Review For The Midterm Exam

REVIEW FOR THE MIDTERM
EXAMINATION
CHAPTER 2
MULTIPLE-CHOICE
QUESTION 1:
Sales of the high-end units have declined. The owners want Arnold, the CEO, to
increase revenues to previous levels. His first action should be ________.
A) to identify previous sales levels
B) to determine why sales are off
C) to compare costs for three new models under development
D) to immediately begin production on the lowest cost model
Diff: 3
AACSB: Application of knowledge
Learning Obj: LO 2.1: Describe the eight steps in the decision-making process
Classification: Application
2-3
Copyright © 2016 by Pearson Education, Ltd.
MULTIPLE-CHOICE
QUESTION 2:
Belinda wants to introduce a new model to the product line. Three models are
being developed. Belinda can choose only one. She has decided to focus on target
market size, production costs, and net profits. These are Belinda's ________.
A) alternatives
B) criterion weights
C) decision criteria
D) problems
Diff: 2
2-4
MULTIPLE-CHOICE
QUESTION 3:
Bryan must select a new supplier for lighting fixtures for his company's mobile
homes. He has decided quality is more important than price but price is more
important than lead times. Bryan will use these priorities to ________.
A) analyze alternatives
B) set his decision criteria
C) allocate weights to the criteria
D) develop alternatives
Diff: 3
2-5
MULTIPLE-CHOICE
QUESTION 4:
Carla is searching the Internet for sources of Himalayan salt to make bath salts.
Carla is at the ________ step in the decision making process.
A) identify-the-problem
B) identify-decision-criteria
C) allocate-weights
D) develop-alternatives
Diff: 2
2-6
MULTIPLE-CHOICE
QUESTION 5:
After Abby listened to the weather report this morning before work, she drove
her car and carried an umbrella instead of riding her motorcycle. Whether she
realizes it or not, Abby ________.
A) analyzed criteria
B) implemented a decision
C) assigned weights to criteria
D) evaluated a decision
Diff: 3
2-7
MULTIPLE-CHOICE
QUESTION 6:
Gilda has an idea that would streamline operations, reduce costs, and increase
profits. Her idea requires the cooperation of several departments, some of which
have demonstrated a resistance to change. By considering the context in which
the changes must happen and the people in her organization, Gilda is using
________.
A) evidence-based management
B) bounded rationality
C) intuition
D) positive employee relations
Diff: 2
AACSB: Reflective thinking
Learning Obj: LO 2.2: Explain the four ways managers make decisions
2-8
MULTIPLE-CHOICE
QUESTION 7:
Abigail is shopping for a new copier for her company. She has set her price range
between $5,000 and $6,000. The copier must handle a minimum of 10,000 copies
per month and have a useful life expectancy of five years. If Abigail selects the
first copier she finds that meets these criteria, we would say she is ________.
A) using perfect rationality
B) using bounded rationality
C) using intuition
D) satisficing
Diff: 3
2-9
MULTIPLE-CHOICE
QUESTION 8:
Julie is keen on joining Columbia University to pursue a master's degree in
economics. However, after three months of applying and waiting for an
acceptance letter, she finally decides to attend NYU, which was one of her
backup colleges. This is an example of ________.
A) maximizing
B) neutralizing
C) minimizing
D) satisficing
Diff: 2
2-10
MULTIPLE-CHOICE
QUESTION 9:
Edgar hired a graduate from his alma mater, thinking he would be a successful
first line supervisor. Unfortunately the new hire hasn't worked out as well as
hoped. Edgar decided to invest time and money in training for the new hire but
saw little improvement. Next he assigned a successful supervisor to mentor the
young employee. The problems persisted. Edgar is displaying ________.
A) bounded rationality
B) irrational behavior
C) poor judgment
D) escalation of commitment
Diff: 2
2-11
MULTIPLE-CHOICE
QUESTION 10:
Farrell has a knack for selecting candidates who become very successful
workers. When asked how he does it, he answered that he "listened to his gut."
Farrell is really ________.
A) using his intuition
B) using bounded rationality
C) using perfect rationality
D) satisficing
Diff: 2
2-12
MULTIPLE-CHOICE
QUESTION 11:
Farrah has called together her management team to review information about
customer satisfaction gathered by an external research company. Farrah is
engaging in ________.
A) perfect rationality
B) bounded rationality
C) evidence-based management
D) relationship management
Diff: 2
2-13
MULTIPLE-CHOICE
QUESTION 12:
Garrett looked at the list of orders for the coming week and made out the
production schedule. He has done this so many times he could do it in his sleep.
This situation represents a(n) ________.
A) structured problem
B) unstructured problem
C) linear problem
D) programmed problem
Diff: 2
Learning Obj: LO 2.3: Classify decisions and decision-making conditions
2-14
MULTIPLE-CHOICE
QUESTION 13:
Harriet's machine has stopped working again. She consulted the operator's
manual troubleshooting guide to find a solution. Harriet used a ________.
A) programmed decision
B) non-programmed decision
C) structured decision
D) non-structured decision
Diff: 2
2-15
MULTIPLE-CHOICE
QUESTION 14:
After nearly 30 years of growth, sales at Ida's company have begun to decline.
None of the managers have been able to determine the cause. Some say the entire
economy is in recession; others blame a change in suppliers; still others say the
work ethic among employees just isn't what it used to be. This is an example of
________.
A) a structured problem
B) an unstructured problem
C) a programmed problem
D) a non-programmed problem
Diff: 3
2-16
MULTIPLE-CHOICE
QUESTION 15:
Lucas always seems to "know" exactly what to do in any given situation. At least
that's what he'll tell you. But his ideas don't always work and his overall
performance as scored by his supervisor isn't nearly as great as he thinks it is.
Lucas is exhibiting the ________.
A) selective perception bias
B) the anchoring effect
C) self-serving bias
D) overconfidence bias
Diff: 2
Learning Obj: LO 2.4: Describe how biases affect decision making
2-17
MULTIPLE-CHOICE
QUESTION 16:
Many new car buyers choose to buy a car with little or no money down and
payments for many years because of the ________.
A) overconfidence bias
B) immediate gratification bias
C) framing bias
D) availability bias
Diff: 2
2-18
MULTIPLE-CHOICE
QUESTION 17:
Sophie is in charge of recruitment at her company. During a particular
interview, the first thing Sophie noticed about the applicant was that he was
improperly attired. Though the candidate possessed the necessary qualifications
and effectively answered all her questions, Sophie rejected him. This is an
example of the ________.
A) availability bias
B) self-serving bias
C) anchoring effect
D) confirmation bias
Diff: 3
2-19
MULTIPLE-CHOICE
QUESTION 18:
"There are no coincidences. If something bad has happened to you, you must
have done something to deserve it." This statement might be made by someone
with the ________.
A) framing bias
B) self-serving bias
C) availability bias
D) randomness bias
Diff: 3
2-20
MULTIPLE-CHOICE
QUESTION 19:
Lila believes the global climate is changing. Every storm, every volcano eruption,
every earthquake is, in her mind, evidence of this climate change. Lila has fallen
victim to ________ bias.
A) framing
B) selective perception
C) confirmation
D) representation
Diff: 3
2-21
MULTIPLE-CHOICE
QUESTION 20:
Beth hired Tom, trained him, coached him, and expected he would be her
eventual replacement when she moved up in the company. She noted each of his
accomplishments with pride but wrote off as vicious gossip the comments from
Tom's co-workers that he was making too many mistakes. Beth is experiencing
the ________.
A) selective perception bias
B) confirmation bias
C) framingbias
D) anchoring effect
Diff: 2
2-22
MULTIPLE-CHOICE
QUESTION 21:
Mildred was persuaded by a fast-talking salesperson to carry an expensive
brand of yarns in her retail needlecraft shop. Seldom does a customer buy this
brand, but on those rare occasions Mildred tells herself she made the right
decision. The yarns have been sitting on the shelf for several months and she has
yet to profit from them. Mildred suffers from the ________.
A) immediate gratification bias
B) selective perception bias
C) confirmation bias
D) hindsight bias
Diff: 2
2-23
MULTIPLE-CHOICE
QUESTION 22:
The Prime Minister of Transylvania prefers darkened rooms, flinches in bright
light, and has unusually long incisors. Despite his long and successful career, his
political opponents claim he is a vampire. This is an example of the ________.
A) representation bias
C) selective perception bias
D) randomness bias
Diff: 3
2-24
MULTIPLE-CHOICE
QUESTION 23:
The last time the Whigs took over Congress, stock prices rose dramatically and
unemployment fell to record lows. Once again, the Whigs are in power, so Jason
expects his stock portfolio to grow significantly. Jason's thinking may be
influenced by the ________.
A) representation bias
B) selective perception bias
C) randomness bias
D) anchoring effect
Diff: 3
2-25
MULTIPLE-CHOICE
QUESTION 24:
The last time he flew Jet Value Air, Juan's plane developed a fuel leak and had to
make an emergency landing. The time before that, his plane was grounded
because of an electrical problem. Juan is sure his current trip will be fraught
with problems and he will once again be delayed. This is an example of the
________ bias
A) confirmation
B) selective perception
C) availability
D) randomness
Diff: 3
2-26
MULTIPLE-CHOICE
QUESTION 25:
"We can't stop now. We've already invested $100,000 in the project." This
speaker is acting on the ________.
A) anchoring effect
B) availability bias
C) representation bias
D) sunk costs error
Diff: 2
2-27
MULTIPLE-CHOICE
QUESTION 26:
Whenever anyone praises Mark for his good performance, he has the tendency
to attribute his success to his personal qualities such as his ability to thrive under
pressure and his eye for detail. However, any negative performance feedback is
always met with excuses such as unsupportive team members or insufficient
time. This is an example of the ________.
A) self-serving bias
C) representation bias
D) hindsight bias
Diff: 2
2-28
MULTIPLE-CHOICE
QUESTION 27:
Marty had arranged for a high-profile speaker to deliver the keynote address at
her college's annual function. However, due to unforeseen circumstances, the
speaker was forced to drop out at the last moment. Marty reacts to this news by
saying, "I knew all along that this would happen." This is an example of the
________.
A) anchoring effect
B) availability bias
C) self-serving bias
D) hindsight bias
Diff: 3
2-29
CHAPTER 3
MULTIPLE-CHOICE
QUESTION 1:
Elmo Research & Development has been going through a rough patch lately. Turnover has been
high and employee morale is at an all-time low. Though employees and competitors hold
management responsible for the decline, the CEO does not let the managers go or change the
management style. Which of the following could explain this attitude?
A) The CEO holds the omnipotent view of management, which asserts that external factors
have a significant effect on performance outcomes.
B) Because the organization has a "take-charge" management style, the employees are
responsible for organizational policies.
C) The CEO is unresponsive to the criticisms from stakeholders.
D) The CEO holds the view that managers have only a limited role in organization success or
failure.
Diff: 2
AACSB: Analytical thinking; Application of knowledge
Learning Obj: LO 3.1: Contrast the actions of managers according to the omnipotent and
symbolic views
Copyright © 2016 Pearson Education, Ltd. 3-31

MULTIPLE-CHOICE
QUESTION 2:
Which of the following factors is an economic component of an organization's external
environment?
A) The employees of the organization have, on average, 2.3 children.
B) The average customer of a firm has a high school education.
C) The firm's customers' disposable income falls in the range of $25,000-$40,000.
D) Most of the firm's customers live in the Midwest.
Diff: 2
Learning Obj: LO 3.2: Describe the constraints and challenges facing managers in today's
external environment

MULTIPLE-CHOICE
QUESTION 3:
Which of the following factors is a sociocultural component of an organization's external
environment?
A) Most of the firm's customers have at least one year of college.
B) The government of the country holds elections whenever confidence in the current regime
falters.
C) Over time, society has become more accepting of alternative lifestyles.
D) The average number of hours worked per year is increasing.
Diff: 3

MULTIPLE-CHOICE
QUESTION 4:
Which of the following, if true, represents a demographic change that will affect decisions future
managers make?
A) The unemployment rate is likely to continue to fall.
B) The percentage of Hispanics in the candidate pool will increase.
C) More job candidates are likely to have tattoos and body piercings.
D) More jobs will be performed by robots.
Diff: 2
AACSB: Diverse and multicultural work environments; Application of knowledge; Analytical
thinking

MULTIPLE-CHOICE
QUESTION 5:
Faced with incomplete information about the future national economic conditions, many
employers have eschewed the tradition of hiring full-time, permanent employees in favor of
________.
A) hiring only high school graduates willing to work for lower wages
B) a reduced work week of no more than 30 hours per week per employee
C) off-shoring as many jobs as possible to reduce costs associated with government-
mandated programs
D) a flexible work arrangement that includes freelancers and temporary workers
Diff: 3
Classification: Concept

MULTIPLE-CHOICE
QUESTION 6:
Which one of the following statements highlights the shared aspect of culture?
A) Organizational culture is concerned with how members perceive the culture and describe
it, not with whether they like it.
B) Organizational culture is not something that can be physically touched or seen, but
employees perceive it on the basis of what they experience within the organization.
C) The original source of the culture of an organization reflects the vision of the
organization's founders.
D) Even though individuals may have different backgrounds or work at different
organizational levels, they tend to describe the organization's culture in similar terms.
Diff: 2
Learning Obj: LO 3.3: Discuss the characteristics and importance of organizational culture

MULTIPLE-CHOICE
QUESTION 7:
Which one of the following most accurately reflects the difference between strong cultures and
weak cultures?
A) Strong cultures tend to encourage employees to try new approaches to changing
conditions, while weak cultures do not.
B) In strong cultures, organizational values are held by top management, while in weak
cultures, values are diffused throughout the organization.
C) Strong cultures have less influence on employee behavior than do weak cultures.
D) Company values are more deeply held and widely shared in strong cultures than in weak
cultures.
Diff: 2

MULTIPLE-CHOICE
QUESTION 8:
Google has often been cited as a model for employee satisfaction. Google takes extensive care to
ensure employees have the best available conditions to perform, ranging from free snack bars,
free massages, innovation rooms, spas-on-site, and many more such measures. Which dimension
of organizational culture is Google said to emphasize through such measures?
A) stability
B) aggressiveness
C) people orientation
D) attention to detail
Diff: 2

MULTIPLE-CHOICE
QUESTION 9:
If Melody wanted to build a strong culture, which of these actions would help most?
A) She and other managers should often tell stories about the company "heroes" and
encourage employees to emulate their behavior.
B) She should allow employees to pursue activities they believe will contribute to future
company growth.
C) She should encourage employees to continue their education and establish a tuition
assistance program.
D) She should hold an annual retreat at which upper management develops a values
statement.
Diff: 3

MULTIPLE-CHOICE
QUESTION 10:
If Nanette is able to strengthen the culture of her organization, which one of the following could
she reasonably expect as a result?
A) an increase in absenteeism
B) a decrease in employee turnover
C) an increase in her stock trading price
D) a decrease in health insurance costs
Diff: 3

CHAPTER 4
MULTIPLE-CHOICE
QUESTION 1: Bill Sanderson, a manager in a manufacturing firm in New York has a
tendency to view the world only through his U.S.-based perspective. What can be
deduced about his attitude?
A) He has an elitist attitude.
B) He has a polycentric attitude.
C) He has a parochialistic attitude.
D) He has a geocentric attitude.
Diff: 2
AACSB: Diverse and multicultural work environments; Application of knowledge
Learning Obj: LO 4.1: Contrast ethnocentric, polycentric, and geocentric attitudes
toward global business

MULTIPLE-CHOICE
QUESTION 2: While talking with her advisor at the university, Jane deduces that she
has a(n) ________ attitude, as she has never traveled abroad and relates well only to
people from her home country.
A) regiocentric
B) polycentric
C) ethnocentric
D) geocentric
Diff: 2

MULTIPLE-CHOICE
QUESTION 3: Melanie joined an international student association in order to better
understand the views of students from other countries. She is trying to become more
________ in her attitude.
A) parochialistic
B) polycentric
C) ethnocentric
D) geocentric
Diff: 2
AACSB: Diverse and work environments; Application of knowledge

MULTIPLE-CHOICE
QUESTION 4: Samanex Corporation maintains production facilities in 13 different
countries on three continents. Each facility is managed by a native of the country
where it is located. This practice is indicative of a(n) ________ attitude.
A) ethnocentric
B) geocentric
C) polycentric
D) multicentric
Diff: 2

MULTIPLE-CHOICE
QUESTION 5: Parochialism is a tendency to ________.
A) think highly of the foreign country in which the organization is doing business
B) focus on best approaches and people from around the globe
C) view the world solely through one's own eyes and perspectives
D) let employees in the host country figure out how best to do things
Diff: 1
AACSB: Diverse and multicultural work environments

MULTIPLE-CHOICE
QUESTION 6: An ethnocentric attitude ________.
A) prompts managers to have a global view and look for the best approaches and
people regardless of origin
B) is the belief that the home country has the best work approaches and practices
C) is the view that employees in the host country know the best work approaches
and practices
D) gives a manager a much broader understanding of what it takes to manage in a
global environment
Diff: 2

MULTIPLE-CHOICE
QUESTION 7: Heinrich, a purchaser for an optics company in Germany, must place
an order for materials for use in its production process. He is most likely to order from
a company ________.
A) within the European Union because there would be no barriers to trade
B) in the United States because we have the same quality as any European
company
C) in Switzerland because the Swiss are known for their fine detail work
D) in Asia because labor is cheaper there
Diff: 2
Learning Obj: LO 4.2: Discuss the importance of regional trading alliances and global
trade mechanisms

MULTIPLE-CHOICE
QUESTION 8: The World Trade Organization ________.
A) advises developing countries on issues of trade barriers
B) promotes long-term economic development and poverty reduction
C) exists to help countries conduct trade through a system of rules
D) facilitates trade among third-world countries and developed nations
Diff: 3
trade mechanisms

MULTIPLE-CHOICE
QUESTION 9: The Association of Southeast Asian Nations is a trading alliance of
________.
A) eight Southeast Asian nations and Japan
B) eight Southeast Asian nations
C) ten Southeast Asian nations
D) ten Southeast Asian nations and China
Diff: 2
trade mechanisms

MULTIPLE-CHOICE
QUESTION 10: The purpose of the World Trade Organization is to ________.
A) facilitate trade among member nations through a system of rules
B) recommend legislation to lessen the advantages of more advanced nations
relative to developing countries
C) manage foreign currency exchanges to alleviate the effects of inflation
D) enforce quotas and tariffs imposed by member nations
Diff: 3
trade mechanisms

MULTIPLE-CHOICE
QUESTION 11: Critics of the WTO claim that ________.
A) global trade destroys jobs and the natural environment
B) it favors third-world countries over developed countries
C) shifting jobs to developing countries harms the economies of member nations
D) has too little power to be effective
Diff: 3
trade mechanisms

MULTIPLE-CHOICE
QUESTION 12: For American company Leather Exporters, first quarter sales in Italy
were higher compared to the preceding year but profits were down. What could
account for this difference?
A) a difference in the currency exchange rate
B) a change in the national leadership in Italy
C) a cultural change in Italian society
D) a reduction in trade barriers with Italy
Diff: 3
Learning Obj: LO 4.4: Explain the relevance of the political/legal, economic, and
cultural environments to global business

MULTIPLE-CHOICE
QUESTION 13: Coca-Moka, an American beverage company, sells its soft drinks in
Thirstania. After earning large profits, Coca-Moka discovered it could not export those
profits back to its American banks because of the ________ in Thirstania.
A) tax policies
B) exchange rate
C) inflation rate
D) export policies
Diff: 2
AACSB: Diverse and work environments; Application of knowledge

MULTIPLE-CHOICE
QUESTION 14: Jack moved to China to manage his company's production facility
there. Immediately he instituted the company practice of recognizing an employee of
the month. The Chinese employees were horrified. Why might this be so?
A) The employees are acting on their national cultural behavior patterns.
B) Each employee took the competition seriously and wanted to win the
recognition.
C) None of them wanted to lose face by not being recognized.
D) The company culture was stronger than their national culture.
Diff: 3

MULTIPLE-CHOICE
QUESTION 15: Alfredo believes that the CEO is no better than the janitor of the
organization and neither should receive preferential treatment. Using the GLOBE
model, what can we infer about Alfredo's culture?
A) Alfredo's culture is high in power distance.
B) Alfredo's culture is high in assertiveness.
C) Alfredo's culture is low in low in humane orientation.
D) Alfredo's culture is low in power distance.
Diff: 3

MULTIPLE-CHOICE
QUESTION 16: Bettina likes to know the end from the beginning. She gathers as much
information as possible before making a decision. Bettina likely lives in a culture
________.
A) with high power distance
B) with high uncertainty avoidance
C) with high future orientation
D) with high performance orientation
Diff: 2

MULTIPLE-CHOICE
QUESTION 17: Caron admits she's a tough cookie. She thrives in an environment in
which employees compete against each other for big rewards. It is likely that Caron's
culture ________.
A) is high in performance orientation
B) is high in in-group collectivism
C) is high in future orientation
D) is high in assertiveness
Diff: 2
AACSB: Diverse and multicultural work environments; Application of knowledge;
Analytical thinking

MULTIPLE-CHOICE
QUESTION 18: "Let's forget about tomorrow for tomorrow never comes." "Live for
today." These expressions would be typical of a culture that is ________.
A) high in assertiveness
B) low in humane orientation
C) high in performance orientation
D) low in future orientation
Diff: 2

MULTIPLE-CHOICE
QUESTION 19: Outsiders would call them clannish. Ianos and his family are very
close. At work, he gives his all to the team. His neighbors support each other but
exclude people they do not know. This describes a culture that is ________.
A) high in institutional collectivism
B) high in in-group collectivism
C) low in humane orientation
D) high in performance orientation
Diff: 3

MULTIPLE-CHOICE
QUESTION 20: The hero is always a loner, riding off into the sunset. Employers expect
key employees to make critical decisions alone; rewards are given to individuals, not to
teams. This describes a culture that is ________.
A) low in institutional collectivism
B) high in institutional collectivism
C) high in assertiveness
D) low in in-group collectivism
Diff: 3

CHAPTER 8
MULTIPLE-CHOICE
QUESTION 1: The effect of planning on managers is that it forces them to ________.
A) generate higher profits
B) anticipate and respond to change
C) eliminate uncertainty
D) work at cross purposes
Diff: 2
Learning Obj: LO 8.1: Define the nature and purposes of planning
8-63
Copyright © 2016 Pearson Education, Ltd.
MULTIPLE-CHOICE
QUESTION 2: Which one of the following is among the reasons why managers should
plan?
A) When work activities are coordinated around plans, inefficiencies become
obvious.
B) Uncertainty can be eliminated and the organization can be insulated from
change with planning.
C) Planning eliminates the need to set goals.
D) Planning eliminates the need to measure work effort.
Diff: 3
8-64
MULTIPLE-CHOICE
QUESTION 3: Which one of the following is among the reasons why managers should
plan?
A) When work activities are coordinated around plans, inefficiencies become
obvious.
B) Uncertainty can be eliminated and the organization can be insulated from
change with planning.
C) Planning eliminates the need to set goals.
D) Planning eliminates the need to measure work effort.
Diff: 3
8-65
MULTIPLE-CHOICE
QUESTION 4: When formal planning fails to lead to higher performance, which one of
the following is most likely to be the reason for the failure?
A) A participative style of planning was used.
B) Managers were allowed too much autonomy.
C) The company emphasized the control function over other functions.
D) External forces constrain managers' options.
Diff: 3
8-66
MULTIPLE-CHOICE
QUESTION 5: Goals are different from plans because ________.
A) goals identify specific steps that the organization needs to achieve, and plans
identify the overall mission of the organization
B) goals describe financial objectives, and plans describe objectives related to
social responsibility
C) goals are important only for small companies, and plans are important only for
large companies
D) goals are desired outcomes, and plans describe how those outcomes will be
accomplished
Diff: 3
Learning Obj: LO 8.2: Classify the types of goals organizations might have and the
plans they use
8-67
MULTIPLE-CHOICE
QUESTION 6: Which one of the following statements is true regarding an
organization's goals?
A) All organizations share the single goal of making profits.
B) A single goal is more efficient than multiple goals for defining an organization's
success.
C) Using a single goal such as profit may result in unethical behaviors by
employees.
D) Long-term success is ensured if managers emphasize only one goal for an
organization.
Diff: 3
plans they use
8-68
MULTIPLE-CHOICE
QUESTION 7: Nike, Inc. is a sportswear and equipment manufacturer that serves a
multitude of sports disciplines. Which one of the following statements from Nike would
be the best example of a strategic goal?
A) a ten percent increase in average annual sales
B) a seven percent increase in average annual income
C) achieving a return on investment of 17 percent
D) accelerating growth through focused execution
Diff: 2
plans they use
8-69
MULTIPLE-CHOICE
QUESTION 8: Robert Downs, owner of a new community newspaper in his home town
of Corning, New York, has set the following goal for his company: "To be a champion
for free speech and for the development of the community." This goal constitutes the
________ goal of the company.
A) informal
B) operational
C) financial
D) strategic
Diff: 3
plans they use
8-70
MULTIPLE-CHOICE
QUESTION 9: When uncertainty is high, plans should be ________ and ________.
A) specific; flexible
B) directional; standing
C) short-term; directional
D) general; informal
Diff: 3
Learning Obj: LO 8.3: Compare and contrast approaches to goal-setting and planning
8-71
MULTIPLE-CHOICE
QUESTION 10: ________ planning dominates managers' planning efforts at lower
levels of the organization.
A) Strategic
B) Organization-wide
C) Operational
D) Directional
Diff: 1
8-72
MULTIPLE-CHOICE
QUESTION 11: Which one of the following is true of the traditional approach to
planning?
A) Plans are developed by organizational members at the various levels.
B) This approach makes managerial planning thorough, systematic, and
coordinated.
C) Plans created through this method are seldom written down.
D) Formal planning departments are rarely used in this approach.
Diff: 2
8-73
MULTIPLE-CHOICE
QUESTION 12: Darby is a member of a global team of engineers who are required to
coordinate their design efforts. Emailing files to each other doesn't work well, as
several versions may be circulating simultaneously. Darby and his team could benefit
from ________.
A) Google Analytics
B) cloud computing
C) frequent face-to-face meetings
D) the use of social media
Diff: 2
Learning Obj: LO 8.4: Discuss contemporary issues in planning
8-74
MULTIPLE-CHOICE
QUESTION 13: Future factories may have equipment that sends data about itself to
the ________ so managers can receive updates even when they are away from the
equipment.
A) Internet of the Future
B) security monitoring company
C) Internet of Things
D) Internet of Data
Diff: 2
8-75
MULTIPLE-CHOICE
QUESTION 14: Which one of the following statements is true of competitive
intelligence as a means of environmental scanning?
A) The Competitive Espionage Act makes it a crime in the United States to engage
in competitive intelligence.
B) It is unethical to use competitive intelligence to make strategic business
decisions.
C) Competitive intelligence is ethical if competitor-related information is collected
from sources accessible and available to the public.
D) Buying competitors' products and asking their own employees to evaluate them
to learn about new technical innovations is an example of the unethical practices
followed in competitive intelligence.
Diff: 2
AACSB: Reflective thinking; Ethical understanding and reasoning
8-76
MULTIPLE-CHOICE
QUESTION 15: A manager's analysis of the external environment can be improved by
________, which involves screening information to detect emerging trends.
A) environmental scanning
B) environmental activism
C) critical path analysis
D) social screening
Diff: 1
8-77
CHAPTER 9
MULTIPLE-CHOICE
QUESTION 1: The CEO is meeting with his top managers to determine how best to
compete successfully in the company's market. This group is developing the company's
________.
A) strategy
B) competitive advantage
C) strengths and weaknesses
D) opportunities and threats
Diff: 3
Learning Obj: LO 9.1: Define strategic management and explain why it's important
9-79
MULTIPLE-CHOICE
QUESTION 2: The CEO and his top managers have asked themselves two important
questions: a. do customers value what the company is providing; and b. can the
company make money doing that? This group is developing a ________.
A) strategy
B) competitive advantage
C) business model
D) BCG matrix
Diff: 3
Learning Obj: LO 9.1: Define strategic management and explain why it's important
9-80
MULTIPLE-CHOICE
QUESTION 3: Defining the organizational mission forces managers to identify what
________.
A) its competitive advantage is
B) the organization is in business to do
C) its capabilities are
D) pending legislation will affect the organization
Diff: 3
Learning Obj: LO 9.2: Explain what managers do during the six steps of the strategic
management process
9-81
MULTIPLE-CHOICE
QUESTION 4: Computer peripherals provider Ascent plans to enter a new market in
another country. Which one of the following represents a threat for Ascent?
A) Ascent's profit margin in the previous year was its lowest on record and it will
require long-term planning to improve margins.
B) Ascent lacks the resources to enter the market on its own and has to find a
partner in the new market.
C) Ascent will have to plan its entry carefully as the laws in the country do not
favor foreign businesses.
D) Ascent needs to improve its service capabilities in the new country as this is an
important source of revenue.
Diff: 3
management process
9-82
MULTIPLE-CHOICE
QUESTION 5: Brutus' Fried Chicken patented the recipe for the spices used in the
coating of the chicken. The patent protection lasts for 17 years. Brutus' Fried Chicken
will view this patent protection as a(n) ________.
A) threat until the patent expires
B) opportunity during the time of the patent protection
C) weakness because the patent cannot be renewed
D) cost of doing business
Diff: 3
management process
9-83
MULTIPLE-CHOICE
QUESTION 6: Helen, the owner of Crazy Cupcakes, is conducting a SWOT analysis of
her company. Which one of the following represents an opportunity for expansion?
A) There has been a trend toward personalized cupcakes for a variety of
occasions.
B) The production process was found to be highly efficient and wastage was kept
to a minimum.
C) In a taste test, Crazy Cupcakes products ranked higher than competitors in the
taste and texture segments.
D) One of Crazy Cupcakes competitors has added cookies to its product line.
Diff: 3
management process
9-84
MULTIPLE-CHOICE
QUESTION 7: Harness International, a global wiring harness company, allows each
customer to access its engineering drawings on the company's extranet, speeding up
the design process for every project. Harness would consider this to be a(n) ________.
A) resource
B) capability
C) competitive advantage
D) opportunity
Diff: 3
management process
9-85
MULTIPLE-CHOICE
QUESTION 8: A(n) ________ strategy determines what businesses a company is in or
wants to be in, and what it wants to do with those businesses.
A) competitive
B) functional
C) operating
D) corporate
Diff: 2
Learning Obj: LO 9.3: Describe the three types of corporate strategies
9-86
MULTIPLE-CHOICE
QUESTION 9: What are the three main types of corporate strategies?
A) stability, focus, and turnaround
B) growth, stability, and renewal/retrenchment
C) growth, cost leadership, and differentiation
D) stability, differentiation, and focus
Diff: 3
9-87
MULTIPLE-CHOICE
QUESTION 10: An organization that grows using ________ focuses on its primary line
of business and increases the number of products offered or markets served in this
primary business.
A) diversification
B) horizontal integration
C) vertical integration
D) concentration
Diff: 2
9-88
MULTIPLE-CHOICE
QUESTION 11: Emily's Bakery's customers have asked her to open a second location
in a neighboring town offering the same menu as the original location. If Emily decides
to do this, she will be following a ________ strategy.
A) focus
B) differentiation
C) concentration
D) diversification
Diff: 3
9-89
MULTIPLE-CHOICE
QUESTION 12: Hendricks Ceramics sells items it buys from ceramic factories. If it
were to purchase one of these factories, it would be engaging in ________ integration.
A) forward vertical
B) backward vertical
C) horizontal
D) concentrated
Diff: 2
9-90
MULTIPLE-CHOICE
QUESTION 13: The French fries at Ronald's fast food business have been its most
popular product. During the past year, its profits have suffered because the farm that
supplies it with potatoes has increased its prices drastically. What should Ronald's do
to control its production costs?
A) Ronald's should expand its menu to include sweet potato fries.
B) Ronald's should buy out the farm and become its own supplier.
C) Ronald's should invest in more efficient fryers.
D) Ronald's should broaden its product range by introducing potato nuggets on its
menu.
Diff: 3
9-91
MULTIPLE-CHOICE
QUESTION 14: ________ takes place when a company combines with other companies
in different, but associated, industries.
A) Stabilized diversification
B) Horizontal integration
C) Vertical integration
D) Related diversification
Diff: 2
9-92
MULTIPLE-CHOICE
QUESTION 15: Florance is a chain of flower shops in the Chicago area. The company
recently acquired Knick-knacks, which owns three gift shops. Which of the following is
most similar to this acquisition?
A) A construction firm acquired a textile manufacturer as it seemed like a good
investment.
B) Faced with mounting raw material costs, a consumer goods producer took over
its supplier.
C) One shoe store chain buys out another shoe store chain and expands its
distribution channels through the acquired chain's outlets.
D) A toy retailer acquired a children's book store chain and now retails both toys
and books from co-branded outlets.
Diff: 3
9-93
MULTIPLE-CHOICE
QUESTION 16: A ________ strategy is used to deal with minor performance problems.
It helps an organization stabilize operations, revitalize organizational resources and
capabilities, and prepare to compete once again.
A) turnaround
B) stability
C) renewal
D) retrenchment
Diff: 2
9-94
MULTIPLE-CHOICE
QUESTION 17: During the Great Recession, Malcolm's Racing Bikes lost a
considerable amount of its business because customers could no longer afford the
expensive models in his shop. He was very near bankruptcy. Malcolm began carrying a
line of less expensive bikes to appeal to recreational bicyclists and families and also
opened a repair service. Malcolm used a ________ strategy.
A) retrenchment
B) diversification
C) turnaround
D) reorganization
Diff: 2
9-95
MULTIPLE-CHOICE
QUESTION 18: AI Rubber is one of four suppliers of molded rubber products and has
a 45% market share. The market for its products is shrinking. AI Rubber is part of a
larger corporation that includes a total of seven different companies. In the BCG
matrix, AI Rubber would be considered a ________.
A) star
B) cash cow
C) question mark
D) dog
Diff: 3
9-96
MULTIPLE-CHOICE
QUESTION 19: Managers should "milk" cash cows for as much as they can, limit any
new investment in them, and use the large amounts of cash generated to invest in
________ and ________.
A) dogs; stars
B) cash cows; dogs
C) stars; question marks
D) question marks; dogs
Diff: 2
9-97
MULTIPLE-CHOICE
QUESTION 20: Bixler Corporation boasts that it has the fewest warranty claims in its
industry. We can infer from this that ________.
A) Bixler's quality is a competitive advantage
B) Bixler has an ineffective TQM program
C) Bixler has employed design thinking in the development of its products
D) Bixler is using social media to promote its products
Diff: 3
Learning Obj: LO 9.4: Describe competitive advantage and the competitive strategies
organizations use to get it
9-98
MULTIPLE-CHOICE
QUESTION 21: Kiva Systems, manufacturer of robots used in flexible automation
systems, demonstrates the power of ________ by "teaching" its robots to dispose of
used cardboard and to assist in gift wrapping for e-commerce warehouse fulfillment.
A) design thinking
B) inventory management
C) strategic flexibility
D) e-business strategies
Diff: 2
9-99
MULTIPLE-CHOICE
QUESTION 22: When one gas station lowers its price a penny, the station on the other
corner of the intersection lowers its price, followed by the gas stations on the next
block, and so on, until nearly every gas station in town has lowered its prices. This
situation illustrates ________.
A) intense rivalry among competitors
B) a differentiation strategy
C) the treat of substitutes
D) a cost leadership strategy
Diff: 2
9-100
MULTIPLE-CHOICE
QUESTION 23: People's Airlines offers what it calls "no frills" flights: no reserved
seating, no snacks or meals on flights, small planes that fly to smaller airports away
from the city centers. People's Airlines is likely following a ________ strategy.
A) differentiation
B) focus
C) quality
D) cost leadership
Diff: 2
9-101
MULTIPLE-CHOICE
QUESTION 24: Every fast food hamburger restaurant chain wants you to believe their
product is the best because it is stored or prepared uniquely. Each of these is pursuing
a ________.
A) low cost leadership strategy
B) differentiation strategy
C) focus strategy
D) quality strategy
Diff: 2
9-102
MULTIPLE-CHOICE
QUESTION 25: Ferrari sells very expensive, stylish, high-quality cars to very wealthy
people. Ferrari follows a ________ strategy.
A) functional
B) focus
C) differentiation
D) quality
Diff: 3
9-103
CHAPTER 10
MULTIPLE-CHOICE
QUESTION 1: Michelle is very concerned about the formal framework by which job
tasks are divided, grouped, and coordinated within her unit. This implies that she is
concerned about ________.
A) the chain of command
B) the organizational structure
C) the organizational design
D) decentralization
Diff: 2
Learning Obj: LO 11.1: Describe six key elements in organizational design
10-105
MULTIPLE-CHOICE
QUESTION 2: In the early 20th century, automobiles were made one at a time by
craftsmen who could perform every operation necessary to build the car. Henry Ford
decided to limit the number of tasks each worker performed so each person could
become expert in his position. With this practice, Ford introduced ________.
A) departmentalization
B) work specialization
C) centralization
D) formalization
Diff: 3
10-106
MULTIPLE-CHOICE
QUESTION 3: Pauline sat on a bar-type stool screwing nuts onto bolts about 3,000
times a day while reading a novel. Her production job paid well but that's about all it
had going for it. Even though the work was not physically taxing, Pauline was
exhausted by the end of her day. Facing another day just like yesterday nearly brought
her to tears. Pauline was experiencing ________.
A) repetitive motion stress
B) burnout
C) economies of scale
D) diseconomies from division of labor
Diff: 2
10-107
MULTIPLE-CHOICE
QUESTION 4: At Chemetron, all the accounting people share one large work area; all
the quality control people are housed in a large office next to the production floor; and
maintenance has its own space at the back of the building. Chemetron is using
________.
A) departmental specialization
B) functional departmentalization
C) process departmentalization
D) product specialization
Diff: 3
10-108
MULTIPLE-CHOICE
QUESTION 5: What kind of departmentalization would be in place in a government
organization where different public service responsibilities are divided into activities
for employees, children, and the disabled?
A) product departmentalization
B) geographic departmentalization
C) process departmentalization
D) customer departmentalization
Diff: 2
10-109
MULTIPLE-CHOICE
QUESTION 6: Melanie has noticed that everyone is very concerned about the line of
authority within the hospital. This implies that the employees at the hospital are
worried about the ________.
A) unity of command
B) chain of command
C) span of control
D) departmentalization
Diff: 2
10-110
MULTIPLE-CHOICE
QUESTION 7: Wilson is offered a chance to help direct the efforts of some employees
assigned to his work group. This is a chance for Wilson to experience ________.
A) responsibility
B) leadership
C) command
D) authority
Diff: 3
10-111
MULTIPLE-CHOICE
QUESTION 8: When Bryan is offered a chance to help direct the efforts of some
employees assigned to his work group, he sees this new assignment as a(n) ________.
A) decrease in authority
B) increase in departmentalization
C) increase in his responsibility
D) decrease in work specialization
Diff: 2
10-112
MULTIPLE-CHOICE
QUESTION 9: Willard has been assigned to a project development team in addition to
his regular duties as a quality engineer. During this assignment he will report to both
the project manager and his quality department manager. This situation ________.
A) violates span of control
B) violates unity of command
C) violates chain of command
D) violates the acceptance theory of authority
Diff: 2
10-113
MULTIPLE-CHOICE
QUESTION 10: After extensive job cuts to reduce costs, upper level managers are
spending significant amounts of time solving problems in the production units. Lower
level managers are resentful that they cannot make decisions for their own units. What
recommendation would you make for this firm?
A) Reorganize; departmentalize around customers instead of products.
B) Formalize; write explicit job descriptions, rules, and procedures so the upper
managers won't have to decide each case individually.
C) Centralize; create a department that does nothing but make decisions.
D) Decentralize; give authority to the lower level managers regarding events in
their own units.
Diff: 3
10-114
MULTIPLE-CHOICE
QUESTION 11: A(n) ________ organization is highly formalized and centralized.
A) organic
B) mechanistic
C) complex
D) learning
Diff: 2
Learning Obj: LO 11.2: Contrast mechanistic and organic structures
10-115
MULTIPLE-CHOICE
QUESTION 12: GlaxoSmithKline would become more ________ if it starts allowing its
lab scientists to set the priorities and allocate the resources.
A) profitable
B) mechanistic
C) diversified
D) organic
Diff: 1
10-116
MULTIPLE-CHOICE
QUESTION 13: Paul Abdul Oil Corporation (PAOC) began as a relatively small oil
company. As PAOC has grown, the company has gained a highly trained group of
managers and analysts at the corporate headquarters. This group is highly adaptive in
its structure. Members of this group do not have standardized jobs, but are empowered
to handle diverse job activities and problems. PAOC seems to have a(n) ________
structure.
A) mechanistic
B) divisional
C) functional
D) organic
Diff: 2
10-117
MULTIPLE-CHOICE
QUESTION 14: Large organizations tend to have more ________ than smaller
organizations.
A) specialization
B) span of control
C) decentralization
D) autonomy
Diff: 3
Learning Obj: LO 11.3: Discuss the contingency factors that favor either the
mechanistic model or the organic model of organizational design
10-118
MULTIPLE-CHOICE
QUESTION 15: Joan Woodward divided firms into three distinct technologies that had
increasing levels of complexity and sophistication: unit production, mass production,
and ________.
A) continuous production
B) repetitive flow production
C) product production
D) process production
Diff: 2
10-119
CHAPTER 11
MULTIPLE-CHOICE
QUESTION 1: Work teams composed of individuals from various functional
specialties are known as ________ teams.
A) cross-control
B) cross-training
C) cross-functional
D) cross-department
Diff: 2
11-121
MULTIPLE-CHOICE
QUESTION 2: ________ is a type of technology that centers on large-batch
production and requires moderate levels of complexity and sophistication.
A) Unit production
B) Mass production
C) Process production
D) Service production
Diff: 1
11-122
MULTIPLE-CHOICE
QUESTION 3: The type of assembly line typically found in automobile
manufacturing is an example of ________.
A) unit production
B) mass production
C) process production
D) continuous production
Diff: 3
11-123
MULTIPLE-CHOICE
QUESTION 4: Lacey believes that Joan Woodward's work will be particularly
pertinent in considering Custom Leather's organizational structure, since
Woodward believed that the effectiveness of the organization was related to the fit
between the firm's structure and ________.
A) culture
B) technology
C) accounting
D) operations
Diff: 2
11-124
MULTIPLE-CHOICE
QUESTION 5: A company with low departmentalization, wide spans of control,
centralized authority, and little formalization possesses a ________ structure.
A) simple
B) functional
C) divisional
D) matrix
Diff: 1
Learning Obj: LO 11.4: Describe traditional organizational design options
11-125
MULTIPLE-CHOICE
QUESTION 6: In the beginning, all employees at Tom's Welding performed
whatever task was needed. Now the employees have gravitated to specific sets of
tasks. Some use only stick welders; some weld only on aluminum. We can infer that
as his business has grown, it has become more ________.
A) specialized
B) formal
C) centralized
D) organic
Diff: 3
11-126
MULTIPLE-CHOICE
QUESTION 7: Tom's Welding is in its third year of operation. Tom now has a sales
person and several production employees. It is most likely Tom has a ________
structure.
A) simple
B) functional
C) divisional
D) matrix
Diff: 3
11-127
MULTIPLE-CHOICE
QUESTION 8: As the number of employees in an organization grows, structure
tends to become more ________.
A) specialized
B) informal
C) centralized
D) relaxed
Diff: 1
11-128
MULTIPLE-CHOICE
QUESTION 9: A ________ is an organizational design that groups similar or related
occupational specialties together.
A) matrix structure
B) functional structure
C) divisional structure
D) simple structure
Diff: 1
11-129
MULTIPLE-CHOICE
QUESTION 10: Which of the following traditional organizational designs focuses on
results by holding division managers responsible for what happens to their products
and services?
A) simple structure
B) functional structure
C) divisional structure
D) matrix structure
Diff: 1
11-130
MULTIPLE-CHOICE
QUESTION 11: In which of the following traditional organizational designs does
duplication of activities and resources lead to an increase in costs and reduced
efficiency?
A) divisional structure
B) team structure
C) matrix structure
D) project structure
Diff: 1
11-131
MULTIPLE-CHOICE
QUESTION 12: The ________ is an organizational structure made up of separate
business units with each unit having limited autonomy.
A) bureaucratic structure
B) simple structure
C) functional structure
D) divisional structure
Diff: 1
11-132
MULTIPLE-CHOICE
QUESTION 13: In a ________ structure the parent corporation typically acts as an
external overseer to coordinate and control the various divisions and provide
financial, legal, or other such support services.
A) divisional
B) simple
C) functional
D) matrix
Diff: 1
11-133
MULTIPLE-CHOICE
QUESTION 14: Which of the following is a strength of simple structures?
A) Employees are grouped with others who have similar tasks.
B) It focuses on results.
C) It is inexpensive to maintain.
D) It remains appropriate even as the organization changes as it grows.
Diff: 1
11-134
MULTIPLE-CHOICE
QUESTION 15: Which of the following is a weakness of the simple structure?
A) Duplication of activities and resources increases costs and reduces efficiency.
B) Specialists become insulated and have little understanding of what other
units are doing.
C) Pursuit of functional goals causes managers to lose sight of what is best for
the overall organization.
D) It relies too much on one person, which is very risky.
Diff: 1
11-135
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