.

Staff managers: A. directly contribute to producing an 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.

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E. elect the top managers. Answer: B Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73.

Kenneth is the sales manager of a firm and his responsibility is limited to the sphere of marketing. Kenneth’s job profile indicates that he is a _____ of the firm. A. director B. general manager C. trustee D. stockholder E. functional manager Answer: E Learning Objective: 1.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

74.

Charlie oversees all the operations of a firm, from purchasing to manufacturing to human resources to finance and accounting functions. Charlie is the _____ of the firm. A. general manager B. line manager C. functional manager D. team leader E. director Answer: A Learning Objective: 1.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

75.

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

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Answer: C Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

76.

_____ is the requirement of one person to show performance results to a supervisor. A. Productivity B. Competency C. Performance effectiveness D. Accountability E. Performance efficiency Answer: D Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77.

Corporate governance is most likely to occur when: A. a board of directors holds the 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 an organization as a whole. E. team leaders report to middle managers about the performance of the nonmanagerial workers. Answer: A Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

78.

_____ is the overall quality of human experiences in the workplace. A. Productivity B. Competency C. Performance effectiveness D. Quality of work life E. Performance efficiency Answer: D Learning Objective: 1.3 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

79.

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 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80.

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 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81.

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 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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82.

Test Bank

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 to ensure the occurrence of groupthink. Answer: B Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

83.

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 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

84.

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 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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85.

Test Bank

According to Mintzberg, a manager’s informational roles involve being a(n) _____. A. leader B. disturbance handler C. disseminator D. entrepreneur E. resource allocator Answer: C Learning Objective: 1.4 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

86.

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 Learning Objective: 1.4 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

87.

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 Learning Objective: 1.4 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

88.

According to Mintzberg, as a resource allocator, a manager is mainly involved in:

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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: C Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89.

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

90.

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

91.

The process of creating positive relationships with people who can help advance agendas is referred to as _____. A. organizing B. networking

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C. capitalizing D. allocating E. controlling Answer: B Learning Objective: 1.4 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

92.

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 a capacity to create 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. Answer: D Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

93.

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 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94.

A(n) _____ is the ability to translate knowledge into action that results in desired performance. A. concept B. commitment C. agenda

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D. process E. skill Answer: E Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

95.

A 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 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96.

A prospective employer asks Berta, “What kind of contribution can you make to our company with your knowledge?” The employer is focusing on Berta’s _____ skills. A. human B. conceptual C. interpersonal D. critical thinking E. technical Answer: E Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

97.

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

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Answer: B Learning Objective: 1.5 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

98.

A(n) _____ 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 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99.

Human skills are also referred to as _____ skills. A. conceptual B. interpersonal C. technical D. emotional E. intellectual Answer: B Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100.

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 emotional intelligence D. Expertise at handling budgets and distributing resources E. Ability to inspire efforts to achieve goals Answer: C Learning Objective: 1.5

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Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge 101.

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 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

102.

_____ 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 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

103.

Allen, a salesman at a retail store, is a quick learner and knows how to handle customers. He could become an assistant manager if he wasn’t reluctant to take on more responsibility and eager to get off work soon. Which of the following skills does Allen lack, for his career advancement? A. Competence B. Commitment C. Knowledge D. Aptitude E. Analytical Answer: B Learning Objective: 1.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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104.

Test Bank

Collin, a trainee with an event management firm, was asked to coordinate the designing, production, and installment of banners and posters for an upcoming project. He was assigned a particular amount of money for this purpose. Collin completed the job in time but exhausted his resources. He made a request for additional funds to make the remaining payments to the vendors. In which of the following ways can Collin’s performance be categorized? A. Effective but not efficient B. Effective and efficient C. Neither effective nor efficient D. Not effective but efficient E. Essential but not effective Answer: A Learning Objective: 1.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

105.

Ryan works in a private firm and manages the accounts department with a team of four junior accountants. In this scenario, Ryan be categorized as a _____. A. line manager B. boundary spanner C. functional manager D. general manager E. nonmanagerial worker Answer: C Learning Objective: 1.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

106.

As a manager, Rachel made sure that her employees’ morale was always high by conducting open discussions on projects, initiating programs to help employees deal with various aspects of their lives, and acknowledging the work they were doing. Which of the following functions of management is being executed by Rachel? A. Planning B. Organizing C. Controlling D. Leading E. Measuring Answer: D

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Learning Objective: 1.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107.

Alex is a software engineer and develops games for Supergamer.com. Which of the following skills is most likely to be used by Alex for fulfilling his job responsibilities? A. Financial skills B. Gross motor skills C. Interpersonal skills D. Human skills E. Technical skills Answer: E Learning Objective: 1.5 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

108.

Glenn refused to promote Carmelia to the position of a global manager because she belonged to a minority community. He was of the opinion that her ethnic identity would limit her from working effectively and that it would make the company’s clients uncomfortable. Which attitude has Glenn displayed in his decision? A. Discrimination B. Favoritism C. Opportunism D. Autocracy E. Incompetency Answer: A Learning Objective: 1.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109.

Bumblebee is a toy manufacturing company. Though the company has been effective in managing its resources without any wastage, its productivity efficiency report shows a decrease in the year 2013 when compared to the previous year. This outcome indicates that its productivity is _____. A. efficient but not effective B. neither effective nor efficient C. effective and efficient D. effective but not efficient

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E. stagnant Answer: A Learning Objective: 1.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

110.

Gary has been promoted to one of the top managerial positions in his company. He needs to set new goals and missions for his team. Which of the following functions will Gary ideally carry out in his new capacity? A. Make decisions regardless of a difference of opinion with his superiors B. Be attentive to any potential long-run problems and opportunities C. Take control of divisions consisting of several smaller work units D. Reduce the quality and quantity of inputs to increase the outputs E. Take charge of a small work group composed of non-managerial workers Answer: B Learning Objective: 1.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

111.

Pauline, a manager at Woorth Industries, acts as a translator for the company’s clients in China because of her fluency in Mandarin. Which of the following roles of a manager is she performing in this scenario? A. Resource allocator B. Monitor C. Spokesperson D. Leader E. Disturbance handler Answer: C Learning Objective: 1.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

112.

Ronald, a marketing manager at Tesron Automobiles, is discussing an automobile concept with the design team, and the discussion quickly turns argumentative. Ronald, aware of his tendency to get angry very quickly, diffuses the argument by diverting the group’s attention to another topic. This scenario illustrates that Ronald has a high degree of _____. A. technical skills

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B. critical thinking C. marketing skills D. emotional intelligence E. cognitive intelligence Answer: D Learning Objective: 1.5 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay Questions

113.

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 of 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 have been 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. Learning Objective: 1.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

114.

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.

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• 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 the preservation of natural resources for future generations and understanding how work affects human well-being. Learning Objective: 1.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

115.

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. Learning Objective: 1.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

116.

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. 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.

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Controlling is the process of measuring performance and taking action to ensure desired results. Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

117.

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. Learning Objective: 1.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Chapter 2: Management Learning Past to Present

True/False

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

Coordination refers to providing and mobilizing resources to implement a plan. Answer: False Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Henri Fayol believed that management could be taught. Answer: True Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

Formal rules and procedures are defining characteristics of Weber’s bureaucratic organization.

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Answer: True Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

Behavioral approaches assume that people are social and self-actualizing, enjoy social relationships, respond to group pressures, and search for personal fulfillment. Answer: True Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

After a series of scientific tests, Elton Mayo and his team of researchers concluded that new a “social setting” created for workers in a test room decreased the productivity of those employees. Answer: False Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

According to Elton Mayo, people would restrict their output in order to avoid the displeasure of their group, even if it meant sacrificing pay that could otherwise be earned by increasing output. Answer: True Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

10.

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

11.

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

12.

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

13.

Physiological needs and safety needs are higher-order needs in Maslow’s hierarchy of human needs. Answer: False Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking 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

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Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16.

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

17.

Argyris asserts that psychological success occurs when people define their own goals. Answer: True Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18.

Argyris’s theory of adult personality counters Fayol’s concept of unity of direction. Answer: True Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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19.

Test Bank

A grocery store receives complaints from customers that the waiting time is too long for checkouts during certain times of the day. This problem can be solved by the queuing theory. Answer: True Learning Objective: 2.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

21.

People and technology are outputs in an open system. Answer: False Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22.

Goods and services are inputs in an open system. Answer: False Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

23.

A tight bureaucracy works best when the environment is relatively stable and operations are predictable and uncomplicated. Answer: True Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

24.

Continuous improvement involves always searching for new ways to improve work quality and performance. Answer: True Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25.

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

Multiple Choice

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 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

27.

Which of the following is a classical management approach? A. Theory X B. Theory Y

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C. Human needs theory D. Hawthorne studies E. Administrative principles Answer: E Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking 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 databases 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 of a business organization. Answer: D

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Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

31.

Pizza Bliss, 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 an order reaches a customer in half an hour. Which of the following management techniques is Pizza Bliss 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 Learning Objective: 2.1 Difficulty: Hard AACSB: Application of knowledge 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 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytical thinking 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

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Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking 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 a plan C. To lead, select, and evaluate workers to get the best work toward a plan D. To fit diverse efforts together and to ensure information is shared and problems are solved E. To make sure things happen according to a plan and to take necessary corrective action Answer: B Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

35.

_____ is to lead, select, and evaluate workers to get the best work toward a plan. A. Foresight B. Organization C. Command D. Coordination E. Control Answer: C Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 2.1

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Difficulty: Moderate AACSB: Interpersonal relations and teamwork Bloom’s Taxonomy: Comprehension

37.

In a fresh juice manufacturing plant, the production team manufactures 2,000 bottles of juice per day while the sales team sells only 1,700 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 Learning Objective: 2.1 Difficulty: Hard AACSB: Application of Knowledge 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 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

39.

A manager employs five 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

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Answer: E Learning Objective: 2.1 Difficulty: Hard AACSB: Application of Knowledge 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 an 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 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking 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 B. Unity of command principle C. Unity of direction principle D. Principle of motion study E. Principle of merit Answer: B Learning Objective: 2.1 Difficulty: Moderate AACSB: Application of Knowledge 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.

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D. There should be a clear and unbroken line of communication from the top to the bottom in an organization. E. Workers should be selected and promoted on ability, competency, and performance. Answer: A Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43.

Which of the following best pertains to 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 an 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. Answer: B Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

44.

Which of the following best pertains to 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 an 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. E. Rules and procedures are impartially and uniformly applied, with no one receiving preferential treatment. Answer: E Learning Objective: 2.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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45.

Test Bank

At Infibeam Solutions, the workers under one manager are expected to follow specific timings for their shifts, and 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 Learning Objective: 2.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

46.

According to Max Weber, 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 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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48.

Test Bank

The _____ approaches assume that people are social and self-actualizing, enjoy social relationships, respond to group pressures, and search for personal fulfillment. A. classical B. scientific management C. contingency thinking D. behavioral E. modern Answer: D Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

49.

Which of the following is true of Follett’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 workers. D. She propagated the idea of workers working individually, rather than in a group. E. She believed that it wasn’t a manager’s job to help people cooperate with one another. Answer: A Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

50.

Which of the following management theories advocates employee ownership, profit sharing, and gain-sharing plans? A. McGregor’s Theory X and Theory Y B. Hawthorne studies C. Fayol’s Administrative Principles D. Maslow’s hierarchy of needs E. Follett’s organizations as communities Answer: E Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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51.

Test Bank

A manager wishes to implement the conclusions of the Hawthorne studies in her organization. To do so, she should: A. create written guidelines for workers. B. implement division of labor in the workplace. C. assure good human relations between workers. D. reduce a job or task to its basic physical motion. E. define authority and responsibility for each worker. Answer: C Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

52.

A manager finds out that the productivity of her workers has declined. Therefore, she 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 her workers. A. the scientific management theory B. the theory of human needs C. Theory X and Theory Y D. the Hawthorne studies E. Fayol’s administrative principles Answer: D Learning Objective: 2.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

53.

According to Mayo’s research team, _____ in a 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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54.

Test Bank

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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking 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. 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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57.

Test Bank

Klark, an employee of Relkins & Sons Ltd., earns a good compensation, owns a house, has a stable job, and is close to his family and friends. He has been recognized as a good manager, 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 Klark’s behavior? A. Progression principle B. Principle of motion study C. Deficit principle D. Hawthorne effect E. Self-fulfilling prophecy Answer: C Learning Objective: 2.2 Difficulty: Hard AACSB: Application of Knowledge 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59.

Which of the following refers 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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60.

Test Bank

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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

61.

Leonard works in a company where he receives minimum wages. He does not have sufficient money to pay his medical bills. His manager offers to award him with a “Best Worker” certificate if he increases his productivity. This offer fails to motivate him. Which of the following explains Leonard’s behavior? A. Progression principle B. Principle of motion study C. Deficit principle D. Hawthorne effect E. Weber’s bureaucracy theory Answer: A Learning Objective: 2.2 Difficulty: Hard AACSB: Application of Knowledge 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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63.

Test Bank

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 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

65.

The CEO of Charter & Co. has a good compensation, a house, a family, and many 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 Learning Objective: 2.2 Difficulty: Moderate AACSB: Application of Knowledge Bloom’s Taxonomy: Application

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66.

Test Bank

The worker of a company earns a wage that provides with him good food, shelter, and a good standard of living. 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 Learning Objective: 2.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

67.

The worker of a company is motivated by the need for security, protection, and stability in the events of his day-to-day life. According to the progression principle, which of the following needs has already been satisfied? A. Safety needs B. Cultural needs C. Social needs D. Esteem needs E. Physiological needs Answer: E Learning Objective: 2.2 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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69.

Test Bank

Penny is the manager at Peace, an international campaigning organization where volunteers work without being paid. According to Maslow’s theory, which of the following needs should Penny focus on to increase the productivity of the volunteers? A. Physical well-being B. Safety C. Esteem D. Mastery E. Protection Answer: C Learning Objective: 2.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

70.

According to McGregor’s 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71.

According to McGregor’s 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking 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 the person’s expectations.

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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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73.

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

74.

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

75.

Managers holding assumptions in Theory X and Theory Y believe that _____. A. people are willing to work and like responsibility. B. people are self-directed and creative.

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C. these theories typically create responsible workers. D. these theories create self-fulfilling prophecies. E. these theories create opportunities to satisfy esteem and self-actualizing needs. Answer: D Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77.

What was the disadvantage Argyris found in Weber’s bureaucratic model? A. It would create passive, dependent workers. B. It limits opportunities for self-actualization. C. It would create conditions for psychological failure. D. It creates a lenient work environment. E. It disregards motion study. Answer: A Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking 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.

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Test Bank

Answer: E Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

79.

According to Argyris’s theory of adult personality, which of the following creates dependent and passive workers? A. Weber’s bureaucracy B. Organizations as systems C. Organizations as communities D. Scientific management E. Maslow’s theory of human needs Answer: A Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

81.

_____ is the use of large databases 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

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Test Bank

Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic thinking Bloom’s Taxonomy: Comprehension

83.

A food chain is getting complaints from customers that the waiting time is 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 C. Queuing theory D. Linear programming E. Network models Answer: C Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic thinking Bloom’s Taxonomy: Comprehension

84.

_____ helps control stocks by mathematically determining how much to automatically order and when. A. Queuing theory B. Mathematical forecasting C. Inventory analysis

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D. Linear programming E. Network models Answer: C Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

87.

_____ allow project managers to analyze, plan, and control timetables for the completion of activity sub-sets. A. Linear programming

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B. C. D. E.

Test Bank

Bureaucracy Network models Queuing theory Inventory analysis

Answer: C Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

88.

A _____ is a collection of interrelated parts working together for a purpose. A. contingency B. system C. motion study D. cost center E. safety need Answer: B Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89.

In an open system, which of the following is an input? A. An oven used by a baker B. A service offered by a baker C. A special type of cheese offered by a deli D. A loaf of bread made by a baker E. A sandwich sold at a deli Answer: A Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90.

In an open system, which of the following is an output? A. Technology B. People C. Supplies D. Money E. Goods

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Answer: E Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91.

_____ 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 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

92.

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 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

93.

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. D. works best in a relatively unstable environment. E. works best when the operations are predictable and uncomplicated. Answer: E Learning Objective: 2.3 Difficulty: Moderate

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

94.

_____ 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 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

95.

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

96.

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 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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97.

Test Bank

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. Answer: C Learning Objective: 2.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

98.

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 databases 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 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

99.

Which of the following holds true for evidence-based management? A. It does not use evidence from the local context. B. An evaluation of the available research evidence is unnecessary. C. It does not use “dangerous half-truths” as evidence. D. The perspectives of those people affected by a decision are irrelevant. E. It does not make decisions based on “hard facts.” Answer: C Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

100.

Which of the following criteria is useful to determine a good scientific method? A. Research question or problem remains unidentified. B. Data are rigorously gathered, analyzed, and interpreted. C. Hypothesis obtained are irrelevant as evidences.

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Test Bank

D. No hypothesis is stated as an explanation. E. A research design is formed at the last stage of the conclusion. Answer: B Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

101.

Antoinette, the CEO of Magnum Heights, believes that employees who feel they are part of the organization in which they work are likely to exhibit better productivity. Keeping these ideals in mind, she has adopted a scheme in which employees are offered shares of the company. Which managerial theory does Antoinette demonstrate? A. Weber’s bureaucracy model B. McGregor’s Theory X C. Follett’s organizations as communities D. Fayol’s administrative principles E. Taylor’s scientific management Answer: C Learning Objective: 2.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Ronald was chosen as the assistant manager because of his skill to manage employees and work out solutions for emerging problems. In his organization, jobs are well defined, and employees become experts at what they do. There is a formal chain of command, yet there is no favoritism. According to this information, choose the approach to management that has been adopted by John’s organization. A. Maslow’s theory of human needs B. Evidence-based management C. Bureaucracy D. Taylor’s managerial approach E. Scalar chain system Answer: C Learning Objective: 2.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

103. Mr. Reymont, the founder of Reymont Public School, set multiple guidelines and rules about each governing body and the hierarchical structure. He has set up a system to ensure that crucial information reaches all stakeholders in the organization. This has helped in the smooth functioning of the school and avoided managerial overrides. Which of the following principles has Mr. Reymont adhered to in this scenario? A. Scalar chain of principle B. Progression principle C. Deficit principle D. Participative management E. Total quality management Answer: A Learning Objective: 2.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. Angelica and her team of tailoring workers were put on an experimental task to see if a particular amount of work could be achieved in a week. The team worked as expected and completed the given amount of work in the given time. The members of the group were rated high on cohesiveness, and the coworkers were influenced by the energy of a few enthusiastic workers in the group. Which of the following does this behavior demonstrate? A. Scalar chain of principle B. Hawthorne effect C. Deficit principle D. Progression principle E. Self-concordance Answer: B Learning Objective: 2.2 Difficulty: Hard AACSB: Application of Knowledge Bloom’s Taxonomy: Application

105. Which of the following employees can be categorized under McGregor’s Theory Y? A. Vivian accepts her new role as a manager and strives to fulfill her responsibilities. B. Richards limits his imaginative skills, which results in his underperformance. C. Cassandra is resistant and rigid to her new work environment. D. Annie depends on her manager for direction and support. E. Cathleen refuses to delegate work to her subordinates. Answer: A Learning Objective: 2.2 Difficulty: Hard AACSB: Application of Knowledge

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Test Bank

Bloom’s Taxonomy: Application

106. Derek, a 36-year-old bachelor, works for a security company. His employer has provided him with living quarters along with the minimum wage he receives. He doesn’t have any close friends or family. According to Maslow’s progression principle, which of the following needs of Derek is being fulfilled at present? A. Physiological needs B. Achievement needs C. Social needs D. Esteem needs E. Self-actualization needs Answer: A Learning Objective: 2.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Mr. Gold believes in Argyris’s theory of adult personality. He does not weigh down his subordinates, nor does he discriminates them by their age or intelligence. He does not limit their opinions, but rather encourages them to define their own strategies and goals. What is the reason for this approach of Mr. Gold? A. A satisfied need does not fail to motivate behavior. B. Limitations cause psychological failure. C. It creates a clear hierarchy of authority. D. Limitations to self-actualization opportunities increase productivity. E. It adheres to the unity of direction principle. Answer: B Learning Objective: 2.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. Adrian is worried about his factory’s consecutive decrease in profits due to the goods that are damaged in the storehouse. This has increased his cost of factors of production. In an attempt to tackle the problem, he has set up a system of measuring the needs of his clients and manufacturing the required number of products. Which of the following approaches has Adrian adopted? A. Mathematical forecasting B. Queuing theory C. Linear programming D. Inventory analysis E. Network models

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Answer: D Learning Objective: 2.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Vernon’s team has published a quarterly report that shows a significant decline in sales regarding a particular retailer. Till now, the retailer has been a profitable customer for Vernon’s company. Vernon needs to find out the problem and deal with the situation quickly. In this situation, which of the following management styles would be most appropriate for Vernon to adopt? A. Quality management B. Knowledge management C. Contingency thinking D. Networks model E. Linear programming Answer: C Learning Objective: 2.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

110. Brad, a manager at an online shopping company, wants to figure out a way for cost effective logistics. While a few suggestions have been made by his colleagues, Brad wants to select only that technique that has been proved to be effective according to hard facts. In this situation, which of the following approaches is being adopted by Brad? A. Evidence-based management B. Knowledge management C. Total quality management D. Contingency thinking E. Linear programming Answer: A Learning Objective: 2.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

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Test Bank

111. 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 received 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 seemed to result in higher productivity. Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

112. Explain the two underlying principles that form the 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. Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

113. 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. Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

114. 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 common purpose. But the reality is that cooperation among the many people and parts is often imperfect and can be improved. That 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 environment in a continual process of transforming inputs—people, technology, information, money, and supplies—into outputs—goods and services for their customers and clients. Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Chapter 03: Ethics and Social Responsibility

True/False

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

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

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

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Cultural view is based on the belief that ethical decisions treat people impartially and fairly, according to legal rules and standards. Answer: False Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

Procedural justice involves the degree to which policies and rules are fairly applied to all individuals. Answer: True Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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

Ethical behavior is determined by its cultural context.

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Answer: True Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

10.

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

11.

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

12.

Cultural relativism is a form of ethical imperialism. Answer: False Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

13.

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

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14.

Test Bank

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 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

15.

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

16.

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

17.

In Kohlberg’s conventional level of moral development, the individual is strongly principle-centered. Answer: False Learning Objective: 3.2 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

18.

The ethics culture in an organization sets high standards and may even push people to behave more ethically than they otherwise would.

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Test Bank

Answer: True Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

19.

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 Learning Objective: 3.2 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

20.

Government laws and regulations can describe and encourage ethical behavior, but they can’t guarantee ethical conduct. Answer: True Learning Objective: 3.2 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

21.

An amoral manager chooses to behave unethically. Answer: False Learning Objective: 3.3 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

22.

According to Archie Carroll, managers who are engaged in unethical practices remain mostly uninformed or undisciplined in considering the ethical aspects of their behavior. Answer: True Learning Objective: 3.3 Difficulty: Easy AACSB: Ethical understanding and reasoning

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

Bloom’s Taxonomy: Knowledge

23.

Strong work group identities that encourage loyalty and self-censorship are barriers to whistle blowing. Answer: True Learning Objective: 3.3 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

24.

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

25.

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

26.

The three P’s of organizational performance are patience, politeness, and planning. Answer: False Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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Schermerhorn & Bachrach Management, 13th edition

27.

Test Bank

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

28.

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

29.

According to the classical view of CSR, the principal obligation of management should be to owners and shareholders. Answer: True Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

30.

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

Multiple Choice

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31.

Test Bank

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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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34.

Test Bank

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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

35.

Samantha Eagles, the CEO of Gama Tech., shuts down offshore operations of the company 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 the 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 Learning Objective: 3.1 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 3.1

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

Difficulty: Easy AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

42.

Which of the following addresses the fair allocation of outcomes, without any communal or gender biases? A. Procedural justice B. Fundamental justice C. Distributive justice D. Commutative justice E. Interactional justice Answer: C

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Test Bank

Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

44.

Suave ZN, a franchisee outlet for Eco Motors, an electric car company, sells Chris Johnson, an older model car. Suave ZN sells the older model without informing Chris of the newer, better models released by Eco Motors in the same price band. According to which justice dimension would Suave ZN conduct be considered unethical? A. Procedural B. Economic C. Distributive D. Commutative E. Interactional Answer: D Learning Objective: 3.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

45.

What is the assumption made in the individualism view of ethical behavior? A. It does not promote honesty or integrity in people. B. People are self-regulating in the quest for long-term advantage for the self. C. The outcome of an ethical decision does not affect the majority of the society. D. Every person works in coordination with another to fulfil each other’s goals.

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E. No individual can take advantage of the freedom allowed in this approach. Answer: B Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

47.

An expatriate of Country A 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 Country A expatriate is guided by _____. A. ethnocentrism B. moral relativism C. ethical imperialism D. cultural relativism E. moral absolutism Answer: D Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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48.

Test Bank

_____ 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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

50.

Managers with strong _____, ones that provide personal rules or strategies for valuebased 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 Learning Objective: 3.2 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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51.

Test Bank

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? 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 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.2 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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54.

Test Bank

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

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 Learning Objective: 3.2 Difficulty: Easy AACSB: Ethical understanding and reasoning 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. The behavior is justified and cannot be held wrong at any time. D. the organization’s (on behalf of whom the individual acts) best interests stand above all others. E. as long as people have acted in good faith, their behavior is ethical. Answer: A Learning Objective: 3.2 Difficulty: Moderate

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

AACSB: Ethical understanding and reasoning 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 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning 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. 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 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

59.

Fredrick works for Vision, a billboard advertising agency, which hires billboards from owners on behalf of clients. Fredrick routinely accepts pay-offs from billboard owners in exchange for referring their billboards to clients. This behavior could result in his dismissal from Vision, if found out. Which statement is Fredrick most probably utilizing to rationalize his actions?

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Test Bank

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 Learning Objective: 3.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

60.

According to Archie Carroll, an _____ manager is defined as a manager who chooses to behave unethically. A. amoral B. apathetic C. immoral D. individualist E. ethnocentric Answer: C Learning Objective: 3.3 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

61.

According to Archie Carroll, an _____ 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 Learning Objective: 3.3 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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Schermerhorn & Bachrach Management, 13th edition

62.

Test Bank

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 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

63.

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

64.

Which of the following is the best way to instill ethical behavior in an organization? A. Promoting rationalizations for unethical behavior B. Promoting a strict legal code C. Conducting ethics training D. Conducting behavioral training E. Conducting physical training Answer: C Learning Objective: 3.3 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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Schermerhorn & Bachrach Management, 13th edition

65.

Test Bank

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 Learning Objective: 3.3 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

66.

Which of the following is a primary reason why almost half the workers in the United States fail to blow the whistle to report wrongdoings they observe at work? A. A flexible and lenient chain of command B. Weak work group identities that discourage loyalty and self-censorship C. Presence of ethical leadership D. The belief that no corrective action would be taken E. The lack of any commitment to the organization Answer: D Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

67.

Which of the following is true of a whistleblower? 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 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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68.

Test Bank

_____ 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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

69.

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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

70.

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 Learning Objective: 3.4 Difficulty: Easy

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

71.

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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

72.

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 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

73.

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 Learning Objective: 3.4

3-22

Schermerhorn & Bachrach Management, 13th edition

Test Bank

Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

74.

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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

75.

Issue urgency: A. indicates the extent to which the stakeholder’s concerns 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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

76.

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

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Test Bank

Answer: B Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

77.

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

78.

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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

79.

The _____ view of CSR is that business should focus on broader welfare of the community and not just profits. A. shared value B. classical C. post-modern D. socioeconomic E. ethnocentric

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Test Bank

Answer: D Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

80.

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

81.

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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

82.

A company following the virtuous circle 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.

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

83.

Which of the following is most likely to result in a virtuous circle? A. Unicorn Educational Services makes anonymous donations to charities every year. B. Holding Hands, a not-for-profit organization, provides free food and shelter to orphans. C. Medix Technology funds frequent AIDS awareness programs held by a not-for-profit organization in the surrounding neighborhood. D. Bubble Plastics incorporates environmentally friendly manufacturing techniques that also result in cost savings. E. Fryt Inc. uses environmentally hazardous chemicals to reduce the cost of manufacturing its products and to maximize its profits. Answer: D Learning Objective: 3.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

84.

A(n) _____ strategy tries to avoid and resist pressures for social responsibility. A. minimalist B. obstructionist C. defensive D. accommodative E. proactive Answer: B Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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85.

Test Bank

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 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

86.

Strathum Tech Inc., 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 the company employ? A. Minimalist B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: B Learning Objective: 3.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

87.

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

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Schermerhorn & Bachrach Management, 13th edition

Test Bank

Bloom’s Taxonomy: Knowledge

88.

A(n) _____ strategy does the minimum legal requirements to display social responsibility. A. leadership B. obstructionist C. defensive D. accommodative E. proactive Answer: C Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

89.

Piggybank 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. The company 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 the company follow? A. Leadership B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: C Learning Objective: 3.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

90.

A(n) _____ strategy accepts social responsibility and tries to satisfy society’s basic ethical expectations. A. resistive B. obstructionist C. defensive D. accommodative

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Test Bank

E. proactive Answer: D Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

91.

Which strategy of corporate social responsibility meets economic, legal, and ethical responsibilities but not discretionary responsibilities? A. Resistive B. Obstructionist C. Diversification D. Accommodative E. Proactive Answer: D Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

92.

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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

93.

Which corporate social responsibility strategy meets economic, legal, ethical, and discretionary responsibilities? A. Resistive B. Obstructionist

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Test Bank

C. Defensive D. Accommodative E. Proactive Answer: E Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

94.

Shine Clean, a laundry detergent manufacturer, employs unskilled locals and trains them. It 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. Shine Clean is pursuing the _____ strategy of CSR. A. resistive B. obstructionist C. defensive D. accommodative E. proactive Answer: E Learning Objective: 3.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

95.

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

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96.

Test Bank

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

97.

_____ is the active 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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

98.

_____ 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 Learning Objective: 3.4 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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99.

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Which of the following is an example of an ethical dilemma? A. Martha, who had filed in her personal details that she was an American, is hired as a receptionist despite some of her co-workers apprehension about her racial identity. B. Wanda, an employee at a real estate firm, files a sexual harassment case against her manger despite his repeated apologies. C. Steward, an engineer, gives his office laptop to his daughter as a birthday gift. D. Vince, a government employee, knows that he should not accept bribes, but is tempted to take the money to save a sick kid. E. Clara fires half of her employees so as to decrease the cost of inputs of her company. Answer: D Learning Objective: 3.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

100.

Bertrand Louise, an important stakeholder at Carmichaels & Sons. Inc., requests for a detailed report of the profit statement of the company when rumors reach him that their balance sheet for the past year was fabricated. Bertrand’s request is immediately granted as some of the higher officials had the same suspicion as that of Bertrand. Which of the following best explains the quick actions taken in this case? A. Issue urgency B. Corporate social responsibility C. Demand legitimacy D. Self-centered behavior E. Organizational setting Answer: C Learning Objective: 3.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

101.

Glendelwalt is a finance corporation that believes in working for the betterment of the present as well as the future generations. They promote the principle of stewardship and sustainability. Which of the following actions should it implement so as to promote their ideals? A. Hire more workers B. Remodel and renovate their building C. Start a ‘save water and energy’ program D. Increase the salary of the workers

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E. Improve their customer service. Answer: C Learning Objective: 3.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

102.

Castle & Co. focuses on using recycled paper as packing material. Though the firm incurs a higher cost of inputs due to this strategy, it continues to use the recycled papers. Thus it contributes to the betterment of the larger community. When a social responsibility audit is taken, on what side will the company’s performance rate? A. Compliance B. Negative C. Underrated D. Conviction E. Moderate Answer: D Learning Objective: 3.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

103.

Karlanium Inc. is a bottle manufacturing company. It is required by law to process its waste byproduct before depositing it in the dumping grounds. Its social responsibility is limited to fulfilling this legal requirement. To which of the following categories does Karlanium belong? A. Resistive B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: B Learning Objective: 3.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Essay

104.

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 self-respect, 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. Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

105.

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

106.

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 first-level 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

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

107.

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. Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

108.

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,

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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. Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

109.

What are codes of ethics? What do they address? Answer: Codes 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. Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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Chapter 4: Environment, Innovation, and Sustainability

True/False

The general environment comprises the actual organizations, groups, and persons with whom an organization interacts and conducts business.

Answer: False Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Offshoring is the return of jobs from foreign locations as companies establish new domestic operations.

Answer: False Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

The legal-political conditions in the global business environment are uniform across all countries.

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Answer: False Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Internet censorship is the deliberate blockage and denial of public access to information posted on the Internet.

Answer: True Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Inflation, income levels, and job outlook are part of the sociocultural conditions in the general environment.

Answer: False Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge 7.

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 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

The baby boomers are “digital natives” who grew up in technology-enriched homes, schools, and friendship environments.

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Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10.

A sustainable business both meets the needs of customers and protects the natural environment for future generations.

Answer: True Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11.

Sustainable business practices generate substantial amounts of waste and toxic materials.

Answer: False Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12.

Stakeholders are the persons, groups, and institutions directly affected by an organization.

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Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

13.

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 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

14.

Risk taking is a way to step forward and try new things.

Answer: True Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

15.

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 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16.

Competitive advantage achieved through costs will help an organization earn profits with prices that one’s competitors have difficulty matching.

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Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17.

The more uncertain the environment, the easier it is to analyze environmental conditions and predict future states of affairs.

Answer: False Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18.

The number of different factors in the environment is referred to as the rate of change.

Answer: False Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

19.

The least challenging and certain situation is an environment of organizations that is both complex and dynamic.

Answer: False Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20.

High-uncertainty environments require an ability of decision makers to respond quickly as new circumstances arise and new information becomes available.

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Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21.

Innovation is a low priority when executives and leaders try to steer organizations through complex and uncertain environments.

Answer: False Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22.

Product innovations result in better ways of doing things.

Answer: False Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

23.

Business model innovations result in new ways of making money for the firm.

Answer: True Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24.

The initial 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.

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25.

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 Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

26.

Environmental capital is the supply of natural resources that we use to sustain life and produce goods and services for society.

Answer: True Learning Objective: 4.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

27.

The executives of Dunes Inc. 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 Dunes Inc. uses the triple bottom line approach.

Answer: True Learning Objective: 4.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

28.

An organization that does not provide health insurance to employees can be categorized as one with poor human sustainability.

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Learning Objective: 4.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

29.

Pfeffer’s concern on human sustainability focusses on the importance of employees as they are organizational stakeholders.

Answer: True Learning Objective: 4.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

30. A. B. C. D. E.

_____ environment consists of economic, legal-political, sociocultural, technological, and natural environment conditions. Specific Task General Stakeholder Customer

Answer: C Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

31. A. B. C. D. E.

Which of the following represents the economic conditions in the general environment? Patents Infrastructure Internet access Unemployment rate Norms

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Answer: D Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32.

A. B. C. D. E.

A country faced 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? Political conditions Legal conditions Technological conditions Sociocultural conditions Economic conditions

Answer: E Learning Objective: 4.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

33. A. B. C. D. E.

Which of the following involves outsourcing of jobs to foreign locations? Reshoring Offshoring Repatriation Nationalization Backshoring

Answer: B Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. A.

Which of the following is a criterion of a good economic condition in the general environment? The rising income inequality among the working class

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B. C. D. E.

Test Bank

The low unemployment rate in the society The introduction of new developments in the technological areas The introduction of carbon neutral methods for sustainable development The occurrence of long-term joblessness among the people of the society

Answer: B Learning Objective: 4.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

35.

A. B. C. D. E.

Adams Inc., an automobile corporation based in London, shifts its manufacturing activities to China in order to minimize its cost of production. Which strategy has is Adams Inc. adopted here? Repatriation Nationalization Backshoring Offshoring Reshoring

Answer: D Learning Objective: 4.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

36. A. B. C. D. E.

Which of the following would qualify as a reason for reshoring? Low costs in the target country Complicated logistics in the target country Excellent customer service in the target country Low shipping costs in the target country Low labor costs in the target country

Answer: B Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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37.

A. B. C. D. E.

Test Bank

Techni Asset, 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 of production in the foreign countries and received complaints and criticisms about the loss of local jobs, the firm decided to return to its home country. This change made to the firm’s global strategy is an example of _____. offshoring outsourcing nationalization privatization reshoring

Answer: E Learning Objective: 4.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

38. A. B. C. D. E.

The patent attorney of Rayon Inc. was accused of stealing the organization’s invention. This scenario is an example of the _____ conditions of the general environment. natural legal-political technological sociocultural educational

Answer: B Learning Objective: 4.1 Difficulty: Easy AACSB: Application of knowledge Bloom’s Taxonomy: Application

39.

A. B. C. D. E.

The government of Floraine imposes certain rules and regulations regarding the interest rates and other transactions for its financial institutions. This is an example of the _____ conditions of the general environment. natural technological sociocultural legal-political educational

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Answer: D Learning Objective: 4.1 Difficulty: Easy AACSB: Application of knowledge Bloom’s Taxonomy: Application

40. A. B. C. D. E.

Which of the following examples illustrates the legal-political conditions in the general environment? Bureaucratic decisions made in a nation Financial market situation existing in a nation Health and Nutritional values of a nation Information technology systems or infrastructure of a nation Population demographics of a nation

Answer: A Learning Objective: 4.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

41.

A. B. C. D. E.

Crayons Inc., 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? Economic conditions Sociocultural conditions Legal-political conditions Technological conditions Natural environment conditions

Answer: C Learning Objective: 4.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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42. A. B. C. D. E.

Test Bank

Which of the following is a part of the sociocultural conditions in the general environment? Inflation Financial markets Government policies Intellectual properties Demographics

Answer: E Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43. A. B. C. D. E.

Diversity issues relating to educational opportunity, access to technology, housing options, and so on are parts of the _____ conditions in the general environment. economic legal technological sociocultural political

Answer: D Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

44.

A. B. C. D. E.

The managers of Vortex Inc. stresses 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. economic legal sociocultural technological political

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AACSB: Application of knowledge Bloom’s Taxonomy: Application

45.

A. B. C. D. E.

The marketing executives of Exphyne Inc. observes the demographics of the population at its different areas of operation. They work towards 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 Exphyne Inc. focuses on the _____ conditions in the general environment to make sales. technological legal philosophical sociocultural political

Answer: D Learning Objective: 4.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

46. A. B. C. D. E.

Which of the following aspects of demographics comprises of generational cohorts? Income levels Race Age Ethnicity Gender

Answer: C Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

47. A. B. C.

_____ are “digital immigrants” who have had to learn about technology as it became available. Baby Boomers Gen Ys Gen Xs

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D. E.

Test Bank

Millennials Gen Zs

Answer: A Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

48.

A. B. C. D. E.

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? Millennials Gen Xs Baby Busters Golden Boomers Baby Boomers

Answer: A Learning Objective: 4.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

49.

A. B. C. D. E.

Vane has the ability to multitask and maintain continuous contact with others. She believes in receiving immediate gratification. This implies that Vane is most likely a _____. Baby Boomer Millennial Gen X Baby Buster Golden Boomer

Answer: B Learning Objective: 4.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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50.

A. B. C. D. E.

Test Bank

Finheat, 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. natural legal technological sociocultural political

Answer: C Learning Objective: 4.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

51.

A. B. C. D. E.

Jamie has a diverse collection of the latest video games. He also owns a mobile phone with a number of applications. His school is well equipped with Internet facilities. Which of the following generational cohorts does Jamie most likely belong to? Baby Boomer Generation Gen X Generation Baby Buster Generation Millennial Generation Golden Boomer Generation

Answer: D Learning Objective: 4.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

52.

A. B. C. D. E.

InGen 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. natural technological legal sociocultural political

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Answer: B Learning Objective: 4.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

53. A. B. C. D. E.

Which of the following examples illustrates the technological conditions in the general environment? Features and applications available on an individual’s phone Income levels of an individual Housing options for an individual Job options for an individual Educational opportunities for an individual

Answer: A Learning Objective: 4.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

54. A. B. C. D. E.

Which of the following examples would qualify as a potential problem of the existing ever-present technological condition? An organization advertising its products on social networking websites An organization’s employees regularly engaging in online pastimes during work hours An organization conducting regular virtual meetings with its clients A musician promoting his debut musical project through media websites An organization implementing digital sharing of files, presentations, and projects

Answer: B Learning Objective: 4.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

55. A. B.

A sustainable business: is involved in risk-taking from position of performance difficulty. has lack of information regarding what exists in the business environment and what developments may occur.

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C. D. E.

Test Bank

creates products or services that become so widely used that they largely replace prior practices and competitors. meets the needs of customers as well as protects the natural environment for future generations. is an organization motivated by desperation to escape existing difficulties.

Answer: D Learning Objective: 4.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

56. A. B. C. D. E.

The _____ environment includes the people and groups with whom an organization interacts. general natural specific macro external

Answer: C Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

57. A. B. C. D. E.

Stakeholders: are described as employees who move to foreign locations to reduce costs to the organization. are individuals who propose laws and regulations, government policies, and the philosophy and objectives of political parties. are owners of organizations who take risks motivated by desperation to get out of bad situations. refer to the employees who return from different host countries and help in establishing new domestic operations. are the persons, groups, and institutions directly affected by an organization.

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

58. A. B. C. D. E.

Which of the following is true of stakeholders? Members of the specific or task environment are often described as stakeholders. Stakeholders are influenced by their stakes, but they are not allowed to influence it in return. An organization’s performance does not affect the stakeholders. All stakeholders belong to the generational cohort of Baby Boomers. All stakeholders are “digital natives” who grew up in technology-enriched homes, schools, and friendship environments.

Answer: A Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59. A. B. C. D. E.

Which of the following falls on the positive side of risk-taking behavior of organizations? Risk taking from position of performance difficulty Risk taking motivated by desperation to get out of bad situation Risk taking from hard time dealing with problems without losing focus Risk taking with the ability to deal with problems as they arise Risk taking from little staying power

Answer: D Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

60. A. B. C. D.

Which of the following is true of value creation by businesses? Businesses create value for customers through realized profits and losses. Businesses create value for employees by wages earned and job satisfaction. Businesses create value for competitors through the benefits of long-term business relationships. Businesses create value for suppliers by the citizenship they display.

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Businesses create value for local communities by stimulating markets and innovations that didn’t exist before.

Answer: B Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

61.

A. B. C. D. E.

Four Rollers Corp., an automobile company, benefits by spending less than its competitors on labor, operations, promotions, and features offered. This enables the firm to charge relatively lower prices on its goods from its customers. Which of the following is a competitive advantage of the firm? High quality Low costs Flexibility Delivery Adaptability

Answer: B Learning Objective: 4.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

62. A. B. C. D. E.

Which of the following examples illustrates a firm that has achieved competitive advantage through costs? A firm that uses patented technology to deliver goods and services to customers on time A firm’s ability to adjust and adapt to different demographic segments and satisfy their needs A firm that invests only a small amount on promotion and maximizes profits by charging low prices A firm’s technology that creates high quality products and services A firm that specializes in developing timely new products

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63.

A. B. C. D. E.

Test Bank

Linkage Communications produces mobile phones, smart phones, and laptops. In terms of longevity and user-friendliness, the firm’s products are rated the best. Additionally, it offers applications and features with the latest technology. Which of the following has enabled Linkage Communications to achieve a competitive advantage over its competitors? Quality Costs Flexibility Delivery Adaptability

Answer: A Learning Objective: 4.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

64. A. B. C. D. E.

Which of the following examples illustrates a firm that has achieved competitive advantage through technology? A firm that invests less on its production processes A firm that focuses on producing zero defect products A firm that uses patented expertise in developing a nuanced product A firm that spends very less on advertising and promotional costs A firm that caters to only a selected few customer needs

Answer: B Learning Objective: 4.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

65. A. B. C. D.

Which of the following examples displays a firm with a competitive advantage achieved through quality? An organization that is famous for its durable products A corporation that reduces its expenses by finding new production processes A firm that delivers goods and services faster than its competitors An organization that gains profits by charging less prices

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A company that tailors its goods and services to fit consumer needs and preferences

Answer: A Learning Objective: 4.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

66.

A. B. C. D. E.

The Oomph Factor, 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. The firm has gained competitive advantage through _____. quality costs flexibility delivery adaptability

Answer: D Learning Objective: 4.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

67. A. B. C. D. E.

Which of the following illustrates a firm that has achieved competitive advantage through delivery? A firm that uses technology to produce durable products A firm that develops timely new products A firm that has the flexibility to operate successfully in any business environment A firm that makes small financial investments at the time of production A firm that can adapt and change according to the needs of different customers

Answer: B Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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68. A. B. C. D. E.

Test Bank

Which of the following illustrates a firm that has achieved competitive advantage through flexibility? A firm that creates customized products based on each of its customer’s preferences A firm that produces goods by maintaining high quality standards A firm that ensures speedy delivery of goods compared to its competitors A firm that develops products with unique features that are not made available by any of its competitors A firm that develops timely new products

Answer: A Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

69.

A. B. C. D. E.

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. quality costs flexibility delivery durability

Answer: C Learning Objective: 4.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

70. A. B. C. D. E.

Which of the following is true of environmental uncertainty? The less uncertain the environment, the harder it is to analyze environmental conditions and predict the future state of affairs. The least challenging situation is an environment that is both complex and dynamic. High-uncertainty environments require less flexibility in organizational designs and work practices as different circumstances arise every now and then. High-uncertainty environments require people to make decisions gradually since new circumstances arise constantly. The uncertainty of an organization can be analyzed using degree of complexity and rate of change.

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Test Bank

Answer: E Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71. A. B. C. D. E.

Innovation refers to the: lack of information regarding what exists in the environment. people and groups with whom an organization interacts. process of taking a new idea and putting it into practice. return of jobs from foreign locations as companies establish new domestic operations. things that an organization does extremely well and that gives it an advantage.

Answer: C Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

72.

A. B. C. D. E.

Brazen 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 Brazen Inc. was engaging in _____. process innovation business model innovation product innovation skimming performance innovation

Answer: C Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

73. A.

Which of the following is an example of a product innovation? A firm launching a new flavor to its existing range of candies

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B. C. D. E.

Test Bank

A firm allowing customers to mail the desired designs of goods A firm introducing a new online shopping model A firm introducing new technology to ease the installation process A firm changing its line of business from manufacturing automobiles to producing music

Answer: A Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

74. A. B. C. D. E.

Footlore Inc. introduced a sophisticated new range of shoes that prevents any type of injury to the wearer’s feet. This is an example of a: process innovation. product innovation. business model innovation. social business innovation. paradigm innovation.

Answer: B Learning Objective: 4.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

75. A. B. C. D. E.

Which of the following forms of innovation focuses on better ways of doing things? Product innovation Process innovation Business model innovation Social business innovation Paradigm innovation

Answer: B Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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76. A. B. C. D. E.

Test Bank

Which of the following is an example of a process innovation? A firm putting coupons on the Web A firm introducing a new social media site A firm introducing “ready to assemble” furniture A firm converting the movie rental business into a subscription business A firm creating the world’s largest online marketplace

Answer: C Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

77.

A. B. C. D. E.

Eureka 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. product process business model reverse social business

Answer: B Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

78. A. B. C. D. E.

Which of the following scenarios best describes a process innovation? A firm launching a new car model with basic features and systems A restaurant where customers are allowed order dishes after taking a sample A footwear manufacturer introducing a unique range of shoes A firm introducing a new software to protect computers from viruses A firm changing its line of business from manufacturing eyewear to producing watches

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Test Bank

Bloom’s Taxonomy: Application

79. A. B. C. D. E.

A business model innovation results in: new ways for firms to make money. better ways of doing things. introduction of new or improved goods. the creation of new services. environmental uncertainty.

Answer: A Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80.

A. B. C. D. E.

Celluloid 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 Celluloid Inc. had engaged in a _____ innovation. product process business model reverse pricing

Answer: C Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

81. A. B. C. D. E.

Which of the following is an example of a business model innovation? A firm introducing a new model of its smartphone A firm introducing “ready to install” software A firm introducing a range of meals that can be cooked instantly A firm introducing its new range of accessories to go with its clothesline A firm introducing a new social networking website to connect with its customers

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Test Bank

Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

82.

A. B. C. D. E.

Garsynth Corporation 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. The company has engaged in _____ innovation. product red ocean reverse breakthrough social business

Answer: E Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

83. A. B. C. D. E.

Which of the following is an example of a social business innovation? An organization working on maintaining cleanliness in the cities A firm specializing in producing customized bags based on preferences of the purchasers A firm introducing a range of meals that can be cooked instantly A firm removing the use of intermediaries to deal with customers directly A record label using an exclusive process to record music albums

Answer: A Learning Objective: 4.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

84. A. B. C.

Microcredit lending is an example of _____ innovation. reverse social business disruptive

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D. E.

Test Bank

environmental green

Answer: B Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. A. B. C. D. E.

Which of the following steps in the innovation process involves thinking about new possibilities? Imagining Experimenting Assessing Designing Scaling

Answer: A Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86. A. B. C. D. E.

Which of the following steps in the innovation process involves building initial models, prototypes, or samples? Imagining Experimenting Assessing Designing Scaling

Answer: D Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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87.

A. B. C. D. E.

Test Bank

A group of employees of Smithson 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? Imagining Experimenting Assessing Designing Scaling

Answer: B Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

88.

A. B. C. D. E.

Red Sun 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? Imagining Experimenting Assessing Designing Scaling

Answer: C Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

89. A. B. C. D. E.

Which of the following steps in the innovation process consists of implementing what has been learned and commercializing new products or services? Scaling Experimenting Assessing Designing Imagining

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Test Bank

Answer: A Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90.

A. B. C. D. E.

Animo 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 the firm? Imagining Experimenting Assessing Designing Scaling

Answer: E Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

91. A. B. C. D. E.

Which of the following is the final step wheel of innovation? Imagining Experimenting Assessing Designing Scaling

Answer: E Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

92. A. B. C.

Which of the following is true of reverse innovation? It taps the potential for innovation existing at higher organizational levels. It emphasizes recognition of innovations developed in well-established markets. It recognizes innovations existing in diverse settings or locations.

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D. E.

Test Bank

It involves a lack of complete information regarding what exists in the environment. It focuses on identifying strengths and weaknesses, and potential costs and benefits.

Answer: C Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

93.

A. B. C. D. E.

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”? Disruptive innovation Product innovation Reverse innovation Incremental innovation Social business innovation

Answer: C Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. A. B. C. D. E.

_____ innovation pulls new products and services from settings, where they are often created under pricing constraints, and pushes them into use elsewhere. Disruptive Reverse Luxurious Product Business model

Answer: B Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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95. A. B. C. D. E.

Test Bank

Which of the following creates products or services that become so widely used that they largely replace prior practices and competitors? Disruptive innovation Sustainability Sustaining innovation Transformational innovation Incremental change

Answer: A Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96.

A. B. C. D. E.

Rhapsody 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? Positioning innovation Incremental change Process improvement Disruptive innovation Process innovation

Answer: D Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

97. A. B. C. D. E.

The commitment to protect the rights of present and future generations as costakeholders of present-day natural resources is termed as _____. disruptive innovation sustainability environmental uncertainty reverse innovation scaling

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

98. A. B. C. D. E.

Which of the following is true of sustainability? It is a lack of information regarding what exists in the environment and what developments may occur. It is a system by which an organization is directed or controlled. It refers to the relationship between an organization’s management, its employees, its stakeholders, and the government. It is a commitment to live and work in ways that protect the rights of both the present and the future generations. It does not apply to the non-living things present on earth.

Answer: D Learning Objective: 4.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99. A. B. C. D. E.

The process of using environmental resources to support societal needs today while also preserving and protecting them for future generations is referred to as _____. triple bottom line experiment global warming sustainable development scaling greenhouse effect

Answer: C Learning Objective: 4.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100. The supply of natural resources which sustain life and produce goods and services for society is referred to as _____. A. global warming B. environmental capital Copyright © 2015 John Wiley & Sons, Inc.

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C. D. E.

Test Bank

green innovation triple bottom line greenhouse effect

Answer: B Learning Objective: 4.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

101. 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 the natural environment. Answer: E Learning Objective: 4.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

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Test Bank

103. Black Corporation 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, it can be inferred that Black Corporation: 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. focusses on the ideals of environmental capital. Answer: D Learning Objective: 4.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. In a country, the web access through mobile devices doubled each year since 2009 and during 2010, on an average, 2 million people used Facebook each day. Which of the following environmental condition does this information portray? A. Economic condition B. Legal-political condition C. Natural condition D. Socio-cultural condition E. Technological condition Answer: E Learning Objective: 4.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. The government of Klayoland introduces a new program whereby it initiated all its business enterprises to adopt “green values”, and minimize and recycle its waste disposal. Which of the following conditions has the government taken care of by this decision? A. Economic B. Sociocultural Copyright © 2015 John Wiley & Sons, Inc.

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C. D. E.

Test Bank

Political Natural Technological

Answer: D Learning Objective: 4.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. Cufflinks, an outstanding house for tailored suits, has always had satisfied customers owing to their ingenuity in facilitating top fashion trends. It is innovative in adapting to changing vogues and demands of its customers.. Through which of the following ways does Cufflinks gain a competitive advantage? A. Costs B. Flexibility C. Delivery D. Quantity E. Profits Answer: B Learning Objective: 4.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. The R&D department of Meredith Inc., a tire manufacturing, discovers a new material to be used as an alternative to rubber that brings down the manufacturing costs. This allows the company to offer its products at a price lower than the market price. The newly discovered material is the company’s: A. disruptive innovation. B competitive advantage. C. natural capital. D. environmental capital. E. competitive environment. Answer: B Learning Objective: 4.2 Difficulty: Hard AACSB: Application of knowledge Copyright © 2015 John Wiley & Sons, Inc.

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Test Bank

Bloom’s Taxonomy: Application

108. Comtrot, a mobile application developer, outsourced the development of an application to a cheaper location in another country. The application would notify users about their blood pressures twice a week. The final product was marketed in the country of Comtrot’s origin. Which of the following does this situation demonstrate? A. Disruptive innovation B. Sustainability C. Reverse innovation D. Social business innovation E. Process innovation Answer: C Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Pandemonium, a software enterprise, introduced a new gaming console in a small way with stimulating features. In six months’ time its popularity and its sales increased manifold. The major players in the business were overshadowed by this new gaming console. Which of the following best describes this situation? A. Environmental capital B. Sustainable development C. Sustainable innovation D. Reverse innovation E. Disruptive innovation Answer: E Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

110. Fredrick comes up with an innovative range of watches. He has built a prototype and has given it to his friends for checking its feasibility and examining its practical use. According to the Hamel’s ‘wheel of innovation’, which of the following step has Fredrick undertaken? Copyright © 2015 John Wiley & Sons, Inc.

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A. B. C. D. E.

Test Bank

Assessment Scaling Imagining Experimenting Designing

Answer: E Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

111. Lewang has decided to launch an innovative product that would help the blind access their mails through a voice application. He has finished designing the product and accessing the costs and its market applicability. Keeping in mind Hamel’s “wheel of Innovation”, what is the next step that Lewang should ideally undertake? A. He should check for its sustainability. B. He should initiate the process of scaling. C. He should implement reverse innovation. D. He should increase the price of the product. E. He should access the rate of change in environment. Answer: E Learning Objective: 4.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

112. Food Chow, a grocery retail business, stopped the use of plastic bags and encouraged the use of reusable bags. This indicates that the firm is practicing _____. A. sustainable business B. triple bottom line C. scaffolding D. competitive advantage E. reverse innovation Answer: A Learning Objective: 4.4 Difficulty: Hard AACSB: Application of knowledge Copyright © 2015 John Wiley & Sons, Inc.

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Test Bank

Bloom’s Taxonomy: Application

113. Which of the following is an example of human sustainability? A. Glenneth & Co., a pharmaceutical company, recruits employees on a temporary basis. B. Margaret works every day for eleven hours as a receptionist in a law firm. C. Carmel Works, a software company, provides ample health insurance coverage for its employees as well as their dependents. D. Preacher & Abel, a cosmetic company, cut down on the wages of its employees to reduce cost of production. E. Brent Inc. takes the initiative of planting trees across the town in which it operates. Answer: C Learning Objective: 4.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

114. 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. Natural 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. Learning Objective: 4.1 Difficulty: Easy Copyright © 2015 John Wiley & Sons, Inc.

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

115. 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. Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

116. 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. Learning Objective: 4.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

117. 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 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. Learning Objective: 4.3 Copyright © 2015 John Wiley & Sons, Inc.

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

Ch05: Global Management and Cultural Diversity

True/False

The growing interdependence among elements of the global economy is known as diversification.

Answer: False Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

In World 3.0, local needs and priorities are largely ignored compared to the economic gains from global integration.

Answer: False Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

Cultural awareness is an important characteristic of a truly global manager.

Answer: True Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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Test Bank

Sigma Inc. conducts for-profit transactions of goods and services across national boundaries. Sigma Inc. is an example of an international business.

Answer: True Learning Objective: 5.1 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

A common first step into international business is global sourcing.

Answer: True Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments 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 Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

In exporting, local products are sold to foreign customers.

Answer: True Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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Test Bank

Franchising refers to acquiring products from abroad and selling them in domestic markets.

Answer: False Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

China’s foreign direct investment in the U.S. has led to the creation of many jobs in China. This is an example of insourcing.

Answer: True Learning Objective: 5.1 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

10.

A foreign subsidiary is a foreign operation completely owned and controlled by a local firm.

Answer: False Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

11.

A foreign subsidiary represents the lowest level of involvement in international operations.

Answer: False Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments

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Test Bank

Bloom’s Taxonomy: Knowledge

12.

Tariffs are basically taxes that governments impose on imports.

Answer: True Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

13.

The goal of most tariffs is to protect local firms from foreign competition.

Answer: True Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

14.

NAFTA was formed by the United Kingdom, France, and Germany.

Answer: False Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

15.

Executives of transnationals view the entire world as their domain for acquiring resources.

Answer: True Learning Objective: 5.2 Difficulty: Easy AACSB: Diverse and multicultural work environments

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Test Bank

Bloom’s Taxonomy: Knowledge

16.

Extraction of excessive profits by global corporations is a potential host-country cost.

Answer: True Learning Objective: 5.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

17.

Long hours of work and poor working conditions are prevalent in sweatshops.

Answer: True Learning Objective: 5.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

18.

Nigel is very proud of his British culture and tends to view other cultures as potentially inferior to his own. This is an example of ethnocentrism.

Answer: True Learning Objective: 5.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

19.

Knowledge about foreign cultures is known as cultural intelligence.

Answer: True Learning Objective: 5.3 Difficulty: Easy

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Test Bank

AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

20.

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 Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

21.

Most communication in low-context cultures takes place via the written or spoken word.

Answer: True Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

22.

Members of monochronic cultures are more flexible in their views of time than those of polychronic cultures.

Answer: False Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

23.

Members of polychronic cultures do not approve of coming late or bringing an uninvited guest.

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Test Bank

Answer: False Learning Objective: 5.3 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

24.

Proxemics is the study of how people use space to communicate.

Answer: True Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

25.

Tight cultures are characterized by clear and rigid social norms.

Answer: True Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

26.

In a tight culture, deviations from norms tend to be tolerated.

Answer: False Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

27.

The ecological fallacy refers to the belief that a generalized cultural value, such as individualism, does not apply equally to all members of that culture.

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Test Bank

Answer: False Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

28.

People in high-power-distance cultures tend to be tolerant of power and are prone to follow orders.

Answer: True Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

29.

People in high uncertainty-avoidance cultures prefer structure in their lives.

Answer: True Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

30.

Intercultural competencies are skills that help an individual to function successfully in cross-cultural situations.

Answer: True Learning Objective: 5.4 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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Test Bank

Multiple Choice

31. A. B. C. D. E.

Which of the following is an effect of globalization? Reducing cooperation among nations in the global economy Weakening economic integration across countries Reducing interdependence among the components in the global economy Increasing the importance of nation states Creating a borderless world where economic integration becomes extreme

Answer: E Learning Objective: 5.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. A. B. C. D. E.

_____ involves managing business and organizations with interests in more than one country. Global management Territorial management Reshoring Insourcing Economic development

Answer: A Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

33. A. B. C.

Which of the following is a common reason for doing international business? Reducing imports Accessing lower-cost labor Boosting domestic demand

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D. E.

Test Bank

Establishing market monopoly Promoting ethnocentrism

Answer: B Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

34.

A. B. C. D. E.

Ronald 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? Global sourcing Insourcing Licensing Franchising Outsourcing

Answer: A Learning Objective: 5.1 Difficulty: Hard AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

35.

A. B. C. D. E.

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

Answer: D Learning Objective: 5.1

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Test Bank

Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

36. A. B. C. D. E.

The growth of export industries _____ the exporting country. reduces imports in provides low-cost labor in creates local jobs in increases financial resources for leads to an excess supply of products in

Answer: C Learning Objective: 5.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

37.

A. B. C. D. E.

When Veriol Inc., a pharmaceuticals company, bought the rights of manufacturing and selling Nocturne Pharma’s vitamin supplement, Vita Plus, in Mexico, Veriol Inc. engaged in _____. exporting global sourcing franchising insourcing licensing

Answer: E Learning Objective: 5.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

38. A.

In _____, the foreign firm buys the rights to use another’s name and operating methods in its home country. insourcing

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B. C. D. E.

Test Bank

franchising global sourcing exporting offshoring

Answer: B Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

39. A. B. C. D. E.

Which of the following terms is used to describe local job creation that results from foreign direct investment? Restructuring Franchising Offshoring Insourcing Horizontal integration

Answer: D Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

40.

A. B. C. D. E.

When Miriam Inc., a handbag 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 joint venture a foreign subsidiary a greenfield venture diversification product development

Answer: A Learning Objective: 5.1

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Test Bank

Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

41. A. B. C. D. E.

A(n) _____ is a local operation completely owned and controlled by a foreign firm. franchise sweatshop foreign subsidiary global strategic alliance export house

Answer: C Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

42. A. B. C. D. E.

Cases presented before the World Trade Organization for resolution are likely to involve disputes regarding _____. cultural appropriateness restructures cultural distance ecological fallacy tariffs

Answer: E Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

43. A. B.

_____ are taxes governments levy on imports from abroad. Excise duties Tariffs

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C. D. E.

Test Bank

Pay-offs Corporate taxes Subsidies

Answer: B Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

44. A. B. C. D. E.

The goal of most tariffs is to: improve present working conditions. protect transnational corporations from political risks. diversify the existing jobs. protect local firms from foreign competition. create jobs for foreign workers.

Answer: D Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

45. A. B. C. D. E.

Which of the following countries is part of NAFTA? Canada United Kingdom Germany Spain France

Answer: A Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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46. A. B. C. D. E.

Test Bank

Arguments against NAFTA blame the organization for: lower productivity of U.S. manufacturers. lower cross-border trade. substantial job losses to Mexico. substantial job losses to the U.S. deterioration of the Mexican business environment.

Answer: C Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

47. A. B. C. D. E.

Which of the following is true with regard to the European Union (EU)? There is an absence of common consensus between the member states of EU with regard to political integration. All the member states of the EU have adopted the Euro as the common currency. The common currency of the EU is a weak competitor of the U.S. dollar. The EU members are supposed to give one another most favored nation status. The EU is a regional economic and political alliance of global importance.

Answer: E Learning Objective: 5.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

48. A. B. C. D. E.

A _____ is an MNE that operates worldwide on a borderless basis. franchise transnational corporation foreign subsidiary greenfield venture limited liability company

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Test Bank

Answer: B Learning Objective: 5.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

49. A. B. C. D. E.

Which of the following is one of the potential host-country benefits? Smaller tax base Interference with the governments Economic domination Introduction of new industries Exploitation of natural resources

Answer: D Learning Objective: 5.2 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

50. A. B. C. D. E.

Home-country criticisms of global firms include complaints about: interference with the local government. hiring the most talented local personnel at a high cost. failure to transfer advanced technologies. sending scarce investments capital abroad. poor working conditions for employees.

Answer: D Learning Objective: 5.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

51. A.

_____ involves illegal practices to further one’s business interests. Corruption

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B. C. D. E.

Test Bank

Ethnocentrism Polycentrism Proxemics Ecological fallacy

Answer: A Learning Objective: 5.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

52. A. B. C. D. E.

The Foreign Corrupt Practices Act (FCPA) makes it illegal for: countries who are not members of the EU to invest in the U.S. U.S. firms to invest overseas in businesses. foreign firms to offer nonmonetary gifts to U.S. officials. foreign firms to offer bribes to U.S. firms. U.S. firms and their representatives to offer bribes overseas.

Answer: E Learning Objective: 5.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

53. A. B. C. D. E.

Which of the following is an example of child labor? A 13-year-old boy accompanying his mother to the carpet factory where she works A 10-year-old boy working in a chemical factory A 10-year-old girl helping her younger brother with schoolwork A 13-year-old boy earning $10 for helping his father pick strawberries A 19-year-old girl working as a salesgirl in the local supermarket

Answer: B Learning Objective: 5.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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54. A. B. C. D. E.

Test Bank

What are sweatshops? Local business operations that expand internationally through foreign direct investment Arbitrating firms that settle labor disputes between employees and employers Business operations that employ workers at low wages for long hours in poor working conditions Foreign firms that hire talented local personnel for training others in the host country Foreign firms that are engaged in rampant corruption and bribery to gain easy access to the local resource pool

Answer: C Learning Objective: 5.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

55. A. B. C. D. E.

Which of the following is a characteristic of a sweatshop? Poor working conditions High wages Low power distance High degree of foreign investment Strong ethics

Answer: A Learning Objective: 5.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

56. A. B.

Which of the following is an example of a sweatshop? Bane & Packhard, an American law firm, opened its branch in Taiwan as part of its business expansion strategy. Rosenberg Inc., a pharmaceuticals company, bought the rights to manufacture and sell a fertility drug in Greenland from Kremline Pharmaceuticals.

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C. D. E.

Test Bank

Patron Wave, an electronic device manufacturing company, housed its employees in poor conditions and also overworked them. Big Sell, a supermarket, sourced its canned fishes from Asia at a far lower price than most of its local competitors. Mammoth InfoTech refused to increase the annual wages of its employees citing poor financial results in the last quarter.

Answer: C Learning Objective: 5.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

57. A. B. C. D. E.

Why are some scarce minerals known as conflict minerals? They bring in greater foreign investments. They are found in abundance. The money from their sales is used to fund armed violence. The source of these minerals is easy to trace back. They are available for a cheap price.

Answer: C Learning Objective: 5.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

58. A. B. C. D. E.

_____ is a shared set of beliefs, values, and patterns of behavior common to a group of people. Culture Meme Folklore Conduct Morality

Answer: A Learning Objective: 5.3

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59. A. B. C. D. E.

Which of the following is true about culture? Culture is a set of legal codes. Culture is an irrelevant factor in international business. Culture is not common to a group of people. Culture remains static over time. Cultural miscues can be costly in international business.

Answer: E Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

60.

A. B. C. D. E.

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 in Yemen 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. the business trends in Yemen Yemeni dress code the business laws in Yemen Yemeni culture the banking system in Yemeni

Answer: D Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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61. A. B. C. D. E.

Test Bank

_____ is the confusion and discomfort a person experiences when in an unfamiliar culture. Cultural appropriation Culture shock Cultural assimilation Cultural relativism Culture phobia

Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

62. A. B. C. D. E.

Culture shock is: an extreme amount of hatred and rejection of foreign cultures. an individual’s failure to comply with the codes of his or her culture. an assumption that one’s own culture is superior to that of others. an assumption that one’s own culture is inferior to that of others. a certain level of discomfort a person experiences when in an unfamiliar culture.

Answer: E Learning Objective: 5.3 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

63.

A. B. C. D. E.

Ilda Bach, 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 _____. claustrophobia culture shock cognitive dissonance acculturation boredom

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Test Bank

Answer: B Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

64. A. B. C. D. E.

_____ is the tendency to consider one’s culture superior to that of others. Regiocentrism Isolationism Geocentrism Ethnocentrism Polycentrism

Answer: D Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

65. A. B. C. D. E.

Which of the following is a trait of ethnocentrism? Showing no concern for the cultures of others Being eager to adopt the elements of foreign cultures Showing a preference for foreign cultural values to one’s own Respecting ethnic minorities and their culture Failing to comply with the cultural values of one’s own group

Answer: A Learning Objective: 5.3 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

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66.

A. B. C. D. E.

Test Bank

John, an American national, was sent to India as part of a cultural exchange program from his university. On his arrival in India, he did not respond to his host who greeted him by joining his hands. He also declined the tea that was offered, emphasizing a cultural preference for coffee. He felt that his ways and culture were far superior to the ones in the host country. In this scenario, John displayed _____. polycentrism idealism ethnocentrism feudalism collectivism

Answer: C Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

67. A. B. C. D. E.

_____ is the ability to accept and adapt to new cultures. Cultural imperialism Cultural intelligence Ethnocentrism Cultural myopia Cultural appropriation

Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

68. A. B. C. D. E.

People with cultural intelligence: are flexible in dealing with cultural differences. are uncomfortable with cultural differences. view one’s culture as superior to that of others. view one’s culture as inferior to that of others. are eager to adopt the values of foreign cultures.

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Test Bank

Answer: A Learning Objective: 5.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

69. A. B. C. D. E.

Someone high in cultural intelligence views cultural differences as _____. threats ethical dilemmas learning opportunities moral dilemmas barriers to learning

Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

70.

A. B. C. D. E.

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

Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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71. A. B. C. D. E.

Test Bank

_____ cultures emphasize communication via spoken or written words. High-context Popular High femininity Low-context Monochronic

Answer: D Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

72. A. B. C. D. E.

People who tend to say or write what they mean and mean what they say belong to _____ cultures. high-context popular low-context mass global

Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

73. A. B. C. D. E.

In _____ cultures, what is actually said or written may convey only part, and sometimes a very small part, of the real message. low-context monochronic polychronic popular high-context

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Test Bank

Answer: E Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

74. A. B. C. D. E.

Which of the following is true with regard to people in high-context cultures? They rely on situational cues as well as on spoken or written words. The main part of the real message is conveyed by what is actually said. Body language is ignored in the communication process. They emphasize the importance of doing one thing at a time. They focus on using time to accomplish many different things at once.

Answer: A Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

75. A. B. C. D. E.

Cultures where it is possible to begin making business deals only after social relationships are established are referred to as _____ cultures. ethnocentric high-context xenocentric polychronic popular

Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

76.

Monochronic cultures focus on _____.

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A. B. C. D. E.

Test Bank

gestures written language social context time space

Answer: D Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

77. A. B. C. D. E.

In _____ cultures, people tend to do one thing at a time. ethnocentric xenocentric monochronic popular high-context

Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

78. A. B. C. D. E.

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. polychronic low-context ethnocentric high-context monochronic

Answer: E Learning Objective: 5.3 Difficulty: Easy

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Test Bank

AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

79. A. B. C. D. E.

In _____ cultures, time is used to accomplish many different things at once. polychronic ethnocentric low-context high-context monochronic

Answer: A Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

80. A. B. C. D. E.

Which of the following is true about members of polychronic cultures? They are known to be punctual without exception. They do only one thing at a time. They are flexible in their views of time. They regard time as the primary focus of business. They have a pre-determined sequence of agenda.

Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

81.

Oskar Gassner, 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. Gassner concluded that he was not being given the dedicated attention he deserved. This is because Gassner closely identifies his working style with the _____ cultural values.

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A. B. C. D. E.

Test Bank

low-context monochronic high-context xenocentric polychronic

Answer: B Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

82. A. B. C. D. E.

_____ is the study of how people use space to communicate. Proxemics Kinesics Haptics Chronemics Vocalics

Answer: A Learning Objective: 5.3 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

83. A. B. C. D. E.

Which of the following is true about proxemics? It studies the importance of time in the context of business. It emphasizes the importance of gestures in the communication process. It emphasizes verbal communication. It focuses on the use of space in communication. It focuses on the comparative analysis of the cultural traits of different groups.

Answer: D Learning Objective: 5.3 Difficulty: Easy AACSB: Written and oral communication

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Test Bank

Bloom’s Taxonomy: Knowledge

84.

A. B. C. D. E.

Ray 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 _____. haptics kinesics vocalics chronemics proxemics

Answer: E Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

85. A. B. C. D. E.

Which of the following describes cultural tightness-looseness? The ability to accept and adapt to new cultures The strength of social norms and tolerance for deviations The confusion and discomfort a person experiences when in an unfamiliar culture The tendency to consider one’s culture superior to others The tendency to rely on nonverbal and situational cues

Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

86. A. B. C.

Which of the following is one of the focuses of cultural tightness-looseness? The tolerance that exists for any deviations from norms The superiority of home country values over a foreign culture The first interaction with a new culture and the anxieties associated with it

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D. E.

Test Bank

The time when a new culture becomes the subject of one’s criticism The ability to interpret the real message from what is being said

Answer: A Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

87. A. B. C. D. E.

In a _____ culture, people guide their behavior according to expectations set by prevailing social norms. low-context loose monochronic polychronic tight

Answer: E Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

88. A. B. C. D. E.

Which of the following countries has a tight culture? Netherlands United States Malaysia Australia New Zealand

Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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89. A. B. C. D. E.

Test Bank

The goal set by tight cultures is to: fit in. stand out. remain complacent. attract attention. disregard the social norms.

Answer: A Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

90. A. B. C. D. E.

In a loose culture, _____. people adhere to the social norms people are expected to fit in people are discouraged to speak out deviations from norms are tolerated conformity to social norms is uniform and absolute

Answer: D Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

91. A. B. C. D. E.

Which of the following countries has a loose culture? South Korea Australia Japan Malaysia Singapore

Answer: B

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Test Bank

Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

92. A. B. C. D. E.

Which of the following is true about loose cultures? A high degree of conformity to social norms is present. Tolerance for deviation is absent. The goal is to fit into the societal expectations. Social norms are narrow and unambiguous. Non-criminal deviations from norms tend to be tolerated.

Answer: E Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

93. A. B. C. D. E.

A mix of cultural tightness and looseness in a cross-cultural team may result in _____. synchronized performance consistent productivity soft or unstated conflict mitigation of conflict uniform and high inclination to volunteer

Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

94. A.

In a cross-cultural team, a member from the loose culture may show an inclination for which of the following? Looking toward formal authority for direction

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B. C. D. E.

Test Bank

Criticizing others Being slow to volunteer Being slow to display emotion Always being on time

Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

95. A. B. C. D. E.

Which of the following is a cultural dimension identified by Geert Hofstede? Social orientation Cultural intelligence Social context Uncertainty avoidance Socialization

Answer: D Learning Objective: 5.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96. A. B. C. D. E.

The _____ assumes that a generalized cultural value applies equally well to all members of the culture. ecological fallacy naturalist theory etymological theory definist culture existential process

Answer: A Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments

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Test Bank

Bloom’s Taxonomy: Knowledge

97.

A. B. C. D. E.

Kiera, 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 Stephan. Stephan was once Kiera’s tenant and the only American she has ever met. Stephan is in the danger of falling prey to the _____. regression fallacy ethical dilemma Samaritan’s dilemma existential fallacy ecological fallacy

Answer: E Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

98. A. B. C. D. E.

_____ is the degree to which a society accepts unequal distribution of power. Masculinity–femininity Proxemics Power distance Individualism–collectivism Power tactics

Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99. A. B.

Which of the following is true about people in high-power-distance cultures? They do not accept differences in rank. They tend to be tolerant of power.

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C. D. E.

Test Bank

They display a narrow perception of the mind. They display egalitarian relationships. They have no respect for the elderly.

Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

100. 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 Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

101. _____ had the highest individualism score of any country in Hofstede’s data. A. The United States B. The United Kingdom C. Canada D. Australia E. China Answer: A Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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Test Bank

102. _____ 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 Learning Objective: 5.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

103. 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 Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

104. 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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Test Bank

Answer: D Learning Objective: 5.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

105. Vincent Melville, 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. Vincent Melville 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 Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. 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 Learning Objective: 5.3 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

107. _____ has the highest masculinity score in Hofstede’s research. A. Malaysia B. Japan C. India D. France E. Germany Answer: B Learning Objective: 5.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

108. 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 Learning Objective: 5.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

109. _____ 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

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Answer: C Learning Objective: 5.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

110. Which of the following pillars of management advocates that a person to be inquisitive and curious about cultural differences? A. Relationship management B. Perception management C. Finance management D. Self-management E. Crisis management Answer: B Learning Objective: 5.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

111. Which of the following is a characteristic of intercultural competencies? A. It refers to acting competent when working in another culture. B. It does not tolerate cultural diversity. C. It involves being judgmental about a cultural norm. D. It refers to the superiority of one culture to another. E. It does not require a person to be open-minded about a culture. Answer: A Learning Objective: 5.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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112. Foot-O, a local footwear company, has made a payment to the German footwear giant Buirick GmbH to use the foreign company’s excellent method of shoe making. Which of the following is this an example of? A. Franchising B. Insourcing C. Joint venture D. Foreign subsidiary E. Licensing agreement Answer: E Learning Objective: 5.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

113. Derrick decides to shut down his steel business in Kenya and shift the production to his home country, the United States. The rising labor problems and political disruptions in the host country had led him to make this decision. This method of shifting of business to a native location is called _____. A. joint venture B. foreign subsidiary C. outsourcing D. franchising E. reshoring Answer: E Learning Objective: 5.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

114. Matata, a Japanese firm that manufactures automobile parts, was running at a loss in its offshore outlet in Mexico due to the governmental and civil disruptions in the country. Thus, it withdrew its business outlets from Mexico. At this opportunity, another Japanese firm, Lui Corporation, entered into business in Mexico. With this decision, Lui Corporation has made itself liable to _____.

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A. B. C. D. E.

Test Bank

a licensing agreement a regional economic alliance political risk insourcing joint venture

Answer: C Learning Objective: 5.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

115. Mobike, a major motorcycle manufacturer sells its motorcycles in more than 20 countries across the globe. According to this information, Mobike is an example of a _____. A. foreign subsidiary B. joint venture C. transnational corporation D. franchise E. greenfield venture Answer: C Learning Objective: 5.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

116. One of the new employees at Colleen’s firm is from Asia. She looks lost most of the time and is not interacting well with others in the office. Which of the following terms best describes her situation? A. Ethnocentrism B. Self-concordance C. Proxemics D. Culture shock E. Ethical dilemma Answer: D

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Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

117. Todd was send to North Korea on a project by his company. He is accompanied by his wife, Sarah. While Todd makes an effort to understand and adapt to the culture and ways of the Koreans, Sarah feels out of place. What does Todd’s behavior reflect? A. Culture shock B. Cultural intelligence C. Ethnocentrism D. Monochronic cultural identity E. Low-context cultural ideals Answer: B Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

118. Juan went to Japan on a company assignment. He often got confused because his hosts did not articulate their expectations and goals clearly. He would ask a lot of questions and would find himself talking a lot. Later, he learnt that he had to consider their gestures to get the complete picture. Which of the following terms best describes the culture of Juan’s hosts? A. High-context culture B. Ethnocentrism C. Polychronic culture D. Monochronic culture E. Tight culture Answer: A Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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119. Dom visited one of the Middle East countries to discuss strategic alliance with a client. He noticed that his hosts wouldn’t mind doing a lot of other things simultaneously during the meeting. Dom was baffled by the amount of interruptions that took place while interacting with his client. Which of the following terms best describes the culture of Dom’s client? A. Ethnocentrism B. Polychronic culture C. Tight culture D. Low-context culture E. Transitional culture Answer: B Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

120. Veronica has been recruited as a human resource manager in a firm based in China. She soon realizes that the work culture at her new office is entirely different from that of her previous firm, which was based in the U.S. In her new office, she could not question an order passed by a higher authority. What kind of a culture is Veronica facing in her new office? A. Individualistic culture B. Loose culture C. Polychronic culture D. High-power-distance culture E. Low-context culture Answer: D Learning Objective: 5.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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121. Patrick, who was posted as a manager in a firm in India, was able to quickly adjust to the host country’s culture and work ethics. His self-confidence and flexible nature allowed him to accept and adapt to the cultural differences well. Which trait of Patrick is displayed in the given scenario? A. Ethnocentrism B. Intercultural competency C. Xenocentrism D. Uncertainty avoidance E. Egocentrism Answer: B Learning Objective: 5.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

122. 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 where 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 a foreign firm buys the rights to use another’s name and operating methods in its home country. Learning Objective: 5.1 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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123. 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 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. Learning Objective: 5.3 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

124. Distinguish between tight and loose cultures. Provide examples. Answer: In a tight culture, such as ones found in 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 noticed and discouraged 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. Learning Objective: 5.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

125. What do you mean by intercultural competencies? What are the different pillars of intercultural competencies? Answer: Intercultural competencies are skills and personal characteristics that help us be successful in cross-cultural situations. The three pillars of intercultural competency are perception management, relationship management, and self-management. In perception

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management, a person must be inquisitive and curious about cultural differences. Being flexible and nonjudgmental are important when interpreting and dealing with situations in which differences are present. In relationship management, a person must be genuinely interested in others, be sensitive to one’s own emotions and feelings, and be able to make personal adjustments while engaging in cross-cultural interactions. In self-management, a person must have a strong sense of personal identity and understand his or her own emotions and values. One must also stay self-confident even in situations that call for personal adaptations because of cultural differences. Learning Objective: 5.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Ch06: Entrepreneurship and New Ventures

True/False

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 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

A first-mover advantage comes from being first to exploit a niche or enter a market.

Answer: True Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Entrepreneurs are born, not made.

Answer: False Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Entrepreneurs’ belief that they are in control of their own destiny shows that they have an internal locus of control.

Answer: True Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

Entrepreneurs have a tolerance for ambiguity.

Answer: True Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

Money is the key to entrepreneurial success.

Answer: False Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 6.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Classic entrepreneurship is a form of ethical entrepreneurship that seeks novel ways to solve pressing social problems.

Answer: False Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Social enterprises have a social mission to help make lives better for underserved populations.

Answer: True Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10.

The vast majority of small businesses employ between 100 and 150 persons.

Answer: False Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

11.

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

Answer: True Learning Objective: 6.2

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Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12.

In a franchise, the franchise parent receives a share of income or a flat fee from the franchisee.

Answer: True Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

13.

A startup is a new venture that the entrepreneur is hoping will take shape and prove successful as things move forward.

Answer: True Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

14.

Lean startups are permanent, cost-intensive organizations.

Answer: False Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

15.

Growing too fast is one of the reasons small businesses fail.

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Answer: True Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16.

A family business feud is the issue of who will run the business when the current head leaves.

Answer: False Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17.

Business incubators are also called business accelerators.

Answer: True Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18.

Having a succession plan helps avoid a succession problem.

Answer: True Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

19.

Small businesses have a high success rate.

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Answer: False Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20.

Business incubators aid in the development of startups.

Answer: True Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21.

The life cycle of an entrepreneurial firm begins with the breakthrough stage.

Answer: False Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22.

The breakthrough stage involves establishing the firm and fighting for its existence.

Answer: False Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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23.

Test Bank

Self-management is an ability to use objective understanding of personal strengths and weaknesses to keep growing—individually and career-wise.

Answer: True Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24.

A succession plan describes the direction for a new business and the financing needed to operate it.

Answer: False Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

26.

A sole proprietorship is simple to start, run, and terminate.

Answer: True Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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27.

Test Bank

A sole proprietorship is the most common form of small business ownership in the United States.

Answer: True Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

28.

When establishing a corporation, a partnership agreement must be made.

Answer: False Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

29.

A limited liability corporation combines the advantages of sole proprietorship, partnership, and corporation.

Answer: True Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 6.3

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Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

31. A. B. C. D. E.

The term _____ describes strategic thinking and risk-taking behavior that results in the creation of new opportunities. business planning partnership entrepreneurship proxemics franchising

Answer: C Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. A. B. C. D. E.

A _____ entrepreneur is a risk-taking individual who takes action to pursue opportunities others fail to recognize, or even view as problems or threats. serial classic follow-through sustainer social

Answer: B Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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33. A. B. C. D. E.

Test Bank

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. sustainer classic serial first-mover necessity-based

Answer: C Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. A. B. C. D. E.

A first-mover advantage comes from: making improvements to existing product lines. being the first to exploit a niche or enter a market. being the first to take a free-ride on the opportunity created by a pioneer. the ability to poach trained personnel from an established business. taking risks while strategizing to improve an existing market.

Answer: B Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

35. A. B. C. D.

Which of the following is true about serial entrepreneurs? They are born, not made. They pursue innovations within the company that can change the organization in significant ways. They make large investments in new ventures in return for an equity stake in the business. They start and run businesses and nonprofits over and over again, moving from one interest and opportunity to the next.

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They are primarily responsible for selling of shares of stock to the public at large.

Answer: D Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

36.

A. B. C. D. E.

Nadia is unemployment and is unable to pay her bills. She realizes she loves baking and soon opens up her own bakeshop with the help of a friend. Which of the following is true about Nadia? She is a necessity-based entrepreneur. She is a social entrepreneur. She is a venture capitalist. She is an intrapreneur. She is a serial entrepreneur.

Answer: A Learning Objective: 6.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

37. A. B. C. D. E.

Which of the following is true of entrepreneurs? They believe that their destiny is beyond their control. They like to avoid risk. They have a high need for achievement. They are averse to autonomy. They have a low tolerance for ambiguity.

Answer: C Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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38. A. B. C. D. E.

Test Bank

Entrepreneurs: do not like situations with high degree of uncertainty. thrive on performance feedback. have an external locus of control. are unwilling to admit problems and errors. do not like autonomy.

Answer: B Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

39. A. B. C. D. E.

Which of the following scenarios demonstrates an entrepreneur who has a tolerance for ambiguity? Jean’s decision to modify a pre-existing problem-tackling strategy in his private firm Roger’s decision to hire an experienced manager to head his new branch in another state Karl’s decision to expand his private firm overseas despite the risk of facing cultural differences Sasha’s decision to quit her job to enter into a partnership with a well-recognized firm Giselle’s decision to join her family’s well-established business

Answer: C Learning Objective: 6.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

40. A. B. C. D. E.

_____ takes place because other employment options don’t exist. Classic entrepreneurship Serial entrepreneurship Intrapreneurship An initial public offering Necessity-based entrepreneurship

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Test Bank

Answer: E Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

41.

A. B. C. D. E.

Yvette 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 _____. classic entrepreneurship serial entrepreneurship intrapreneurship necessity-based entrepreneurship social entrepreneurship

Answer: D Learning Objective: 6.1 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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43. A. B. C. D. E.

Test Bank

Social entrepreneurs: take risks and create enterprises whose missions is to help make lives better for underserved populations. bring buyers and sellers together for online business transactions and take a percentage from the sales. are wealthy individuals willing to invest in a new venture in return for an equity stake. pursue innovations that can change the organization in significant ways. start new ventures because they have few or no other employment and career options.

Answer: A Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

44.

A. B. C. D. E.

Barbara, 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 _____. serial entrepreneurship classic entrepreneurship intrapreneurship necessity-based entrepreneurship social entrepreneurship

Answer: E Learning Objective: 6.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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45. A. B. C. D. E.

Test Bank

A(n) _____ necessarily has 500 or fewer employees, is independently owned and operated, and does not dominate its industry. small business social organization non-profit organization classic entrepreneurship Internet entrepreneurship

Answer: A Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

46. A. B. C. D. E.

A _____ is a business in which the owner of a business sells to another the right to operate the same business in another location. non-profit organization franchise joint venture family business wholly-owned subsidiary

Answer: B Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

47. A. B. C. D. E.

Which of the following is true about a franchise? It is one of the least common ways to get involved in a business. It runs under the franchisee’s name and guidance. The franchise parent receives a flat fee from the franchisee. It makes use of things like opensource software, while containing costs, staying small, and keeping operations as simple as possible. It refers to a business in which material or goods are given to another person, but ownership is retained until the goods are sold.

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Answer: C Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

48. A. B. C. D. E.

A business model is a: plan that describes the organizational structure of the company. plan for making a profit by generating revenues that are greater than costs. plan to determine the strengths and viability of a company’s organizational structure. model that depicts the detail of an organization’s workflow. model that lists the details of all the employees of an organization.

Answer: B Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

49. A. B. C. D. E.

A(n) _____ is a new and temporary venture that is trying to discover a profitable business model for future success. family business intrapreneurship startup business incubator acquisition

Answer: C Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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50. A. B. C. D. E.

Test Bank

Lean startups: aim to create a sophisticated product with a big budget. focus on increasing their acquisitions. establish a complex and detailed work structure. aim to keep operations as simple as possible. focus on making lives better for underserved populations.

Answer: D Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

51. A. B. C. D. E.

New small business startups often fail because of: lack of business expertise. strict financial controls. high ethical standards. slow growth. strategic leadership.

Answer: A Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

52.

A. B. C. D. E.

Nailah 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 Nailah own? Limited liability corporation Social enterprise Family business Corporation Necessity-based enterprise

Answer: C

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Learning Objective: 6.2 Difficulty: Easy AACSB: Application of knowledge Bloom’s Taxonomy: Application

53. A. B. C. D. E.

In family businesses, _____ refers to the problem that arises when members of the family have major disagreements over how the business should be run. budget deficit debt financing an ethical dilemma a reverse culture shock a family business feud

Answer: E Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

54. A. B. C. D. E.

A(n) _____ refers to the issue of who will run the business when the current head leaves. family business integration family business feud family disagreement succession problem role confusion

Answer: D Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55.

Toby and William are both general managers at Alton & Sons, their father’s business. After a heart attack, their father decides to retire. He is faced with the challenge of choosing

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A. B. C. D. E.

Test Bank

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? Family business integration Succession problem Family disagreement Role confusion Family business feud

Answer: B Learning Objective: 6.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

56. A. B. C. D. E.

A(n) _____ plan describes how the leadership transition and related financial matters will be handled when the time for changeover arrives. partnership startup succession liability equity

Answer: C Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

57. A. B. C. D. E.

Insufficient financing implies: not taking the time to consolidate a position, fine-tune the organization, and systematically meet the challenges of growth. not having enough money available to maintain operations while still building the business and gaining access to customers and markets. not having expertise in the essentials of business operations, including finance. not keeping track of the numbers, and failure to keep business finances to best advantage. not making the best use of existing monies.

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Answer: B Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

58. A. B. C. D. E.

Stating that the failure of a small business was due to “lack of experience” implies: not having expertise in the essentials of business operations, including finance, purchasing, selling, and production. not taking the time to craft a vision and mission, nor to formulate and properly implement a strategy. not keeping track of the numbers, and failure to control business finances and use existing monies to best advantage. not taking the time to consolidate a position, fine-tune the organization, and systematically meet the challenges of growth. not having sufficient know-how to run a business in the chosen market or geographical area.

Answer: E Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59.

A. B. C. D. E.

Daphne 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 Daphne’s business? Lack of experience Insufficient financing Lack of commitment Ethical failure Growing too fast

Answer: A

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Learning Objective: 6.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

60. A. B. C. D. E.

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

Answer: C Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

61. A. B. C. D. E.

Which of the following best describes lack of commitment? Not having enough funding to maintain operations while still building the business and gaining access to customers and markets Not having sufficient know-how to run a business in the chosen market or geographical area Not having expertise in the essentials of business operations, including finance, purchasing, selling, and production Falling prey to the temptations of fraud, deception, and embezzlement Not devoting enough time to the requirements of running a competitive business

Answer: E Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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62. A. B. C. D. E.

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Which of the following best describes lack of strategy and strategic leadership? Not taking the time to craft a vision and mission, nor to formulate and properly implement a plan Not having enough funding to maintain operations while still building the business and gaining access to customers and markets Not having sufficient know-how to run a business in the chosen market or geographical area Falling prey to the temptations of fraud, deception, and embezzlement Not having expertise in the essentials of business operations, including finance, purchasing, selling, and production

Answer: A Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

63.

A. B. C. D. E.

Aisha 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 Aisha’s failure? Lack of commitment Poor financial control Ethical failure Late entry into the business Lack of motivation

Answer: B Learning Objective: 6.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

64.

Habib, 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

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A. B. C. D. E.

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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 Habib’s business? Lack of motivation Lack of strategy Lack of commitment Ethical failure Late entry into the business

Answer: D Learning Objective: 6.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

65. A. B. C. D. E.

_____ offer space, shared services, and advice to help get small businesses started. Business councilors Business incubators Succession plans Social advisors Internet entrepreneurships

Answer: B Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

66. A. B. C. D. E.

The goal of business incubators is to: ensure that established businesses retain their competitive advantage. aid third generation family businesses resolve family business feuds. formulate a succession plan for established family businesses. increase the survival rates for new startups. establish social enterprises.

Answer: D

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Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

67. A. B. C. D. E.

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

Answer: C Learning Objective: 6.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

68. A. B. C. D. E.

According to the life cycle of entrepreneurial firms, the birth stage signifies the stage in which the: entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. entrepreneur experiences the advantages of market success and financial stability. entrepreneur faces the continuing management challenge of remaining competitive in a changing environment. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. 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 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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69. A. B. C. D. E.

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According to the life cycle of entrepreneurial firms, the breakthrough stage signifies the stage in which the: entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. entrepreneur experiences the advantages of market success and financial stability. entrepreneur faces the continuing management challenge of remaining competitive in a changing environment. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. 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 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

70. A. B. C. D.

According to the life cycle of entrepreneurial firms, the maturity stage signifies the stage in which the: entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. entrepreneur experiences the advantages of market success and financial stability while facing the continuing management challenge of remaining competitive in a changing environment. entrepreneur formulates a plan for making a profit by generating revenues that are greater than the costs of doing business.

Answer: D Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

71. A. B. C. D. E.

_____ leadership brings the venture into being and sees it through the early stages of an enterprise. Transactional Entrepreneurial Bureaucratic Transformational Democratic

Answer: B Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

72. A. B. C. D. E.

_____ leadership manages and leads the venture into maturity as an ever-evolving and stillgrowing enterprise. Strategic Entrepreneurial Bureaucratic Transformational Democratic

Answer: A Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73. A. B.

A(n) _____ plan describes the direction for a new business and the financing needed to operate it. succession business

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C. D. E.

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structural operational feasibility

Answer: B Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

74. A. B. C. D. E.

In a business plan, the overview of the business purpose and the business model for making money is contained in the _____. market strategy market description company description industry analysis executive summary

Answer: E Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

75. A. B. C. D. E.

In a standard business plan, an organization’s mission, ownership details, and, legal forms are listed under _____. market strategy executive summary company description industry analysis staffing description

Answer: C Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

76. A. B. C. D. E.

In a business plan outline, the marketing strategy contains the: description of the size of market, competitor strengths and weaknesses, and five-year sales goals. overview of the business purpose and the business model for making money. description of the management and staffing skills needed and available, compensation, and human resource systems. details of the product characteristics, distribution, promotion, pricing, and market research. description of cash flow projections for one to five years, breakeven points, and phased investment capital.

Answer: D Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77. A. B. C. D. E.

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

Answer: C Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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78. A. B. C. D. E.

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In a business plan outline, _____ detail the amount of funds needed to run the business, amount available, and amount requested from new sources. capital needs milestones performance needs liability needs capability needs

Answer: A Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

79. A. B. C. D. E.

In a business plan outline, the _____ provides details of cash flow estimate for one to five years, break-even points, and phased investment capital. staffing description financial projection capital need milestones operations description

Answer: B Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. A. B. C. D. E.

Which of the following forms of ownership holds the business owner personally liable for business debts and claims? Sole proprietorship Corporation Limited liability partnership General partnership Limited liability corporation

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Answer: A Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81.

A. B. C. D. E.

Arianne 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. Arianne’s store is an example of a _____. sole proprietorship corporation limited liability partnership general partnership limited liability corporation

Answer: A Learning Objective: 6.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

82. A. B. C. D. E.

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. corporation limited liability corporation partnership social enterprise business incubator

Answer: C Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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83. A. B. C. D. E.

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Erik and Elsa own a pet grooming business. Erik manages the financial responsibilities while Elsa manages the customers. This is an example of a _____. sole proprietorship general partnership corporation limited liability partnership limited liability corporation

Answer: B Learning Objective: 6.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

84.

A. B. C. D. E.

“Sheng’s Designs” is an architectural firm owned by four investors but Sheng is the only one who handles the day-to-day business management of the firm. They share their profits, but their losses are restricted to the amount invested by each. This is an example of a _____. limited partnership general partnership corporation limited liability corporation sole proprietorship

Answer: A Learning Objective: 6.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

85. A. B.

A _____, common among professionals such as accountants and attorneys, limits the liability of one partner for the negligence of another. general partnership sole proprietorship

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C. D. E.

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limited partnership limited liability corporation limited liability partnership

Answer: E Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86. A. B. C. D. E.

Which of the following is true about a corporation? It combines the advantages of the other forms—sole proprietorship, partnership, and limited liability corporation. Only a for-profit business can be registered as a corporation. It exists separately from its owners. For tax purposes, it functions as a partnership. For liability purposes, it functions as a partnership.

Answer: C Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

87. A. B. C. D. E.

Which of the following characteristics of a corporation gives it a life of its own that can extend beyond that of its owners? It grants the organization certain legal rights. It is a legal entity that is chartered by the state. The cost for incorporating a corporation is very high. The corporation becomes responsible for its own liabilities. Incorporated businesses require complex documentation.

Answer: D Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Comprehension

88. A. B. C. D. E.

Which of the following is true of a limited liability corporation? It is commonly identified by the “Inc.” designation in a name. It consists of a general partner and one or more “limited” partners who do not participate in day-to-day business management. The business owner is personally liable for business debts and claims. For tax purposes, it functions as a sole proprietorship in the case of a single owner. It involves the owners going into debt by borrowing money from another person, bank, or financial institution.

Answer: D Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89. A. B. C. D. E.

For liability purposes, a limited liability corporation functions like a _____ and protects the assets of owners against claims made against the company. sole proprietor corporation general partnership limited partnership limited liability partnership

Answer: B Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90. A.

_____ involves going into debt by borrowing money from another person, bank, or financial institution. Debt financing

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B. C. D. E.

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Risk management Securitization Debt consolidation Equity financing

Answer: A Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91. A. B. C. D. E.

_____ involves giving ownership shares in the business to outside investors in return for their cash investments. Debt consolidation Equity financing Debt financing Securitization Risk management

Answer: B Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

92. A. B. C. D. E.

_____ facilitates making large investments in new ventures in return for an equity stake in the business. State-directed financing Entrepreneurial capitalism Venture capitalism Debt financing Oligarchic capitalism

Answer: C Learning Objective: 6.3 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

93. A. B. C. D. E.

When shares of stock are first sold to the public and begin trading on a stock exchange, it is referred to as _____. venture capitalism equity financing angel investing an initial public offering an Internet entrepreneurship

Answer: D Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. A. B. C. D. E.

_____ are wealthy individuals willing to invest in a new venture in return for an equity stake. Limited liability partners Sole proprietors General partners Debt financers Angel investors

Answer: E Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

95.

Arthur, a young college graduate, started a store for traditional musical instruments. He liked working independently and without being directed by others. He believed that his

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A. B. C. D. E.

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destiny is under his own control. Which of the following personality traits of an entrepreneur is exhibited by Arthur? Internal locus of control High energy level High need for achievement Tolerance for ambiguity Flexibility

Answer: A Learning Objective: 6.1 Difficulty: Moderate AACSB: Application of Knowledge Bloom’s Taxonomy: Application

96.

A. B. C. D. E.

Wendy, a single parent of two boys, has started a small bakery in her house. She cannot work away from home because her children are very young. Which of the following kinds of entrepreneurship is this an example of? Serial entrepreneurship Necessity-based entrepreneurship Intrapreneurship Internet entrepreneurship Social entrepreneurship

Answer: B Learning Objective: 6.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

97.

A. B.

Colin and Becky started a garbage disposal and recycling program called “No More Trash” in their city, which has seen enormous growth in the last few years. The public waste management system has proved to be a failure as the authorities are overwhelmed by the influx of people from all parts of the country. Which of the following kinds of entrepreneurship is “No More Trash” an example of? Serial entrepreneurship Necessity-based entrepreneurship

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C. D. E.

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Intrapreneurship Internet entrepreneurship Social entrepreneurship

Answer: E Learning Objective: 6.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

98. A. B. C. D. E.

Before starting on his new venture, Mike writes down the specifics of his ideas, the amount of money needed, and future business operations. Mike is involved in preparing a _____. succession plan business portfolio business plan competitive analysis mission statement

Answer: C Learning Objective: 6.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

99. A. B. C. D. E.

Ali, a small business owner, is concerned about passing the business to his heirs after his retirement or death. He should prepare a formal _____ plan. retirement contingency business succession liquidation franchising

Answer: C Learning Objective: 6.2 Difficulty: Moderate AACSB: Application of knowledge

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Bloom’s Taxonomy: Application

100. Julia is an entrepreneur. At the current stage in which her company is stated, her main concerns are if she will have enough customers and money. Julia’s company is in the: A. birth stage. B. breakthrough stage. C. maturity stage. D. stagnant stage. E. failure stage. Answer: A Learning Objective: 6.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

101. Karl takes a loan from a reputed bank to set up a recording studio. Which of the following best represents Karl’s source of finance? A. Initial public offering B. Revolving credit C. Debt financing D. Angel investment E. Venture capital financing Answer: C Learning Objective: 6.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Igor needed financing for his budding business, but was rejected by many financing companies. Finally, one of his uncle’s friends, a wealthy man, got interested in the business and gave Igor a substantial amount for a share in the venture. Which of the following best represents Igor’s source of finance?

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A. B. C. D. E.

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Initial public offering Revolving credit Debt financing Angel investor Loan shark

Answer: D Learning Objective: 6.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. Joe has started his one-man audio consulting business under the name Sound Wiz. The legal structure for the company can best be described as a _____. A. sole proprietorship B. partnership C. trade alliance D. corporation E. benefit corporation Answer: A Learning Objective: 6.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. Emma, Heidi, and Hilda have opened a new cafe. Each of them have contributed $1,500 toward start-up costs and have agreed on dividing costs and profits equally. The legal structure for the company can best be described as a: A. proprietorship. B. partnership. C. trade alliance. D. corporation. E. benefit corporation. Answer: B

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Learning Objective: 6.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

105. 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. Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

106. Give the outline of a sample business plan.

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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. Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

107. 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

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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. Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

108. 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. Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

109. Describe equity financing. Answer: Equity financing is an alternative to debt financing. It involves giving ownership shares in the business to outside investors 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. Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Chapter 07: Information and Decision Making

True/False

The raw facts and observations made useful and meaningful for decision making is called information.

Answer: True Learning Objective: 7.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Analytical competency is the ability to understand new technologies and to use them to their best advantage.

Answer: False Learning Objective: 7.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Public information is the information gathered from stakeholders and the external environment.

Answer: False Learning Objective: 7.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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A performance threat occurs when the actual performance is less than desired or is moving in an unfavorable direction.

Answer: True Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

A performance opportunity offers a chance for a better future if the right steps are taken.

Answer: True Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Problem avoiders deal reasonably well with performance threats but miss many performance opportunities.

Answer: False Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Problem solvers actively process information and constantly look for problems to solve.

Answer: False Learning Objective: 7.2 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Intuitive thinking tends to work best in situations where facts are limited and few decision precedents exist.

Answer: True Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Sensation thinkers are comfortable with abstraction and unstructured situations.

Answer: False Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10. Intuitive feelers prefer broad and global issues, and they value flexibility and human relations. Answer: True Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11. Structured problems can be dealt with through programmed decisions as they are routine and occur over and over again.

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Answer: True Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

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15. A classical decision model describes decision making within the constraints of limited information and alternatives. Answer: False Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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

18. The decision-making process is not complete until results are evaluated. Answer: True Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

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 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20. Heuristics are strategies that help in dealing with complex and ambiguous situations. Answer: True Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21. The availability bias bases a decision on similarity to other situations. Answer: False Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking 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

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Learning Objective: 7.4 Difficulty: Easy AACSB: Application of knowledge 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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25. A confirmation error occurs when focusing only on information that is consistent with a decision already made. Answer: True Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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26. The confirmation error is also known as the sunk-cost fallacy. Answer: False Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

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

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30. Creativity potential blossoms best when it has management support and the right organizational culture. Answer: True Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

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 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytical thinking 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

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Test Bank

information

Answer: B Learning Objective: 7.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

37. An IT program manager realizes that there are certain defects in a product delivered. However, he assumes that the users will not use the application that is defective but does not make efforts to rectify it. This manager is most likely a problem _____. A. seeker B. creator

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C. D. E.

Test Bank

defender avoider claimer

Answer: D Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 or 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking 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

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Answer: E Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 or 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.2 Difficulty: Moderate

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AACSB: Application of knowledge Bloom’s Taxonomy: Application

42. Problem solvers differ from problem seekers as problem solvers: 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, making decisions or dealing with problems. E. ignore information that would otherwise signal the presence of a performance opportunity threat. Answer: B Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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. It makes managers deal with many aspects of a problem at once and consider hunches based on past experience. D. It makes a person approach 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Test Bank

44. Dr. Morales initially conducts basic medical tests for her patients. Once she examines the reports of these tests, she suggests more specific tests to the patients. She 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 Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 E. instinctive Answer: B Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

46. A. B. C. D.

A manager using _____ thinking is flexible and spontaneous in problem fixing. systemic lateral systematic design

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Test Bank

intuitive

Answer: E Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

47. Maria, a manager at a mining firm, is good at handling crisis situations. She is spontaneous in problem solving, has a flexible approach, and provides quick alternative courses of action. This type of problem-solving approach by Maria shows that she is a(n) _____ thinker. A. systematic B. analytical C. intuitive D. systemic E. lateral Answer: C Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

48. A. B. C. D. E.

_____ thinking is an ability to address many problems at once. Lateral Intuitive Systematic Critical Multidimensional

Answer: E Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

49. Yousuf, 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 he makes decisions that benefit the organization in the short and the long run. Yousuf’s effectiveness reveals that he most likely uses _____ thinking. A. critical B. multidimensional C. lateral D. intuitive E. heuristic Answer: B Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

51. Martha has succeeded as a manager due to her ability to remain focused on longterm 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 Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53. Salma emphasizes 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. Salma can be regarded as a(n) _____. A. sensation feeler B. idealistic thinker

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C. D. E.

Test Bank

sensation thinker intuitive feeler intuitive thinker

Answer: C Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. Deepak tends to emphasize the impersonal and takes a logical approach to problem solving, but he usually avoids details. He is prone to intellectual and theoretical positions and is comfortable with unstructured situations. These traits show that Deepak is a(n) _____. A. sensation feeler B. idealistic thinker C. sensation thinker D. intuitive feeler E. intuitive thinker Answer: E Learning Objective: 7.2

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Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

57. Dmitri 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. Dmitri is most likely a(n) _____. A. sensation feeler B. idealistic thinker C. sensation thinker D. intuitive feeler E. intuitive thinker Answer: D Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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58. _____ are open communicators, tend to be realistic, and emphasize both analysis and human relations. A. Intuitive feelers B. Intuitive thinkers C. Sensation feelers D. Intuitive seekers E. Sensation thinkers Answer: C Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59. Bao 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 Bao is a(n) _____. A. sensation thinker B. intuitive feeler C. intuitive thinker D. sensation feeler E. idealistic thinker Answer: D Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

60. A. B. C. D. E.

Sensation thinkers differ from intuitive thinkers as intuitive thinkers: are insightful and prefer broad and global issues. are comfortable with abstraction and unstructured situations. like hard facts, clear goals, certainty, and situations of high control. tend to emphasize the impersonal rather than the personal and take a realistic approach to problem solving. are open communicators and sensitive to feelings and values.

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Test Bank

Answer: B Learning Objective: 7.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

62. Judith has been asked to prepare a report comparing the profits the company earned in the current financial year in its domestic market and compare it with the previous year’s report 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 Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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63. A. B. C. D. E.

Test Bank

Which of the following is true of unstructured problems? They are clear with respect to information needs. They can be resolved using readily available solutions from past experiences. They can be resolved with a high degree of certainty. They are ambiguous and contain information deficiencies. They are routine and occur over and over again.

Answer: D Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

64. Sumaira 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 Sumaira in the above situation is a(n) _____ problem. A. integrated B. anticipated C. computational D. certain E. unstructured Answer: E Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

65. A. B. C. D.

A _____ decision applies a solution from past experience to a routine problem. unique nonprogrammed tactical nonrecurring

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programmed

Answer: E Learning Objective: 7.2 Difficulty: Easy AACSB: Application of knowledge Bloom’s Taxonomy: Knowledge

66. Melissa, a manager in the customer service division of a company, usually makes 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 Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

68. Julio is devising a marketing plan for introducing his company’s products into a new market. Julio comes up with customized marketing strategies that cater to the unique needs of the new market. All his decisions involve risk and uncertainty as he is unaware of the conditions in the new market. The type of decision being made by Julio in the above situation is called a _____ decision. A. repetitive B. programmed C. standard D. nonprogrammed E. satisficing Answer: D Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71. To assist in their promotions and appraisals, Ho Sook analyzed and graded the performance of her team members in the previous year. She is sure of her decisions and its possible outcomes as she had all the factual information. This type of environment that is ideal for decision making is known as a(n) _____. A. uncertain environment B. risk environment C. certain environment D. threat environment E. unanticipated environment Answer: C Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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

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Test Bank

definite

Answer: C Learning Objective: 7.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73. Chikashi, a manager at a hotel, decided to launch a new type of cuisine in his restaurant because the restaurant was incurring losses due to negative feedback on its existing cuisine. He had to make a decision immediately to improve the situation and was aware of the possible consequences of his actions. Chikashi had to make the decision in a(n) _____ environment. A. uncertain B. risk C. certain D. secure E. anticipated Answer: B Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.2 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

75. Nikolai and his team have been asked to make a decision on implementing a new technology that might help to decrease the production time at their firm. They do not have any factual information about the performance of the new technology, and it is difficult to predict the outcome of their decision. They are forced to rely heavily on their intuition to make the decision. This represents a(n) _____ environment. A. anticipated B. secure C. certain D. precise E. uncertain Answer: E Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

76. A. B. C. D. E.

Which of the following is the first step in a decision-making process? Generating alternative solutions Evaluating results Evaluating alternative solutions Identifying and defining a problem Choosing a preferred course of action

Answer: D Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

77. Nicole is trying to solve a problem that has resulted in defective products. She has understood that the problem is due to a technical failure and has realized 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 Learning Objective: 7.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

78. A. B. C. D. E.

A decision-making process ends with the: choice of a preferred course of action. evaluation of implemented solutions. implementation of the decision. evaluation of alternative solutions. generation of alternative solutions.

Answer: B Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking 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

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Test Bank

Answer: D Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. A classical decision model differs from a behavior 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 Learning Objective: 7.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

81. A. B. C. D. E.

Which of the following describes decision making with complete information? Classical decision model Satisficing decision Bounded rationality Behavioral decision model Cognitive limitation

Answer: A Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

82. A(n) _____ decision chooses the alternative that gives the absolute best solution to a problem. A. satisficing B. intuitive C. optimizing D. experimental E. heuristic Answer: C Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

83. Priya, 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 Learning Objective: 7.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

84. Which of the following describes making decisions within the constraints of limited information and alternatives? A. Decision optimization

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B. C. D. E.

Test Bank

Management analytics Bounded rationality Classical decision model Business intelligence

Answer: C Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking 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. Behavioral decision model E. Unstructured environment Answer: D Learning Objective: 7.3 Difficulty: Easy AACSB: Analytical thinking 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 D. satisficing E. absolute best Answer: D Learning Objective: 7.3 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

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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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90. A. B. C. D. E.

The _____ bases a decision on recent information or events. framing error availability bias representativeness bias confirmation error anchoring bias

Answer: B Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91. Based on his recollection of a recent product failure, Abdul, the manager of a company, decides not to invest in a new product, 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

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Test Bank

Answer: C Learning Objective: 7.4 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 7.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

95. Rajiv was asked to prepare a report on the estimated costs of introducing a new product into the market. He estimated the costs by slightly increasing 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 Learning Objective: 7.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

97. Catalina, the manager of a law firm, makes a decision about the pay raise of her interns based only on their current salaries. This type of decision making can lead to _____. A. lack-of-participation error B. availability bias C. representativeness bias D. framing error E. confirmation error Answer: D Learning Objective: 7.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

98. A(n) _____ 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

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Test Bank

Answer: A Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99. Julie is a manager who completely trusts one of her employee’s decisions due to his previous good performances. She always looks for positives in his decisions rather than analyzing the employee’s decisions in a rational manner. She 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 Learning Objective: 7.4 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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. He is not ready to admit his mistakes and applies more resources to pursue a course of action that is not working. This type of decision-making trap is known as _____. A. confirmation error B. escalating commitment C. framing error D. strategic opportunism E. lack-of-participation error Answer: B Learning Objective: 7.4 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

103. The ideation step in design thinking involves:

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A. B. C. D. E. F.

Test Bank

accepting problems as they are delivered. defining problems by research and observation. visualizing and brainstorming potential solutions in collaboration with others. looking for Answers to assigned problems through standard procedures. testing and modifying the potential solution over and over to achieve the best outcome.

Answer: C Learning Objective: 7.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

104. Roberto is good with electronic devices. He learns their functions fast and can operate new gadgets well. Which of the following can best describe Roberto’s ability? A. Technological competency B. Business competency C. Information competency D. Entrepreneurial competency E. Analytical competency Answer: A Learning Objective: 7.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Ayesha, an assistant manager of a retail chain, is always inspecting areas for possible issues that could hinder smooth functioning of the business. She always anticipates a problem or an opportunity and takes appropriate actions in advance. Ayesha can be referred to as a _____. A. problem solver B. problem maker C. problem avoider

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D. E.

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problem creator problem seeker

Answer: E Learning Objective: 7.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. Henry takes time to examine problems and breaks them down into segments to see where the actual problems lie and how they can be solved. He divides the problems into smaller components and then addresses them in a logical and integrated fashion. Henry’s approach to problem solving is an example of _____. A. problem seeking B. systematic thinking C. multidimensional thinking D. intuitive thinking E. strategic opportunism Answer: B Learning Objective: 7.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Priya, a manager at an IT firm, has to make a decision on the amount of money to be allocated for purchasing five new laptops for her team members. She is aware of the current price of the laptops and has the information about the amount of money spent on purchasing new laptops the previous year. This type of environment that is ideal for decision-making is known as a(n) _____. A. structured environment B. risk environment C. certain environment D. threat environment E. unanticipated environment

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Answer: C Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. Aara does not seem to be as productive as she usually is. Afreen, her manager, is concerned about her performance. Afreen wants to talk to Aara and solve the problem. Which of the following is the first step Afreen should take in the decisionmaking process? A. Generate and evaluate alternative solutions to improve her performance B. Choose a preferred course of action for performance improvement C. Identify and define the problem that is causing the productivity issues D. Talk to Aara’s family E. Evaluate solutions before consulting Aara Answer: C Learning Objective: 7.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. “We cannot rely on Stephen. He also worked for the same company Anna did. And we all know how little we could rely on her.” This statement is an example of a(n) _____. A. availability bias B. conjunction fallacy C. representativeness bias D. anchoring bias E. framing error Answer: C Learning Objective: 7.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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110. Alejandro is assigned the task of marketing a new experimental drug to consumers in a developing country. He is not aware of the potential side-effects of the drug. Moreover, Alejandro does not know if there is a demand for this drug in that developing country. He is unable to even assign probabilities to the likely outcomes of his marketing strategies to sell this drug. The decision-making environment of Alejandro can be referred to as a(n) _____. A. uncertain environment B. risk environment C. certain environment D. threat environment E. unanticipated environment Answer: A Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

111. Jiao is the assistant manager in a bank. She notices that few of her team members have become very complacent and they no longer follow quality control procedures. However, Jiao ignores this information and does not take any action to rectify this threat to performance. Usually, she passively gathers information and is unwilling to deal with problems. In this scenario, Jiao can be regarded as a _____. A. problem defender B. problem avoider C. problem claimer D. problem seeker E. problem solver Answer: B Learning Objective: 7.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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112. Vikram is a very successful car salesman who generates a lot of revenue for his firm. His manager is impressed with his performance and hires his younger brother as a car salesman in the firm, assuming that he will be as successful as Vikram in selling cars. However, Vikram’s brother fails to live up to the expectations. The type of decision-making error made by Vikram’s manager in this scenario is known as _____. A. availability bias B. confirmation error C. adjustment bias D. lack-of-participation error E. representativeness bias Answer: E Learning Objective: 7.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

113. Melissa has been assigned to implement performance improvement procedures in her organization. She is in the final stage of the decision-making process. In order to make sure that the performance improvement procedures she implemented have been effective, she should _____. A. analyze the performance improvement procedures B. identify and define the factors affecting performance C. generate and evaluate alternative course of action D. choose a preferred course of action E. evaluate the results Answer: E Learning Objective: 7.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Essay

114. 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, public relations messages, and financial reports that serve a variety of purposes, ranging from image-building to product promotion to financial documentation to damage control. 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. Learning Objective: 7.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

115. What are the five criteria that help in testing if available data is useful and meaningful for decision making? Answer: Data are raw facts and observations. In contrast, information is data made useful and meaningful for decision making. We all have lots of access to data, but we don’t always gather and use this data to create useful information that meets the test of these five criteria: 1. Timely—The information is available when needed; it meets deadlines for decision making and action.

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2. High quality—The information is accurate, and it is reliable; it can be used with confidence. 3. Complete—The information is complete and sufficient for the task at hand; it is as current and up to date as possible. 4. Relevant—The information is appropriate for the task at hand; it is free from extraneous or irrelevant material. 5. Understandable—The information is clear and easily understood by the user; it is free from unnecessary detail. Learning Objective: 7.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

116. 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 that 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. Learning Objective: 7.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

117. What is the role of ethical reasoning in the decision-making process? How can ethical reasoning be checked in decision making? Answer: Each step in the decision-making process can and should be linked with ethical reasoning. The choices made often have moral dimensions that might easily be overlooked.

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We sometimes have to take special care to stay tuned into virtues—things like fairness, kindness, compassion, and generosity—and guard against vices—things like greed, anger, ignorance, and lust. One way to check ethical reasoning in decision making is to ask and Answer pointed questions that bring critical thinking into the process. Gerald Cavanagh and his associates, for example, suggest that a decision should test positive on these four ethics criteria. 1. Utility—Does the decision satisfy all constituents or stakeholders? 2. Rights—Does the decision respect the rights and duties of everyone? 3. Justice—Is the decision consistent with the canons of justice? 4. Caring—Is the decision consistent with my responsibilities to care? Learning Objective: 7.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

118. 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. Learning Objective: 7.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Chapter 08: Planning Processes and Techniques

True/False

The management process involves planning, organizing, leading, and controlling the use of resources to achieve performance objectives.

Answer: True Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Controlling is the process of setting objectives and determining how to accomplish them.

Answer: False Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Leading refers to guiding the efforts of human resources to ensure high levels of task accomplishment.

Answer: True Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Stretch goals are performance targets that we have to work extra hard to reach.

Answer: True Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Plans alone don’t deliver results; implemented plans do.

Answer: True Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

An organization with flexibility operates with an orientation toward the past rather than the future.

Answer: False Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Planning helps us avoid simply being carried along by the flow of events, and focuses our attention on priorities.

Answer: True Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

For effective time management, one must become calendar-bound by letting others control one’s schedule.

Answer: False Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11. Strategic plans are focused only on a specific department of an organization.

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Answer: False Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking 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. Answer: True Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

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15. Policies set expectations for many aspects of employee behavior. Answer: True Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16. Procedures set broad guidelines for decisions. Answer: False Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

17. Budgets are standing plans that are used over and over again. Answer: False Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking 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. Answer: True Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

19. Operating budgets allocate resources like labor, equipment, and space. Answer: False Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20. A flexible budget allocates resources as if each budget were brand new. Answer: False Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21. Qualitative forecasting uses expert opinions to predict the future. Answer: True Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

22. Contingency planning identifies alternative courses of action to take when things go wrong. Answer: True Learning Objective: 8.3 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

23. Scenario planning is a short-term version of contingency planning. Answer: False Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25. Internal benchmarking encourages members and work units to learn from competitors and non-competitors alike. Answer: False Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking 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.

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Answer: True Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

27. Great goals include a challenging stretch factor while still being realistic and possible to achieve. Answer: True Learning Objective: 8.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 8.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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30. Even though participatory planning takes more time, it can improve results by improving implementation. Answer: True Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

Multiple Choice

31. A. B. C. D. E.

_____ is the process of setting objectives and determining how to accomplish them. Directing Controlling Leading Organizing Planning

Answer: E Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. Abasi, the supervisor at KNYA Inc., is in the process of setting certain specific goals for his team, and is deciding how his team can reach those goals. In this scenario, Abasi is involved in the process of _____. A. planning B. leading C. organizing D. controlling E. directing

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Answer: A Learning Objective: 8.1 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. _____ is a management function that guides the efforts of human resources to ensure high levels of task accomplishment. A. Leading B. Directing C. Resourcing D. Organizing E. Processing Answer: A Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

36. A. B. C. D. E.

Which of the following is the first step in the planning process? Analyzing alternatives and making a plan Defining the objectives Implementing the plan and evaluating results Determining where one stands vis-à-vis objectives Developing premises regarding future conditions

Answer: B Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

37. Yoonsuh, the chief technology officer at Namkoong 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 also has an idea of how far off the desired mark the company 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.

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D. E.

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implementing the plan and evaluating the results. determining where her company stands vis-à-vis objectives.

Answer: B Learning Objective: 8.1 Difficulty: Moderate AACSB: Application of knowledge 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 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

39. After evaluating the current sales of PCs in relation to the desired sales, Rehan, the marketing manager at Alfalah Inc., 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. Rehan 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

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Learning Objective: 8.1 Difficulty: Hard AACSB: Application of knowledge 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 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

41. Roshan, the marketing manager at Kalx Inc., 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 of the organization? 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 Difficulty: Moderate Learning Objective: 8.1 AACSB: Application of knowledge Bloom’s Taxonomy: Application

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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 Difficulty: Moderate Learning Objective: 8.1 AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43. In the planning process, _____ are 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 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

44. A. B. C. D. E.

Performance targets that we have to work extra hard to reach are called _____. stretch goals tactical goals objectives plans missions

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Answer: A Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

46. Neehara, who is being given the responsibility to meet certain sales targets for next year, is preparing a list of measures she will take to reach these targets. Her list includes such specific action items as preparing a log, checking the quality of inputs and outputs, pricing, and details about his advertising strategy. In this scenario, which of the following is Neehara creating? A. Goal B. Policy C. Plan D. Concept E. Objective Answer: C Learning Objective: 8.1 Difficulty: Easy AACSB: Application of knowledge

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Bloom’s Taxonomy: Application

47. A. B. C. D. E.

Which of the following is true of planning? It is done by managers at scheduled times. It is a one-time process. It doesn’t need to be evaluated or monitored for viability. It can include the active participation of all employees. It can deliver results even without implementation.

Answer: D Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

48. A. B. C. D. E.

Which of the following is an external source of organizational pressure? Quest for operating efficiencies Alternative work arrangements Government regulations Concerns for work–life balance New organizational structures

Answer: C Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

49. A. B. C. D. E.

Which of the following is an internal source of organizational pressure? Government regulations Changing social norms and ethical expectations Changing technologies Greater workplace diversity Uncertainties of a global economy

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Answer: D Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking 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. Complacency trap D. Ecological fallacy E. Ethnocentrism Answer: C Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

51. A(n) _____ oriented manager makes sure the most important things get first attention. A. priority B. result C. advantage D. change E. innovation Answer: A Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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52. 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 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53. A(n) _____ oriented manager anticipates problems and opportunities so they can be dealt with most effectively. A. result B. employee C. priority D. change E. advantage Answer: D Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

54. A. B. C. D. E.

The link between planning and controlling begins with _____. anticipating problems and opportunities setting objectives and standards analyzing the alternatives evaluating and monitoring the results understanding the internal and external organizational threats

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Answer: B Learning Objective: 8.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. A. B. C. D. E.

Which of the following is true about planning? Good planning improves rigidity. An organization with flexibility starts losing focus. Planning allows organizations to get into the complacency trap. Planning improves coordination. When planning is not done well, it facilitates control.

Answer: D Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

56. 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 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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57. 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 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

58. A. B. C. D. E.

Which of the following is true about long-range and short-range plans? There is a lot more permanency to long-term plans today than there was in the past. Long-term plans are not subject to frequent revisions today. Long-term plans typically look at least ten years or more into the future. The time frames of planning are shifting at present. Lower management is mainly responsible for creating short-term plans.

Answer: D Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

59. 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. consumers

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Answer: D Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

60. A. B. C. D. E.

_____ are longer-term plans that set broad directions for the organization. Procedural plans Functional plans Strategic plans Tactical plans Operational plans

Answer: C Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

61. 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 group 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 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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62. 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 E. budget Answer: A Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

63. A. B. C. D. E.

_____ are developed and used to implement strategic plans. Tactical plans Visions Operational plans Missions Procedures

Answer: A Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

64. The management of Khilona, a toy manufacturing company, decides that they will promote their products at the various shopping malls of the city. In order to do so, they prepare teams of employees to visit the shopping malls and promote its goods. The decision of the management to allocate the company’s human resources for promoting the toys can be regarded as a _____ plan. A. tactical B. strategic C. top-down

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D. E.

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production visionary

Answer: A Learning Objective: 8.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

65. _____ 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 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

66. In order to help implement its corporate strategy, the managers of an organization 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 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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67. A. B. C. D. E.

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Which of the following functional plans deal with work methods and technologies? Human resource plans Marketing plans Facilities plans Financial plans Production plans

Answer: E Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

68. Functional plans dealing with money and capital investments are called _____ plans. A. marketing B. logistics C. financial D. human resource E. facilities Answer: C Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

69. Nakatomi Inc. wants to open a new automobile manufacturing unit in Kasnia. Kaoruko’s team is assigned the task of planning the layout of the new factory in Kasnia. In this scenario, Kaoruko is dealing with the _____ plan. A. facilities B. financial C. operational

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D. E.

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marketing inventory

Answer: A Learning Objective: 8.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

70. As Hazel Inc.’s original suppliers have suddenly shut down, it is now making plans to find 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 Learning Objective: 8.2 Difficulty: Easy AACSB: Application of knowledge Bloom’s Taxonomy: Application

71. _____ 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 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

72. A. B. C. D. E.

_____ plans deal with selling and distributing goods or services. Production Financial Facilities Logistics Marketing

Answer: E Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73. A. B. C. D. E.

Which of the following functional plans deal with building a talented workforce? Human resource plans Logistics plans Marketing plans Production plans Facilities plans

Answer: A Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

74. 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

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tactical

Answer: D Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

75. A. B. C. D. E.

Which of the following is a standing plan? A policy A budget A vision A mission A forecast

Answer: A Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

76. A policy of zero-tolerance toward sexual harassment at workplace is an example of _____ plans used by organizations. A. facilities B. financial C. single-use D. standing E. logistics Answer: D Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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77. A. B. C. D. E.

Test Bank

Which of the following is a single-use plan? A procedure A policy A budget A mission A vision

Answer: C Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

78. 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 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

79. 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 long-term directions. E. A policy guides fair employment, but a procedure guides ethical principles.

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Answer: B Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

80. A. B. C. D. E.

Procedures are stated in employee handbooks and often called _____. bureaucratic procedures contingency procedures standard operating procedures experimental procedures catalogued procedures

Answer: C Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81. _____ 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 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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82. A. B. C. D. E.

Test Bank

Financial budgets: project cash flows and expenditures. plot anticipated sales or revenues against expenses. allocate resources like labor, equipment, and space. allocate a stated amount of resources for a specific purpose. allow resources to vary in proportion with various levels of activity.

Answer: A Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

83. A. B. C. D. E.

_____ budgets allocate resources like labor, equipment, and space. Financial Operating Nonmonetary Zero-based Flexible

Answer: C Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

84. 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 Learning Objective: 8.2

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Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. A. B. C. D. E.

A fixed budget: allocates a stated amount of resources for a specific purpose. allocates resources as if each budget were brand new. allows resources to vary in proportion with various levels of activity. allocates resources like labor, equipment, and space. always has equal expenditures and revenue.

Answer: A Learning Objective: 8.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86. Morrison Manufacturing (MM) creates a budget for projects or activities in each new budget period as if it were brand new. It does not renew any of the past funding. MM is using a(n) _____ budgeting approach. A. nonmonetary B. operating C. zero-based D. fixed E. flexible Answer: C Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

87. _____ is the process of predicting what will happen in the future. A. Benchmarking

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B. C. D. E.

Test Bank

Scenario planning Contingency planning Staff planning Forecasting

Answer: E Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

88. The current issue of a popular business periodical 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 Learning Objective: 8.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

89. A. B. C. D. E.

Qualitative forecasting uses _____ to predict future events. budgets expert opinions mathematical models statistical analyses surveys

Answer: B Learning Objective: 8.3 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90. Maria, a marketing manager at Kurt Consulting, predicts a 15% drop in the sales of their premium packages. She used correlation and regression analyses of previous years’ sales records to arrive at the conclusion. Maria is using _____. A. contingency planning B. qualitative forecasting C. quantitative forecasting D. internal benchmarking E. external benchmarking Answer: C Learning Objective: 8.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

91. A. B. C. D. E.

_____ identifies alternative courses of action to take when things go wrong. Internal benchmarking Contingency planning External benchmarking Goal setting Staff planning

Answer: B Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

92. Which of the following is a long-term version of contingency planning? A. Benchmarking B. Scenario planning

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C. D. E.

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Forecasting Staff planning Operationalizing

Answer: B Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

93. _____ 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 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. _____ 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 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

95. A. B. C. D. E.

The purpose of benchmarking is to _____. identify alternative future scenarios and make plans to deal with each scenario identify alternative courses of action to take when things go wrong plan how to incorporate the good, profitable ideas of other organizations into one’s own operations use expert opinions to predict the future use mathematical models and statistical analyses of historical data and surveys to predict future events

Answer: C Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96. Riveras, a chain of discount stores, utilized the best retailing strategies of another successful retail chain to create a market for itself. By learning from the retail chain, Riveras has used _____. A. qualitative forecasting B. quantitative forecasting C. scenario planning D. external benchmarking E. internal benchmarking Answer: D Learning Objective: 8.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

97. Which of the following is true about the use of staff planners? A. It can lead to a communication gap between planners and implementers.

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B. C. D. E.

Test Bank

It can lead to an increase in commitment to implement the plans. The use of staff planners can lead to a short-term rather than a long-term focus. Very few organizations use staff planners as they don’t bring any expertise to the planning process. The use of staff planners always reduces the focus of the planning team.

Answer: A Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

98. _____ 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 E. Operating activities Answer: D Learning Objective: 8.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99. A. B. C. D. E.

Which of the following is a characteristic of a “great goal”? It has no precise timetable. It is general and not too specific. It is almost impossible to accomplish. It can be measured easily. It is not challenging.

Answer: D Learning Objective: 8.4 Difficulty: Moderate

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100. Which of the following is true of “great goals”? A. They are impossible to achieve. B. They are challenging. C. They are difficult to measure. D. They are very generic in nature. E. They are not bound by timetables. Answer: B Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

101. 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 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

102. Silver Finance requires that its 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. Silver Finance is utilizing _____. A. contingency planning

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B. C. D. E.

Test Bank

scenario planning management by objectives participatory planning benchmarking

Answer: D Learning Objective: 8.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. 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 Learning Objective: 8.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

104. The planning team at Abdullah and Sons has thoroughly examined all possible situations that may be encountered in the current year. They have also addressed various factors that may provide assistance or act as barriers to objectives. Which of the following steps in the planning process has been completed by the planning team at Abdullah and Sons by taking these actions? A. Defining objectives B. Determining where one stands vis-à-vis objectives C. Developing premises regarding future conditions D. Measuring performance E. Implementing the plan and evaluating results Answer: C

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Learning Objective: 8.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Aziza is an assistant manager at a popular retail outlet. She likes to keep her employees motivated and she insists that the sales team meet their daily sales target and strive to go beyond their targets for extra bonuses. Aziza can be regarded as a(n) _____ manager. A. change oriented B. results oriented C. priority oriented D. relational oriented E. complacency oriented Answer: B Learning Objective: 8.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. Sahoko, the manager of a construction company, is in charge of allocating equipment and construction workers to different construction projects. She allocates the majority of equipment and workers to high priority projects. In this scenario, Sahoko creates a _____ budget. A. financial B. operating C. nonmonetary D. zero-based E. personal Answer: C Learning Objective: 8.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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107. LazyMart, an online retailer, hopes to be one of the most popular, highly efficient, and biggest e-tailers in the country. It wishes to excel in all its endeavors to serve customers. This is an example of a: A. policy. B. functional plan. C. code of conduct. D. vision. E. tactical plan. Answer: D Learning Objective: 8.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. Laura is the owner of a boutique. She comes up with a new plan to improve the sale and distribution of the merchandise of her boutique. Which functional plan did Laura employ in this scenario? A. Human resource plan B. Logistics plan C. Marketing plan D. Production plan E. Facilities plan Answer: C Learning Objective: 8.2 Difficulty: Easy AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Morrison Associates, a law firm, encourages its lawyers to learn from each other about how they can handle their cases better. It encourages the lawyers to share their best practices and collectively work toward meeting the objectives of the firm. This is an example of _____.

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A. B. C. D. E.

Test Bank

internal benchmarking forecasting functional planning tactical planning external benchmarking

Answer: A Learning Objective: 8.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

110. Javier and his team of engineers have gone through the blueprint of a new commercial complex and have underlined major issues that could crop up when work starts at the site. They have also thought of possible fixes to the issues. This is an example of _____. A. benchmarking B. operational planning C. functional planning D. tactical planning E. contingency planning Answer: E Learning Objective: 8.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

111. A magazine publishes forecasts of industry conditions, interest rates, unemployment trends, and national economies every quarter. It uses expert opinion to predict the future. This method of forecasting the future falls under the category of _____ forecasting. A. specific B. attainable C. timely D. measurable

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qualitative

Answer: E Learning Objective: 8.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

112. The team leader of an IT firm has called for a meeting of all software engineers to view and discuss the course of action for a new software creation project. This is an example of _____. A. participatory planning B. performance appraisal C. contingency planning D. benchmarking E. zero-based budgeting Answer: A Learning Objective: 8.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

113. Sujata works for RLB financial services, a mortgage company. The company has opened a new branch in a developing country and Sujata has been assigned the task of identifying all kinds of risks the company might face in that country. She identifies several possible events such as political unrest, ethnic riots, and natural calamities that would endanger the business continuity of the organization. She makes plans to deal with each of these events. Sujata is involved in the process of _____. A. scenario planning B. performance appraisal C. contingency planning D. benchmarking E. zero-based budgeting

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Answer: A Learning Objective: 8.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

114. 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. Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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115. Describe the benefits of planning for individuals and organizations. Answer: The benefits of planning for individuals and organizations include the following: • 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.” Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

116. Compare and contrast 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

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Test Bank

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. Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

117. Identify and briefly describe each of the five major planning tools and techniques that managers use. Answer: The five major planning tools and techniques that managers use are described below: • Forecasting is the process of predicting what will happen in the future. • 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. Learning Objective: 8.3 Difficulty: Hard AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

118. What are the five characteristics that great goals tend to have?

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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. Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Ch09: Control Processes and Systems

True/False

Controlling is the process of setting directions and allocating resources in an organization.

Answer: False Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Feedforward control focuses on what happens during the work process.

Answer: False Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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The goal of concurrent controls is to solve problems as they occur.

Answer: True Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

Preliminary control is also known as steering control.

Answer: False Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Steering controls are largely reactive.

Answer: False Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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An internal control strategy requires a high degree of trust.

Answer: True Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Normative control flows through an organization’s hierarchy of authority.

Answer: False Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10. The bureaucratic control system influences behavior through norms and expectations set by the organizational culture. Answer: False Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11. The clan control influences employees and members to display common behavior patterns. Answer: True Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

13. Output standards measure work efforts that go into performing a task. Answer: False Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

14. Earnings per share, sales growth, and market share are the input standards used by businesses. Answer: False Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

15. Quality of production and error rates are output standards used by businesses. Answer: True Learning Objective: 9.2

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Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16. The second step in the control process is to set the performance objectives and standards. Answer: False Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17. Historical comparisons benchmark performance against that being achieved by other people, work units, or organizations. Answer: False Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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19. CPM/PERT graphically displays the scheduling of tasks required to complete a project. Answer: False Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

21. Just-in-time scheduling automatically orders a fixed number of items every time an inventory level falls to a predetermined point. Answer: False Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

22. A balance sheet shows profits or losses of a business at a point in time. Answer: False Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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23. Leverage measures the ability of a firm to meet short-term obligations. Answer: False Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24. Inventory turnover is calculated as Sales/Total Assets. Answer: False Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

26. _____ is a function of the controlling process. A. Creating structures

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B. C. D. E.

Test Bank

Setting directions Measuring performances Allocating resources Inspiring efforts

Answer: C Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

27. A. B. C. D. E.

Which of the following best describes controlling? The process of deciding where an individual should go and how to best go about it The process of inspiring people to best utilize the resources The process of bringing people and material resources together in working combinations The process of setting directions and allocating resources The process of measuring performance and taking action to ensure desired results

Answer: E Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.1 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

29. A. B. C. D. E.

Which of the following is true of controlling? It is all about setting goals and making plans. It is primarily involved in creating structures. It sees to it that the right things happen, in the right way, and at the right time. It sets the directions and allocates resources. It brings people and material resources together in working combinations.

Answer: C Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

30. A. B. C. D. E.

_____ control is also known as preliminary control. Concurrent Steering Feedback Feedforward Throughput

Answer: D Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

31. A. B. C. D.

Which of the following is true of feedforward control? It focuses on what happens during the work process. It is preventive in nature. It is largely reactive. It solves problems as they occur.

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Test Bank

It focuses on the quality of end results rather than on inputs.

Answer: B Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

32. A. B. C. D. E.

Feedforward control differs from feedback control, in that feedforward control: corrects mistakes already made. focuses on the quality of end results rather than inputs. solves problems as they occur. focuses on what happens during the work process. takes place before a work activity begins.

Answer: E Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

33. A. B. C. D. E.

_____ control is also known as steering control. Feedback Post-action Concurrent Feedforward Preliminary

Answer: C Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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34. A. B. C. D. E.

Test Bank

Steering control takes place _____. during the work process reactively in an organization before work begins after the work is completed to correct mistakes already made

Answer: A Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

35. A. B. C. D. E.

The function of steering control is to _____. focus on the quality of end results rather than throughputs focus on activities before they begin ensure a proactive and forward-thinking approach to problem solving solve problems as they occur correct mistakes already made

Answer: D Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking 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 E. Post-action control Answer: B Learning Objective: 9.1

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Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

37. A. B. C. D. E.

_____ controls are largely reactive. Input Concurrent Steering Post-action Feedforward

Answer: D Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

38. A. B. C. D. E.

Feedback control takes place to: correct mistakes already made. solve problems as they occur. focus on activities before they begin. ensure the implementation of a proactive approach to problem solving. ensure direct supervision during the work process.

Answer: A Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

39. When a hair stylist at a salon asks a customer if she liked their services after a haircut, the hair stylist is engaging in _____ control. A. feedforward B. steering

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C. D. E.

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feedback concurrent throughput

Answer: C Learning Objective: 9.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

40. Through _____ control, managers can manage in ways that allow and expect people to control their own behavior. A. normative B. internal C. regulatory D. clan E. bureaucratic Answer: B Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking 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. internal control Answer: E Learning Objective: 9.1 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking 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 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking 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-to-day 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. E. It refers to the existence of participative organizational cultures in which everyone treats each other with respect and consideration. Answer: C Learning Objective: 9.1

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Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

45. A. B. C. D. E.

Which of the following is true of a bureaucratic control system? It influences employees and members to display common behavior patterns. It harnesses the power of group cohesiveness and collective identity. It expects people to work on their own as they are given the freedom to do so. It allows and encourages people to exercise self-discipline in performing their jobs. It provides laws and regulations that govern the behavior of an organization’s top executives.

Answer: E Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

46. Bureaucratic control differs from clan control in that bureaucratic control:

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A. B. C. D. E.

Test Bank

influences behavior through norms and expectations set by the organizational culture. emphasizes hierarchy and authority. harnesses the power of group cohesiveness and collective identity. gives people freedom to work on their own. encourages participation, empowerment, and involvement.

Answer: B Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

47. A. B. C. D. E.

_____ is also known as normative control. Self-control Bureaucratic control Regulatory control Clan control Administrative control

Answer: D Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking 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.

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Answer: A Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

49. A. B. C. D. E.

Clan control influences: behavior of organizations and the members through market competition. managers to give workers freedom to work on their own. hierarchy of authority. budgets for personnel, equipment, and travel expenses. employees and members to display common behavior patterns.

Answer: E Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

51. Which of the following is true of market control?

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A. B. C. D. E.

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It is the way business firms use budgets for personnel, equipment, travel expenses, and the like to keep behavior targeted within set limits. It is the way business firms emphasize hierarchy and authority. It is the way business firms influence employees and members to display common behavior patterns. It is the way business firms adjust products, pricing, promotions, and other practices in response to customer feedback and what competitors are doing. It is the way business firms harness the power of group cohesiveness and collective identity.

Answer: D Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

52. A. B. C. D. E.

The first step to the control process is to _____. measure actual performance compare results with objectives establish performance objectives and standards take corrective actions compare results with standards

Answer: C Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking 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.

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D. E.

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It involves relative comparisons that benchmark performance against that being achieved by other people, work units, or organizations. It focuses attention on substantial differences between actual and desired performance.

Answer: A Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

54. Output standards differ from input standards in that output standards measure _____. A. work efforts B. actual outcomes C. efficiency in the use of resources D. conformance with rules E. work attendance Answer: B Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. A. B. C. D. E.

Input standards differ from output standards in that input standards measure _____. actual outcomes earnings per share work results work efforts error rates

Answer: D Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

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 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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58. A. B. C. D. E.

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Which of the following is the control equation? Need for Action = Desired Performance – Actual Performance Breakeven Point = Fixed Costs – (Price – Variable Costs) Acid Test = Current Assets – Inventories/Current Liabilities Debt Ratio = Total Debts/Total Assets Net Income = Sales – Expenses

Answer: A Learning Objective: 9.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.2 Difficulty: Hard AACSB: Application of knowledge 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

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Answer: B Learning Objective: 9.2 Difficulty: Hard AACSB: Application of knowledge 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. 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 Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 9.3

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Test Bank

Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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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 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

67. A. B. C. D. E.

Which of the following is the formula for calculating breakeven point? Fixed Costs/(Price – Variable Costs) Fixed Costs – Variable Cost/Price (Fixed Costs/Variable Costs) – Price (Fixed Costs/Price) – Variable Costs Fixed Cost – (Price + Variable Costs)

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Answer: A Learning Objective: 9.3 Difficulty: Hard AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

68. Traxer 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 C. 4000 units D. 6500 units E. 3500 units Answer: B Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

69. Rex’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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

71. A. B. C. D. E.

According to financial controls, liquidity measures _____. the ability to meet short-term obligations the use of debt asset and inventory efficiency the ability to earn revenues greater than costs the ability to operate at minimum cost

Answer: A Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

72. A. B. C. D.

In the context of financial controls, which of the following best describes leverage? It is the ability to operate at minimum cost. It is the ability to earn revenues greater than costs. It is the ability to earn more in returns than the cost of debt. It is the ability to meet short-term obligations.

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It is the ability to generate cash to pay bills.

Answer: C Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

73. A. B. C. D. E.

In the context of financial controls, asset management refers to the ability to _____. use resources efficiently and operate at minimum cost earn more in returns than the cost of debt earn revenues greater than costs meet short-term obligations generate cash to pay bills

Answer: A Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

74. A. B. C. D. E.

Liquidity differs from leverage in that liquidity is the: ability to operate at minimum cost. ability to use resources efficiently. ability to generate cash to pay bills. ability to earn more in returns than the cost of debt. ability to earn revenues greater than costs.

Answer: C Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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75. A. B. C. D. E.

Test Bank

Leverage differs from profitability in that leverage measures: the ability to operate at minimum cost. the ability to meet short-term obligations. the ability to earn revenues greater than costs. the use of debt. asset and inventory efficiency.

Answer: D Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

76. A. B. C. D. E.

Acid Test = _____ Net Income/Total Assets Net Income/Owner’s Equity Sales – Expenses Total Debts/Total Assets Current Assets – Inventories/Current Liabilities

Answer: E Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77. A. B. C. D. E.

Which of the following ratios is also known as acid test? Current Ratio Debt Ratio Asset Turnover Ratio Inventory Turnover Ratio Quick Ratio

Answer: E Learning Objective: 9.3 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking 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 Inventories = $100,000. Current Liabilities = $100,000 A. 2:1 B. 1:2 C. 3:1 D. 4:1 E. 2:2 Answer: A Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

79. A. B. C. D. E.

_____ = Current Assets/Current Liabilities Acid Test Current Ratio Debt Ratio Assets Turnover ratio Net Current Margin

Answer: B Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. Calculate the current ratio from the following information:

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Test Bank

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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

81. A. B. C. D. E.

Which of the following is the formula to measure debt ratio? Average Inventory/Total Debts Sales/Average Inventory Net Income/Owner’s Equity Total Debts/Total Assets Current Assets/Current Liabilities

Answer: D Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking 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

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A. B. C. D. E.

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3:4 1:4 2:3 2:2 1:3

Answer: B Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

83. Karzon Ltd., a car manufacturing company, calculated its debt ratio to be 2:5. Calculate the total debt for Karzon 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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge 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

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C. D. E.

Test Bank

Sales/Total Assets Net Income/Total Assets Total Debts/Total Assets

Answer: C Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. Calculate assets turnover for a car manufacturing company from the following information: Sales = $600,000 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 E. 6 times Answer: B Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

86. A. B. C. D. E.

Inventory turnover = _____ Current Assets – Inventories/Current Liabilities Net Income/Total Assets Total Debts/Total Inventories Net Income/Owner’s Equity Sales/Average Inventory

Answer: E

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Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

87. A. B. C. D. E.

Calculate average inventory if sales is $400,000 and the inventory turnover is 1.6. $280,000 $250,000 $150,000 $180,000 $140,000

Answer: B Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

88. A. B. C. D. E.

With reference to profitability, Net margin = _____. Net Income/Owner’s Equity Net Income/Sales Net Income/Total Assets Net Income/Inventories Net Income/Debts

Answer: B Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89. Calculate net margin from the following information. Sales $250,000 Net Income $100,000

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A. B. C. D. E.

Test Bank

50% 60% 40% 30% 80%

Answer: C Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

90. A. B. C. D. E.

Calculate the net income if the net margin is 75% and sales is $160,000. $120,000 $240,000 $360,000 $570,000 $600,000

Answer: A Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

91. A. B. C. D. E.

Calculate sales if the net income is $200,000 and the net margin is 50%. $480,000 $400,000 $300,000 $570,000 $600,000

Answer: B Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge

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Bloom’s Taxonomy: Application

92. A. B. C. D. E.

Return on assets = _____ Current Assets/Current Liabilities Sales/Total Assets Total Debts/Total Assets Net Income/Total Assets Current Assets – Inventories/Current Liabilities

Answer: D Learning Objective: 9.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Knowledge

93. Calculate return on assets from the following information: Net income $1,800,000 Current Assets $350,000 Land and building $250,000 A. 1:1 B. 3:2 C. 4:1 D. 2:2 E. 3:1 Answer: E Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

94. Calculate net income from the following information: ROA = 35% Sales = $250,000

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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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

95. A. B. C. D. E.

_____ = Net Income/Owner’s Equity Return on Equity Return on Assets Net Margin Inventory Turnover Acid Test

Answer: A Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking 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 Sales $1,500,000 A. $2,000,000 B. $800,000 C. $375,000 D. $1,250,000

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Test Bank

$820,000

Answer: A Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge 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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge 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 Learning Objective: 9.3 Difficulty: Hard

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Test Bank

AACSB: Application of knowledge 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. E. It reduces costs and improves workflow by scheduling materials to arrive at a workstation or facility just in time for use. Answer: C Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking 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 review E. customer satisfaction Answer: B Learning Objective: 9.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

101. Drelex, 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 the company? A. Feedback control B. Output control C. Throughput control D. Concurrent control E. Feedforward control Answer: E Learning Objective: 9.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Bake-It, 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 Bake-It? A. Feedback control B. Steering control C. Feedforward control D. Concurrent control E. Preliminary control Answer: A Learning Objective: 9.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. Dillon, 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

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A. B. C. D. E.

Test Bank

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. economic order quantity just-in-time scheduling management by exception breakeven analysis critical path method

Answer: C Learning Objective: 9.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. Antonio 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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Shaun, a production manager at Taxener Inc., receives a complaint from the company’s employees that raw materials were being used in an unorganized manner leading to production delays. Which of the following techniques will help Shaun to organize the flow of raw materials for production? A. Breakeven point analysis B. Just-in-time scheduling

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C. D. E.

Test Bank

Business process reengineering Pareto principle External control

Answer: B Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. Bill, a finance manager at Iridium Inc., desires to understand why the company’s profitability fell in the past 6 months. He must use _____ to understand this issue. A. CPM statement B. balanced scorecard C. PERT chart D. breakeven analysis account E. income statement Answer: E Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Rachel, the CEO of Telexon Inc., finds that her company’s current ratio is 1:3. In this context, which of the following statements is true? A. The company is performing financially well. B. The company’s revenues are equal to their costs. C. The company’s leverage is relatively low. D. The company has lesser liquid assets than liabilities. E. The company has high owner’s equity. Answer: D Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge

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Test Bank

Bloom’s Taxonomy: Application

108. 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 Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Freddie, the CEO of MagTel Inc., found that employees are wasting time on unproductive tasks. To solve this issue, he measured one of his employees’ performances and provided regular feedback. This helped the employee to improve his productivity. In doing so, Freddie found that “what gets measured happens.” Therefore, in the context of project management and control, he must use _____ as a managerial review tool to improve financial performance and customer satisfaction of his company. A. debt equity ratio B. balanced scorecards C. breakeven analysis D. just-in-time technique E. critical path analysis Answer: B Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

110. Dilma, a finance manager at FinTel Inc., needs to understand the current financial position of the company in terms of meeting its short-term financial obligations. Dilma must calculate the _____ to accomplish this task. A. debt ratio B. asset turnover C. return on assets D. inventory turnover E. acid test ratio Answer: E Learning Objective: 9.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

111. 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 self-management, 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.

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Test Bank

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. Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

112. 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. Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

113. What is project management? Explain the two techniques of project management.

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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. Use of CPM/PERT techniques helps project managers track activities to make sure they happen in the right sequence and on time. Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Test Bank

Ch10: Strategy and Strategic Management

True/False

Competitive advantage is the ability to do something so well that one outperforms competitors.

Answer: True Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

The purpose of corporate strategy is to guide activities within one specific area of operations.

Answer: False Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

In single-product enterprises, business strategies are distinct from corporate strategies.

Answer: False Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 10.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

The strategic management process begins with analysis of mission, values, and objectives.

Answer: True Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

In the process of strategic management, strategic implementation is typically followed by strategic analysis.

Answer: False Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Stakeholders are individuals and groups unaffected by the organization and its strategic accomplishments.

Answer: False Learning Objective: 10.2 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Core values are broad beliefs about what is or is not appropriate behavior.

Answer: True Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

The presence of strong core values helps build a clear organizational identity.

Answer: True Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10. Emergence of new competitors and resource scarcities are environmental threats. Answer: True Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11. In a hypercompetition situation, a firm faces only a few competitors. Answer: False Learning Objective: 10.2 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12. An unattractive industry is one in which there are high barriers to entry. Answer: False Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

13. In an attractive industry, there are many competitors. Answer: False Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

14. The less attractive the industry structure, the harder it will be to make good strategic choices. Answer: True Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

15. In the context of the BCG matrix, the preferred strategy for Stars is retrenchment. Answer: False Learning Objective: 10.3

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16. The BCG Matrix recommends making further resource investments in Dogs. Answer: False Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17. A growth strategy involves expansion of an organization’s current operations. Answer: True Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

19. Bankruptcy under U.S. law protects a firm from creditors while management reorganizes to restore solvency.

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Answer: True Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20. Restructuring by divestiture is mostly followed by organizations that are focused and not complex. Answer: False Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

21. Restructuring by turnaround often occurs along with a change in top management. Answer: True Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22. A globalization strategy adopts standardized products and advertising for use worldwide. Answer: True Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

23. The transnational strategy focuses on working with rivals on projects of mutual benefit. Answer: False Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24. In a supplier alliance, firms join together to sell and distribute products or services. Answer: False Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

26. It is advisable to combine a cost leadership strategy with a differentiation strategy to get better results. Answer: False Learning Objective: 10.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

27. Failures of substance in strategic management show up in poor analysis and bad strategy selection. Answer: True Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 10.5 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

29. Inside directors are chosen from the ranks of middle managers. Answer: False Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

30. A strategic leader needs to reduce the sense of urgency so as to achieve the best results. Answer: False Learning Objective: 10.5

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

31. It is a strategic leader’s job to teach the strategy and make it a “cause.” Answer: True Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

32. A. B. C. D. E.

Which of the following best defines the term “sustainable competitive advantage”? It is the ability to outperform rivals in ways that are difficult or costly to imitate. It is the ability to formulate technology to gain market exposure. It is the ability to focus organizational energies on a unifying and compelling goal. It is the ability to formulate strategies efficiently to accomplish long-term goals. It is the ability to identify the setbacks in the organizational procedure and work towards correcting them.

Answer: A Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking 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.

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C. D. E.

Test Bank

It is the document expressing the organization’s reason for existence in society. It is the predominant value system of the organization as a whole. It is a special strength that gives an organization a competitive advantage.

Answer: A Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. A. B. C. D. E.

A _____ strategy typically sets long-term direction for the total enterprise. branding business corporate functional marketing

Answer: C Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

38. A. B. C.

A _____ strategy guides activities within one specific area of operations. branding divisional corporate

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D. E.

Test Bank

functional business

Answer: D Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking 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 makes decisions regarding facilities locations, and new technologies and

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Test Bank

the latter customizes products and advertising to best fit local needs. Answer: A Learning Objective: 10.1 Difficulty: Moderate AACSB: Analytical thinking 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 makes decisions regarding facilities locations, and new technologies and the latter customizes products and advertising to best fit local needs. Answer: B Learning Objective: 10.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 10.1

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43. A. B. C. D. E.

Strategic analysis typically refers to the process of: crafting strategies to guide the allocation of resources. revising objectives and selecting new strategies. formulating and implementing strategies. directing the total enterprise. analyzing the organization’s competitive position.

Answer: E Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

44. A. B. C. D. E.

_____ is the process of crafting strategies to guide the allocation of resources. Strategic analysis Strategy formulation Strategy implementation Strategic crafting Strategic outsourcing

Answer: B Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

45.

Miranda Corp. changes its business strategy from a focused differentiation strategy to a focused cost leadership one, as this new strategy works better for the organization. Which of the following steps in the process of strategic management ideally includes this action?

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A. B. C. D. E.

Test Bank

Strategy analysis Strategy formulation Strategy assessment Strategy identification Strategy outsourcing

Answer: B Learning Objective: 10.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

46. A. B. C. D. E.

Which of the following is the first step in the process of strategic management? Strategic analysis Strategy formulation Strategy implementation Strategic marketing Strategic outsourcing

Answer: A Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

47. A. B. C. D. E.

Which of the following is the last step in the process of strategic management? Strategic analysis Strategy formulation Strategy implementation Strategic marketing Strategic outsourcing

Answer: C Learning Objective: 10.1 Difficulty: Easy AACSB: Analytical thinking

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Schermerhorn-Management, 13th edition

Test Bank

Bloom’s Taxonomy: Knowledge

48. A. B. C. D. E.

A(n) _____ expresses an organization’s reason for existence in society. statement of purpose mission statement cash flow statement net worth statement operating objective

Answer: B Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

49. A. B. C. D. E.

_____ are broad beliefs about what is or is not appropriate behavior. Corporate subcultures Marketing values Core values Diversified values Functional values

Answer: C Learning Objective: 10.2 Difficulty: Easy AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

50. A. B. C. D. E.

_____ is the predominant value system for the enterprise as a whole. Organizational culture Corporate subculture Managerial value system Functional culture Leadership value system

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Test Bank

Answer: A Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

51. A. B. C. D. E.

Which of the following is true about operating objectives? They set forth an organization’s purpose. They direct activities toward key performance areas. They represent what the underlying business model is trying to accomplish. They set guidelines regarding the organization’s purpose and core values. They set standards for accomplishing the mission statement.

Answer: B Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

53. What is an advantage of a SWOT analysis? A. It deliberates on the optimum use of organizational resources. B. It gives an organization a competitive advantage. C. It is an external analysis of environmental opportunities and threats. D. It analysis the external factors that give way to organizational weaknesses. E. It defines specific objectives that an organization must accomplish. Answer: C Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

54. 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 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. Powerston 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

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Test Bank

Answer: B Learning Objective: 10.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

56. A. B. C. D. E.

Which of the following is a defining characteristic of a SWOT analysis? It examines the diversity at the work place and increases cohesiveness. It is based on the statistical principle of multivariate. It identifies things that inhibit optimum performance achievement. It determines the level of sales needed in order to breakeven. It is based on a year-to-year comparison of a firm’s ratios.

Answer: C Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

57. A. B. C. D. E.

Which of the following is true about oligopoly? There are several direct competitors. It ensures that there is no competition for resources. There are only a few competitors. It is seen most often in the fast foods industry. There are many substitute products.

Answer: C Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

58. According to Porter, which of the following is one of the five forces that affect industry competition?

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A. B. C. D. E.

Test Bank

Bargaining power of intermediaries Market share Market growth rate Substitute products Workplace diversity

Answer: D Learning Objective: 10.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59. A. B. C. D. E.

If there are many competitors and the barriers to entry are low, the: industry is attractive. industry is unattractive. customers have low bargaining power. industry is mature. industry is not mature.

Answer: B Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

60. A. B. C. D. E.

Which of the following increases the attractiveness of a market? Low barriers to entry Many competitors Many substitute products High power of suppliers Few substitute products

Answer: E Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytical thinking

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Schermerhorn-Management, 13th edition

Test Bank

Bloom’s Taxonomy: Comprehension

61. A. B. C. D. E.

_____ decreases the attractiveness of the market. Few competitors High barriers to entry Few substitute products High power of customers Low power of suppliers

Answer: D Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

62. _____ 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 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

63. 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

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D. E.

Test Bank

Dogs Apples

Answer: B Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

64. A. B. C. D. E.

The Stars in a BCG matrix typically: produce large profits through substantial penetration of expanding markets. produce low profits and limited cash flow, but with little upside potential. may not generate much profit at the moment, but have upside potential to do so. produce little if any profit, and have low potential for future improvement. generate high profit for a short span of time and then become inactive.

Answer: A Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

65. A. B. C. D. E.

The preferred strategy for Stars is: stability or modest growth. targeting only the most promising of the stars. retrenchment of some of the stars. decrease of current operations. growth and further resource investments.

Answer: E Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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66. A. B. C. D. E.

Test Bank

The preferred strategy for Stars is growth because they: produce large profits and a strong cash flow, but have little upside potential. may not generate much profit at the moment, but have upside potential. produce large profits and a strong cash flow for only a short span of time and must be nurtured. are not only high performers in the present, but they offer similar potential for the future. produce little if any profit, and must be supported so that they perform better.

Answer: D Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

67. 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. Apples Answer: A Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

68. A. B. C. D. E.

The preferred strategy for Cash cows is: stability or modest growth. targeting only the most promising of the Cash Cows. retrenchment of some of the Cash Cows. decrease of current operations. growth and further resource investments.

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Test Bank

Answer: A Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

69. A. B. C. D. E.

The preferred strategy for Cash cows is stability or modest growth because: they produce large profits and a strong cash flow, but have little upside potential. they may not generate much profit at the moment, but have upside potential. the markets offer great growth opportunity given that they are new to the market. they are not only high performers in the present, but they offer similar potential for the future. they produce little if any profit, and must be supported so that they perform better.

Answer: A Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

70. A. B. C. D. E.

One of the differences between Stars and Cash cows is that: Cash Cows produce high profits. the strategy for Cash Cows is retrenchment. Cash Cows have little upside potential. Cash Cows can easily penetrate expanding markets. the strategy for Cash Cows is growth.

Answer: C Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Test Bank

71. 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. Apples Answer: C Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

72. A. B. C. D. E.

The preferred strategy for Question Marks is: stability or modest growth. retrenchment. decrease of current operations. growth and retrenchment. growth and heavy resource investments.

Answer: D Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73. A. B. C. D. E.

The preferred strategy for Question Marks is to grow or retrench because: they produce large profits and a strong cash flow, but have little upside potential. they may not generate much profit at the moment, but they have an upside potential. the markets offer great growth opportunity, given that they are new to the market. they are not only high performers in the present, but they offer similar potential for the future. they produce little if any profit, and must be supported so that they perform better.

Answer: B

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Test Bank

Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

74. 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. Apples Answer: D Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

75. A. B. C. D. E.

The preferred strategy for Dogs is: stability or modest growth. retrenchment. decrease of current operations. to grow or retrench the dogs. growth and heavy resource investments.

Answer: B Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

76. The preferred strategy for dogs is retrenchment because: A. they produce large profits and a strong cash flow, and the upside potential is there.

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B. C. D. E.

Test Bank

they may not generate much profit at the moment, but the upside potential is there. the markets offer great growth opportunity given that they are new to the market. they are not only high performers in the present, but they offer similar potential for the future. they produce little if any profit, and they have low potential for future improvement.

Answer: E Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

77. 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 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

78. Vintop Inc., a successful designer brand, has several outlets in the U.S. To push sales growth, Vintop has decided to focus more on its primary business and open up its branches in ten different countries. This approach taken by Vintop is an example of growth through _____. A. strategic alliance B. vertical integration C. liquidation D. diversification E. concentration

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Test Bank

Answer: E Learning Objective: 10.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

79. 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 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. A. B. C. D. E.

Growth through _____ typically occurs by acquiring suppliers or distributors. strategic alliance vertical integration liquidation divestiture concentration

Answer: B Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81. _____ is where a business closes and sells its assets to pay creditors.

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A. B. C. D. E.

Test Bank

Concentration Diversification Vertical integration Liquidation Strategic alliance

Answer: D Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

82. A. B. C. D. E.

Restructuring by downsizing primarily involves: decreasing the size of operations. working with rivals on projects of mutual benefit. customizing products and advertising to best fit local needs. joining in partnership to pursue an area of mutual interest. adopting standardized products and advertising for use worldwide.

Answer: A Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

83. A. B. C. D. E.

Restructuring by divestiture primarily involves: selling off parts of the organization to refocus on core competencies. working with rivals on projects of mutual benefit. customizing products and advertising to best fit local needs. joining in partnership to pursue an area of mutual interest. adopting standardized products and advertising for use worldwide.

Answer: A Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

84. 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 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. 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 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86. A. B. C.

Which of the following is a defining characteristic of the transnational strategy? It involves working with rivals on projects of mutual benefit. It seeks efficiencies of global operations with attention to local markets. It tries to fix specific performance problems within the organization.

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D. E.

Test Bank

It involves expansion of the organization’s current operations. It analyzes business opportunities according to market growth rate.

Answer: B Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

87. Compsolute, an IT company, enters into a partnership with Double Edge Finances. The terms of the agreement state that Compsolute would purchase the service of Double Edge 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 Learning Objective: 10.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

88. 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 Learning Objective: 10.3 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89. 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 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90. A. B. C. D. E.

A differentiation strategy typically seeks competitive advantage by: offering products that are unique and different from the competition. operating with lower costs than competitors. continuously improving operating efficiencies in purchasing. controlling and monitoring the performance of top management. including key persons in strategic planning.

Answer: A Learning Objective: 10.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91. Watercandy sells a range of premium confectionery products. Although the company’s products are priced a little higher than those of its competitors, its customers are ready to pay for its unique flavours. Watercandy uses the _____ strategy to gain an advantage over its competitors.

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A. B. C. D. E.

Test Bank

cost leadership stuck-in-the-middle focused cost leadership differentiation co-opetition

Answer: D Learning Objective: 10.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

92. 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 Learning Objective: 10.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

93. Which of the following allows organizations to make profits while selling products or services at low prices that 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 Learning Objective: 10.4

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. Aries is a new company in the laundry detergent market, which already has many competitors. Researchers at Aries have devised a new, cost-efficient formula for manufacturing detergents that has made it possible for the company to charge less than its competitors and still make a profit. The strategy used by Aries is that of _____. A. cost leadership B. stuck-in-the-middle C. focused differentiation D. differentiation E. co-opetition Answer: A Learning Objective: 10.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

95. A. B. C. D. E.

Which of the following is true of a cost leadership strategy? It seeks competitive advantage through uniqueness. It works best with the product differentiation strategy. To succeed, it requires tight cost and managerial controls. It concentrates on serving a unique market segment better. It involves working with rivals on projects of mutual benefit.

Answer: C Learning Objective: 10.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Test Bank

96. 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 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

97. 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 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

98. A. B. C. D. E.

Which of the following is a defining characteristic of a focused cost leadership? It offers a regular product to a common market segment. It seeks the lowest costs of operations within a special market segment. It analyzes business opportunities according to market growth rate. It focuses on substantial penetration of expanding markets. It involves decreasing the size of operations.

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Test Bank

Answer: B Learning Objective: 10.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99. A. B. C. D. E.

A lack of participation error is most likely to occur when: the planning process becomes an end in itself. the performance of top management is not monitored. key persons are not included in the strategic planning. there is lack of efficiency in vertical communication. the cost leadership strategy and the differentiation strategy are used simultaneously.

Answer: C Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100. 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 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

101. Why is corporate governance essential in an organization? A. To downsize the workforce so as to earn less cost of production B. To ensure that the strategic management is successful C. To criticize and condone the status quo D. To be compliant and uncritical in endorsing all management decisions E. To avoid rigorous oversight and accountability

Answer: B Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

102. _____ is the capability to inspire people to successfully engage in a process of continuous change, performance enhancement, and implementation of organizational strategies. A. Freeriding B. Scientific management C. Strategic leadership D. Social loafing E. Groupthink

Answer: C Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

103. Vibgyor Inc. is a newly established organization which manufactures home appliances. The company is in the process of selecting the locations for its production facilities and an appropriate manufacturing technology. This information indicates that the company is developing its _____ strategy.

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A. B. C. D. E.

Test Bank

contingency competitive business-level marketing tactical

Answer: C Learning Objective: 10.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. Syntagmatic, an educational consultancy firm, is particular about recruiting qualified professionals, so as to provide more value to its global clients. The company strives to maintain its high standard as well as to provide good insurances to its employees. Which of the following operating objectives is the primary focus of Syntagmatic? A. Social responsibility B. Cost efficiency C. Market share D. Human talent E. Financial health Answer: D Learning Objective: 10.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. The financial statement of Labyrinth Inc., a heavy-metal industry, for the year 2013, showed a loss in revenue. The main cause was the entry of new competitors in the market, with advanced skill and expertise. The company decided to conduct an internal assessment of the organization through a SWOT analysis. What was the possible deduction arrived at by the company through its internal analysis? A. Weak management B. Strong economy

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C. D. E.

Test Bank

Shortage of resources Obsolete technologies Weak market rivals

Answer: D Learning Objective: 10.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. Enigma Breweries, a distillery company, bought Suave Clothing, a premium men’s fashion boutique chain. By entering a different business area, Enigma Breweries plans to grow and expand its business and profits. Which type of growth strategy has Enigma Breweries adopted? A. Growth through concentration B. Growth through diversification C. Market development strategy D. Market penetration strategy E. Product development strategy Answer: B Learning Objective: 10.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Bella Dairy Products, a company producing ice creams, has recently bought two dairy farms. This strategic action falls under the category of _____. A. growth through concentration B. vertical integration C. retrenchment D. divestiture E. franchising Answer: B Learning Objective: 10.3

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Test Bank

Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. Food Lord, a fast food chain, is expanding its operations in several states in the country. Which of the following is this an example of? A. Growth through concentration B. Diversification C. Vertical integration D. Retrenchment E. Divestiture Answer: A Learning Objective: 10.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Fresh Nest, a retail grocery store, provides a wide variety of products to its customers. So as to keep up with the varying demand in fruits, vegetables, and other groceries, the store stocks up products according to the needs and particulars of the locality. Which of the following strategies has been adopted by Fresh Nest by this move? A. Transnational strategy B. Downsizing strategy C. Turnaround strategy D. Co-opetition strategy E. Multidomestic strategy Answer: E Learning Objective: 10.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

110. Telkon, a mobile phone company, has recently launched a device which, apart from all the regular mobile phone features, also has an electric cigarette lighter and a small hidden knife. None of the other mobile handset makers have such a product. According to this information, which of the following business-level strategies is being used by Telkon? A. Co-opetition strategy B. Cost leadership strategy C. Focus strategy D. Differentiation strategy E. Turnaround strategy Answer: D Learning Objective: 10.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

111. Which of the following examples best captures the function of a strategic leader? A. Vincent ensures the optimum allocation and consistent use of resources in his firm. B. Don refrains from pressurizing his subordinates and allows them to be complacent. C. Clarence allows her employees to carve their own paths rather than acting as a teacher. D. Hethilda limits her interactions with her subordinates and disapproves the questioning of her orders. E. Sarah trusts her subordinates and does not cross-check their work. Answer: A Learning Objective: 10.5 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

112. Verticone, a software firm, suffered heavy loss due to poor analysis and bad strategy selection. The loss occurred in this example is the result of _____.

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A. B. C. D. E.

Test Bank

representativeness bias failures of substance goal displacement congruence bias endowment effect

Answer: B Learning Objective: 10.5 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

113. 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. 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.

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Test Bank

Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

114. 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. Learning Objective: 10.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

115. 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 side tracked. • 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.

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Test Bank

•

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. Learning Objective: 10.5 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

Chapter 11: Organization Structures and Design

True/False

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 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

An organization chart includes major subunits in which positions reporting to a common manager are shown.

Answer: True Learning Objective: 11.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

A social network analysis is a tool that identifies formal structures and their social relationships.

Answer: False Learning Objective: 11.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

Informal networks are sources of emotional support and friendship that satisfy members’ social needs.

Answer: True Learning Objective: 11.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

In a functional structure, the functions become formalized not only on the organization chart, but also in the mind-sets of people.

Answer: True Learning Objective: 11.2

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

One of the disadvantages of functional structures is that employees lack a clear career path within functions.

Answer: False Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Divisional structures are common in organizations dealing with only one or a few products or services.

Answer: False Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10. A product structure prompts managers to be responsive to changing market demands and customer tastes. Answer: True Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

11. 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 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12. A customer structure is the least common structure in the consumer products industry. Answer: False Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

13. A divisional structure is characterized by reduced coordination across functional departments. Answer: False Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

14. Divisional structures can create unhealthy rivalries as divisions compete for resources and top management attention. Answer: True Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

15. Workers in a matrix structure are allowed to be part of only one formal group at a time. Answer: False Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16. Workers in a matrix structure report to two supervisors—one within the function and the other within the team. Answer: True Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17. A matrix structure is characterized by poor customer service. Answer: False Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18.

In a matrix structure, top managers are freed from lower-level problem solving to focus time on more strategic issues.

Answer: True

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Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

19. Team meetings in matrix structures are short and quick. Answer: False Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20. Organizations with team structures make extensive use of both permanent and temporary teams to solve problems, complete special projects, and accomplish dayto-day tasks. Answer: True Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21. Project teams are permanent in nature and cannot be disbanded. Answer: False Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

22. 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 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

23. Network structures result in increasing overhead and reducing operating efficiency. Answer: False Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24. Empowerment refers to letting others make decisions and exercise discretion in their work. Answer: True Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25.

In a virtual organization, when the work is complete, the alliance rests until next called into action.

Answer: True Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

Multiple Choice

26. A. B. C. D. E.

An organization structure refers to: a relationship between two or more firms to meet a particular business need. the group of employees who perform jobs together in the same location. the network of employees in a particular team. a system of tasks, reporting relationships, and communication linkages. a cooperation agreement with another organization to jointly pursue activities of mutual interest.

Answer: D Learning Objective: 11.1 Difficulty: Easy AACSB: Analytical thinking 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. financing B. sourcing C. controlling D. decentralizing E. organizing Answer: E Learning Objective: 11.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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28. A. B. C. D. E.

Test Bank

In an organizational structure, division of work refers to: lines that show who reports to whom. positions and titles that show work responsibilities. the vertical layers of management. lines that show formal communication flows. positions that report to a common manager.

Answer: B Learning Objective: 11.1 Difficulty: Easy AACSB: Analytical thinking 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 structures E. Sources of emotional support Answer: A Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

30. A. B. C. D. E.

In an organizational structure, major subunits refer to: positions and titles that show work responsibilities. lines that show who reports to whom. positions that report to a common manager. lines that show how formal communication flows. the vertical layers of management.

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Test Bank

Answer: C Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. A. B. C. D. E.

Which of the following is true of informal structures? They represent supervisory relationships. They help in preventing the occurrence of rumors. They are sources of emotional support and friendship. They show the vertical layers of management. They are characterized by the presence of major subunits.

Answer: C Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Answer: A Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

34. A. B. C. D. E.

Which of the following is a disadvantage of informal structures? They are characterized by too many vertical layers of management. They are typified by the presence of complex formal communication flows. They have very centralized systems that restrict employee freedom. They are characterized by the existence of “in” and “out” groups. They discourage informal learning as people work and interact together throughout the workday.

Answer: D Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

35. A _____ structure groups together people with similar skills who perform similar tasks. A. product B. divisional C. geographical D. customer E. functional

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Answer: E Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

36. Fredent 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 Fredent Corporation? A. Product structure B. Divisional structure C. Functional structure D. Geographical structure E. Customer structure Answer: C Learning Objective: 11.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

37. A. B. C. D. E.

Which of the following is true of a functional structure? It is characterized by low-quality technical problem solving. It consists of task assignments consistent with expertise and training. It does not have the advantage of economies of scale. It is common in complex organizations with diverse operations. It is the ideal structure when there is a need to differentiate products or services in various locations.

Answer: B Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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38. A. B. C. D. E.

Test Bank

Which of the following is an advantage of a functional structure? Economies of scale with efficient use of resources Improved coordination across functional departments Establishment of a sense of common purpose Clear points of responsibility for product or service delivery Expertise focused on specific customers, products, and regions

Answer: A Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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. silos structure C. divisional structure D. vertical structure E. matrix structure Answer: C Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking 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.

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D. E.

Test Bank

It is an attempt to gain the advantages and minimize the disadvantages of the matrix structure. It overcomes the disadvantages of a functional structure, such as the functional chimneys problem.

Answer: E Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

41. Rezter Group, a consumer goods company, owns several brands that produce different goods. Each brand is focused on a single consumer good and has a separate chief executive who is responsible for the manufacturing, sales, costs, profits, and losses of his or her brand. This implies that each brand at Rezter Group is applying a _____ structure in the organization. A. geographical B. product C. customer D. functional E. process Answer: B Learning Objective: 11.2 Difficulty: Hard AACSB: Application of knowledge 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.

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Answer: D Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43. Slice-It 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 Slice-It Inc. using? A. Geographical structure B. Product structure C. Customer structure D. Functional structure E. Process structure Answer: A Learning Objective: 11.2 Difficulty: Hard AACSB: Application of knowledge 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. Under this structure, jobs and activities are grouped together based on preferences of similar 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 Learning Objective: 11.2 Difficulty: Moderate

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

45. Amethyst Inc.’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 Amethyst Inc.? A. Geographical structure B. Product structure C. Customer structure D. Functional structure E. Process structure Answer: C Learning Objective: 11.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

46. An order fulfillment by a catalog retailer, a procedure that takes an order from point of initiation by the customer to point of fulfilment by a delivered product is an example of a _____. A. operational chimney B. functional silo C. directional array D. work process E. strategic alliance Answer: D Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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47. Employees who are involved in designing, engineering, and preparing models are grouped together at Zener 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 Zener Inc.? A. Geographical structure B. Product structure C. Customer structure D. Client structure E. Process structure Answer: E Learning Objective: 11.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

48. A. B. C. D. E.

Which of the following is an advantage of a divisional structure? Expertise focused on specific customers, products, and regions Economies of scale with efficient use of resources Reduced costs because of common resources and efforts across divisions Emphasis on the goals of the organization as a whole No scope for unhealthy rivalries within the organization

Answer: A Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking 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 reduce the level of coordination across functional departments. D. They make it impossible to focus on specific customers, products, and regions.

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They require the deletion of divisions in an organization.

Answer: B Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

51. A. B. C. D. E.

Which of the following is an advantage of a matrix structure? Improved strategic management No scope for issues such as “groupitis” across teams Clearly defined tasks and no conflict in work priorities No power struggles across teams Fast and effective team meetings

Answer: A Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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. 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 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53. A. B. C. D. E.

Which of the following is true about a team structure? A temporary team does not have prominence in a team structure. A team structure is most often observed in a vertical organization. The intention of a team structure is to create more effective lateral relations around and across the organization. In a team structure, cross-functional structures are convened for a particular task or project and disbanded once the task is completed. The main focus of a team structure is to improve and maintain the hierarchical system of management.

Answer: C Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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-oriented team Answer: C Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

56. A. B. C.

Which of the following is a limitation of having a team structure? The total time spent together in a team meeting is not productive. A team structure is associated with poor performance. Project teams are informal structures that group together jobs and activities focused on a single product or service.

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D. E.

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People working in a team structure often experience a reduced sense of identification. A team structure is not very effective at mobilizing talents.

Answer: A Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking 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. the central core consists of temporary employees and focuses on 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.

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Answer: B Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

59. A. B. C. D. E.

Which of the following is true about a network structure? It does everything for itself with full-time employees. It consists of networks that are composed of full-time employees. It groups jobs and activities that are part of the same processes. It consists of a relatively small central core that results in an increase in costs. It employs a minimum staff and contracts out as much work as possible.

Answer: E Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

60. Zack 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 Learning Objective: 11.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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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 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

62. Feast-It Inc., a fast food corporation, entered into an agreement with Spark Inc., a company that manufactures cheese, mayonnaise, and other toppings. Feast-It Inc. exclusively uses the toppings produced by Spark Inc. 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 Learning Objective: 11.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

63. Delix Juices Co., well-known for its fruit juices with catchy names, has recently signed an agreement with Finred Books Ltd. According to this agreement, Delix Juices Co. has an outlet at each Finred store. This agreement has led to an increase

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A. B. C. D. E.

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in profits for both the companies as sales of both have increased. This is an example of a _____. boundaryless organization joint venture cross-functional team strategic alliance co-operative structure

Answer: D Learning Objective: 11.3 Difficulty: Hard AACSB: Application of knowledge 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 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking 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.

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D. E.

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Network structures are broad and complex. Network structures tend to increase overheads of an organization and reduce its operating efficiency.

Answer: B Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

67. A. B. C. D. E.

A _____ uses IT and the Internet to engage a shifting network of strategic alliances. formal structure project team virtual organization bureaucratic structure matrix organization

Answer: C Learning Objective: 11.3 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

68. Brandon & 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. Brandon & Sons Inc. is a _____. A. cross-functional team B. project team C. virtual organization D. cross-functional team E. formal organization Answer: C Learning Objective: 11.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

69. A. B. C. D. E.

An organizational design: is the process of creating structures that accomplish mission and objectives. is a system of tasks, reporting relationships, and communication linkages. is a group of related tasks that collectively creates a valuable work product. identifies the informal structures and their embedded social relationships that are active in an organization. is a cooperation agreement with another organization to jointly pursue activities of mutual interest.

Answer: A Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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. D. achieves a good match between structure and situational contingencies. E. has narrow spans of control and structures of the pyramid form. Answer: D Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

72. Which of the following emphasizes formal authority, order, fairness, and efficiency? A. Bureaucracy

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B. C. D. E.

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Boundaryless organization Decentralization Strategic business unit Strategic alliance

Answer: A Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73. A. B. C. D. E.

Which of the following is true of a bureaucracy? It is characterized by open divisions of labor. It encourages worker empowerment and teamwork. It is built on a foundation of trust that people will do the right things on their own initiative. It is a vertical structure with promotion based on competency. It performs well in environments that demand flexibility in dealing with changing conditions.

Answer: D Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

74. LMZ 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. LMZ Inc. is a(n) _____. A. adaptive organization B. bureaucracy C. decentralized organization D. boundaryless organization E. autocracy

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Answer: B Learning Objective: 11.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

75. A. B. C. D. E.

Which of the following is true of a mechanistic design? It is a horizontal structure with decentralized authority. It is characterized by wide spans of control. It is characterized by a precise division of labor. It is typified by informal means of coordination. It is a design with very few rules and procedures.

Answer: C Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

76. The staff at Grace 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. Grace Grocery Store is functioning with a(n) _____ design. A. organic B. decentralized C. mechanistic D. adaptive E. boundaryless Answer: C Learning Objective: 11.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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77. Adzen 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 Adzen Inc.? A. Organic B. Centralized C. Bureaucratic D. Nonadaptive E. Authoritative Answer: A Learning Objective: 11.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

78. A. B. C. D. E.

Which of the following is true of an organic design? It is a horizontal structure with decentralized authority. It has narrow spans of control. It has a vertical structure of authority. It is typified by many rules and procedures. It is characterized by very precise division of labor.

Answer: A Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

79. A. B. C. D.

A(n) _____ performs well in environments that demand flexibility in dealing with changing conditions. authoritative structure centralized system mechanistic design adaptive organization

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bureaucratic structure

Answer: D Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. A. B. C. D. E.

Which of the following is true of adaptive organizations? They work with narrow spans of control and formal coordination. They operate with a distinguished feature of promotion based on competency. They are built on a foundation of trust that people will do the right things on their own initiative. They are characterized by vertical structures with a clear-cut division of labor and a hierarchy of authority. They work best for organizations doing routine tasks in stable environments.

Answer: C Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81. The employees of Astro Inc., 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 Astro Inc. is a(n) _____ organization. A. centralized B. adaptive C. bureaucratic D. strategic E. authoritative Answer: B Learning Objective: 11.4

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Difficulty: Hard AACSB: Application of knowledge 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 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

83. A. B. C. D. E.

The chain of command: is the number of subordinates directly reporting to a manager. links all persons with successively higher levels of authority. horizontally links all positions of an organization’s management. operates with a minimum of bureaucratic features. is the process of distributing and entrusting work to other persons.

Answer: B Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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84. A. B. C. D. E.

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_____ refers to the number of subordinates directly reporting to a manager. Span of control Chain of command Delegation Empowerment Decentralization

Answer: A Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. Oasis Inc. is an organization with a tall structure. Which of the following would be a characteristic of Oasis Inc.? A. Oasis Inc. would reduce the number of employees in its organization. B. Oasis Inc. would have an inadequate number of managers. C. Oasis Inc. would allow for wider spans of control. D. Oasis Inc. would incur high costs due to the existence of many managers. E. Oasis Inc. would be a highly efficient and customer-sensitive organization. Answer: D Learning Objective: 11.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

86. A. B. C. D. E.

Which of the following is true of tall structures? They have inadequate levels of management. They are characterized by scarcity of employees. They reduce overhead costs. They are highly efficient and flexible. They have narrow spans of control.

Answer: E

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Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

87. Branxon Corporation functions with a flat structure. Which of the following would be a characteristic of Branxon Corporation? A. Branxon Corporation would be functioning with many managers. B. Branxon Corporation would permit workers to make their own decisions. C. Branxon Corporation would tend to be more costly due to the existence of many levels of management. D. Branxon Corporation would have a narrow span of control. E. Branxon Corporation would have a scarcity of employees. Answer: B Learning Objective: 11.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

88. A. B. C. D. E.

Which of the following is true of flat structures? They are inflexible. They help in reducing overhead costs. They have narrow spans of control. They tend to be very efficient due to the existence of many managers. They are not customer-sensitive.

Answer: B Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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89. The process of entrusting work to others by giving them the right to make decisions and take action is referred to as _____. A. adaption B. mechanization C. delegation D. bureaucratization E. centralization Answer: C Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90. Which of the following holds true regarding delegation? A. Authority should 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 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91. Which of the following is true regarding the process of delegation? A. The manager seldom gives 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.

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C. D. E.

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When a subordinate takes an assignment, he does not have an obligation to the manager to complete the job as agreed. In the process of delegation, a manager does not have the power to create accountability. A manager is allowed to provide the subordinate with responsibility but not the authority to perform.

Answer: B Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytical thinking 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. E. It results when delegation enables people who are most capable of doing the work to make decisions. Answer: E Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking 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.

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C. D. E.

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It allows people at all levels to make more decisions that affect themselves and their work. It enables employees of an organization to work with strong hierarchical levels of authority. It encourages employees to use more formal means of coordination with many rules and procedures.

Answer: C Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. A. B. C. D. E.

Centralization refers to the: concentration of authority for most decisions at the top level of an organization. dispersion of authority to make decisions throughout all organization levels. system that allows others to make decisions and exercise discretion in their work. process of creating wide spans of control and few hierarchical levels in organizations. process of entrusting work to others by giving them the right to make decisions and take action.

Answer: A Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

95. At ZCN Bank, all operational decisions regarding promotional measures, interest rates, benefits, and customers are made completely by the top management. This implies that ZCN Bank has a(n) _____. A. decentralized system B. centralized system C. boundaryless structure D. informal structure E. organic design

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Answer: B Learning Objective: 11.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 11.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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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 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100. 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.

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D. E.

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Organizations can create a central core of full time staff personnel to improve efficiency. Organizations should focus on employing more staff personnel to increase efficiency.

Answer: A Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

101. Leisure Viaje is a major tour operator in the country. Four senior managers look after the company’s operations in 20 locations. All these senior managers report to the general manager of the company who is stationed at the company headquarter in Chicago. This description represents the _____ of the company. A. code of conduct B. social network C. organization chart D. focal structure E. mission Answer: C Learning Objective: 11.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Ramon Auto, an automobile manufacturer, operates in several countries. The company has three major brands which are headed by three separate managers. Each of these three managers look after all the jobs and activities associated with their respective brands. According to this information, which of the following organization structures is adopted by Ramon Auto? A. Functional structure B. Product structure C. Geographical structure D. Customer structure

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Process structure

Answer: B Learning Objective: 11.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. Speak-Up, a cooperative group, meets every week to discuss its plans and actions for helping the community to learn more about organic farming. They form temporary teams based on tasks and actions. The size of the teams depends on the size of the tasks. In the context of team structures, Speak-Up group has the _____ structure. A. bureaucratic B. matrix C. closed D. boundaryless E. network Answer: D Learning Objective: 11.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. Traves Inc., a transcription services company, manages all its core processes with a small team of highly skilled employees. However, it outsources five of its processes to contractors. This helps the company to lower its costs and have a high degree of flexibility. In this context, Traves Inc. is using a(n) _____ structure to carry out its functions. A. matrix B. bureaucratic C. network D. geographical E. product

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Answer: C Learning Objective: 11.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Brendon, a software engineer at Re-Soft Inc., has to report to two managers at the same time, a functional manager and a team manager. In the context of divisional structures, Brendon is working in a _____ structure. A. geographical B. customer C. process D. product E. matrix Answer: E Learning Objective: 11.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. Four engineers from the technology cell of a company are required to work together for a certain time on a job till the job is completed. This is an example of a(n) _____. A. cross-functional team B. outsourcing strategic alliance C. boundaryless organization D. project team E. functional silo Answer: D Learning Objective: 11.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

107. Crexons Inc. finds that there is too much bureaucracy in their organization. The CEO of the company desires to increase flexibility in the organizational structure. To accomplish this, he must _____. A. create temporary matrix structures B. empower the employees to make their own decisions C. establish strict organizational policies D. create functional silos to make sure the functions have well-defined boundaries. E. divide the organization based on processes. Answer: B Learning Objective: 11.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. In Bill’s organization, employees are encouraged to use their skills without restrictions, provide views and concepts, and independently select the best line of solutions. This information indicates that Bill’s organization practices _____. A. centralization B. vertical integration C. divestiture D. horizontal integration E. empowerment Answer: E Learning Objective: 11.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Isabelle, the CEO of Roll-En Pens, finds that vertical hierarchy exists in the organization. She plans to reduce the stress on this hierarchical structure and give more decision-making ability to the subordinates. In the context of tall and flat organizations, Isabelle is trying to create a(n) _____ organization.

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A. B. C. D. E.

Test Bank

bureaucratic decentralized informal matrix adaptive

Answer: B Learning Objective: 11.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

110. At Sync-In Information Solutions, a startup in software solutions, most processes are determined by the few active partners of the business. Which of the following does this example illustrate? A. Centralization B. Empowerment C. Divestiture D. Vertical integration E. Delegation Answer: A Learning Objective: 11.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

111. 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

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Test Bank

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. Learning Objective: 11.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

112. 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. In addition, 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. Learning Objective: 11.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

113. Describe the steps involved in the process of delegation.

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Test Bank

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. Learning Objective: 11.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

Chapter 12: Organization Culture and Change

True/False

The organizational culture is what you see and hear when walking around an organization as a visitor, a customer, or an employee.

Answer: True Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

Organizational culture can have a big impact on performance through its influence on employees and customers.

Answer: True Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

Enterprising cultures emphasize collaboration and trust according to LeadershipIQ’s description of common organizational cultures.

Answer: False Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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Test Bank

Collaboration is the process of helping new members learn the cultures and values of the organization.

Answer: False Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

Organizational culture is usually described from the perspective of two levels—the external level and the internal level.

Answer: False Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

The observable culture is visible and readily apparent at the surface of every organization.

Answer: True Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

Core values are beliefs and values shared by organization members.

Answer: True Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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Test Bank

Workplace spirituality refers to inclusiveness, pluralism, and respect for diversity in the workplace.

Answer: False Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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 Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

10.

The foundation for ethnocentrism is respect for the full value of human beings.

Answer: False Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

11.

Socialism is the belief that one’s membership group or subculture is superior to all others.

Answer: False Learning Objective: 12.2 Difficulty: Easy

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Test Bank

AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

12.

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 Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

13.

Ethnocentrism can creep into organizations and adversely affect the way people relate to one another.

Answer: True Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

14.

Ethnic subcultures or national subcultures are formed among persons who share the same skills and work responsibilities.

Answer: False Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

15.

In the context of leaking pipeline problem, decisions of high-performing women to drop out of upward-tracking carrier paths are not always based on outright gender prejudice.

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Test Bank

Answer: True Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

16.

The leaking pipeline problem gives an advantage to advancement by women and minorities in organizations.

Answer: False Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

17.

The glass ceiling leads to the leaking pipeline problem.

Answer: True Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

18.

Existence of biculturalism in an organization implies fear of discrimination among organizational subcultures.

Answer: True Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

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19.

Test Bank

Ideally, every manager should act as a change leader.

Answer: True Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments 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 Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

21.

Change leaders are risk-takers.

Answer: True Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

22.

In the context of change leadership, innovation is embraced by status quo managers.

Answer: False Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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23.

Test Bank

Bottom-up change tries to tap into ideas and initiative at lower organizational levels and lets them percolate upward.

Answer: True Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

24.

Transformational change is usually led from the bottom.

Answer: False Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

25.

Transformational change is at the top of the organizational change pyramid.

Answer: True Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments 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 Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments

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Test Bank

Bloom’s Taxonomy: Knowledge

27.

The “changing phase” is the first phase in Lewin’s model for planned change.

Answer: False Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

28.

Lewin’s model for planned change depicts change as a non-linear, dynamic process.

Answer: False Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

29.

Change is a dynamic and complex process.

Answer: True Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments 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 Learning Objective: 12.3

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

31. A. B. C. D. E.

_____ is the system of shared beliefs and values that guides behavior in organizations. Organizational culture Organizational tactics Organizational dynamics Organizational motives Organizational workflow

Answer: A Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

32.

A. B. C. D. E.

Jimi has been working at Drazer Inc., a consulting firm, for two days now. He is told by one of his colleagues about the different dos and don’ts of the organization, their values and beliefs, and the way people communicate and form groups. This information gives Jimi an insight into the: turnover rate in the organization. level of employee satisfaction in the organization. culture of the organization. degree of collectivism in the organization. profile of his job at the organization.

Answer: C Learning Objective: 12.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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33. A. B. C. D. E.

Test Bank

_____ is the process through which new members learn the culture of an organization. Unfreezing Ethnocentrism Socialization Ethical reasoning Creative visualization

Answer: C Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

34. A. B. C. D. E.

The _____ is what one sees and hears when walking around an organization as a visitor, a customer, or an employee. role culture power culture core culture observable culture person culture

Answer: D Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

35.

It is Beth’s second month at her new job, and she has noticed that people dress casually every Friday. She feels that her co-workers are helpful, and her bosses are friendly. She is comforted by the fact that if in doubt she can always ask for help and not be afraid of being shunned and embarrassed. Which of the following organizational cultures has influenced Beth? Observable culture

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B. C. D. E.

Test Bank

Power culture Core culture Task culture Role culture

Answer: A Learning Objective: 12.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

36.

A. B. C. D. E.

Chen’s team has successfully completed one of the most important projects of the company. To recognize the long hours and the extra effort that Chen’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? Power culture Core culture Task culture Observable culture Role culture

Answer: D Learning Objective: 12.1 Difficulty: Easy AACSB: Application of knowledge Bloom’s Taxonomy: Application

37. A. B. C. D. E.

Which of the following scenarios gives us an insight into the observable culture of TZN Systems, a tech consulting firm? The requirement that all employees wear their ID tags The reward and recognition given to the best employees on a monthly basis The belief that hard work leads to favorable results The priority given to quality The expectation of integrity in all tasks

Answer: B

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Test Bank

Learning Objective: 12.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

38. A. B. C. D. E.

Which of the following scenarios is an example of the observable culture of an organization? The prohibition of the use of camera phones in the office premises The hostility toward whistleblowers The rewarding of a team’s achievement by conducting a team outing The emphasis on deadlines The encouragement of innovation

Answer: C Learning Objective: 12.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

39.

A. B. C. D. E.

Shapiro, who has made the maximum number of sales done in a day at Denrex Inc., 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 the company? Power culture Core culture Task culture Observable culture Role culture

Answer: D Learning Objective: 12.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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40. A. B. C. D. E.

Test Bank

The _____ of an organization consists of the main values, or underlying assumptions and beliefs that shape and guide people’s behaviors in an organization. power culture core culture task culture observable culture role culture

Answer: B Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

41.

A. B. C. D. E.

At Ray’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 Ray’s Café has become a very popular coffee shop. This represents Ray’s Café’s _____. power culture task culture core culture peripheral culture ceremonial culture

Answer: C Learning Objective: 12.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

42. A. B. C. D.

Value-based management: improves the observable culture of an organization. increases an organization’s tolerance for ambiguity. communicates and enacts an organization’s core beliefs. suppresses the idea of innovation within the organization.

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Test Bank

emphasizes the rigidity of the organization’s regulations.

Answer: C Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

43. A. B. C. D. E.

_____ create(s) meaning and shared community among organizational members. Ecological fallacy Workplace spirituality Workplace etiquette Organizational ethics Bureaucratic informality

Answer: B Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

44.

A. B. C. D. E.

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? Ecological fallacy Acculturation Ethnocentrism Power culture Workplace spirituality

Answer: E Learning Objective: 12.1 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

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45. A. B. C. D. E.

Test Bank

Which characteristic of multiculturalism implies that members of both minority cultures and majority cultures are influential in setting key values and policies? Structural division Pluralism Integration Absence of prejudice and discrimination Minimum intergroup conflict

Answer: B Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

46. A. B. C. D. E.

In the context of multicultural organizations, structural integration implies that: diversity does not lead to destructive conflicts between members of majority and minority cultures. a variety of training and task-force activities address the need to eliminate culture-group biases. members of both minority cultures and majority cultures are influential in setting key values and policies. various forms of mentoring and support groups assist in the career development of minority-culture members. minority-culture members are well represented in jobs at all levels and in all functional responsibilities.

Answer: E Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

47.

In multicultural organizations, informal network integration implies that:

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A. B. C. D. E.

Test Bank

diversity does not lead to destructive conflicts between members of majority and minority cultures. a variety of training and task-force activities address the need to eliminate culture-group biases. members of both minority cultures and majority cultures are influential in setting key values and policies. various forms of mentoring and support groups assist in the career development of minority-culture members. minority-culture members are well represented in jobs at all levels and in all functional responsibilities.

Answer: D Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

48.

A. B. C. D. E.

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? Structural integration Pluralistic differentiation Informal network integration Absence of prejudice and discrimination Minimum intergroup conflict

Answer: C Learning Objective: 12.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

49.

Kidz-Candies Inc. is famous for its candies with international flavors such as “Tuscanblue,” “straw-berry.” The company has experts from across the globe who develop new flavors from their country of origin. This has resulted in influence of various cultures on

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A. B. C. D. E.

Test Bank

policies of the company. In the context of multicultural organizations, this is an example of _____. structural integration pluralism informal network integration ethnocentrism minimum intergroup conflict

Answer: B Learning Objective: 12.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

50. A. B. C. D. E.

In the context of multicultural organizations, _____ are groups of people who share similar beliefs and values based on their work or personal characteristics. gender subcultures organizational subcultures core culture groups generational subcultures ethnocentric groups

Answer: B Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

51. A. B. C.

In a multicultural organization, minimum intergroup conflict ensures that: diversity does not lead to destructive conflicts between members of majority and minority cultures. a variety of training and task-force activities address the need to eliminate culture-group biases. various forms of mentoring and support groups assist in the career development of minority-culture members.

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D. E.

Test Bank

minority-culture members are well represented in jobs at all levels and in all functional responsibilities. members of both minority cultures and majority cultures are influential in setting key values and policies.

Answer: A Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

52. A. B. C. D. E.

Which characteristic of multiculturalism implies that a variety of training and task-force activities address the need to eliminate culture-group biases? Structural integration Pluralistic differentiation Informal network integration Absence of prejudice and discrimination Minimum intergroup conflict

Answer: D Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

53. A. B. C. D. E.

Which of the following is true about ethnocentrism? It helps in bringing together people of various cultures. It forms among people who work together and share similar ages. It is the belief that one’s membership group or subculture is superior to all others. It forms among persons who work together and share the same gender identities. It refers to the belief that women cannot handle senior positions in organizations.

Answer: C Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments

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Test Bank

Bloom’s Taxonomy: Knowledge

54. A. B. C. D. E.

_____ are formed among persons who work together and share similar ages, such as Millennials and Baby Boomers. Organizational sects Generational subcultures Ethnic subcultures Gender subcultures Functional subcultures

Answer: B Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

55.

A. B. C. D. E.

Frenzen 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 Frenzen Inc.? Ethnocentric subculture Generational subculture Formal subculture Occupational subculture Functional subculture

Answer: D Learning Objective: 12.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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56.

A. B. C. D. E.

Test Bank

The manager at Fillend 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. organizational sects generational subcultures ethnic subcultures gender subcultures functional subcultures

Answer: B Learning Objective: 12.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

57. A. B. C. D. E.

_____ are formed among persons who share the same skills and work responsibilities. Cohort subcultures Generational subcultures Ethnic or national subcultures Gender subcultures Occupational and functional subcultures

Answer: E Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

58.

A. B. C.

Some employees at Altirol 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. organizational sects generational subcultures ethnic subcultures

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D. E.

Test Bank

gender subcultures functional subcultures

Answer: E Learning Objective: 12.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

59. A. B. C. D. E.

Which of the following is an invisible barrier to advancement by women and minorities in organizations? Generational subcultures Ethnocentrism Multiculturalism Glass ceiling Revolving door

Answer: D Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

60.

A. B. C. D. E.

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 _____. the leaking pipe problem a power distance culture a generation subculture a gender subculture the functional silos issue

Answer: A Learning Objective: 12.2 Difficulty: Moderate

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Test Bank

AACSB: Application of knowledge Bloom’s Taxonomy: Application

61. A. B. C. D. E.

_____ occurs when minority members adopt characteristics of majority cultures in order to succeed. Ethnocentrism Nepotism Discrimination Biculturalism Segregation

Answer: D Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

62.

A. B. C. D. E.

Jim Bates 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 _____. ethnocentrism socialization discrimination biculturalism diversity

Answer: D Learning Objective: 12.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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63. A. B. C. D. E.

Test Bank

With respect to diversity leadership, the “affirmative action” leadership approach to diversity refers to: creating upward mobility for minorities and women. building quality relationships with respect for diversity. achieving full utilization of diverse human resources. adopting characteristics of majority cultures in order to succeed. helping people better understand and respect individual differences.

Answer: A Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

64. A. B. C. D. E.

With respect to diversity leadership, the “valuing differences” leadership approach to diversity refers to: creating upward mobility for minorities and women. building quality relationships with respect for diversity. achieving full utilization of diverse human resources. adopting characteristics of majority cultures in order to succeed. allowing members to reach their full potential.

Answer: B Page: 276 Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

65. A. B. C. D. E.

With respect to diversity leadership, the “managing diversity” leadership approach to diversity refers to: creating upward mobility for minorities and women. building quality relationships with respect for diversity. achieving full utilization of diverse human resources. adopting characteristics of majority cultures in order to succeed. helping people better understand and respect individual differences.

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Test Bank

Answer: C Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

66. A. B. C. D. E.

A _____ in a multicultural organization takes initiative in trying to alter the behavior of another person or social system. groupthinker change leader biculturalist mediator status quo manager

Answer: B Learning Objective: 12.3 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

67.

Michael has been a manager at Rexgen Systems for two years. He is known to be a risktaker 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. benevolent autocrat D. group thinker E. status quo manager Answer: B Learning Objective: 12.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

68.

Mexan 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 Danny’s team come up with a number of innovative suggestions and strategies. However, Danny, 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. Danny depicts the characteristics of a _____. A. benevolent leader B. change leader C. proactive manager D. democratic manager E. status quo manager Answer: E Learning Objective: 12.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

69. A. B. C. D. E.

With respect to change leadership, which of the following implies initiation of change from senior management? Bottom-up change Incremental change Frame-bending change Top-down change Organic change

Answer: D Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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70.

A. B. C. D. E.

Test Bank

Edward, the director of 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 _____. bottom-up change incremental change organic change top-down change frame-bending change

Answer: D Learning Objective: 12.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

71. 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 strategies where lower-level inputs are not taken into consideration Answer: E Learning Objective: 12.3 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

72. A. B. C. D. E.

In the context of change leadership, _____ implies that change initiatives come from lower levels in the organization. bottom-up change radical change transformational change top-down change frame-breaking change

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Test Bank

Answer: A Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73. A. B. C. D. E.

In the context of organizational change, _____ results in a major and comprehensive redirection of the organization. bottom-up change incremental change transformational change frame-bending change continuous improvement change

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

74. A. B. C. D. E.

Which of the following is true of transformational change? It is usually led from the top. It is a modest, frame-bending change. It does not intend to break and remake the system. It involves gradual and continual change toward the desired result. It involves evolutions in products, processes, technologies, and work systems.

Answer: A Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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75.

A. B. C. D. E.

Test Bank

Raybern’s company is not able to meet targets, and this is affecting the company’s revenues. Raybern decides to hold weekly meetings with employees from all functional levels of the organization to find a solution to the company’s problem. He listens to the employees carefully, and based on their suggestions, he gradually implements certain changes in the organization. This is an example of _____. bottom-up change radical change transformational change top-down change frame-breaking change

Answer: A Learning Objective: 12.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

76. A. B. C. D. E.

In the context of organizational change, _____ change bends and adjusts existing ways to improve performance. radical incremental transformational top-down frame-breaking

Answer: B Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77. A. B. C.

Which of the following is true of incremental change? It is a radical or frame-breaking change. Its execution results in a major and comprehensive redirection of the organization. It involves the evolution of products, processes, technologies, and work systems.

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D. E.

Test Bank

It creates fundamental shifts in strategies, culture, structures, and even the underlying sense of purpose or mission. Its intent is to break and remake the system.

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

78. A. B. C. D. E.

RZB Ltd., a clothing manufacturer, decides to upgrade its machines and train its workers in order to improve its productivity. These changes are examples of _____ change. radical incremental transformational top-down frame-breaking

Answer: B Learning Objective: 12.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

79.

A. B. C. D. E.

Blues perfumes recently replaced its CEO. The new CEO has decided to change the organizational structure, introduce more transparency, and tweak the current style of communication to increase effectiveness and clarity. In the context of organizational change, this is an example of _____. bottom-up change incremental change transformational change frame-bending change continuous improvement change

Answer: C Learning Objective: 12.3

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Test Bank

Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

80. A. B. C. D. E.

_____ is at the lowest level in an organizational change pyramid. Radical change Incremental change Transformational change Top-down change Frame-breaking change

Answer: B Learning Objective: 12.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

81. A. B. C. D. E.

According to Kurt Lewin’s model for planned change, which of the following phases involves preparing a system for change? Unfreezing phase Changing phase Refreezing phase Improvising phase Coercing phase

Answer: A Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

82. A.

Which of the following scenarios depict the unfreezing stage according to Lewin’s model for planned change? A firm firing an employee owing to bad performance

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B. C. D. E.

Test Bank

A firm rearranging existing teams in order to cope with the new system upgrade that has to be made A firm re-establishing its competency in the market by executing transformational changes A firm hiring new employees because it is experiencing a high rate of employee turnover A firm deciding to outsource some of its projects because of lack of appropriate talent and high costs of working in-house

Answer: B Learning Objective: 12.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Application

83.

A. B. C. D. E.

Delaying a sense of urgency for change and neglecting to build a coalition of influential persons who support the change, is a major reason for the failure of the _____ phase in the Lewin’s model for planned change. unfreezing changing refreezing improvising coercing

Answer: A Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

84. A. B. C. D. E.

The final phase in Lewin’s planned change process is _____. unfreezing changing refreezing improvising coercing

Answer: C

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Test Bank

Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. A. B. C. D. E.

According to Kurt Lewin’s model for planned change, which of the following phases involves stabilizing the system after change? Unfreezing phase Structuring phase Refreezing phase Improvising phase Coercing phase

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86.

A. B. C. D. E.

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? Unfreezing phase Structuring phase Refreezing phase Improvising phase Coercing phase

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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87. A. B. C. D. E.

Test Bank

The most common error in the refreezing phase in Lewin’s model for planned change is: facilitating the forgetting or abandoning of change with the passage of time. declaring victory too soon and withdrawing support before the change is really fixed in normal routines. implementing change before people are prepared and feel a need for it. not creating a sense of urgency for change and neglecting to build a coalition of influential persons who support it. preparing for more change even before the present one is fully implemented.

Answer: B Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

88. A. B. C. D. E.

Which of the following specifically involves making continual adjustments as changes are being implemented? Unfreezing Changing Refreezing Improvising Coercing

Answer: D Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89.

A. B. C.

The owner of Makers & Bakers Ltd. 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? Framing change Improvisational change Transformational change

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D. E.

Test Bank

Coercive change Radical change

Answer: B Learning Objective: 12.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

90. A. B. C. D. E.

Which of the following change strategies in an organization pursues change through formal authority and/or the use of rewards or punishments? Rational persuasion strategy Environmental-adaptive strategy Shared power strategy Force-coercion strategy Collaborative strategy

Answer: D Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91. A. B. C. D. E.

With respect to the force-coercion strategy, _____ involves straightforward and unilateral action to “command” that change take place. direct forcing political maneuvering diplomatic coercing indirect maneuvering alliance forming

Answer: A Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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92. A. B. C. D. E.

Test Bank

With respect to change strategies, _____ is more likely to get slower results with high commitment and long term internalization. rational persuasion strategy top-down strategy shared power strategy force-coercion strategy authoritarian strategy

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

93. A. B. C. D. E.

With respect to the force-coercion strategy, _____ involves working indirectly to gain special advantage over other persons and thereby make them change. direct forcing political maneuvering unilateral decision-making rational persuading authoritarian planning

Answer: B Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94.

A. B.

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: the behavior of your co-workers. your tolerance for ambiguity.

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C. D. E.

Test Bank

your tolerance for the observable culture of the organization. your perceptions about the core culture of the organization. how to suppress personal preferences and adhere to organizational changes.

Answer: B Learning Objective: 12.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

95. A. B. C. D. E.

Which of the following change strategies in an organization pursues change through empirical data and sound argument? Rational persuasion strategy Environmental-adaptive strategy Shared power strategy Force-coercion strategy Authoritarian strategy

Answer: A Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96. A. B. C. D. E.

With respect to change strategies, a(n) _____ pursues change by participation in assessing change needs, values, and goals. rational persuasion strategy reason-based strategy shared power strategy force-coercion strategy authoritarian strategy

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

97. A. B. C. D. E.

Which of the following change strategies is empowerment based and highly participative? Rational persuasion strategy Environmental-adaptive strategy Shared power strategy Force-coercion strategy Authoritarian strategy

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

98. A. B. C. D. E.

_____ tries to covertly influence others by selectively providing information and structuring events in favor of the desired change. Education and communication Explicit and implicit coercion Manipulation and co-optation Negotiation and agreement Facilitation and support

Answer: C Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

99.

Lexiren Inc. follows an organizational culture where new leaders are given the opportunity to present their ideas. The company follows a flexible organizational structure where creativity, growth, and change are valued. In the context of organizational cultures, which of the following cultures is reflected in the given scenario? Team culture

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B. C. D. E.

Test Bank

Hierarchical culture Entrepreneurial culture Rational culture Autocratic culture

Answer: C Learning Objective: 12.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

100. Ramon, a new employee at SRV Inc., finds that the company encourages formal attire and manners of speech. He notices that people are very organized in their approach to different tasks and all communication follows a strict hierarchy. In the given context, Ramon is observing the _____ culture at the organization. A. B. C. D. E.

observable core informal team horizontal

Answer: A Learning Objective: 12.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

101. When Andre started working for the company, he would often be told about the achievements of one of his colleagues, Jose, by his manager. Jose had, on many occasions, been named “Employee of the Month”. Which of the following components of the observable culture of Andre’s organization is illustrated in this example? A. Ceremonies B. Legends C. Symbols D. Heroes

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Test Bank

Metaphors

Answer: D Learning Objective: 12.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Darelen Inc. has majority of workers from Spanish communities and a minority of workers from the Finnish community. The policies and values of the company are directly influenced by both cultures. In the context of characteristics of multicultural organizations, this is an example of _____. A. network integration B. structural diversity C. pluralism D. nepotism E. ethnocentrism Answer: C Learning Objective: 12.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. Suzanne, a marketing manager at Ralens Inc. is criticized for being “too lenient” when interacting with women and “too harsh” when communicating with men. This situation best exemplifies the existence of _____. A. occupational subculture B. gender paradox C. glass ceiling D. double-bind dilemma E. discriminatory jeopardy Answer: D Learning Objective: 12.2 Difficulty: Hard

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Test Bank

AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. The finance and accounts team members in a company who are Europeans believe that they are the most important contributors to the organization. Which of the following concepts is best illustrated by this example? A. Ethnocentrism B. Generational subcultures C. Structural integration D. Pluralism E. Leaking pipeline problem Answer: A Learning Objective: 12.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Abigail, an ambitious professional, worked very hard as an assistant manager in an organization for three years. Even though she had worked with efficiency and determination she was not promoted to the manager’s position. She finally gave up pursuing her career goals. Which of the following concepts is illustrated in this example? A. Functional subculture B. Scaffolding C. Biculturalism D. Force management strategy E. Leaking pipeline problem Answer: E Learning Objective: 12.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

106. Brad, a manager, felt that his subordinates needed to change the way they functioned to enhance performance. He interacted with them and made them aware that their present way of doing things was not effective enough. He tried to ensure that the employees accepted that change was inevitable. On the basis of the given information, it can be concluded that Brad is in the _____ phase of the planned change. A. freezing B. unfreezing C. structuring D. refreezing E. improvising Answer: B Learning Objective: 12.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Clayton, a manager, wanted to implement some changes in the processes at work. He used facts and reports of conducted surveys to show that the change would prove advantageous to all concerned and increase performance. Which of the following strategies is being applied by Clayton to incorporate change? A. Force Strategy B. Coercion strategy C. Rational persuasion D. Political maneuvering E. Shared power strategy Answer: C Learning Objective: 12.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. Marco, a new employee at Krone Inc., is resisting change in processes because he is feeling apprehensive about the fast rate at which change is occurring. In the context of resistance to change, which of the following represents Marco’s thought process?

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A. B. C. D. E.

Test Bank

Disrupted habits Loss of face Lack of purpose Work overload Poor timing

Answer: E Learning Objective: 12.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

109. 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. Learning Objective: 12.2 Difficulty: Moderate AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Knowledge

110. How does the glass ceiling affect women?

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Test Bank

Answer: Glass ceiling is an invisible barrier that limits the professional advancement of women and minorities in some organizations. 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 maledominant 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. Learning Objective: 12.2 Difficulty: Easy AACSB: Diverse and multicultural work environments Bloom’s Taxonomy: Comprehension

111. 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. 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. Learning Objective: 12.3 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

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Test Bank

Chapter 13: Human Resource Management

True/False

The goal of human resource management is to support organizational performance by aligning people and their talents with organizational strategies and objectives.

Answer: True Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking 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 his or her organization.

Answer: True Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

The strategic role of HRM does not extend to supporting core values and corporate culture.

Answer: False Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

The use of bona fide occupational qualifications based on sex, religion, age, and national origin are not allowed under any circumstances.

Answer: False Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

Quid pro quo sexual harassment occurs when job decisions are made based on whether an employee submits to or rejects sexual advances.

Answer: True Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

A job analysis lists the qualifications required of a job holder.

Answer: False Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Recruiting websites such as Monster and CareerBuilder are sources of internal recruits.

Answer: False Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Higher levels of early job satisfaction, greater trust in an organization, and less inclination to quit prematurely are among the expected benefits of traditional recruitment practices.

Answer: False Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

10. Lift-cam 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 Learning Objective: 13.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

11. In an assessment center, applicants are evaluated while performing actual work tasks.

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Test Bank

Answer: False Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

14. The evaluation purpose of performance appraisal focuses on future performance. Answer: False Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

15. All trait-based performance appraisal methods tend to be very subjective and as a result, have relatively poor reliability and validity. Answer: True Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17. Results-based performance measures may ignore the impact of circumstances beyond an employee’s control, such as economic conditions or poor performance by someone else. Answer: True Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18. 360-degree appraisals may include self-evaluations by a job holder to identify strengths, weaknesses, and development needs. Answer: True

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Test Bank

Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21. The logic behind stock options is that the option holders will work hard so that their company performs well and they reap some of the financial benefits. Answer: True Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Test Bank

22. Employee benefits are monetary forms of compensation like travel costs and other reimbursements. Answer: False Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking 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 higherwage workers with less expensive newer hires. Answer: True Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25. Labor unions are organizations to which employers belong and that deal with workers on the employers’ behalf. Answer: False Learning Objective: 13.4 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

26. Affirmative action is the process through which labor and management representatives negotiate, administer, and interpret labor contracts. Answer: False Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice Questions

27. _____ is the degree to which an individual is achievement-oriented, careful, hardworking, organized, persevering, responsible, and thorough. A. Veracity B. Fecundity C. Righteousness D. Conscientiousness E. Precariousness Answer: D Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

28. A. B. C.

Which of the following is true of people high on conscientiousness? They tend to be laid back. They are always overachievers. They always feel guilty about taking breaks.

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D. E.

Test Bank

They are self-disciplined. They are often procrastinators.

Answer: D Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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 always tends to decrease over time. C. Conscientiousness is the extent to which a person exhibits a high-Mach personality. D. Conscientiousness decreases performance in training programs. E. Conscientiousness improves the job knowledge of employees. Answer: E Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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31. A. B. C. D. E.

Test Bank

_____ is a process of attracting, developing, and maintaining a talented work force. Customer relationship management Human resource management Database management Supply chain management Enterprise feedback management

Answer: B Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. A. B. C. D. E.

HRM specialists within organizations deal with _____. inventory management quality assurance publicity customer feedback employee relations

Answer: E Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

33. A. B. C. D. E.

Which of the following is an HRM job title? Copywriter Sales representative Corporate recruiter File clerk Marketing manager

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Test Bank

Answer: C Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. A. B. C. D. E.

The goal of human resource management is to _____. maintain the files and databases of an organization enhance organizational performance through the effective utilization of people control the promotion and advertising expenditures represent a business and sell its merchandise to customers in a store maintain and audit all the business accounts of an organization

Answer: B Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

37. Which of the following is involved in the HRM task of maintaining a quality workforce? A. Employee selection B. Training and development C. Performance management D. Labor–management relations E. Employee recruitment Answer: D Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking 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. Employer–person E. Person–manager

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Test Bank

Answer: B Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

39. _____ fit is the extent to which an individual’s values, interests, and behavior are consistent with the culture of his or her organization. A. Manager–person B. Person–team C. Employer–organization D. Person–job E. Person–organization Answer: E Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

42. _____ occurs when someone is denied a job or a job assignment for reasons that are not job-relevant. A. Discrimination B. Domination C. Acculturation D. Affirmative action E. Nepotism Answer: A Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43. Title VII of the Civil Rights Act of 1964 prohibits discrimination in all aspects of employment based on _____. A. education B. national origin C. age D. pregnancy E. family matters

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Test Bank

Answer: B Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

44. Which of the following is true of the Age Discrimination in Employment Act (ADEA)? A. It allows employees to lie about their age to their employers. 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 restricts mandatory retirement ages in most employment sectors. Answer: E Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking 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 an employee submits to or rejects sexual advances E. an employee is threatened with physical attack Answer: D Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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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 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

47. All male mechanics at a local garage are paid $50 per day. However, Sally, the sole female employee with the same job role is paid $30. Sally demands that she be paid the same wages as her male counterparts, as she performs the same jobs. Sally's demand is based on the idea of_____. A. permatemp B. comparable worth C. base compensation D. recency bias E. critical-incident technique Answer: B Learning Objective: 13.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

48. _____ are hired as needed and are not part of an organization’s permanent workforce. A. Part-time workers

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B. C. D. E.

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Frontline staff Independent contractors Flextime employees Line managers

Answer: C Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

50. A. B. C. D. E.

A job _____ details the duties and responsibilities of a job holder. specification description analysis evaluation supervision

Answer: B Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking

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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 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking 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. Probation D. Orientation E. Training Answer: A Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53. A. B. C.

Which of the following is the first step in a typical recruitment process? Preliminary contact with potential job candidates Face-to-face interview Advertisement of a job vacancy

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D. E.

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Initial screening to create a pool of qualified applicants Employment test

Answer: C Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

54. A. B. C. D. E.

Which of the following is the final step of the recruitment process? Personal interview Behavioral interview Preliminary contact with potential job candidates Initial screening to create a pool of qualified applicants Employment test

Answer: D Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. A. B. C. D. E.

Which of the following is a method of external recruitment? Divisional transfers Company electronic postings Manager recommendations Expatriation Employee referrals

Answer: E Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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56. A. B. C. D. E.

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Which of the following is a method of internal recruitment? Recruiting websites Virtual job fairs Managers’ recommendations Employment agencies Headhunters

Answer: C Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking 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 an 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 reduces turnover rates. E. It aids in the retention of high-quality employees. Answer: B Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytical thinking 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 a job. B. The negatives of a job are always clearly revealed and not downplayed or concealed. C. It leads to higher levels of early job satisfaction and greater trust in an organization. D. Employers could suffer lost productivity and the added costs of having to recruit again.

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New employees always have less inclination to quit prematurely.

Answer: D Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

59. Which of the following is true of realistic job previews? A. It focuses on only communicating the most positive features of a job and organization to all applicants. B. The negatives of a job 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 of using realistic job previews. E. Lower levels of early job satisfaction and lesser trust in organizations are the expected consequences of using realistic job previews. Answer: D Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

60. _____ is the process of choosing individuals to hire from a pool of qualified job applicants. A. Orientation B. Selection C. Assignment D. Promotion E. Remuneration Answer: B Learning Objective: 13.2 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

61. A. B. C. D. E.

Which of the following is the first step of a selection process? Interview Screening applicant information Site visit Pre-employment check Employment testing

Answer: B Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

63. _____ means that scores on a selection device have demonstrated links with future job performance. A. Compatibility B. Reliability

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C. D. E.

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Validity Equity Accountability

Answer: C Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

64. The traditional_____ is the most common method of assessment in selection processes. A. assessment test B. face-to-face interview C. work sample D. telephone interview E. virtual interview Answer: B Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

66. In an interview, an interviewer asks a 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 Learning Objective: 13.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

67. In a face-to-face interview with a manager, a 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 Learning Objective: 13.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

68. Biodata methods:

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A. B. C. D. E.

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collect certain personal information that has been proven to correlate with good job performance. examine how job candidates handle simulated work situations. evaluate applicants while performing actual work tasks. ask job candidates about their past behavior, focusing specifically on actions that are likely to be important in a work environment. ask job candidates how they would react when confronted with specific work situations they would be likely to experience on the job.

Answer: A Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

69. In _____, companies ask applicants to do actual job tasks while being graded by observers on their performance. A. situational interviews B. assessment centers C. cognitive interviews D. psychiatric interviews E. work sampling Answer: E Learning Objective: 13.2 Difficulty: Easy AACSB: Analytical thinking 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

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Answer: B Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71. A. B. C. D. E.

_____ is a set of activities that helps people acquire and improve job-related skills. Interviewing Sampling Recruitment Training Selection

Answer: D Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

72. _____ 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 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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73. _____ 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 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

74. A. B. C. D. E.

Which of the following is an example of off-the-job training methods? Job rotation Coaching Temporary promotions Mentoring Management development

Answer: E Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

75. _____ 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

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Answer: E Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

76. The _____ purpose of performance assessment focuses on past performance and measures results against standards. A. interviewing B. training C. sampling D. evaluation E. selection Answer: D Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77. _____ 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 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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78. 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. D. They should be biased against poor performers. E. They should measure all factors directly and indirectly relevant to job performance. Answer: C Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

79. A. B. C. D. E.

A graphic rating scale _____. uses specific descriptions of actual behaviors to rate various levels of performance uses a checklist of traits or characteristics to evaluate performance keeps a log of someone’s effective and ineffective job behaviors is a slow and difficult approach for performance evaluation is very objective and has relatively high reliability and validity

Answer: B Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. Which of the following performance appraisal methods uses specific descriptions of actual behaviors to rate various levels of performance? A. Graphic rating scale B. Behaviorally anchored rating scale C. 360-degree appraisal D. Multiperson comparison E. Critical-incident technique Answer: B

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Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81. A. B. C. D. E.

Which of the following is true of the behaviorally anchored rating scale (BARS)? It is less reliable and valid than the graphic rating scale. It is not consistent with the development purpose of the performance appraisal. It tends to focus on recent behaviors rather than on behavior that occurred throughout the evaluation period. An employee with a BARS rating of 4 most likely treats his customers rudely and with disrespect. It describes expected behaviors for various levels of performance achievement in a job.

Answer: C Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

82. _____ overemphasizes the latest behaviors of an individual when evaluating the individual's performance. A. The critical-incident technique B. Recency bias C. A graphic rating scale D. 360-degree appraisals E. A multiperson comparison Answer: B Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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83. 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. behaviorally anchored rating scale Answer: D Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

84. A. B. C. D. E.

Which of the following is true of results-based approaches? They only focus on employee traits or specific behaviors. They are typically qualitative. They may ignore the impact of circumstances beyond the employee’s control. They are subjective methods of appraisal. They focus on recent performances rather than past performances.

Answer: C Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. _____ 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

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Answer: B Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86. _____ are intended to gather feedback from multiple sources in order to provide a comprehensive evaluation of an employee’s performance. A. 360-degree appraisals B. Results-based performance appraisals C. Critical-incident techniques D. Behavior-based performance appraisals E. Trait-based performance appraisals Answer: A Learning Objective: 13.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

87. _____ 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 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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88. A. B. C. D. E.

Test Bank

_____ is a salary or hourly wage paid to an individual. Indemnity Emolument Reimbursement Reparation Base compensation

Answer: E Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89. In _____, pay increases are awarded to an employee in proportion to his/her performance contributions. A. merit pay systems B. seniority pay systems C. employee stock ownership plans D. profit-sharing plans E. early retirement incentive programs Answer: A Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90. _____ 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. A. Profit-sharing B. Gain sharing C. Merit pay D. Bonus pay E. Employee stock ownership

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Answer: D Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91. 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 gain-sharing 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 Learning Objective: 13.4 Difficulty: Hard AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

92. A. B. C. D. E.

Stock options: do not lose value even if the stock price ends up lower. are nonmonetary forms of compensation. give an owner the right to buy shares of stock at a future date at a fixed price. provide one-time or lump-sum payments to employees who meet specific performance targets. offer workers to purchase stock in their employing companies whenever they chose to.

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Answer: C Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

93. _____ 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 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. A. B. C. D. E.

Which of the following employee benefits is mandated by law? Vacation Social Security Health care Retirement plan Sick leave

Answer: B Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

95. Family-friendly benefits include _____.

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A. B. C. D. E.

Test Bank

stock options counseling on alcohol referrals for sexual abuse part-time employment options counseling for stress

Answer: D Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

96. Eva, an employee at DrexCom Inc., is experiencing marital problems. 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 Learning Objective: 13.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

97. A. B. C. D. E.

_____ refers to the involuntary dismissal of an employee. Termination Retirement Affirmative action Resignation Collective bargaining

Answer: A Learning Objective: 13.4

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Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

98. A. B. C. D. E.

The employment-at-will doctrine assumes that _____. employers must have bona-fide job-related reasons for a termination employers can terminate employees at any time for any reason workers should be provided legal protections against discriminatory firings workers should be provided financial incentives to retire early workers should be provided severance packages in the event of dismissal

Answer: B Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

99. 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 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100. _____ protects employees by recognizing their right to join unions and engage in union activities. A. The Sarbanes-Oxley Act of 2002

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B. C. D. E.

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The Glass–Steagall Act of 1933 The Civil Service Reform Act of 1978 The Wagner Act of 1935 The Taft-Hartley Act of 1947

Answer: D Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

101. _____ 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 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

102. _____ 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 Learning Objective: 13.4 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

103. _____ is the process of negotiating, administering, and interpreting a labor contract in labor-management relations. A. Collective bargaining B. Acculturation C. Mediation D. Nepotism E. Affirmative action Answer: A Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

104. Following sentence was printed in the advertisement of a job vacancy, “Only men under the age of 45 may apply for the job because it entails strenuous physical work for long hours.” Which of the following does this statement exemplify? A. Affirmative action B. Bona fide occupational qualification C. Sexual discrimination D. Age discrimination E. Comparable worth Answer: B Learning Objective: 13.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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105. Richard wants to hire Mark for a position as a security guard in his company. In his interview with Mark, Richard asks Mark if he has any previous experience as a security guard. Richard is trying to assess Mark's _____. A. Person–job fit B. person–organization fit C. comparable worth D. graphic rating scale E. behaviorally anchored rating scale Answer: A Learning Objective: 13.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. While interviewing candidates for a job vacancy, an interviewer asked different questions with varying degrees of difficulty to different candidates. No preestablished list of questions was used during the interview. The interview described in this case is most likely to be an example of a(n) _____ interview. A. structured B. behavioral C. unstructured D. situational E. operational Answer: C Learning Objective: 13.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. During a job interview, Clive is asked about the time when he had accidently revealed a secret about his coworker and how he had managed to diffuse the tension between him and the coworker. Clive has undergone a(n) _____ interview. A. structured B. behavioral

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C. D. E.

Test Bank

exit situational operational

Answer: B Learning Objective: 13.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. As part of the selection process for a job, Derek was asked to work for a few hours inside a facility where the real work conditions of the job were simulated. Which of the following selection techniques is being used in this case? A. Work sampling B. Biodata method C. Behavioral interview D. Assessment center E. Situational interview Answer: D Learning Objective: 13.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Andrew applied for a position as a truck driver at a transport company. Andrew was asked by his interviewers to drive a loaded truck for about 200 miles to assess his driving abilities. Andrew's interviewers have used _____ to assess him. A. work sampling B. biodata method C. behaviorally anchored rating scale D. critical-incident technique E. graphic rating scale Answer: A Learning Objective: 13.2

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Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

110. The marketing head of Rexcam Inc. has recently quit. Rexcam needs to hire a new marketing head, but it does not want to spend much money. Which of the following recruitment options is most suitable for Rexcam? A. External recruitment B. Internal recruitment C. Social recruitment D. Traditional recruitment E. Campus recruitment Answer: B Learning Objective: 13.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

111. When Anna was inducted into her new organization, she was briefed about the work processes, introduced to other employees, and informed about the organization’s vision and objectives. Which of the following terms best describes this process? A. Orientation B. Socialization C. Training D. Job rotation E. Coaching Answer: A Learning Objective: 13.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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112. Jim has been sent to Australia by his company to learn some processes involved in a different role than his in the company’s subsidiary there. Which of the following is best described by this situation? A. Socialization B. Mentoring C. Work sampling D. Orientation E. Job rotation Answer: E Learning Objective: 13.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

113. Walter is the manager of a restaurant. He keeps a log of all the times his waiters get a good or bad review from the customers. Walter is using the _____. A. graphic rating scale B. behaviorally anchored rating scale C. work sampling technique D. critical-incident technique E. job analysis technique Answer: D Learning Objective: 13.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

114. Define Human resource management (HRM). Describe its goal and major tasks.

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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. Learning Objective: 13.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

115. 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

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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 12month 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. Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

116. 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 high-quality employees. Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

117. 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 pre-established 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

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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. Learning Objective: 13.2 Difficulty: Hard AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

118. 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 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 traitbased 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.

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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. Learning Objective: 13.3 Difficulty: Hard AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

119. What are the different types of benefits received by employees in organizations?

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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. 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 familyfriendly benefits that help employees balance work and nonwork responsibilities. These include child care, elder care, flexible schedules, parental leave, and parttime 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. Learning Objective: 13.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

120. 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

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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. Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Chapter 14: Leading and Leadership Development

True/False

The two bases of position power are expertise and reference.

Answer: False Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

In a reward power relationship, the power is lost as soon as the value of the reward or the reward itself is taken away.

Answer: True Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Expertise is a power derived from charisma or interpersonal attractiveness.

Answer: False Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Legitimate power is the ability to influence through expertise.

Answer: False Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Physical characteristics such as a person’s height, weight, and physique contribute in determining leadership success.

Answer: False Learning Objective: 14.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

A laissez-faire leader emphasizes both tasks and people.

Answer: False Learning Objective: 14.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10.

A manager who follows a laissez-faire style of leadership is known as an impoverished manager.

Answer: True Learning Objective: 14.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11.

Leadership styles are recurring patterns of behaviors exhibited by leaders.

Answer: True Learning Objective: 14.2 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12.

A human relations leader emphasizes people over task.

Answer: True Learning Objective: 14.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

13.

A manager who follows a democratic style of leadership is known as a team manager.

Answer: True Learning Objective: 14.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

14.

Fred Fiedler developed the situational leadership model.

Answer: False Learning Objective: 14.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

15.

The quality of leader–member relations measures the degree to which a position gives a leader power to reward and punish subordinates.

Answer: False Learning Objective: 14.3

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Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17.

The Hersey-Blanchard situational leadership model suggests that successful leaders never change their styles.

Answer: False Learning Objective: 14.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18.

Path–goal theory contributed to the recognition of substitutes for leadership.

Answer: True Learning Objective: 14.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

19.

An authority decision is made by a leader after receiving information, advice, or opinions from group members.

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Answer: False Learning Objective: 14.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20.

Consultative decisions and group decisions contribute to leadership development by allowing others to gain experience in the problem-solving process.

Answer: True Learning Objective: 14.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21.

A leader’s choice among alternative decision-making methods is governed only by the decision time factor.

Answer: False Learning Objective: 14.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22.

Transformational leaders use their position of authority to inspire followers.

Answer: False Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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23.

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A leader who is strong in emotional intelligence lacks self-awareness.

Answer: False Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24.

Interactive leadership uses command-and-control use of position power to get work done.

Answer: False Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25.

The concept of servant leadership fits with the concept of a moral leader.

Answer: True Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

26.

Moral leadership begins with personal integrity, a concept fundamental to the notion of transformational leadership.

Answer: True Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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27.

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According to Peter Drucker, effective leadership is primarily based on being clever and not on being consistent.

Answer: False Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

28. A. B. C. D. E.

Which of the following is a function of leading? Setting directions and objectives Bringing together resources Creating structures Motivating commitment and hard work Ensuring results

Answer: D Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

29. A. B. C. D. E.

Which of the following is a basis of personal power? Reward power Coercive power Legitimate power Authority power Referent power

Answer: E

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Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

30. A. B. C. D. E.

Which of the following accurately defines reward power? It is the capacity to offer something of value as a means of influencing other people. It is the capacity to punish or withhold positive outcomes as a means of influencing other people. It is the capacity to influence other people by virtue of formal authority, or the rights of office. It is the capacity to influence other people because of specialized knowledge. It is the capacity to influence other people by personally identifying with them.

Answer: A Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

31. A. B. C. D. E.

Coercive power is the capacity to: offer something of value as a means of influencing other people. influence other people by virtue of formal authority, or the rights of office. punish or withhold positive outcomes as a means of influencing other people. influence other people because of specialized knowledge. influence other people by personally identifying with them.

Answer: C Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

32.

Identify the definition of legitimate power from the following.

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A. B. C. D. E.

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It is the capacity to influence other people using specialized knowledge. It is the capacity to influence other people by personally identifying with them. It is the capacity to offer something of value as a means of influencing other people. It is the capacity to punish or withhold positive outcomes as a means of influencing other people. It is the capacity to influence other people by virtue of formal authority, or the rights of office.

Answer: E Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

33. A. B. C. D. E.

Legitimate power differs from referent power in that legitimate power is the ability to influence through: authority. skills, knowledge, and information. expertise. punishment. rewards.

Answer: A Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. A. B. C.

Which of the following is true of legitimate power? It can only be obtained through the use of incentives such as pay raises, bonuses, promotions, special assignments, and verbal or written compliments. It can only be gained from experience and accomplishments as well as access to useful information. It is the right by virtue of one’s organizational position or status to exercise control over persons in subordinate positions.

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D. E.

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It only exists when people expect rewards and a leader makes rewards inconsistently available. It is derived from charisma or interpersonal attractiveness.

Answer: C Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

35. A. B. C. D. E.

Which of the following statements refer to expert power? It is the capacity to influence other people by virtue of formal authority, or the rights of office. It is the capacity to influence other people because of specialized knowledge. It is the capacity to offer something of value as a means of influencing other people. It is the capacity to influence other people by personally identifying with them. It is the capacity to punish or withhold positive outcomes as a means of influencing other people.

Answer: B Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

36. A. B. C. D. E.

When a manager uses referent power, he or she has the capacity to: influence other people using specialized knowledge. influence other people by virtue of formal authority, or the rights of office. punish or withhold positive outcomes as a means of influencing other people. influence other people because of their desire to identify personally with the manager. offer something of value as a means of influencing other people.

Answer: D Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning

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Bloom’s Taxonomy: Comprehension

37. A. B. C. D. E.

Which of the following bases of power refers to the ability to influence through identification? Legitimate power Expert power Referent power Coercive power Reward power

Answer: C Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

38. A. B. C. D. E.

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”? Referent power Legitimate power Coercive power Expert power Reward power

Answer: B Learning Objective: 14.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

39. A.

Which of the following is true of referent power? It is only maintained by protecting one’s credibility by not overstepping boundaries and pretending to have expertise that really isn’t there.

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B. C. D. E.

Test Bank

It is only based on serving others and helping them use their talents fully so that organizations benefit society. It never allows others to exercise power and achieve influence within an organization. It can be developed and maintained through good interpersonal relationships that encourage the admiration and respect of others. It never allows managers to act in a unilateral fashion.

Answer: D Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

40. A. B. C. D. E.

Which of the following is a benefit of having a visionary leadership? It only exists when every team member exercises power and achieves influence within an organization. It gives meaning to people’s work; it makes what they do seem worthy and valuable. It is only based on serving others and helping them use their talents fully so that organizations benefit society. It never allows team members to take decisions and act accordingly. It requires managers to act in a unilateral fashion and retain authority and information.

Answer: B Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

41. A. B. C. D. E.

Servant leadership differs from visionary leadership in that servant leadership: is follower-centered. influences through authority. controls persons in subordinate positions. influences through punishment. is coercive.

Answer: A

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Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

42. A. B. C. D. E.

Which of the following accurately defines “empowerment”? The ability to manage emotions in social relationships The ability to exercise dominating power over people to force them to be more productive The ability to act with honesty, credibility, and consistency in putting values into action The process of explaining task directions in a supportive and persuasive way The process of allowing others to exercise power and achieve influence within an organization

Answer: E Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

43. A. B. C. D. E.

When a leader is said to have cognitive ability what does it indicate? The leader has high energy, displays initiative, and is tenacious. The leader is creative and original in his or her thinking. The leader has the intelligence to integrate and interpret information. The leader enjoys influencing others to achieve shared goals. The leader has confidence in his or her abilities.

Answer: C Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

44.

When a leader enjoys influencing others to achieve shared goals, he or she has the personal trait of _____.

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A. B. C. D. E.

Test Bank

dependability flexibility cognitive ability integrity motivation

Answer: E Learning Objective: 14.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

45. A. B. C. D. E.

Identify the function of a leader who is production-centered from the following statements. Displays sensitivity toward the needs of employees Monitors performance results of employees Shows trust in employees Acts with supportiveness toward employees Respects the feelings of employees

Answer: B Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

46. A. B. C. D. E.

When a leader is high in concern for task performance, he or she: assigns task responsibilities to employees. maintains good social relations with employees. is sensitive toward employees’ needs. is supportive toward employees. shows trust in employees.

Answer: A Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning

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Bloom’s Taxonomy: Comprehension

47. A. B. C. D. E.

Which of the following is true of a leader who is production-centered? The leader allows employees to choose their own work. The leader lets employees take their own time to complete work. The leader sets clear work standards for employees. The leader maintains good social relations with employees. The leader shows trust in employees and allows them to make decisions regarding work.

Answer: C Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

48. A. B. C. D. E.

An employee-centered leader: monitors the performance of employees. urges task completion from employees. sets clear work standards for employees. maintains good social relations with employees. defines the work to be done by employees.

Answer: D Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

49. A. B. C. D. E.

When a leader is high in concern for people, he or she: assigns task responsibilities. urges task completion from employees. monitors the performance of employees. sets clear work standards for employees. acts with supportiveness toward employees.

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Answer: E Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

50. A. B. C. D. E.

Which of the following is a function of a leader high in concern for people? The leader shows trust in employees. The leader plans the work to be done by employees. The leader assigns task responsibilities to employees. The leader sets clear work standards for employees. The leader monitors the work of each employee.

Answer: A Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

51. A. B. C. D. E.

When a leader practices an autocratic style of leadership, he or she: shows little concern for a task. emphasizes people over tasks. acts in a command-and-control fashion. lets team members make decisions. acts with a “do the best you can and don’t bother me” attitude.

Answer: C Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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52. A. B. C. D. E.

Test Bank

An autocratic leader differs from a leader practicing laissez-faire style of leadership in that an autocratic leader: lets team members make decisions. shows little concern for tasks. emphasizes people over tasks. retains authority and information. acts with a “do the best you can and don’t bother me” attitude.

Answer: D Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

53. A. B. C. D. E.

Which of the following management traits would a laissez-faire leader have? Low concern for production; low concern for people Low concern for people; high concern for production High concern for production; high concern for people High concern for people; low concern for production Balanced and equal concern for people and production

Answer: A Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

54. A. B. C. D. E.

A(n) _____ manager primarily focuses on getting work done with minimum effort. achievement-oriented team authority-obedience country club impoverished

Answer: E Learning Objective: 14.2

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Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

55. A. B. C. D. E.

Which of the following characteristics refers to a leader practicing a human relations style of leadership? Acting in a command-and-control fashion Acting in a unilateral fashion Acting with a “do the best you can and don’t bother me” attitude Retaining authority and information Emphasizing people over task

Answer: E Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

56. A. B. C. D. E.

Which of the following kinds of management traits would a human relations leader have? Low concern for production; low concern for people Low concern for people; high concern for production High concern for production; high concern for people High concern for people; low concern for production Constantly changing concern for both people and production

Answer: D Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

57. A. B.

Which of the following is a characteristic of an autocratic leader? Emphasizes tasks over people Lets team members make decisions

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C. D. E.

Test Bank

Shows little concern for tasks Encourages participation in decision making Helps others develop their skills and capabilities

Answer: A Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

58. A. B. C. D. E.

An authority-obedience manager focuses on _____. balancing work output and employee morale people’s needs and building relationships efficiency of tasks and operations minimum effort to get work done building participation and support for a shared purpose

Answer: C Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

59. A. B. C. D. E.

Which of the following management traits would an autocratic leader have? Low concern for production; low concern for people Low concern for people; high concern for production High concern for production; high concern for people High concern for people; low concern for production Constantly changing concern for both people and production

Answer: B Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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60. A. B. C. D. E.

Test Bank

Which of the following is a characteristic of a laissez-faire leader? Acts in a command-and-control fashion Lets team members make decisions Retains authority and information Emphasizes task over people Actively helps others develop their skills

Answer: B Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

61. A. B. C. D. E.

Which of the following is a characteristic of a democratic leader? Emphasizing tasks over people Emphasizing people over tasks Encouraging employee participation in decision making Showing little concern for tasks Displaying a “do the best you can and don’t bother me” attitude

Answer: C Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

62. A. B. C. D. E.

Which of the following management traits would a democratic leader have? Low concern for production; low concern for people Low concern for people; high concern for production High concern for production; high concern for people High concern for people; low concern for production Constantly changing concern for both people and production

Answer: C

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Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

63. A. B. C. D. E.

A democratic leader differs from an autocratic leader in that a democratic leader: emphasizes tasks over people. acts in a unilateral fashion. shows little concern for a task. helps others develop their skills and capabilities. displays a command-and-control type of leadership.

Answer: D Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

64. A. B. C. D. E.

A(n) _____ manager follows a human relations style of leadership. team country club impoverished authority-obedience achievement-oriented

Answer: B Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

65. A. B.

Which of the following is a characteristic of a democratic leader? Getting things done while sharing information Retaining authority and information

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C. D. E.

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Acting in a unilateral fashion Acting in a command-and-control fashion Acting with a “do the best you can and don’t bother me” attitude

Answer: A Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

66. A. B. C. D. E.

In Fiedler’s contingency model, the least-preferred co-worker scale is used to: increase a leader’s power. improve a leader’s leadership traits. measure a person’s leadership style. measure the rewards to be given to a leader. improve a leader’s situational strength.

Answer: C Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

67. A. B. C. D. E.

According to Fiedler’s contingency model, the quality of leader-member relations measures the _____. degree to which a group supports a leader extent to which task goals and procedures are clearly spelled out extent to which a leader has authority over his or her supporters degree to which the position gives a leader power to reward subordinates degree to which the position gives a leader power to punish subordinates

Answer: A Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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68. A. B. C. D. E.

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Which of the following is suggested by the Hersey-Blanchard situational leadership model? Successful leaders can only be visionary. Successful leaders only follow the servant leadership style. Successful leaders are all task motivated. Successful leaders may adjust their style of leadership. Successful leaders always stick to any one particular form of leadership style.

Answer: D Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

69. A. B. C. D. E.

According to the Hersey-Blanchard situational leadership model, the delegating style of leadership works best in: low-readiness situations, where followers are unable and unwilling, or insecure. low-to-moderate-readiness followers who are able but unwilling, or insecure. moderate-to-high-readiness followers who are unable, but willing or confident. low-readiness followers who are unable but willing and insecure. high-readiness situations with able, willing, and confident followers.

Answer: E Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

70. A. B. C. D.

Which of the following types of leadership styles follows a low-task, low-relationship feature according to the Hersey-Blanchard situational leadership model? Instructing Participating Selling Telling

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Delegating

Answer: E Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

71. A. B. C. D. E.

According to the Hersey-Blanchard situational leadership model, the telling style of leadership works best in: low-readiness followers who are unable but willing and insecure. low-readiness situations, where followers are unable and unwilling, or insecure. high-readiness situations with able, willing, and confident followers. moderate-to-high-readiness followers who are unable, but willing or confident. low-to-moderate-readiness followers who are able but unwilling, or insecure.

Answer: B Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

72. A. B. C. D. E.

Which of the following types of leadership styles follows a low-task, high-relationship feature according to the Hersey-Blanchard situational leadership model? Instructing Participating Selling Telling Delegating

Answer: B Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

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73. A. B. C. D. E.

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In which of the following situations is the participating style of leadership recommended? With low-to-moderate readiness followers who are able but unwilling, or insecure With moderate-to-high-readiness followers who are unable but willing or confident With low-readiness followers who are unable but willing and insecure With low-readiness situations, where followers are unable and unwilling, or insecure With high-readiness situations with able, willing, and confident followers

Answer: A Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

74. A. B. C. D. E.

The selling style of leadership is recommended for: low-readiness followers who are unable but willing and insecure. low-to-moderate-readiness followers who are able but unwilling, or insecure. moderate-to-high-readiness followers who are unable, but willing or confident. high-readiness situations with able, willing, and confident followers. low-readiness situations, where followers are unable and unwilling, or insecure.

Answer: C Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

75. A. B. C. D. E.

Which of the following types of leadership styles follows a high-task, high-relationship feature according to the Hersey-Blanchard situational leadership model? Instructing Participating Selling Telling Delegating

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Answer: C Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

76. A. B. C. D. E.

The telling style of leadership has a_____ feature. constantly changing task-relationship low-task, high-relationship high-task, high-relationship high-task, low-relationship low-task, low-relationship

Answer: D Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Knowledge

77. A. B. C. D. E.

Which of the following is true of the path-goal theory? It disregards the tendency of leaders to develop special relationships with some team members. It advances the theory that that one leadership style can fit all situations in decision making. It promotes using just two types of leadership styles for varying situations. It advances theories against changing leadership styles according to situations. It advises leaders to shift among the four leadership styles in ways that fit situational needs.

Answer: E Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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78. A. B. C. D. E.

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According to the path–goal leadership theory, which of the following is a function highlighted in the directive leadership style? Clarifying the leader’s role in a group Showing concern for the well-being of subordinates Emphasizing continuous improvement in performance Involving team members in decision making Displaying confidence in meeting high standards

Answer: A Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

79. A. B. C. D. E.

From the following, identify the function of the supportive leadership style in the path–goal leadership theory. Setting challenging goals Treating team members as equals Expecting the highest levels of performance Involving team members in decision making Clarifying the leader’s role in a group

Answer: B Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

80. A. B. C. D. E.

According to the path–goal leadership theory, which of the following is highlighted in an achievement-oriented leadership style? Showing concern for the well-being of subordinates Clarifying the leader’s role in a group Emphasizing continuous improvement in performance Consulting team members and asking for suggestions Treating team members as equals

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Answer: C Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

81. A. B. C. D. E.

Identify the function emphasized by participative leadership from the following statements. Setting challenging goals Expecting the highest levels of performance Maintaining definite standards of performance Involving team members in decision making Clarifying the leader’s role in a group

Answer: D Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

82. A. B. C. D. E.

Directive leadership differs from supportive leadership in that directive leadership emphasizes: showing concern for the well-being of subordinates. involving team members in decision making. consulting team members and asking for suggestions. using team members’ suggestions when making decisions. letting followers know what is expected.

Answer: E Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

83.

Which of the following is true of directive leadership?

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A. B. C. D. E.

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When job assignments are unclear, directive leadership helps to clarify task objectives and expected rewards. When worker self-confidence is low, directive leadership can increase confidence by emphasizing individual abilities and offering needed assistance. When task challenge is insufficient in a job, directive leadership helps to set goals and raise performance aspirations. When performance incentives are poor, directive leadership can clarify individual needs and identify appropriate rewards. When a leader is short of ideas, directive leadership encourages workers to give their suggestions.

Answer: A Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

84. A. B. C. D. E.

Which of the following is true of supportive leadership? When task challenge is insufficient in a job, supportive leadership helps to set goals and raise performance aspirations. When worker self-confidence is low, supportive leadership can increase confidence by emphasizing individual abilities and offering needed assistance. When a leader is short of ideas, supportive leadership encourages workers to give their suggestions. When performance incentives are poor, supportive leadership might clarify individual needs and identify appropriate rewards. When job assignments are unclear, supportive leadership helps to clarify task objectives and expected rewards.

Answer: B Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

85.

Which of the following is true of achievement-oriented leadership?

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A. B. C. D. E.

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When performance incentives are poor, achievement-oriented leadership helps to clarify individual needs and identify appropriate rewards. When a leader is short of ideas, achievement-oriented leadership encourages workers to give their suggestions. When job assignments are unclear, achievement-oriented leadership helps to clarify task objectives and expected rewards. When task challenge is insufficient in a job, achievement-oriented leadership helps to set goals and raise performance aspirations. When worker self-confidence is low, achievement-oriented leadership can increase confidence by emphasizing individual abilities and offering needed assistance.

Answer: D Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

86. A. B. C. D. E.

Which of the following is true of participative leadership? When task challenge is insufficient in a job, participative leadership helps to set goals and raise performance aspirations. When worker self-confidence is low, participative leadership can increase confidence by emphasizing individual abilities and offering needed assistance. When performance incentives are poor, participative leadership helps to clarify individual needs and identify appropriate rewards. When work is not scheduled, participative leadership can schedule work in an orderly manner. When job assignments are unclear, participative leadership helps to clarify task objectives and expected rewards.

Answer: C Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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87. A. B. C. D. E.

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Achievement-oriented leadership differs from participative leadership in that participative leadership emphasizes the: setting of challenging goals as a method to enhance employee proficiency. clarification of task objectives and expected rewards. need for continuous improvement in performance. importance of setting goals and raising performance aspirations. involvement of team members in decision making.

Answer: E Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

88. A. B. C. D. E.

Which of the following notions is central to the leader–member exchange theory? When worker self-confidence is low, supportive leadership can increase confidence by emphasizing individual abilities and offering needed assistance. 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. Leaders adjust their leadership styles according to the situation. Good leadership depends on the match or fit between a person’s leadership style and situational demands. Leaders are most effective when they make decisions in ways that best fit a problem situation.

Answer: B Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

89. A. B. C.

The Vroom-Jago leader-participation model suggests that: not everyone is treated the same by a leader. there are aspects of the work setting and the people involved that can reduce the need for active leader involvement. there are only two leadership styles that a leader can shift back and forth between.

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D. E.

Test Bank

leaders are most effective when they make decisions in ways that best fit a problem situation. linking together charismatic qualities like enthusiasm and inspiration always makes a good leader.

Answer: D Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

90. A. B. C. D. E.

According to the Vroom-Jago leader-participation model, consultative decisions differ from authority decisions in that in consultative decisions: leaders lack the expertise or information to solve problems. leaders have the information needed to solve problems. leaders only have a supportive contribution in the decision-making process. followers are likely to accept and implement a leader’s decision. followers make the decisions and leaders follow.

Answer: A Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

91. A. B. C. D. E.

A transformational leader uses his or her _____ to inspire followers. personality authority position power expertise

Answer: A Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

92. A. B. C. D. E.

The pathway to transformational leadership starts with _____. discharging any decision-making powers that a leader could have promising monetary incentive to incite interest in followers a leader adopting a unilateral and command-and-control style of leading a willingness to bring real emotion to the leader–follower relationship using coercive measures to influence the behavior of followers

Answer: D Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

93. A. B. C. D. E.

Daniel Goleman’s work on leadership development emphasized the influence of a leader using his or her _____. educational quotient emotional intelligence cultural intelligence curiosity quotient intelligence quotient

Answer: B Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. A. B. C. D.

According to Daniel Goleman, which of the following influences a leader to be successful? The ability to offer something of value as a means of influencing other people. The ability to punish or withhold positive outcomes as a means of influencing other people. The ability to have a clear sense of the future. The ability to monitor the performance results of employees.

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The ability to manage emotions in social relationships.

Answer: E Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

95. A. B. C. D. E.

Which of the following is true of leaders strong in emotional intelligence? They work on disruptive impulses. They are able to empathize with others. They always make authority decisions. They lack the ability to emphasize continuous improvement. They are less capable at establishing rapport with others.

Answer: B Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

96. A. B. C. D. E.

Which of the following emotional intelligence competencies does a leader possess when he or she is able to empathize with others? Social awareness Self-management Relationship management Self-awareness Motivation and persistence

Answer: A Learning Objective: 14.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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97. A. B. C. D. E.

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A leader who possesses the emotional competency of self-awareness has the ability to: offer something of value as a means of influencing other people. establish rapport with others and to build social capital through relationships and networks. understand his or her own moods and emotions, and to understand their impact on his or her own work and on others’ work. work hard for reasons other than money and status. understand the emotions of others and to use this understanding to better relate to them.

Answer: C Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

98. A. B. C. D. E.

Which of the following is true of authentic leadership? It uses coercive measures to influence the behavior of followers. It allows others to exercise power and achieve influence within an organization. It helps to establish rapport with others and to build social capital through relationships and networks. It offers something of material value as a means of influencing people. It activates positive psychological states to achieve self-awareness and positive selfregulation.

Answer: E Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

99.

A. B. C.

Bruno, Tim’s manager, suggested that if Tim would get his additional work done in a day, then Bruno would make sure that Tim gets two days of extra pay. Which of the following types of leadership powers is Bruno displaying? Coercive power Legitimate power Expert power

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D. E.

Test Bank

Reward power Referent power

Answer: D Learning Objective: 14.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

100. Bill, a store manager, asked Robert, a store clerk, to stack cereal boxes at the back of the store. Robert told Bill that doing so would result in a drop in the sale of cereal boxes. Bill asked Robert to refrain from questioning his judgment and instead follow his orders because he was in charge of the store’s operations. What power did Bill exert over Robert? A. Coercive power B. Legitimate power C. Expert power D. Reward power E. Referent power Answer: B Learning Objective: 14.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

101. Richard, a manager of a transport company, discovered that one of his employees, Kevin, was habitually late on his deliveries. Richard threatened to fire Kevin if he didn’t perform better. What power has Richard exerted over Kevin? A. Coercive power B. Legitimate power C. Expert power D. Reward power E. Referent power Answer: A Learning Objective: 14.1

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Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Bridget was asked by Brenda, her boss, to take on a difficult assignment. Bridget, although entirely occupied with other tasks, took on the assignment without hesitation. Bridget’s motivation for taking on the assignment was the opportunity to develop a positive relationship with Brenda. What power has Brenda exerted over Bridget? A. Coercive power B. Legitimate power C. Expert power D. Reward power E. Referent power Answer: E Learning Objective: 14.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. Susanna 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 empowers 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 Susanna follow? A. Servant leadership B. Autocratic leadership C. Directive leadership D. Achievement-oriented leadership E. Laissez-faire leadership Answer: A Learning Objective: 14.1 Difficulty: Moderate AACSB: Application of knowledge

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Test Bank

Bloom’s Taxonomy: Application

104. Kenneth is a manager who prioritizes efficiency over everything else. To achieve this he micromanages his workers and assigns them their tasks. He doesn’t allow his employees to make independent decisions or participate in the decision making process. What leadership style does Kenneth follow? A. Servant leadership B. Autocratic leadership C. Directive leadership D. Achievement-oriented leadership E. Laissez-faire leadership Answer: B Learning Objective: 14.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Samuel, 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. Which of the following leadership styles does Samuel employ? A. Autocratic leadership style B. Human relations style C. Laissez-faire style D. Democratic style E. Impoverished manager style Answer: C Learning Objective: 14.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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106. Anthony is a manager who values maintaining social relationships with all his employees. He treats them like family and allows them to take days off even if it means that work will be compromised. He personally tracks each employee’s performance and tries to help them in whatever way he can. What leadership style is Anthony following? A. Autocratic style B. Human relations style C. Laissez-faire style D. Democratic style E. Impoverished style Answer: B Learning Objective: 14.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Steven, a young manager, strongly believes that his workers have the potential to accomplish better results on their jobs. Steven 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 Steven adopted? A. Directive leadership B. Supportive leadership C. Telling leadership D. Participative leadership E. Achievement-oriented leadership Answer: E Learning Objective: 14.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

108. Harry, 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. Harry, who held strong ethical principles, refused the offer and instead supported his team’s demand. Harry’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 Harry display? A. Achievement-oriented leadership B. Moral leadership C. Directive leadership D. Autocratic leadership E. Interactive leadership Answer: B Learning Objective: 14.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

109. 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. Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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110. List and describe 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. Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

111. What are the four leadership styles identified by Robert House that can add value in different types of situations for a leader? 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. Learning Objective: 14.3

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Difficulty: Moderate AACSB: Ethical understanding and reasoning Bloom’s Taxonomy: Comprehension

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Test Bank

Chapter 15: Individual Behavior

True/False

Perception affects the impressions we form of ourselves, other people, and daily life experiences.

Answer: True Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

A healthy psychological contract offers a balance between the contributions individuals make on behalf of their organization and inducements they receive.

Answer: True Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Fundamental attribution error neglects internal explanations for poor-quality work.

Answer: False Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Self-serving bias explains personal success by internal causes and personal failures by external causes.

Answer: True

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Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Self-serving bias creates a false sense of confidence.

Answer: True Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Stereotypes are always negative and ill-intended.

Answer: False Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

A halo effect often shows up in performance evaluations.

Answer: True Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Under selective perception, information that makes us uncomfortable is screened out; comfortable information is allowed in.

Answer: True Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

Impression management is the systematic attempt to influence how others perceive us.

Answer: True Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10.

One of the tactics of impression management is to avoid smiling when engaged in conversations as this creates personal bonds.

Answer: False Learning Objective: 15.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11.

A person who lacks conscientiousness focuses on what can be accomplished and meets commitments.

Answer: False Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12.

An open person is broad-minded, receptive to new things, and comfortable with change.

Answer: True Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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13.

Test Bank

A person with a high degree of openness to experience has a low degree of curiosity.

Answer: False Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16.

Locus of control is the belief that what happens is not within one’s control.

Answer: False Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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17.

Test Bank

Authoritarianism is the degree to which a person defers to authority and accepts interpersonal status differences.

Answer: True Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

19.

A person high in self-monitoring is predictable and tends to act in a consistent way regardless of circumstances.

Answer: False Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20.

A person with a Type A personality feels guilty when relaxing.

Answer: True Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21.

The cognitive component of an attitude reflects a belief or an opinion. 15-5

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Answer: True Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22.

The affective component of an attitude reflects an intention to behave in a manner consistent with a belief or feeling.

Answer: False Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

23.

Job satisfaction is the degree to which an individual feels positive or negative about a job.

Answer: True Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25.

Moods tend to be short term and clearly targeted.

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Test Bank

Answer: False Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

26. A. B. C. D. E.

_____ is the process through which people receive, organize, and interpret information from the environment. Attribution Perception Projection Conversion Distortion

Answer: B Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

27. A. B. C. D. E.

Which of the following is true about perceptions? Perceptions have a marginal influence on individual behavior. Perceptions do not have an impact on daily life experiences. People perceive the same people, things, or situations differently. People’s perceptions are unaffected by their cultural background. Perceptions refer to the desire to achieve or to accomplish something.

Answer: C Learning Objective: 15.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

28.

A psychological contract refers to: 15-7

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A. B. C. D. E.

Test Bank

the loyalty of an employee to an organization. the extent to which an individual is dedicated to a job. the mental exhaustion from work stress. a strong positive feeling about one’s job and an organization. the set of individual expectations about an employment relationship.

Answer: E Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

29. A. B. C. D. E.

Which of the following is a consequence of an unbalanced psychological contract? Eustress Fundamental attribution error Projection Withdrawal False sense of confidence

Answer: D Learning Objective: 15.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

30. A. B. C. D. E.

Which of the following refers to attribution? It is the set of individual expectations about an employment relationship. It is the process of explaining events. It is the process through which people receive, organize, and interpret information from the environment. It is the tendency to define problems from one’s own point of view. It is the assignment of personal attributes to other individuals.

Answer: B Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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31. A. B. C. D. E.

Test Bank

The _____ overestimates internal factors and underestimates external factors as influences on someone’s behavior. fundamental attribution error stereotyping effect halo effect projection error self-serving bias

Answer: A Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32.

A. B. C. D. E.

Jason’s performance at work was declining as he had to meet unrealistic targets daily. Though he was able to meet his targets, the quality of his work was not very good. His supervisor assumed that this was due to a lack of concentration and laziness. This scenario is an instance of a _____. stereotyping error halo effect fundamental attribution error projection error self-serving bias

Answer: C Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

33. A. B. C. D. E.

Which of the following occurs when attributes commonly associated with a group are assigned to an individual? Fundamental attribution error Psychological contract Selective perception Self-serving bias Stereotype

Answer: E

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Test Bank

Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34.

A. B. C. D. E.

Karen, the manager of a research organization, believes that women avoid arithmetic and statistics, whereas men prefer such topics. This assumption made by Karen is an example of a _____. stereotype self-serving bias projection fundamental attribution error halo effect

Answer: A Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

35. A. B. C. D. E.

A _____ occurs when one attribute is used to develop an overall impression of a person or situation. projection error fundamental attribution error projection halo effect stereotype

Answer: D Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

36.

Carla 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? 15-10

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A. B. C. D. E.

Test Bank

Anchoring effect Selective perception Projection Fundamental attribution error Halo effect

Answer: E Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

37. A. B. C. D. E.

Selective perception refers to: the tendency to define problems from one’s own point of view. the assignment of personal attributes to other individuals. using a single attribute to develop an overall impression of a person or situation. the systematic attempt to influence how others perceive us. assigning the attributes commonly associated with a group to an individual.

Answer: A Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

38.

A. B. C. D. E.

The revenues of Venus Media Inc. were low for the past few months. The marketing department of the firm believed that the financial meltdown in the nation was the primary reason for the poor performance of the firm. It failed to consider any other reason put forth by the other departments. Which of the following perceptual tendencies is displayed in this case? Stereotype Selective perception Projection Fundamental attribution error Self-serving bias

Answer: B Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge

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Test Bank

Bloom’s Taxonomy: Application

39. A. B. C. D. E.

_____ involves the assignment of personal attributes to other individuals. Fundamental attribution error Self-serving bias Projection Halo effect Stereotyping

Answer: C Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

40.

A. B. C. D. E.

Eric, 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? Stereotype Selective perception Fundamental attribution error Self-serving bias Projection

Answer: E Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

41. A. B. C. D. E.

The profile of characteristics making an individual unique from others is referred to as _____. a stereotype personality self-serving bias the locus of control cognitive dissonance

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Test Bank

Answer: B Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

42. A. B. C. D. E.

The degree to which someone is outgoing, sociable, and assertive is referred to as _____. agreeableness perceptiveness cognitive dissonance extraversion conscientiousness

Answer: D Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43.

A. B. C. D. E.

Ronald is a senior executive at Brown Inc. He is well-mannered and has the ability to cooperate with all his colleagues. When employees have work-related or personal issues, they approach him for support because they trust him. Which of the following personality traits does Ronald most likely possess that enables him to be so approachable? Agreeableness Introversion Self-serving bias Locus of control Extraversion

Answer: A Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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44. A. B. C. D. E.

Test Bank

The degree to which someone is responsible, dependable, and careful is referred to as _____. agreeableness introversion perceptiveness extraversion conscientiousness

Answer: E Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

45.

A. B. C. D. E.

Wilson often tries to multi-task and, as a result, fails to do well in any task. He also tends to be careless and irresponsible while working on his projects. This implies that Wilson most likely: lacks conscientiousness. has low agreeableness. lacks emotional stability. lacks openness to experience. has low extraversion.

Answer: A Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

46. A. B. C. D. E.

Which of the following is true of a conscientious person? A conscientious person focuses on new ideas and is imaginative. A conscientious person is withdrawn and reserved. A conscientious person focuses on what can be accomplished and meets commitments. A conscientious person has few interests and is resistant to change. A conscientious person always engages in multi-tasking.

Answer: C Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

47. A. B. C. D. E.

Which of the following examples displays the personality trait of emotional stability? A manager encouraging unique suggestions from employees for the promotion of a product A CEO being careful about making merger decisions A manager staying calm and confident when his team fails to meet quarterly targets A proprietor implementing changes in his organization A team lead exhibiting good communication skills with his subordinates

Answer: C Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

48. A. B. C. D. E.

Which of the following is true of openness to experience? Openness to experience refers to the degree to which someone is outgoing and sociable. An open person is always a source of conflict and discomfort for others. Openness to experience refers to the degree to which someone is good-natured, cooperative, and trusting. Openness to experience refers to the degree to which someone is responsible, dependable, and careful. An open person is broad-minded and receptive to new things.

Answer: E Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

49.

A. B. C.

Joshua, the business head of an organization, is broad-minded and well-informed. He believes in adapting to changes in the environment. He also encourages his coworkers to suggest new ideas to help in the growth of the organization. This implies that Joshua has _____. low conscientiousness low agreeableness high openness to experience 15-15

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D. E.

Test Bank

high selective perception low emotional stability

Answer: C Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

50.

A. B. C. D. E.

Josephine, 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 Josephine lacks _____. conscientiousness openness to experience agreeableness extraversion emotional stability

Answer: B Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

51. A. B. C. D. E.

Sensing refers to: focusing on details while gathering data. relying on emotions while making decisions. focusing on the big picture in dealing with problems while gathering data. acting with flexibility and spontaneity while gathering data. being quiet and shy when interacting with people.

Answer: A Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

52.

Perceiving work style refers to: 15-16

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A. B. C. D. E.

Test Bank

focusing on details while gathering data. focusing on details while working. acting with flexibility and spontaneity while working. acting with order and control while working. relying on rules and regulations while working.

Answer: C Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53. A. B. C. D. E.

Which of the following is true of locus of control? It is the degree to which a person defers to authority and accepts status differences. People with an internal locus of control are more prone to blame others for what happens to them. Individuals with an external locus of control are more self-confident and accept responsibility for their own actions. People with an internal locus of control tend to be more satisfied and less alienated from their work. It describes the extent to which someone is emotionally detached and manipulative.

Answer: D Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

54. A. B. C. D. E.

Christopher is an employee with an internal locus of control. Which of the following characteristics would be observed in Christopher? Self-confidence Lack of job satisfaction High alienation from work Denial of responsibility Tendency to blame others

Answer: A Learning Objective: 15.2 Difficulty: Moderate AACSB: Application of knowledge

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Test Bank

Bloom’s Taxonomy: Application

55. A. B. C. D. E.

Which of the following is true of authoritarianism? Authoritarianism is a system that opposes status differences. An individual with an authoritarian personality tends to act rigidly and be controloriented in a follower capacity. An individual with an authoritarian personality is likely to be subservient and follow rules when in a leadership capacity. People with authoritarian principles never act unethically or illegally. Authoritarianism is the degree to which a person defers to authority and accepts interpersonal status differences.

Answer: E Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

56.

A. B. C. D. E.

Robert is a senior executive at PLM Inc. He accepts the 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 Robert has a(n) _____ personality. Type A authoritarian high-Mach introverted self-monitored

Answer: B Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

57. A. B.

Which of the following refers to Machiavellianism? The extent to which someone is able to adjust his or her behavior in response to external factors The extent to which a person tends to defer to authority 15-18

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C. D. E.

Test Bank

The extent to which someone is curious, open to new ideas, and imaginative The extent to which someone is emotionally detached and manipulative The extent to which someone is relaxed, secure, and unworried

Answer: D Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

58. A. B. C. D. E.

Which of the following is true of Machiavellianism? A person with a “high-Mach” personality is deferential in allowing others to exert power over him or her. A person with a “high-Mach” personality often acts with the assumption that the end justifies the means. A person with a “low-Mach” personality tends to be very manipulative. A person with a “low-Mach” personality is viewed as exploitative and unconcerned about others. Machiavellianism is the extent to which one believes that what happens is within one’s control.

Answer: B Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59.

A. B. C. D. E.

Jeffrey works for a financial consulting firm. He is generally manipulative and is unconcerned about the interests and values of his coworkers. He does not care about others’ emotions and lacks basic social skills. This implies that Jeffrey has: high self-monitoring skills. low authoritarianism. a “high-Mach” personality. high extraversion. an internal locus of control.

Answer: C Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge

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Test Bank

Bloom’s Taxonomy: Application

60. A. B. C. D. E.

A person with a “low-Mach” personality: often acts with the assumption that the end justifies the means. is viewed as exploitative and unconcerned about others. is emotionally detached and manipulative. is deferential in allowing others to exert power over him or her. is not interested in others’ emotions and values.

Answer: D Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

61. A. B. C. D. E.

The degree to which someone is able to adjust behavior in response to external factors is referred to as _____. self-monitoring authoritarianism locus of control extraversion Machiavellianism

Answer: A Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

62. A. B. C. D. E.

Which of the following is true of self-monitoring? A person high in self-monitoring is not comfortable with feedback. A person low in self-monitoring is highly unpredictable. A person high in self-monitoring tends to act consistently regardless of circumstances. A person high in self-monitoring tends to be a learner. A person low in self-monitoring is flexible in changing behavior from one situation to the next.

Answer: D

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Test Bank

Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

63.

A. B. C. D. E.

Louis is an executive analyst in the merchandising department of Kira Inc. He loves to get feedback for his work as he believes that it helps improve his performance. He is a fast learner and has the ability to modify his behavior in response to the immediate situation and to external factors. This implies that Louis _____. has an introverted personality has a high Mach personality is high in self-monitoring is an authoritarian is low in self-monitoring

Answer: C Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

64. A. B. C. D. E.

Penelope is low in self-monitoring. Which of the following characteristics would be observed in Penelope? Learning skills Internal locus of control Willingness to change Flexibility Predictability

Answer: E Learning Objective: 15.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

65. A. B.

A person with a Type A personality: believes in taking breaks during work. is oriented toward extreme achievement and perfectionism. 15-21

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C. D. E.

Test Bank

never interrupts the speech of others. believes in doing one task at a time. is oriented toward extreme patience.

Answer: B Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

66.

A. B. C. D. E.

Salim 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 Salim possess? Authoritarianism Machiavellianism Low Self-monitoring Type A orientation External locus of control

Answer: D Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

67. A. B. C. D. E.

Sophie is a Type A personality. Which of the following patterns of behavior would be observed in Sophie? Slow-eating patterns Patience Multi-tasking Laziness Lack of stress

Answer: C Learning Objective: 15.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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68. A. B. C. D. E.

Test Bank

Which of the following components of individual attitudes reflects a belief or an opinion? Cognitive component Affective component Normative component Emotional component Behavioral component

Answer: A Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

69. A. B. C. D. E.

Nathan joined a law school in California because he believed that the school was good. This is an example of the _____ component of individual attitudes. affective normative emotional behavioral cognitive

Answer: E Learning Objective: 15.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

70. A. B. C. D. E.

The _____ component of an attitude reflects a specific feeling. cognitive intentional affective opinion behavioral

Answer: C Learning Objective: 15.3 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71. A. B. C. D. E.

Gabriel is an advertising professional who loves his job. This is an example of the _____ component of Gabriel’s attitude. cognitive affective intentional opinion behavioral

Answer: B Learning Objective: 15.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

72. A. B. C. D. E.

The _____ component of an attitude reflects an intention to act in a manner that is consistent with a belief and feeling. cognitive emotional affective intentional behavioral

Answer: E Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73.

A. B. C. D.

Colin 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. behavioral affective intentional emotional 15-24

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Test Bank

cognitive

Answer: A Learning Objective: 15.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

74. A. B. C. D. E.

Which of the following refers to cognitive dissonance? The predisposition to act in a certain way The extent to which someone is emotionally detached and manipulative The degree to which someone is able to adjust behavior in response to external factors The degree to which an individual feels positive about a job The discomfort felt when attitude and behavior are inconsistent with one another

Answer: E Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

75.

A. B. C. D. E.

Wendy was against the use of animals for testing cosmetics. She believed that it amounted to cruelty toward animals. She worked in a particular organization that was known for using alternative testing methods. When a special investigative team revealed that the firm actually used animals for testing purposes, she experienced a psychological discomfort. This discomfort that Wendy experienced is an example of _____. mood contagion cognitive dissonance constructive stress destructive stress workplace rage

Answer: B Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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76.

A. B. C. D. E.

Test Bank

Nadya 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 Nadya experiencing? Organizational citizenship Mood contagion The Halo effect Job satisfaction Machiavellianism

Answer: D Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

77. A. B. C. D. E.

Which of the following would result in job satisfaction? Opportunities for promotion Job attendance Cognitive dissonance Machiavellianism Mood contagion

Answer: A Learning Objective: 15.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

78.

A. B. C. D. E.

Roger works at Tracer Consulting Ltd. He receives task-related support from his managers and has friendly and trustworthy colleagues. His job is stress-free and secure. These working conditions help in increasing Roger’s _____. mood contagion job satisfaction locus of control cognitive dissonance Machiavellianism

Answer: B

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Test Bank

Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

79. A. B. C. D. E.

Which of the following is true about job satisfaction? Job satisfaction tends to be lower in small firms and higher in large firms. The relationship between job satisfaction and temporary absenteeism is not strong. Performance does not influence job satisfaction. There is a strong relationship between job satisfaction and performance. A strong relationship exists between job satisfaction and actual job turnover.

Answer: E Learning Objective: 15.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. A. B. C. D. E.

A strong positive feeling about one’s job and employer is referred to as _____. mood contagion emotional intelligence cognitive dissonance employee engagement Machiavellianism

Answer: D Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81.

A. B. C.

Gerard looks up to his organization and speaks positively about it. He involves himself in group discussions and brainstorming 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 Gerard possess? Mood contagion Employee engagement Emotional intelligence 15-27

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D. E.

Test Bank

Cognitive dissonance Machiavellianism

Answer: B Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

82. A. B. C. D. E.

Which of the following refers to job involvement? The extent to which an individual is dedicated to a job The extent to which one experiences cognitive dissonance in their job The comfort one feels with one’s coworkers The predisposition of employees to act in a certain way The willingness to “go beyond the call of duty” in one’s work

Answer: A Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

83.

A. B. C. D. E.

Bella generally stays at her office beyond normal work hours in order to complete special projects. She also comes to work every weekend and on other holidays. From this information, it is likely that Bella has high _____. personal wellness Machiavellianism self-serving bias openness to experience job involvement

Answer: E Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

84.

Which of the following refers to organizational commitment? 15-28

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A. B. C. D. E.

Test Bank

The willingness to “go beyond the call of duty” in one’s work The loyalty of an individual to an organization The predisposition of employees to act in a certain way The extent to which someone is emotionally detached and manipulative The degree to which someone is able to adjust behavior in response to external factors

Answer: B Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. A. B. C. D. E.

Which of the following is true of organizational commitment? Organizational commitment refers to the extent to which an individual experiences cognitive dissonance at his or her job. Rational commitments are based primarily on values and interests of others. Rational commitments are generally more powerful in positively influencing performance than are emotional commitments. Emotional commitments are only based on pay and self-interests. Individuals with a high organizational commitment identify strongly with their organization.

Answer: E Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86.

A. B. C. D. E.

As Angelo shares many mutual interests with his coworkers and respects their values, he has a high regard for the company that he works for. This indicates that Angelo has high _____. personal wellness rational commitment Machiavellianism self-serving bias emotional commitment

Answer: E Learning Objective: 15.3 Difficulty: Hard

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Test Bank

AACSB: Application of knowledge Bloom’s Taxonomy: Application

87. A. B. C. D. E.

Rational commitments are primarily based on _____. values the interests of other employees self-interests effective employee relationships personal wellness

Answer: C Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

88.

A. B. C. D. E.

Franco is loyal to 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. emotional commitment rational commitment self-serving bias cognitive dissonance affective commitment

Answer: B Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

89. A. B. C. D. E.

Which of the following refers to organizational citizenship? It is the loyalty of an individual toward an organization. It is a willingness to “go beyond the call of duty in one's work.” It is an ability to understand emotions and manage relationships effectively. It is the spillover of an employee’s positive or negative moods onto others. It is a strong positive feeling about one’s job and the organization that one works for.

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Test Bank

Answer: B Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90.

A. B. C. D. E.

Ben is a financial analyst at Capron Inc. He works over the weekends and on all public holidays to do additional work, without claiming extra pay or compensatory benefits. Ben’s employee behavior is an example of _____. organizational citizenship personal wellness cognitive dissonance emotional intelligence emotional stability

Answer: A Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

91. A. B. C. D. E.

Which of the following is true of emotions? Emotions always tend to be long term. Emotions are generalized positive and negative feelings. Emotions are states of mind that may persist for some time. Emotions tend to be clearly targeted. Emotions are not directed toward any person or any particular thing.

Answer: D Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

92.

Maria works for a children’s magazine. She worked hard and did intensive research to write an article. When her boss criticized her article, she felt very upset for some time. This feeling experienced by Maria is an example of a(n) _____. mood 15-31

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B. C. D. E.

Test Bank

attitude emotion behavior projection

Answer: C Learning Objective: 15.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

93. A. B. C. D. E.

Which of the following is true of moods? Moods are clearly targeted. Moods are generalized positive and negative feelings. Moods tend to be short term. Moods are strong feelings directed toward someone or something. Moods are feelings that do not last for a long time.

Answer: B Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. A. B. C. D. E.

Which of the following is a difference between an emotion and a mood? An emotion is a generalized feeling, while a mood is a strong feeling directed toward someone. Emotions have a general effect on attitude and behavior, as opposed to moods that have a specific effect on attitude and behavior. While an emotion tends to persist for some time, a mood tends to be brief. An emotion is a positive feeling, while a mood represents a negative feeling. Emotions are clearly targeted feelings, whereas moods are generalized states of mind.

Answer: E Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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95. A. B. C. D. E.

Test Bank

Mood contagion refers to the: spillover of one’s positive or negative moods onto others. ability to understand moods and manage relationships effectively. collection of strong feelings directed toward someone or something. positive mood created by cognitive dissonance. discomfort felt when attitude and behavior are inconsistent.

Answer: A Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96.

A. B. C. D. E.

Giselle felt very good when she reached her office on time and completed her tasks before her deadline. This positive feeling spilled over onto her coworkers because she interacted with them in a very cheerful manner. This is an example of _____. emotional intelligence organizational citizenship eustress mood contagion self-serving bias

Answer: D Learning Objective: 15.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

97. A. B. C. D. E.

Which of the following is true of eustress? It impairs the performance of an individual. It occurs when intense stress breaks down a person’s mental system. It encourages diligence in one’s work. It acts in a negative way to decrease effort and inhibit creativity. It is a feeling of physical and mental exhaustion from work stress.

Answer: C Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

98. A. B. C. D. E.

Which of the following is true of strain? It is sometimes called constructive stress. It is dysfunctional. It helps prevent job burnout among employees. It acts in a positive way to increase effort and stimulate creativity. It enhances diligence.

Answer: B Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99. A. B. C. D. E.

Which of the following refers to job burnout? Showing aggressive behavior toward coworkers or a work setting A situation where an individual ends up in a job that does not match his or her talents A potential outcome of eustress The spillover of one’s positive or negative moods onto others The physical and mental exhaustion from work stress

Answer: E Learning Objective: 15.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100. Leopold regularly gets into arguments with his colleagues due to excessive stress at work. He also engages in physical confrontations. This is an example of: A. constructive stress. B. workplace rage. C. eustress. D. job burnout. E. a low-Mach personality. Answer: B Learning Objective: 15.4

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Test Bank

Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

101. Peter has been working night shifts for about six months now, and owing to this, his performance level has decreased significantly. Benjamin, his manager, thinks that Peter has become complacent and is trying to avoid work. Which of the following would best describe Benjamin’s behavior? A. Self-serving bias B. Stereotyping C. Halo effect D. Fundamental attribution error E. Projection Answer: D Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Michael comes across as a friendly personality. His bold and confident voice impresses Timothy, the marketing manager of Goldwyn Inc., during an interview. Owing to these attributes, Timothy hires him assuming that he will be a hard-working and smart employee. Timothy's assumption is a result of the _____. A. mood contagion error B. Machiavellian effect C. halo effect D. fundamental attribution error E. projection effect Answer: C Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. Julia, a manager at a logistics company, found that her subordinate, Olivia, frequently missed her deadlines for projects. When asked for an explanation, Olivia responded

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A. B. C. D. E.

Test Bank

saying that she had to meet unrealistic deadlines. Olivia's co-workers have similar workloads and deadlines, but they always finish their work on time. Olivia has arrived at the conclusion that her deadlines are unrealistic mostly because of _____. her mood contagion bias the Machiavellian effect the Halo effect her fundamental attribution error her self-serving bias

Answer: E Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. Desmond is a shrewd manager, but he tends to be dishonest and takes advantage of people. He doesn’t care about manipulating people as long as goals are achieved. Which of the following terms best represents Desmond’s description? A. Authoritarian B. High-Mach C. External locus of control D. Internal locus of control E. Self-monitoring Answer: B Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Vincent is a project manager at a software development firm. One of Vincent's best employees, Brian, is considering leaving the company because he wants to pursue his passion of photography. Vincent's bosses want him to manipulate Brian into staying, but Vincent refuses to do so and allows Brian to make his own decisions. From this information, it can be said that Vincent has a (n) _____ personality. A. self-serving B. high-Mach C. low-Mach D. Type A E. authoritarian

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Answer: C Learning Objective: 15.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. Steven was ordered by his boss, Michael, to shred some incriminating documents that might have led to a lawsuit against their company. Steven obeyed Michael and shredded the documents. From the given information, it is likely that Steven has a (n) _____ personality. A. contagion B. conscientious C. low-Mach D. Type A E. authoritarian Answer: E Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Rose has a Type A personality and works for a software company. Her company has been receiving fewer projects lately, so she spends most of her time at work doing nothing. She is most likely to _____. A. have high job satisfaction B. attend work irregularly C. pay little attention to her tasks D. quit her job E. have high levels of employee engagement Answer: D Learning Objective: 15.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

108. Carson had promised to himself to jog every morning for a month to lose some weight. At the end of the month, he had gone for jogging for a total of seven days only. He reassured himself by saying, “I am not that overweight anyway.” Which of the following best describes Carson’s behavior? A. Fundamental attribution error B. Withdrawal behavior C. Cognitive dissonance D. Self-serving bias E. Halo effect Answer: C Learning Objective: 15.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. In a team meeting, Simon, the manager, was cheerful and happy. Everyone in the room felt good, and the meeting seemed to conclude in no time at all. Which of the following best describes the situation? A. Halo effect B. Constructive stress C. Personal wellness D. Job involvement E. Mood contagion Answer: E Learning Objective: 15.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

110. George has been working long hours for several weeks now. His work is very stressful. As a result, his efficiency is decreasing, and his health is deteriorating. Which of the following best describes George’s condition? A. Job burnout B. Workplace rage C. Eustress D. Self-serving bias E. Fundamental attribution error

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Test Bank

Answer: A Learning Objective: 15.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

111. 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 advance in jobs and careers, form relationships with people we admire, and even create pathways to group memberships. Learning Objective: 15.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

112. What are the three main distinctions of Jung’s model of personality differences? Answer: Jung’s model of personality differences includes three main distinctions. The first is how people differ in the ways they relate to others—by extraversion (outgoing and sociable) or introversion (shy and quiet). The 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). The 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). Learning Objective: 15.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

113. What are the most commonly discussed and measured facets of job satisfaction?

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Answer: The following are among the facets of job satisfaction that are most commonly discussed and measured: • Work itself—Does the job offer responsibility, interest, challenge? • Quality of supervision—Are task help and social support available? • Co-workers—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? Learning Objective: 15.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

Chapter 16: Motivation Theory and Practice

True/False Questions

Abraham Maslow classifies physiological needs as lower-order needs in his human needs theory.

Answer: True Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

According to the hierarchy of needs theory, the need to self-actualize can never be fully met.

Answer: True Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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The lower-order needs in Maslow’s hierarchy of needs theory are similar to growth needs in ERG theory.

Answer: False Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

According to Frederick Herzberg, issues related to the work environment are satisfier factors.

Answer: False Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

According to Herzberg, improving the hygiene factors can increase job satisfaction and motivation.

Answer: True Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

High need achievers prefer achievable but challenging goals and expect feedback on performance.

Answer: True Learning Objective: 16.1 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

McClelland believes that the need for personal power is essential to managerial leadership.

Answer: False Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11.

Under-reward inequity occurs when an individual perceives that his or her outcomes-toinputs ratio is greater than that of his or her referent.

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Answer: False Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

13.

Benevolents are people who have a desire to be over-rewarded.

Answer: False Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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15.

Test Bank

Expectancy theory predicts that high expectancy, instrumentality, and valence will result in zero motivation.

Answer: False Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

16.

Managers can create positive instrumentalities by rewarding people on a performancecontingent basis.

Answer: True Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

19.

Extinction strategies are employed to strengthen or increase the frequency of desirable behavior.

Answer: False Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20.

An intermittent reinforcement schedule works best to draw forth a desired behavior.

Answer: False Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22.

Job enrichment works best when people have appropriate knowledge, skills, and abilities to perform the job.

Answer: True

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Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

23.

Job rotation makes jobs vertically bigger by expanding the job depth.

Answer: False Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

24.

Flexible working hours help to reduce stress and also provide greater autonomy to employees.

Answer: True Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25.

Employees receive two consecutive days off from work each week in a compressed workweek schedule.

Answer: False Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Multiple Choice

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26. A. B. C. D. E.

Test Bank

Which of the following is regarded as a lower-order need in Maslow’s hierarchy? Esteem Freedom Safety Self-actualization Identity

Answer: C Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

27. A. B. C. D. E.

According to Maslow’s theory of human needs, _____ is a higher-order need. existence physical comfort safety social concern esteem

Answer: E Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

28. A. B. C. D. E.

In Maslow’s hierarchy of needs, lower-order needs differ from higher-order needs as higher-order needs: focus on desires for good-interpersonal relationships. are addressed by things such as physical comfort on the job and reasonable work hours. focus on desires for psychological development and growth. are served by job security and adequate compensation and benefits. focus on desires for physical and social well-being.

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Answer: C Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

29. A. B. C. D. E.

The _____ states that a satisfied need is not a motivator of behavior. expectancy theory progression principle self-efficacy theory deficit principle frustration-regression principle

Answer: D Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

30. A. B. C. D. E.

The _____ states that a need does not become activated until the next-lower-level need is already satisfied. expectancy theory deficit principle self-efficacy theory frustration-regression principle progression principle

Answer: E Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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31. A. B. C. D. E.

Test Bank

_____ satisfies the self-actualization needs. Praise and recognition from boss Participation in decision making Safe working conditions Promotion to higher status job Pleasant supervisor

Answer: B Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. A. B. C. D. E.

Esteem needs are satisfied by _____. promotion to higher status job having a pleasant supervisor adequate compensation and benefits participation in decision making safe working conditions

Answer: A Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

33. A. B. C. D. E.

Creative and challenging work and job autonomy satisfy _____ needs. physiological esteem self-actualization social safety

Answer: C Learning Objective: 16.1 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. A. B. C. D. E.

Which of the following satisfies social needs? Adequate compensation and benefits Physical comfort on the job Safe working conditions Pleasant supervisor Promotion to higher status job

Answer: D Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

35. A. B. C. D. E.

_____ needs are served by job security and adequate compensation and benefits. Social Safety Self-actualization Esteem Physiological

Answer: B Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

36. A. B. C. D.

_____ satisfies esteem needs. Physical comfort on the job Praise and recognition from boss Adequate compensation and benefits Interaction with customers

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Test Bank

Reasonable work hours

Answer: B Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

37. A. B. C. D. E.

_____ satisfies lower-order physiological needs. Adequate compensation and benefits Physical comfort on the job Safe working conditions Friendly co-workers Creative and challenging work

Answer: B Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

38. A. B. C. D. E.

According to the ERG theory, _____ needs are desires for physiological well-being. growth safety relatedness existence power

Answer: D Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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39. A. B. C. D. E.

Test Bank

According to the ERG theory proposed by Clayton Alderfer, relatedness needs are desires for: physiological and material well-being. recognition, responsibility, and job autonomy. psychological growth and development. personal growth and development. satisfying interpersonal relationships.

Answer: E Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

40. A. B. C. D. E.

_____ needs described by Clayton Alderfer are essentially the same as the higher-order needs in Maslow’s hierarchy. Esteem Relatedness Growth Existence Social

Answer: C Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

41. A. B. C. D. E.

Which of the following states that an already satisfied need can become reactivated when a higher-level need is blocked? Progression principle Self-efficacy theory Deficit principle Frustration-regression principle Expectancy theory

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Test Bank

Answer: D Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

42. A. B. C. D. E.

According to Frederick Herzberg’s two-factor theory, a satisfier factor is found in the job content such as _____. working conditions advancement opportunities organizational policies interpersonal relations compensation

Answer: B Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43. A. B. C. D. E.

In Herzberg’s two-factor theory, interpersonal relations are regarded as _____ factors. satisfier equity valence hygiene compensation

Answer: D Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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44. A. B. C. D. E.

Test Bank

According to McClelland’s theory, _____ is the desire to do something better, to solve problems, or to master complex tasks. need for power need for autonomy need for achievement need for affiliation need for participation

Answer: C Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

45. A. B. C. D. E.

Acquired needs theory states that people with a high need for achievement: seek satisfying interpersonal relationships. prefer collective responsibility for results. tend to like jobs that involve working with people. take moderate risks in competitive situations. behave in ways that have a clear impact on other people.

Answer: D Learning Objective: 16.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

46. A. B. C. D. E.

According to McClelland, people with a high need for power: put their competencies to work. seek satisfying interpersonal relationships. must be able to master complex tasks. take moderate risks in competitive situations. behave in ways that have a clear impact on other people.

Answer: E Learning Objective: 16.1

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Test Bank

Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

47. A. B. C. D. E.

According to the acquired needs theory, the need for _____ is the desire to control other people, to influence their behavior, or to be responsible for them. power achievement participation affiliation accomplishment

Answer: A Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

48. A. B. C. D. E.

Need for _____ is the desire to establish and maintain friendly and warm relations with other people. accomplishment achievement power autonomy affiliation

Answer: E Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking 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.

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A. B. C. D. E.

Test Bank

autonomy affiliation accomplishment achievement power

Answer: B Learning Objective: 16.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

50. A. B. C. D. E.

_____ theory suggests that being treated unfairly makes people uncomfortable and motivates them to eliminate the discomfort. Acquired needs Two-factor Equity Hierarchy of needs ERG

Answer: C Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

51. A. B. C. D. E.

According to equity theory, _____ is an outcome. quality of work education experience special skills job security

Answer: E Learning Objective: 16.2 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

52. A. B. C. D. E.

_____ 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. Frustration-regression Continuous reinforcements Extinction Perceived inequities Negative reinforcement

Answer: D Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53. A. B. C. D. E.

Over-reward inequity occurs when an individual perceives that: his outcomes-to-inputs ratio is lower than that of his referent. the reward he has received for his work is not matching his inputs. he is receiving less than he should in comparison to somebody else. his outcomes-to-inputs ratio is greater than that of his referent. the reward he has received for his efforts is fair.

Answer: D Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

54. A. B.

The concept of _____ proposes that people have different preferences for equity and thus react differently to perceptions of inequity. positive reinforcement instrumentality

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C. D. E.

Test Bank

equity sensitivity perceived inequities negative reinforcement

Answer: C Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. A. B. C. D. E.

People who are less concerned about being under-rewarded are called _____. referents benevolents influencers sensitives entitleds

Answer: B Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

56. A. B. C. D. E.

_____ are those who have a strong preference for rewards to be distributed equitably, so they react as the basic equity theory proposes. Influencers Altruists Sensitives Benevolents Entitleds

Answer: C Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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57. A. B. C. D. E.

Test Bank

_____ 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. Altruists Sensitives Affiliates Benevolents Entitleds

Answer: E Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

58. A. B. C. D. E.

Benevolents differ from entitleds as benevolents _____. create situations of positive inequity for themselves have a strong preference for rewards to be distributed equitably have a desire to be over-rewarded more readily accept situations of negative inequity are very concerned about being under-rewarded

Answer: D Learning Objective: 16.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59. A. B. C. D. E.

Which of the following is true about sensitives and entitleds? Both are less concerned about being under-rewarded. Both readily accept situations of negative inequity. Both have a strong preference for rewards. Both create situations of positive inequity for themselves. Both have a strong preference for rewards to be distributed equitably.

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Test Bank

Answer: C Learning Objective: 16.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

60. A. B. C. D. E.

_____ is a person’s belief that working hard will result in high task performance. Instrumentality Expectancy Resiliency Equity Efficacy

Answer: B Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

61. A. B. C. D. E.

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 _____. high benevolence positive expectancy positive instrumentality high need for affiliation positive valence

Answer: B Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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62. A. B. C. D. E.

Test Bank

A person’s belief that successful performance will be followed by rewards and other workrelated outcomes is known as _____. resiliency competency efficacy instrumentality valence

Answer: D Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

63. A. B. C. D. E.

According to expectancy theory, if a person has high instrumentality, he will: not value the rewards being offered. lack the confidence that he will be promoted if he improves his performance. believe that he can meet the performance expectations through hard work. be able to link high performance and available rewards. perceive himself to be under-rewarded for his efforts compared to other coworkers.

Answer: D Learning Objective: 16.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

64. A. B. C. D. E.

Which of the following is true about valence? It is sometimes called performance-outcome expectancy. It is the desire to establish good relations with co-workers. It refers to a person’s belief that working hard will result in a desired level of task performance being achieved. It indicates that successful performance will be followed by rewards. It is the value a person assigns to the possible rewards and other work-related outcomes.

Answer: E

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Test Bank

Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

65. A. B. C. D. E.

According to Vroom’s expectancy theory, managers can build positive expectancies by: setting challenging goals and making people work hard to achieve those goals even though they lack the ability and resources to complete the tasks. clarifying the rewards for high performance. selecting workers with the right abilities for the jobs to be done and providing them with the best training and development. increasing the communication with the subordinates to help identify important employee needs and benefits. allotting rewards fairly on a performance-contingent basis.

Answer: C Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

66. A. B. C. D. E.

Which of the following measures when employed will help managers to create positive instrumentalities among employees? Providing employees with the best training and development Linking the needs and desires of employees with the rewards that can be earned through high performance Increasing communication with subordinates to help identify important employee needs and desires Clarifying the possible rewards for high performance and allocating those rewards fairly on a performance-contingent basis Selecting workers with the right abilities for the jobs to be done

Answer: D Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

67. A. B. C. D. E.

Managers can effectively obtain the motivational benefits of goal setting by: encouraging the employees to do their best instead of mentioning what is expected of them. setting goals that are easily attainable so that the employees do not have the fear of failure in performing a task. providing feedback on the performance related to the assigned goal and rewarding people on the accomplishment of those goals. letting the employees decide the goals they want to accomplish rather than making them aware of management’s expectations. giving challenging goals to the employees and pressurizing them to meet the expectations.

Answer: C Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

68. A. B. C. D. E.

_____ is a person’s belief that he or she is capable of performing a task. Expectancy Self-efficacy Instrumentality Credibility Competency

Answer: B Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

69. A.

According to Albert Bandura, if a person gains confidence through positive experience, it is referred to as _____. emotional arousal

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B. C. D. E.

Test Bank

vicarious modeling social persuasion verbal persuasion enactive mastery

Answer: E Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

70. A. B. C. D. E.

Which of the following sources helps to enhance self-efficacy through learning by observing others succeed at a task? Social persuasion Verbal persuasion Emotional arousal Vicarious modeling Enactive mastery

Answer: D Learning Objective: 16.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71. A. B. C. D. E.

_____ 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. Emotional arousal Vicarious modeling Verbal persuasion Enactive mastery Moral disengagement

Answer: C Learning Objective: 16.2 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

72. A. B. C. D. E.

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. law of contingent reinforcement progression principle law of effect deficit principle law of immediate reinforcement

Answer: C Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

73. A. B. C. D. E.

_____ is the control of behavior by manipulating its consequences. Relative benchmarking Verbal persuasion Vicarious modeling Operant conditioning Concurrent control

Answer: D Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

74. A. B.

_____ strengthens behavior by making a desirable consequence contingent on its occurrence. Vicarious modeling Extinction

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C. D. E.

Test Bank

Punishment Job rotation Positive reinforcement

Answer: E Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

75.

A. B. C. D. E.

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 _____. vicarious modeling job rotation positive reinforcement extinction punishment

Answer: C Learning Objective: 16.3 Difficulty: Moderate AACSB: Reflective thinking Bloom’s Taxonomy: Application

76. A. B. C. D. E.

_____ strengthens behavior by making the avoidance of an undesirable consequence contingent on its occurrence. Punishment Negative reinforcement Extinction Job rotation Vicarious modeling

Answer: B Learning Objective: 16.3

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77.

A. B. C. D. E.

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 _____. extinction intermittent reinforcement positive reinforcement punishment negative reinforcement

Answer: E Learning Objective: 16.3 Difficulty: Moderate AACSB: Reflective thinking Bloom’s Taxonomy: Application

78. A. B. C. D. E.

_____ is a strategy of reinforcement that discourages behavior by making an unpleasant consequence contingent on its occurrence. Positive reinforcement Extinction Punishment Negative reinforcement Vicarious modeling

Answer: C Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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79. A. B. C. D. E.

Test Bank

_____ is a reinforcement strategy that discourages behavior by making the removal of a desirable consequence contingent on its occurrence. Negative reinforcement Vicarious modeling Positive reinforcement Extinction Punishment

Answer: D Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80.

A. B. C. D. E.

Justin notices that one of his employees has been coming late to work and his team members have been shielding him. Justin counsels the co-workers to stop shielding him and to not encourage him to be late to work. This type of reinforcement strategy is known as _____. negative reinforcement extinction intermittent reinforcement positive reinforcement punishment

Answer: B Learning Objective: 16.3 Difficulty: Moderate AACSB: Reflective thinking Bloom’s Taxonomy: Application

81. A. B. C.

Which of the following is true about punishment and extinction strategies? Both of these strategies weaken or eliminate undesirable behaviors. Both of these strategies strengthen desirable behavior by making a desirable consequence contingent on its occurrence. Both of these strategies make the removal of a pleasant consequence contingent on its performance.

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D. E.

Test Bank

Both of these strategies strengthen desirable behavior when it occurs. Both of these strategies make an unpleasant consequence contingent on its occurrence.

Answer: A Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

82. A. B. C. D. E.

_____ is positive reinforcement of successive approximations to the desired behavior. Chaining Horizontal loading Job rotation Vertical loading Shaping

Answer: E Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

83. A. B. C. D. E.

A(n) _____ reinforcement schedule administers a reward each time a desired behavior occurs. conditioned continuous immediate intermittent annual

Answer: B Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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84. A. B. C. D. E.

Test Bank

A schedule that rewards desired behavior only periodically is known as a(n) _____ reinforcement schedule. ongoing unconditioned intermittent continuous immediate

Answer: C Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

85. A. B. C. D. E.

The _____ states that for a reward to have maximum enhancement value, it must be delivered only if the desired behavior is exhibited. law of effect deficit principle law of immediate reinforcement frustration-regression principle law of contingent reinforcement

Answer: E Learning Objective: 16.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

86. A. B. C. D.

The law of immediate reinforcement states that: a punishment should be administered in private. a behavior that results in a pleasant outcome is likely to be repeated. a satisfied need does not motivate behavior. an instant delivery of a reward after the occurrence of a desirable behavior enhances the reinforcing value of the reward.

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Test Bank

a satisfied need can become activated when a higher level need is blocked.

Answer: D Learning Objective: 16.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

87. A. B. C. D. E.

_____ is a process of arranging work tasks for individuals and groups. Task analysis Operant conditioning Work scope Resource management Job design

Answer: E Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

88. A. B. C. D. E.

_____ employs people in clearly defined and specialized tasks with narrow job scope. Job enlargement Job simplification Vertical loading Job enrichment Job rotation

Answer: B Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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89. A. B. C. D. E.

Test Bank

One way to eliminate problems associated with job simplification by total mechanization of a job is _____. job sharing job enrichment automation job enlargement shaping

Answer: C Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

90. A. B. C. D. E.

_____ helps in eliminating the problems associated with job simplification by increasing the task variety by periodically shifting workers between different jobs. Job enrichment Vertical loading Job enlargement Job rotation Automation

Answer: D Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

91. A. B. C. D. E.

_____ increases task variety by combining into one job two or more tasks previously done by separate workers. Vertical loading Job enlargement Job enrichment Job rotation Automation

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Test Bank

Answer: B Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

92.

A. B. C. D. E.

John, a supervisor in a tea manufacturing company, observes that the employees are not happy with their jobs as they find it monotonous. They get bored of doing the same thing every day. John 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 John to increase the task variety is called job _____. sharing rotation simplification enrichment enlargement

Answer: E Learning Objective: 16.4 Difficulty: Moderate AACSB: Reflective thinking Bloom’s Taxonomy: Application

93. A. B. C. D. E.

Job _____ increases job depth by adding work planning and evaluating duties normally performed by the supervisor. rotation simplification enrichment sharing enlargement

Answer: C Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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94. A. B. C. D. E.

Test Bank

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 _____. task identity skill variety autonomy task significance task analysis

Answer: B Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

95. A. B. C. D. E.

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 _____. job enlargement task significance task identity skill variety task analysis

Answer: C Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

96. A. B. C.

A job that provides a person the complete authority to schedule the work and choose the course of action is high in _____. task significance task identity skill variety

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D. E.

Test Bank

autonomy task analysis

Answer: D Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

97. A. B. C. D. E.

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 _____. seasonal employment temp job compressed workweek flextime weekend work schedule

Answer: C Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

98. A. B. C. D. E.

Which of the following helps in providing flexibility to workers by splitting a full-time job between two or more people? Flextime Telecommuting Office sharing Compressed workweek Job sharing

Answer: E Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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99. A. B. C. D. E.

Test Bank

_____ is an arrangement that allows at least a portion of scheduled work hours to be completed outside the office. Compressed workweek Automation Job sharing Telecommuting Contingency

Answer: D Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

101. Kevin, a young graduate, wanted to get a job and work hard to become an assistant manager in a year’s time. Now that he is an assistant manager after more than a year’s struggle, Kevin seems to have become complacent and does not seem to have the same drive as he had a year ago. Which of the following does Kevin’s situation exemplify? A. Self-serving bias

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B. C. D. E.

Test Bank

Framing error Deficit principle Progression principle Frustration-regression principle

Answer: C Learning Objective: 16.1 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

102. Peter believes in excelling in all the projects assigned to him and delivering beyond the expectations of his manager. Thus, Peter’s manager may ask him to work independently on projects that allow him to use his knowledge and skills to the best of his abilities. Peter has a strong need for _____. A. affiliation B. achievement C. personal power D. social power E. relatedness Answer: B Learning Objective: 16.1 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

103. Roger is unhappy with the treatment meted out to him by his supervisor who feels that Roger is not performing as per expectations. As a result, Roger’s performance linked incentives are a bare minimum, and he is also given lesser stock options than what Roger was expecting for the amount of dedication and hard work put in by him. Which of the following best represents Roger’s understanding of the situation? A. Bandwagon effect B. Under-reward inequity C. Snowball effect D. Instrumentality

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Test Bank

Self-concordance

Answer: B Learning Objective: 16.2 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

104. When Jason was selected as the “Employee of the month” of his organization, he received a cash prize, a holiday package for two, and a year’s membership at the Prestize club. Jason was overwhelmed and felt that he got more than what he deserved. Which of the following terms best represents Jason’s understanding of the situation? A. Bandwagon effect B. Representativeness bias C. Framing error D. Over-reward inequity E. Self-concordance Answer: D Learning Objective: 16.2 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

105. David had put extra hours into the project and had made sure that all glitches were taken care of. His manager acknowledged his effort and recommended him to be a part of the reconnaissance team visiting China. David was very happy and assured his manager that he’d put in extra effort in the future. Which of the following does this situation exemplify? A. Law of effect B. Under-reward inequity C. Deficit principle D. Progression principle E. ERG theory Answer: A Learning Objective: 16.3

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Test Bank

Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

106. Katie is rewarded with gift vouchers, bonuses, and other perks after the successful completion of every project handled by her. This is an example of _____. A. Continuous reinforcement B. Contingent reinforcement C. Intermittent reinforcement D. Job enlargement E. Job enrichment Answer: A Learning Objective: 16.4 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

107. Ruth works at a car assembling plant. The plant uses a lot of machines to complete most of the work. As a result, Ruth’s work is highly standardized. Ruth needs to check the number and mounting of rubber hoses in a vehicle and replace dysfunctional ones. Which of the following does this signify? A. Job rotation B. Job simplification C. Job loading D. Job enlargement E. Job enrichment Answer: B Learning Objective: 16.4 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

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Test Bank

108. Stacy works as a deputy editor for SimplyRead, a biweekly. Apart from approving and finalizing the content to be published, her job as a deputy editor also involves finalizing the outlay of the magazine that was earlier handled by the senior editors from the design team. This is an example of _____. A. job automation B. vertical loading C. operant conditioning D. job enlargement E. job enrichment Answer: D Learning Objective: 16.4 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

109. Andrew, a final year communications student, has been working for an advertising firm for a few months because the firm needed some more people to work on a project till November. This is an example of _____. A. telecommuting B. job enrichment C. operant conditioning D. intermittent reinforcement E. contingency work Answer: E Learning Objective: 16.4 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

110. Nick, the marketing manager of an electronics manufacturing company, is impressed with the work of his subordinate, James, and hence grants additional authority to James to report directly to the company’s chief marketing officer and board of directors with all his marketing strategies. Nick’s decision to increase James’s responsibilities could be viewed as an initiative of _____.

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A. B. C. D. E.

Test Bank

job rotation job enrichment job simplification job sharing job automation

Answer: B Learning Objective: 16.4 Difficulty: Hard AACSB: Reflective thinking Bloom’s Taxonomy: Application

Essay

111. 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 higher-order 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. Learning Objective: 16.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

112. How can managers effectively use positive reinforcement to increase the frequency of desirable behavior?

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Test Bank

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. Learning Objective: 16.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

113. 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 Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

Ch17: Teams and Teamwork

True/False

A team is a collection of people who regularly interact to pursue common goals.

Answer: True Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Synergy pools individual talents and efforts to create extraordinary results through collective action.

Answer: True Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

Formal groups emerge from relationships and shared interests among the members.

Answer: False Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Members of informal groups can satisfy needs that are otherwise unmet in their formal work assignments.

Answer: True Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Project teams or task forces work on common problems on a permanent basis.

Answer: False Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

A cross-functional team operates with members who come from different functional units of an organization.

Answer: True Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

The functional chimneys problem is more prominent in the case of cross-functional teams.

Answer: False Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10. A key feature of any self-managing team is multitasking. Answer: True Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

11. Members of a self-managing team are held individually accountable for performance results. Answer: False Learning Objective: 17.2 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking 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 Learning Objective: 17.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

13. Team building is a sequence of activities to analyze a team and make changes to improve its performance. Answer: True Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

14. Team effectiveness is inversely proportional to the quality of inputs. Answer: False Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

15. With respect to member satisfaction, members should take pleasure from the team’s performance accomplishments and not focus on their personal contribution.

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Test Bank

Answer: False Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17. The right inputs alone guarantee team effectiveness. Answer: False Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20. Persons in a highly cohesive team are less likely to conform to the norms. Answer: False Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

21. By reinforcing the desired behaviors with rewards, leaders can help their teams in building positive norms. Answer: True Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22. A strong conformity to norms by members has a beneficial effect on team performance. Answer: True Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

23. Increasing membership homogeneity in a team increases team cohesiveness. Answer: True Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25. The best teams use centralized communication network at all times. Answer: False Learning Objective: 17.3 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

26. Centralized communication networks work better on simple tasks. Answer: True Learning Objective: 17.3 Difficulty: Easy AACSB: Written and oral communication

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Test Bank

Bloom’s Taxonomy: Knowledge

27. The “decision by majority” rule ensures that no coalitions are formed. Answer: False Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

28. Highly cohesive teams have a tendency of losing their critical evaluative capabilities. Answer: True Learning Objective: 17.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

29. Groupthink is likely to occur when members of a group refuse to look realistically at other groups. Answer: True Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

30. In a situation prone to interpersonal conflicts, brainstorming works best in preventing groupthink. Answer: False

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Test Bank

Learning Objective: 17.4 Difficulty: Moderate AACSB: Written and oral communication Bloom’s Taxonomy: Comprehension

Multiple Choice

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 Answer: A Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. A. B. C. D. E.

In his role as a coach or team developer, a manager is primarily involved in: serving as the peer leader and networking hub for a special task force. serving as a helpful contributing member of a project team. looking out for “free-riding” in groups and preventing its occurrence. serving as a team’s advisor on ways to improve processes and performance. working together with the team and solving problems through computer-based interactions.

Answer: D Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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35. A. B. C. D. E.

Test Bank

Which of the following is a drawback closely associated with teamwork? Functional chimneys problem Glass ceiling effect Social loafing Ecological fallacy Absence of a sense of security

Answer: C Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

37. A. B. C. D. E.

Which of the following is true of informal groups? Managers are the key “linking pins” among these groups. They emerge from natural or spontaneous relationships among people. They are convened for a specific purpose and disband when their task is completed. They are officially recognized and supported by the organization. Their members have the tendency to avoid responsibility by “free-riding” in groups.

Answer: B

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Test Bank

Learning Objective: 17.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 17.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 17.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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40. A. B. C. D. E.

Test Bank

A project team or task force is: unofficial and emerges from relationships and shared interests among members. designated to work on a special task on a continuing basis. a team in which members solve problems through computer-based interactions. a team in which members have the tendency of “free-riding” in groups. convened for a specific purpose and disbands when its task is completed.

Answer: E Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

42. A. B. C.

Which of the following is most likely to reduce the functional chimneys problem? A cross-functional team A self-managing work team A committee

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D. E.

Test Bank

A virtual team A distributed team

Answer: A Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.2 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 17.2 Difficulty: Easy

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Test Bank

AACSB: Analytical thinking 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 computerbased interactions. Answer: A Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

46. Blocs Inc. is headquartered in the United States 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 Learning Objective: 17.2 Difficulty: Hard

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Test Bank

AACSB: Application of knowledge 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 Learning Objective: 17.2 Difficulty: Easy AACSB: Information technology Bloom’s Taxonomy: Knowledge

48. A. B. C. D. E.

Which of the following is true of a distributed team? Its members are less likely to get sidetracked by interpersonal difficulties. Its members are more sensitive to nonverbal cues in communication. It always ensures that team members do not feel isolated. It consists of members across departments who work at one place. It has a limited number of members owing to the hassles of expanding such a team.

Answer: A Learning Objective: 17.2 Difficulty: Moderate AACSB: Analytical thinking 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

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C. D. E.

Test Bank

Groupthink Free-riding Strong leadership

Answer: E Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

51. A. B. C. D. E.

The main difference between homogeneous and heterogeneous teams is that: the risk of occurrence of groupthink is more in the latter. the latter has members who are quite dissimilar to one another. members of the latter work together through computer-based interactions. the latter achieves high levels of task performance and future viability. only the latter has a task-driven, results-oriented structure.

Answer: B Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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52. A. B. C. D. E.

Test Bank

As team diversity increases, it is most likely that the: risk of the occurrence of groupthink increases. complexity of interpersonal relationships increases. members become more sensitive to nonverbal cues. risk of occurrence of social loafing increases. scope for special performance opportunities reduces.

Answer: B Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53. A. B. C. D. E.

Which of the following is most likely to increase team effectiveness? Increase in the complexity of interpersonal relationships Good information and material resources Involvement in social loafing Teams that have more than eight or nine members Strong cohesiveness that leads to groupthink

Answer: B Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

54. A. B. C. D. E.

As teams increase in size: the communication becomes less congested. it becomes easier to manage them. the number of potential interactions increases geometrically. the nature of the task ceases to affect team effectiveness. team effectiveness reaches its peak.

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Test Bank

Answer: C Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. A. B. C. D. E.

_____ is the way team members work together to accomplish tasks. Team effectiveness Team process Team managing Team leading Team controlling

Answer: B Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

56. A. B. C. D. E.

The _____ stage involves the first entry of individual members into a team. storming norming performing forming adjourning

Answer: D Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

57. The forming stage of team development is the stage: A. of initial task orientation and interpersonal testing.

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B. C. D. E.

Test Bank

when subteams are formed around areas of agreement and disagreement. when shared rules of conduct emerge and the team feels a sense of leadership. of total integration in which members are able to deal in creative ways. when team members prepare to achieve closure and disband.

Answer: A Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

58. A. B. C. D. E.

The storming stage of team development is the stage: of initial task orientation and interpersonal testing. when subteams are formed around areas of agreement and disagreement. when shared rules of conduct emerge and the team feels a sense of leadership. of total integration in which members are able to deal in creative ways. when team members prepare to achieve closure and disband.

Answer: B Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking

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Test Bank

Bloom’s Taxonomy: Knowledge

60. A. B. C. D. E.

The norming stage of team development is the stage: of initial task orientation and interpersonal testing. when subteams are formed around areas of agreement and disagreement. when shared rules of conduct emerge and the team feels a sense of leadership. of total integration in which members are able to deal in creative ways. when team members prepare to achieve closure and disband.

Answer: C Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

62. Which of the following is the last stage in team development?

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A. B. C. D. E.

Test Bank

Storming stage Norming stage Performing stage Forming stage Adjourning stage

Answer: E Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

64. A special team is put together at D.M.G. to work on a robotics project. The team is in the process of completing its 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

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C. D. E.

Test Bank

performing forming adjourning

Answer: E Learning Objective: 17.3 Difficulty: Hard AACSB: Application of knowledge 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. 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.3

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Test Bank

Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

67. A. B. C. D. E.

Conformity to norms in a team is likely to be the highest when: diversity is high. diversity is low. cohesiveness is high. cohesiveness is low. the size of the team is big.

Answer: C Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

68. A. B. C. D. E.

Which of the following is true of a highly cohesive team? The team members are less likely to conform to the norms. The members often violate core values. The intensity of rivalry among the members is very high. The members are not ethical in their dealings. The team members strive to maintain positive relationships.

Answer: E Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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

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C. D. E.

Test Bank

Impose strict guidelines and penalties Strengthen team cohesiveness Encourage rivalry among members

Answer: D Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

70. A. B. C. D. E.

Which of the following is the best way to build high team cohesiveness? Decrease membership homogeneity Increase team size Build agreement on team goals Reward individual results Increase rivalry among members

Answer: C Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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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 Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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 Learning Objective: 17.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

74. Encouraging team members and developing good interpersonal relationships are part of _____ activities.

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A. B. C. D. E.

Test Bank

maintenance direct performance oriented task social loafing information sharing

Answer: A Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

75. A. B. C. D. E.

Which of the following is an example of a maintenance activity? Information sharing Elaborating Initiating Gatekeeping Summarizing

Answer: D Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

76. A. B. C. D. E.

_____ activities are self-serving behaviors that interfere with team effectiveness. Maintenance Disruptive Task Orientation Self-management

Answer: B Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking

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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 Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 17.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

79. Which of the following is an example of a disruptive activity? A. Gatekeeping B. Controlling

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C. D. E.

Test Bank

Being aggressive Following Opinion giving

Answer: C Learning Objective: 17.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

80. A. B. C. D. E.

A decentralized communication network: allows all members to communicate directly with one another. restricts direct communication between individual members and the hub. allows limited communication among subgroups. decreases cohesiveness in a team. allows communication flows only between individual members and a hub.

Answer: A Learning Objective: 17.3 Difficulty: Easy AACSB: Written and oral communication 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 Learning Objective: 17.3 Difficulty: Moderate AACSB: Written and oral communication Bloom’s Taxonomy: Comprehension

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Test Bank

82. In a(n) _____ communication network, communication flows only between individual members and a hub. A. restricted B. centralized C. all-channel D. star E. polarized Answer: B Learning Objective: 17.3 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

83. A. B. C. D. E.

Which of the following is true of a chain communication structure? Its activities are coordinated and results pooled by a central point of control. It allows all members to communicate directly with one another. It best suits teams when members must interact intensively and work closely. Polarized subgroups contest one another and may even engage in conflict. It promotes self-serving behaviors that interfere with team effectiveness.

Answer: A Learning Objective: 17.3 Difficulty: Easy AACSB: Written and oral communication 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

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Test Bank

wheel

Answer: A Learning Objective: 17.3 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

85. A. B. C. D. E.

In a restricted communication network: activities are coordinated and results pooled by a central point of control. all team members communicate directly with one another. all members of a team contribute helpful task and maintenance behaviors. polarized subgroups contest one another and may even engage in conflict. self-serving behaviors that interfere with team effectiveness are promoted.

Answer: D Learning Objective: 17.3 Difficulty: Easy AACSB: Written and oral communication 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 Learning Objective: 17.4 Difficulty: Easy AACSB: Written and oral communication Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 17.4 Difficulty: Easy AACSB: Written and oral communication 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 Learning Objective: 17.4 Difficulty: Hard AACSB: Application of knowledge 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

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D. E.

Test Bank

decision by consensus decision by unanimity

Answer: C Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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Test Bank

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 Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

93. A. B. C. D. E.

Which of the following helps one in achieving consensus? Every member in the team is kept involved in the decision process. Two or three people dominate and lead the team into making a decision. The leader, manager, or some other authority figure makes decisions for the team. One idea after another is suggested without any discussion taking place. A suggestion is provided and then the team is forced into quick agreement.

Answer: A Learning Objective: 17.4 Difficulty: Moderate AACSB: Analytical thinking 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.

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D. E.

Test Bank

It is the process of making choices among alternative possible courses of action. It is a tendency for highly cohesive teams to lose their evaluative capabilities.

Answer: E Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

95. A. B. C. D. E.

Which of the following is a symptom of groupthink? Emphasis on centralized communication Self-serving behavior Decrease in team size Illusions of invulnerability High team diversity

Answer: D Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96. A. B. C. D. E.

In which of the following situations is groupthink most likely to occur? When members indulge in criticism of their own work When members thoroughly consider alternatives When members accept consensus prematurely When members are skeptical of inherent group morality When members communicate personal concerns to the whole team

Answer: C Learning Objective: 17.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Test Bank

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 Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

98. A. B. C. D. E.

Which of the following is likely to be most effective in checking groupthink? Assigning the role of critical evaluator to each team member Building agreement among team members on team goals Increasing membership homogeneity Rewarding team rather than individual results Providing physical isolation from other teams

Answer: A Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

99. A. B. C. D. E.

Which of the following best describes the nominal group technique? It is the technique of making choices among alternative possible courses of action. It is the technique of structuring interaction among team members discussing ideas. It is the technique of building agreement on team goals and thus increasing cohesiveness. It is the technique of measuring the degree to which members are motivated to remain as a part of a team. It is the technique of measuring the effectiveness and efficiency of individual

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Test Bank

members of a team. Answer: B Learning Objective: 17.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

100. John works in a software services company. He is currently a member of a large team working on a project. John generally tries to avoid taking responsibilities and works as less as possible because he knows that there are other team members who will complete the work. Which of the following terms best represents John’s behavior? A. Social loafing B. Self-concordance C. Fundamental attribution error D. Representativeness bias E. Bandwagon effect Answer: A Learning Objective: 17.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

101. Peter is the marketing head of AdSure, a renowned digital marketing company, known for its innovative marketing strategies. When being quizzed on his definition of a “perfect marketer,” Peter responded with reference to his team members and stated that Roger’s out of the box thinking, Steve’s Written and oral communication, Jessica’s innovative designs, and Jane’s technical prowess would reflect the qualities of a “perfect marketer.” Which of the following would best describe Peter’s definition of a “perfect marketer”? A. Social loafing B. Cohesiveness C. Synergy D. Representativeness bias

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Test Bank

Bandwagon effect

Answer: C Learning Objective: 17.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

102. Eddie’s company is concerned about the recent decline in sales of one of its bestselling products. The company has decided to permanently put a group of people in charge of analyzing competitive products and determining new features that should be added to their products. All the people in this group work in the marketing department of the company. The people in this group will perform these new tasks in addition to the ones they already have. Which of the following terms would best describe the newly formed group? A. Project team B. Task force C. Cross-functional team D. Committee E. Functional chimney Answer: D Learning Objective: 17.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

103. The sales team of June Electronics comprises members who collectively decide if a member should focus on indoor or outdoor sales. The team also decides the strategies to be adopted apart from evaluating each other’s performances. This is an example of _____. A. self-managing team B. task force C. cross-functional team D. committee E. functional chimney

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Test Bank

Answer: A Learning Objective: 17.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

104. Melony Inc., a supermarket chain, utilizes the expertise of its employees from the marketing, design, product outlay, supply management, and inventory management teams to attract customers and drive sales. This is an example of a _____. A. self-managing team B. task force C. cross-functional team D. distributed team E. functional chimney Answer: C Learning Objective: 17.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

105. Randall’s team is strained. The team members differ in views and opinions that result in frequent conflicts within the team. But irrespective of the conflicts, things to be achieved are becoming clearer and people are beginning to understand one another’s working styles. Which of the following stages of team development does this situation exemplify? A. Forming stage B. Norming stage C. Storming stage D. Adjourning stage E. Performing stage Answer: C Learning Objective: 17.3 Difficulty: Moderate

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Test Bank

AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. The members of the Research & Development team of TechlicLabs have developed an understanding among themselves, thereby reducing the possibilities of interpersonal hostilities or disintegration. The team members also occupy key leadership positions thereby evoking a sense of leadership. Which of the following stages of team development does this situation exemplify? A. Forming stage B. Norming stage C. Storming stage D. Adjourning stage E. Performing stage Answer: B Learning Objective: 17.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Frederick’s team is highly cohesive and the members of the team find it difficult to disapprove the ideas and opinions expressed by their teammates. Which of the following terms would best describe this situation? A. Groupthink B. Brainstorming C. Halo effect D. Synergy E. Social loafing Answer: A Learning Objective: 17.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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Test Bank

108. Jacob, the customer relationship manager of SimplyBuyz.com, an e-commerce retailer, calls for a meeting of his team to discuss strategies to handle customer grievances effectively. Jacob seeks inputs from all his team members who come up with amicable solutions to certain grievances without being evaluated or criticized by the other team members. Which of the following approaches does Jacob adopt to invoke creativity in the process of team decision-making? A. Team virtuousness B. Brainstorming C. Halo effect D. Nominal group technique E. Social loafing Answer: D Learning Objective: 17.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. “There’ll be a meeting to discuss issues related to the execution of new project. Please feel free to point out difficulties in carrying out tasks, suggest solutions, and voice doubts,” said the team leader to the members of his team. Which of the following terms would best describe the meeting to be held? A. Groupthink B. Centralized communication network C. Wheel communication structure D. Distributed leadership E. Brainstorming Answer: E Learning Objective: 17.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay Questions

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110. 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 Learning Objective: 17.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

111. 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 expense 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. Learning Objective: 17.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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112. 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. Learning Objective: 17.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

113. 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

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are involved in the dialogue and discussion, decision making takes longer. This added time may be costly, even prohibitively so, in certain circumstances. Learning Objective: 17.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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Chapter 18: Communication and Collaboration

True/False 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 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

Planning is accomplished and plans are shared through the communication of information.

Answer: True Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Controlling relies on organizing to process information to measure performance results.

Answer: False Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

An effective communication is always efficient.

Answer: False Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking 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 Learning Objective: 18.1 Difficulty: Moderate .

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AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

Due to information filtering, the higher levels get biased and inaccurate information from below and end up making bad decisions.

Answer: True Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

Emails can be used as documentation for conveying directives.

Answer: True Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

A visitor dropping in during the middle of a meeting is an example of a distraction that can interfere with the effectiveness of communication.

Answer: True Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

10.

A lack of communication transparency is evident when managers try to hide information and restrict access to it by organizational members.

Answer: True Learning Objective: 18.2 Difficulty: Easy .

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AACSB: Analytical thinking 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 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

12.

An active listener must never paraphrase and restate to the source what he thinks he is hearing.

Answer: False Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

13.

Feedback is useful and constructive as long as it satisfies some personal need of the sender.

Answer: False Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

14.

The distance between people conveys varying intentions in terms of intimacy, openness, and status in interpersonal communications.

Answer: True Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

15.

The physical layout of an office or room is a form of nonverbal communication.

Answer: True Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking .

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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 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

17.

Too little conflict promotes complacency.

Answer: True Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

18.

Unless a conflict is fully resolved, it may remain latent only to emerge again in the future.

Answer: True Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

19.

People tend to respond to interpersonal conflict only through assertive behavior.

Answer: False Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

20.

The compromise style of conflict management pretends that conflict doesn’t really exist.

Answer: False Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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21.

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Not all conflict can be resolved at the interpersonal level.

Answer: True Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

22.

Changing reward systems is a way of reinforcing teamwork and reducing the tendencies of team members to compete with one another.

Answer: True Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

23.

Negotiation is the process of making joint decisions when the parties involved have similar preferences.

Answer: False Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

24.

Substance goals are tied to the ways people work together while negotiating and how they will be able to work together again in the future.

Answer: False Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

25.

No one should lose in a principled negotiation, and positive relationships should be maintained in the process.

Answer: True Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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26.

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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 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

28.

A negotiator from a low-context culture is used to getting information through direct questions and answers.

Answer: True Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking 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 issuing a ruling.

Answer: False Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking 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 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge .

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Multiple Choice

31. A. B. C. D. E.

_____ is the capacity to attract support and help from others in order to get things done. Intellectual capital Operating capital Social capital Risk capital Venture capital

Answer: C Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

32. A. B. C. D. E.

Which of the following is a difference between intellectual capital and social capital? When screening candidates for university internships and first jobs, recruiters give high priority to social capital, but not to intellectual capital. Social capital is your ability to connect with others, whereas intellectual capital is your ability to move information to and from others. Whereas intellectual capital is basically what you know, social capital comes from the people you know and how well you relate to them. 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. Social capital is a non-monetary measure, whereas intellectual capital is a monetary measure.

Answer: C Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

33. A. B. C. D. E.

_____ is the process of sending and receiving symbols with meanings attached to them. Propagation Collaboration Articulation Cohesion Communication

Answer: E Learning Objective: 18.1 Difficulty: Easy

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AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

34. A. B. C. D. E.

Communication is the glue that binds together the four functions of planning, organizing, leading, and _____. administering controlling coordinating processing ordering

Answer: B Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

35. A. B. C. D. E.

Effective communication occurs when _____. the sender’s message is fully understood by the receiver minimum costs are expended in terms of resources the manager is connected with others everyone is aware of their immediate environment a message is supported by everyone

Answer: A Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

36. A. B. C. D. E.

Efficient communication occurs when _____. the manager is connected with others the sender’s message is fully understood by the receiver the message is credible a message is supported by everyone minimum costs are expended in terms of resources

Answer: E Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

37. A. B. .

_____ presents a message in a manner that causes the other person to support it. Information filtering Scientific management 18-8

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C. D. E.

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Ethnocentrism Active listening Persuasive communication

Answer: E Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

38. A. B. C. D. E.

_____ is that which is based on trust, respect, and integrity in the eyes of others. Active listening Scientific management Ethnocentrism Credible communication Information filtering

Answer: D Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

39. A. B. C. D. E.

Mark, a manager at APZI Inc., wants to be consistently persuasive when communicating with his team members. To build credibility, Mark must: make sure that the rewards for compliance are clear. hire similar minded people. communicate his decision-making authority to his team. be knowledgeable about the issue in question. have team members with strong technical skills.

Answer: D Learning Objective: 18.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

40. A. B. C. D. E.

_____ refers to anything that interferes with the effectiveness of communication. Deviation Fluctuation Noise Obscurity Haphazardness

Answer: C Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking .

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Bloom’s Taxonomy: Knowledge

41. A. B. C. D. E.

_____ is the intentional distortion of information to make it appear most favorable to the recipient. Communication breakdown Information filtering Persuasive communication Exaggerated communication Noise

Answer: B Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

42. A. B. C. D. E.

A(n) _____ is the pathway or medium through which a message is conveyed from sender to receiver. communication channel information filter communication censor information decoder information bank

Answer: A Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

43. A. B. C. D. E.

_____ are most suitable for simple messages that are easy to convey and for those that require extensive dissemination quickly. Written channels Spoken channels Information filters Nonverbal communications Mixed messages

Answer: A Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

44. A. .

Which of the following is a written channel of communication? Face-to-face meeting 18-10

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B. C. D. E.

Test Bank

Virtual meeting Conference E-mail Seminar

Answer: D Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

45. A. B. C. D. E.

Which of the following is a spoken channel of communication? Memo Online conferences E-mail Post-it Text messages

Answer: B Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

46. A. B. C. D. E.

Which of the following statements is true of communication channels? Face-to-face meetings are most acceptable for simple messages that are easy to convey. A simple e-mail works best for messages that are complex and difficult to convey. Where immediate feedback to the sender is valuable, written channels should be used. Spoken channels are less personal and less likely to be perceived as supportive. Written channels are useful when it is important to document information or directives.

Answer: E Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

47. A. B. C. D. E.

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 _____. poor proxemics a poor choice of communication channels substantive conflict information overload failure to recognize nonverbal signals

Answer: B Learning Objective: 18.1 .

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Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

48. A. B. C. D. E.

_____ takes place through gestures and body language. Credible communication Information filtering Active listening Nonverbal communication Communication transparency

Answer: D Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

49. A. B. C. D. E.

When words communicate one message while actions, body language, or appearance communicate something else it results in a(n) _____. information filtering mixed message persuasive communication prevarication substantive conflict

Answer: B Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

50. A. B. C. D. E.

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) _____. transparent communication mixed message poor oral expression poor choice of communication channel exaggerated communication

Answer: B Learning Objective: 18.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

51. .

Which of the following is an example of physical distractions in communication? 18-12

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A. B. C. D. E.

Test Bank

Mixed messages Lack of privacy Loss of meaning through translation Language barrier Information filtering

Answer: B Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

52. A. B. C. D. E.

_____ is the tendency to consider one’s culture superior to any and all others. Anthropocentrism Geocentrism Ethnocentrism Polycentrism Nepotism

Answer: C Learning Objective: 18.1 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

53.

A. B. C. D. E.

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 natives of Country B. Yet, he continues to use these gestures because he does not have much regard for Country B’s culture. This can be regarded as an example of _____. passive listening ethnocentrism persuasive speaking active listening polycentrism

Answer: B Learning Objective: 18.1 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

54. A. B. C. D. E. .

_____ involves being honest in sharing accurate and complete information about the organization and workplace affairs. Communication transparency Information filtering Ethnocentrism Proxemics Distributive negotiation 18-13

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Answer: A Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

55. A. B. C. D. E.

Which of the following is an example of high communication transparency? A manager who intentionally distorts information to make it appear more favorable to his subordinates A manager whose words communicate one message while his gestures communicate something else A manager who sets aside adequate time and privacy for a meeting without interruptions A manager who openly distributes the company financial information throughout the organization A manager who uses electronic channels to convey messages that are complex

Answer: D Learning Objective: 18.2 Difficulty: Hard AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

56. A. B. C. D. E.

The term _____ describes a form of communication transparency where employees are provided with essential financial information about their companies. heralded management publicized management open book management cautious management provident management

Answer: C Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

57. A. B. C. D. E.

Neehara is an executive at a consulting firm. While in office, she likes browsing the web and using social networking sites. Which of the following statements is most likely to be true in this scenario? She can continue browsing the sites as she has electronic privacy by default. She will not be in any trouble as her employer cannot monitor her Internet usage. She can continue browsing the sites as they are not illegal. She should continue browsing the sites if her co-workers are also doing the same. She should find out the Internet usage policy of her employer and follow it.

Answer: E Learning Objective: 18.2 .

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Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

58. A. B. C. D. E.

_____ uses electronic media to pass messages and information among members of social networks. Electronic grapevine Active listening Electronic open book management Electronic feedback management Social reformation

Answer: A Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

59. A. B. C. D. E.

_____ is the process of helping the source of a message say what he or she really means. Communication transparency Information filtering Active listening Proxemics Open book management

Answer: C Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

60. A. B. C. D. E.

Mark asks his colleague Steve, “Don’t you think politicians should be elected solely based on merits?” Steve responds, “It seems to you that they should, I take it?” This is an example of _____. communication transparency active listening a mixed message information filtering communication noise

Answer: B Learning Objective: 18.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

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61. A. B. C. D. E.

Test Bank

Which of the following would most likely be the response of an active listener? “I don’t think you are right.” “You are not allowed to make such accusations.” “You are displeased with the management’s decision, aren’t you?” “May the best candidate be promoted!” “I’m not very sure you would be the suitable candidate.”

Answer: C Learning Objective: 18.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

62. A. B. C. D. E.

_____ involves being sincere and trying to find out the full meaning of what is being said. Information overloading Communication filtering Active listening Passive listening Information filtering

Answer: C Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

63. A. B. C. D. E.

The process of telling other people how you feel about something they did or said, or about the situation in general, is called _____. mixed messaging feedback compromising collaboration active speaking

Answer: B Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

64. A. B. C. D. E.

Which of the following is an example of an evaluative feedback? “You never complete your projects on time and always come to office late.” “You were 40 minutes late for today’s meeting and missed a lot of the context of our discussion.” “You missed the deadline for the first time; you need to let me know if you need help.” “You are working on too many projects, you should delegate some work to others.” “You’re coming late to meetings; you might be spreading yourself too thin and have trouble meeting your obligations.” 18-16

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Answer: A Learning Objective: 18.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

65. A. B. C. D. E.

Which of the following is an example of a descriptive feedback? “You are unreliable and always late for everything.” “You were 20 minutes late for the training session and missed a lot of important points we discussed.” “You missed another deadline today.” “You are working on too many projects, you should delegate some work to others.” “You’re coming late to meetings; you might be spreading yourself too thin and have trouble meeting your obligations.”

Answer: B Learning Objective: 18.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

66. A. B. C. D. E.

Which of the following guidelines should be followed while giving constructive feedback? Feedback should be given indirectly with the help of a middleman. Feedback should be general and not specific. Feedback should be elaborate and long. Feedback should be given on all things the receiver can or cannot be expected to do. Feedback should be given at a time when the receiver seems most willing to accept it.

Answer: E Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

67. A. B. C. D. E.

_____ is the study of how we use space in communication. Anthropology Civics Proxemics Demography Ecology

Answer: C Learning Objective: 18.2 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

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68. A. B. C. D. E.

Test Bank

A manager removes the door of his office and rearranges the furniture so that his entire team can interact with him. This implies that the manager understands the importance of _____ in communication. verbal messages space written rules time information filtering

Answer: B Learning Objective: 18.2 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

69. A. B. C. D. E.

_____ is a disagreement over issues of substance and/or an emotional antagonism. Noise Encounter Negotiation Eustress Conflict

Answer: E Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

70. A. B. C. D. E.

_____ involves disagreements over goals, resources, rewards, policies, procedures, and job assignments. Substantive conflict Emotional conflict Rebellion Structural conflict Dysfunctional conflict

Answer: A Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

71. A. B. .

Emotional conflicts result from _____. disagreement over policies and procedures disagreement over distribution of rewards 18-18

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C. D. E.

Test Bank

personality clashes clash over allocation of resources disagreements over goals

Answer: C Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

72. A. B. C. D. E.

Which of the following statements is true of managing conflicts? When managed well, conflicts can stimulate creativity. Conflicts always result in low performance. Substantive conflicts can be addressed by handling personality issues. Emotional conflicts do not cause difficulties in organizations. Too much conflict leads to groupthink.

Answer: A Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

73. A. B. C. D. E.

Which of the following statements is true of conflict? Positive performance results from very little conflict. Moderate levels of conflict are constructive. Functional conflict leads to negative performance. Absent of conflict leads to higher creativity. Dysfunctional conflict leads to positive performance.

Answer: B Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

74. A. B. C. D. E.

_____ conflict harms performance, relationships, and even individual well-being. Dysfunctional Functional Moderate Cooperative Constructive

Answer: A Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge .

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75. A. B. C. D. E.

Test Bank

_____ in the form of unclear job expectations and other task uncertainties increase the likelihood for people to work at cross-purposes. Task interdependencies Role ambiguities Competing objectives Structural differentiations Resource scarcities

Answer: B Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

76. A. B. C. D. E.

_____ breed conflict when people depend on others to perform well in order to perform well themselves. Task interdependencies Role ambiguities Competing objectives Structural differentiations Resource scarcities

Answer: A Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

77. A. B. C. D. E.

_____ 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. Task interdependencies Role ambiguities Competing objectives Structural differentiations Resource scarcities

Answer: C Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

78. A. B. .

_____ is the desire to satisfy another party’s needs and concerns. Ethnocentrism Egocentricity 18-20

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C. D. E.

Test Bank

Cooperativeness Individuality Assertiveness

Answer: C Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

79. A. B. C. D. E.

_____ is the desire to satisfy one’s own needs and concerns. Altruism Cooperativeness Accommodation Earnestness Assertiveness

Answer: E Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

80. A. B. C. D. E.

_____ means being uncooperative and unassertive in approaching conflict by staying on a neutral position. Competition Accommodation Avoidance Compromise Collaboration

Answer: C Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

81. A. B. C. D. E.

_____ means being cooperative but unassertive, letting the wishes of others rule, smoothing over or overlooking differences to maintain harmony. Accommodation Avoidance Competition Compromise Collaboration

Answer: A Learning Objective: 18.3 Difficulty: Easy .

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Test Bank

AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

82. A. B. C. D. E.

Which of the following statements is true of the accommodating style of conflict management? It pretends that conflict doesn’t really exist. Everyone withdraws from the conflict and hopes it will simply go away. It leads to a win-win situation. It plays down differences and highlights areas of agreement. One party wins because superior skill allows his or her desires to be forced on the other.

Answer: D Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

83. A. B. C. D. E.

In the authoritative command approach of conflict management, managers _____. pretend that a conflict doesn’t really exist play down differences and highlight similarities to reduce conflict make each party give up something of value to the other make the parties work through conflict differences and solving problems so everyone wins use force, superior skill, or domination to “win” a conflict

Answer: E Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: comprehension

84. A. B. C. D. E.

Ross, a manager at Cyberdawn 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. collaboration avoidance competition compromise accommodation

Answer: D Learning Objective: 18.3 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

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85. A. B. C. D. E.

Test Bank

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. competition compromise collaboration avoidance accommodation

Answer: C Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

86. A. B. C. D. E.

Which of the following conflict management approaches often create lose–lose conflict? Competing and compromising Avoiding and accommodating Competing and collaborating Authoritative command and compromising Collaborating and compromising

Answer: B Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

87. A. B. C. D. E.

_____ involves working through conflict differences and solving problems so everyone wins. Compromise Competition Smoothing Avoiding Collaboration

Answer: E Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

88. A. B. C. D. .

_____ and _____ styles tend to create win–lose conflict where each party strives to gain at the other’s expense. Withdrawing; collaborating Avoiding; accommodating Smoothing; collaborating Competing; compromising 18-23

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Test Bank

Collaborating; accommodating

Answer: D Learning Objective: 18.3 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

89. A. B. C. D. E.

When personalities and emotions prove irreconcilable, the _____ approach is often helpful. avoidance structural collaboration accommodation smoothing

Answer: B Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

90. A. B. C. D. E.

What is the structural solution to managing conflict when people just can’t seem to appreciate one another’s points of view? Appealing to higher-level goals Making more resources available to everyone Altering the physical environment Changing reward systems Using integrating devices

Answer: A Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

91. A. B. C. D. E.

Which of the following is an integrating device used to help manage conflicts between groups? Transferring one or more of the conflicting parties Rearranging facilities, work space, or workflows Changing reward systems Making more resources available to everyone Setting up cross-functional teams

Answer: E Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension .

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92. A. B. C. D. E.

Test Bank

_____ is the process of making joint decisions when the parties involved have different preferences. Recommendation Negotiation Conferencing Proposition Integration

Answer: B Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

93. A. B. C. D. E.

Substance goals are _____. not concerned with negotiation outcomes tied to content issues concerned with negotiation processes tied to the way people work together while negotiating tied to employees ‘performance issues in the future

Answer: B Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

94. A. B. C. D. E.

Which of the following is one of the criteria of an effective negotiation? Harmony Timeliness Authority Validity Credibility

Answer: A Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

95. A. B. C. D. .

_____ focuses on win–lose claims made by each party for certain preferred outcomes. Distributive negotiation Integrative negotiation Principled negotiation Collaborative negotiation 18-25

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Test Bank

Substantive negotiation

Answer: A Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

96. A. B. C. D. E.

The goal of _____ is to achieve a final agreement based on the merits of each party’s claims. accommodating negotiation distributive negotiation principled negotiation authoritative command negotiation compromise negotiation

Answer: C Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

97. A. B. C. D. E.

Which of the following is one of the pathways or rules for gaining integrated agreements as set forth by Roger Fisher and William Ury in their book Getting to Yes? A win–lose orientation for certain preferred outcomes should be used. The problem and the people should not be separated. Relationships should get sacrificed to facilitate negotiations. Results should be based on some objective standard to gain integrated agreements. Focus should be on positions, not on interests to gain integrated agreements.

Answer: D Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

98. A. B. C. D. E.

_____ in a negotiation is defined as the space between one party’s minimum reservation point and the other party’s maximum reservation point. Proxemics The arena of indifference Glass ceiling Mixed message space The bargaining zone

Answer: E Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking .

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Test Bank

Bloom’s Taxonomy: Knowledge

99. A. B. C. D. E.

The myth of the “fixed pie” in negotiations refers to the _____. overconfidence of a party by ignoring the other party’s needs assumption that in order for you to gain the other person must give something up error that occurs when parties don’t really make themselves understood to each other error that occurs when parties fail to listen well enough to understand what each other is saying 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 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

100. Which of the following statements is true 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 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

101. _____ 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 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

102. A(n) _____ is a neutral third party who issues a binding decision to resolve a dispute. .

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A. B. C. D. E.

Test Bank

mediator bargainer arbitrator avoider accommodator

Answer: C Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

103. 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 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

104. A designated _____ listens to complaints and disputes, and often plays a key role in the alternative dispute resolution process. A. compromiser B. bargainer C. ombudsperson D. advocate E. accommodator Answer: C Learning Objective: 18.4 Difficulty: Easy AACSB: Analytical thinking Bloom’s Taxonomy: Knowledge

105. Kyle, a young college student, wanted a motorcycle. He talked to his parents and convinced them that it would only do him good. Next day, his father took him to a motorcycle dealer. Which of the following terms would best describe Kyle’s communication? A. Persuasive B. Credible C. Polycentric D. Noisy E. Ethnocentric .

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Test Bank

Answer: A Learning Objective: 18.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

106. While Leroy said he understood the terms of the agreement, he had a quizzical look on his face. Which of the following barriers to communication does this exemplify? A. Physical distraction B. Mixed message C. External locus of control D. Poor choice of channel E. Information filtering Answer: B Learning Objective: 18.1 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

107. Sam said, “I think Julia would have done much better if she had used some basic colors for the interiors.” This will be best example of which of the following? A. Active listening B. Grapevine C. Feedback D. Communication transparency E. Proxemics Answer: C Learning Objective: 18.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

108. ZebraTech is an IT company that provides information to its employees about the earnings of the company, its profits, expenses, etc. on a regular basis. In this scenario, the company can be said to follow which of the following styles of management? A. B. C. D. E.

Heralded management Publicized management Open book management Cautious management Provident management

Answer: C Learning Objective: 18.2 Difficulty: Moderate .

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Test Bank

AACSB: Application of knowledge Bloom’s Taxonomy: Application

109. Priya is a very efficient manager and is very popular with her team members. Whenever her team members talk to her, she tries to properly understand the content of their message, tries to identify their feelings, and looks for signs that can help her to interpret their message. In this scenario, Priya is involved in the process of: A. B. C. D. E.

communication transparency. information filtering. active listening. proxemics. open book management.

Answer: C Learning Objective: 18.2 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

110. Salma, the operations manager, and Chang, the human resource manager, argue over the allocation of targets, objectives, and resources among the leaders of different teams in their firm. Salma and Chang are likely to be involved in a(n) _____. A. emotional conflict B. functional conflict C. dysfunctional conflict D. lose-lose conflict E. substantive conflict Answer: E Learning Objective: 18.3 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

111. Maria is very angry with Da Chun, her boss, because Da Chun would not approve her leave request. Maria dislikes Da Chun and often gets into arguments with her. In this scenario, Maria and Da Chun are likely to be involved in a(n) _____. A. emotional conflict B. functional conflict C. dysfunctional conflict D. lose-lose conflict E. substantive conflict Answer: A Learning Objective: 18.3 Difficulty: Moderate

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Test Bank

AACSB: Application of knowledge Bloom’s Taxonomy: Application

112. During a negotiation session Sam thought, “This doesn’t seem right. If he is getting so much out of it, then surely I must be dropping something off.” Which of the following common negotiation pitfalls is illustrated in this statement? A. Nonrational escalation of conflict B. Overconfidence C. Premature cultural comfort D. The myth of the “fixed pie” E. Trap of ethical misconduct Answer: D Learning Objective: 18.4 Difficulty: Moderate AACSB: Application of knowledge Bloom’s Taxonomy: Application

113. The employees of a garment factory and its top managers get involved in a negotiation about the wages of the employees. They thoroughly examine each other’s claims and come to a mutually beneficial arrangement. As per this arrangement, the employees are given a salary hike of 30 %, while they increase their productivity by 10 % thus benefiting the factory. Identify the type of negotiation in this scenario from the following. A. Accommodating negotiation B. Distributive negotiation C. Principled negotiation D. Authoritative command negotiation E. Compromise negotiation Answer: C Learning Objective: 18.4 Difficulty: Hard AACSB: Application of knowledge Bloom’s Taxonomy: Application

Essay

114. 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, co-workers, and bosses. Their success is often due to more convincing than to giving orders. Credible communication is that which is based on trust, respect, and integrity in the eyes of others. .

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Test Bank

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. Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

115. 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. Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension .

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Test Bank

116. 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. Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

117. 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 them 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. Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

118. 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 .

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Test Bank

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 hard-and-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. Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytical thinking Bloom’s Taxonomy: Comprehension

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