Management Care

Foundations of Health Care Management: Principles and Methods
Exam Questions & Answers
Chapter One
MULTIPLE CHOICE
1. The problem with our current health care system is
a. Cost
b. Access
c. Health levels
d. All of the above
Correct Answer: d.
Rationale: page 4
2. The Kaiser Family Foundation predicts that by 2018 health care will consume this amount of
Gross Domestic Product (GDP)
a. $4.3 trillion
b. $2.7 trillion
c. $3 trillion
d. None of the above
Correct Answer: a.
Rationale: page 4
3. Victor Fuchs, health economist, believes that in order to get health care costs under control the
health care system requires
a. Information
b. Infrastructure
c. Incentives
d. All of the above
Correct Answer: d.
Rationale: page 5
4. The Obama administration is focusing on health care cost savings from

a. Comparative effectiveness research
b. Managed care
c. Health Savings Accounts
d. Preferred Provider Organizations
Correct Answer: a.
Rationale: page 7
5. The most important demands of the reforming health care sector are:
a. Efficiency
b. Effectiveness
c. Quality
d. All of the above
Correct Answer: d.
Rationale: page 9
6. Black and Miller argue that there are many reasons to improve health care delivery that
include:
a. Patients deserve better
b. Government deserve a better price for health care
c. Better health care delivery will contain costs
Correct Answer: a.
Rationale: page 9
7. The most important individual in the delivery of health care services has become
a. Physician
b. Consumer
c. Insurance providers
d. Health care administrators
Correct Answer: b.
Rationale: page 13
8. The major requirements for high velocity health care organizations include:
a. Collaboration
b. Incentives
c. Advanced training
d. Charisma
Correct Answer: a.
Rationale: page 15
9. Bureaucratic management is being replaced in health care by organic management requires

a. Thick culture
b. Effective communication
c. Employee personal growth
d. All of the above
Correct Answer: d.
Rationale: page 19
10. In health care, the change process must be sustained over time to improve efficiency by
a. Embracing information technology
b. Financial incentives
c. More training
d. A&b
Correct Answer: d.
Rationale: page 23
TRUE/FALSE
1. According to Victor Fuchs the major problems in our health care system are: cost, access and
health levels.
Correct Answer: True

Rationale: page 4
2. The rapidly changing health care delivery system in our country has made change much easier
for health care managers.
Correct Answer: False

Rationale: page 5
3. According to Peter Drucker, management is the least understood of our basic tools required o
improve outcomes.

Rationale: page 6
4. The two major goals of health care organizations are effectiveness and efficiency.

Rationale: page 8
5. Cost Effectiveness Research (CER) is a new law meant to expand managed care organizations
in order to reduce health care costs.

Rationale: page 11
6. A medical error is usually defined as an event that does not achieve its intended purpose.

Rationale: page 12
7. There are now cures for many chronic diseases.

Rationale: page 14
8. Our health care system should focus on prevention rather than cure of disease.
Rationale: page 14
9. According to Senge, personal mastery allows all employees to use the same mental model
individually.

Rationale: page 17
10. The per capita cost for health care is over $11,000 each year and most other countries fare
better than we do on cost and quality indices.

Rationale: page 21Chapter 2
MULTIPLE CHOICE
1. The functions of management do not include
a. Planning
b. Organizing
c. Conflict management
d. Controlling
Correct Answer: c.
Rationale: page 47
2. The management skills include:

a. Technical
b. Human
c. Conceptual
d. All of the above
Correct Answer: d.
Rationale: page 46
3. The theory of administrative principles was a management theory developed by

a. Chester Barnard
b. Henry fayol
c. Frederick Taylor
d. Peter Drucker
Correct Answer: b.
Rationale: page 37
4. The theory of bureaucratic management was developed by

a. Henry Fayol
b. Chester Barnard
c. Max Weber
d. Elton Mayo
Correct Answer: c.
Rationale: page 38
5. Champy and Greenspun argue that there are three major components of reengineering health
care services. Which of the following components is not part of reengineering theory.
a. Technology as an enabler of cost reduction and improved quality
b. Transformational leadership used to improve collaboration
c. Improvement of the entire process of health services delivery
d. People are the most important component in health services delivery
Correct Answer: b
Rationale: page 43
6. The controlling function in health care delivery consists of various activities designed to
ensure that employee actions lead to the achievement of organizational activities. Which of the
following activities is not part of the controlling function
a. Evaluating the performance of work
b. Clearing roadblocks to performance for employees
c. Comparing actual output with desired objectives
d. Taking corrective actions
Correct Answer: b.
Rationale: page 50
7. Members of a self-managed work team could include:

a. Physician
b. Manager
c. Secretary
d. All of the above
Correct Answer: d
Rationale: page 50
8. In recent years the health care consumer has been gaining considerable power in evaluating
the quality of health services due to
a. News media
b. Government
c. Internet
d. All of the above
Correct Answer: d
Rationale: page 52
9. The U.S. health care system has become dysfunctional. The major problem found in health
care delivery is
a. Decreasing quality and poor outcomes
b. Medicare budget cuts
c. AIDS
d. Third party payers
Correct Answer: a
Rationale: page 54
10. Technology is capable of solving the vast majority of present and future problems in health
care service delivery. This is a distinct function for the manager that requires a new set of
management skills like
a. Leadership and culture development
b. Change management skills
c. The manager requires an appreciation of the value and vision of technology
d. Conceptual skills
Correct Answer: c.
Rationale: page 59
TRUE/FALSE
1. The health care industry is now the third largest employer in the United States.

Rationale: page 33
2. Management theory is a collection of observations about how the process of managing people
and things occur.

Rationale: page 35
3. Management is also concerned with leadership and motivation of people.

Rationale: page 36
4. The theory of scientific management was developed by Max Weber in 1911.

Rationale: page 37
5. Frederick Taylor has been given the title of the father of modern organizational theory because
the duties he outlined resemble the functions of management that are taught in most management
courses even today.

Rationale: page 38
6. Adaptive organizations thrive on teamwork and employee empowerment to accomplish their

goals and objectives.

Rationale: page 40
7. The research concerning a hierarchy of human needs was completed by Abraham Maslow in
1924 at a Western Electric plant in Illinois in 1924.

Rationale: page 42
8. Conceptual management skills allow the manager to communicate effectively with workers,
both orally and in writing.

Rationale: page 46
9. The controlling function entails designing positions and grouping them into departments that
ultimately carry out the organization’s plans.

Rationale: page 48
10. Health care managers have a great deal of responsibility for building and sustaining a strong
culture among the workforce.

Rationale: page 55Chapter 3
MULTIPLE CHOICE
1. Which items below should be considered part of the health care organizations infrastructure?
a. Job design
b. Organization values and culture
c. Goals and policies
d. All of the above
Correct Answer: d
Rationale: page 68
2. Strategic management involves the following activities:

a. Formulating goals
b. Implementing goals
c. Development of job descriptions
d. A&B above
Correct Answer: d.
Rationale: page 68
3. Who is ultimately responsible for the developing the strategy of the organization?
a. CEO
b. Board of directors
c. Senior management
d. All of the above
Correct Answer: b
Rationale: page 70
4. For a health care organization the stakeholders can be

a. Patients
b. Physicians
c. Insurers
d. All of the above
Correct Answer: d
Rationale: page 73
5. Examples of competitive rivalry include all but one of the following components
a. Price discounting
b. Proliferation of products and services
c. Advertising
d. Unionization of workers
Correct Answer: d
Rationale: page 80
6. In order to be effective objectives must include:

a. Quantifiable data
b. Measurable
c. Time bounded
d. All of the above
Correct Answer: d
Rationale: page 83
7. According to Porter there are three generic strategies that can be followed by an organization.
Which strategy listed below was not used by Porter.
a. Differentiation
b. Price discounting
c. Cost leadership
d. Focus
Correct Answer: b
Rationale: page 84
8. Organizational design issues include all of the following except

a. Division of tasks to be done
b. Technology used
c. Communication systems
d. Control systems
Correct Answer: a
Rationale: page 87
9. Flatter organization structures include:

a. Dependent on employees at lower levels of decision-making authority
b. They value horizontal relationships
c. Quick to adapt to change
d. All of the above
Correct Answer: d.
Rationale: page 93
10. There are several different types of organizational structures. Which of the following is used
frequently in health care organizations?
a. Functional structure
b. Divisional structure
c. Matrix structure
d. Hybrid structure
Correct Answer: d
Rationale: page 97
TRUE/FALSE
1. Strategic management involves several activities that rest on an appropriate infrastructure to
support the chosen strategy.

Rationale: page 68
2. Strategic management, then, is about the controlling of the functions that confront the future of
the organization.

Rationale: page 69
3. The health care manager usually has primary responsibility for strategic management of the
organization.

Rationale: page 70
4. Environmental scanning is a systematic analysis of the current reality facing the organization
in its market.

Rationale: page 72
5. There are very large differences between environmental scanning and a SWOT analysis

Rationale: page 73
6. Strategy formulation includes all of the following except for a SWOT analysis
Rationale: page 81
7. Statement of purpose and mission are essentially the same thing.
Correct Answer: true

Rationale: page 81
8. The strategy reveals why the organization exists and what it intends to do and how the
organization goes about achieving these things.

Rationale: page 83
9. The evaluation and control aspects of the strategic management process involves only the
evaluation of individual program initiatives.
Correct Answer: F
Rationale: page 85
10. Organizational structure is the process that results in the formal structure, but it is a concept
that involves a host of other details that permit the organization to function as a cohesive unit.

Rationale: page 86
hapter 4
C
MULTIPLE CHOICE
1. Our health care system is experiencing is in the process of unbelievable, breathtaking reform.
This change requires a leader with all but one of the following skills
a. Communication skills
b. Bureaucratic management skills
c. Building a culture of trust
d. Conflict management skills
Correct Answer: b
Rationale: page 105
2. The leader needs to provide a vision of the future that supplies the organization with positive
and sustainable momentum. In order to accomplish this goal the leader must
a. The leader must delegate more responsibility to his or her managers
b. The leader needs to provide the organization with a vision of efficiency and effectiveness
c. The leader must develop the team approach throughout the organization
d. All of the above
Correct Answer: d
Rationale: page 106
3. High performing organizations concentrate their efforts on

a. Being provider of choice
b. Being the employer of choice
c. Being the investment of choice
d. All of the above
Correct Answer: d.
Rationale: page 108
4. The type of reward power that is granted by the organization is

a. Coercive power
b. Reference power
c. Legitimate power
d. Expert power
Correct Answer: c
Rationale: page 109
5. There are many theories of leadership that can be applied to health care organizations. These
theories include all of the following except for
a. Transformational leadership
b. Behavioral theory
c. Theory X
d. Situational Leadership
Correct Answer: c
Rationale: pages 112,113,114
6. Behavioral leadership focusses on

a. What leaders do
b. Learning leadership through readings and education
c. A&b
Correct Answer: c
Rationale: page 113
7. Transformational leadership involves

a. Includes exchanges between the leader and follower
b. An exceptional form of influence
c. How the leader functions in a given situation
d. All of the above
Correct Answer: b.
Rationale: page 115
8. Servant leadership involves all of the following except

a. Power
b. Decentralized decision-making
c. Motivating employees to grow
d. Serve customers
Correct Answer: a.
Rationale: page 118
9. In order to create a vision of excellence for health care services the health care manager must
a. Listen to customers and employees
b. Encourage employee participation in all decisions
c. Articulate the vision to all employees
d. All of the above
Correct Answer: d.
Rationale: pages 120, 121
10. According to Brownlee (2007) the most common error in health care delivery involves
a. Improper charting of vital signs
b. Administering the wrong drug
c. Performing the wrong procedure on a patient
d. All of the above
Correct Answer: b
Rationale: page 124
TRUE/FALSE
1. The difference between managers and leaders is found in the fact that leaders focus on vision
while managers focus on efficiency.

Rationale: page 106
2. According to Zenger, Folkman and Edinger the most important leadership ingredient is
charisma.

Rationale: page 107
3. The source of personal power in the leader is reward and legitimate power.

Rationale: page 109
4. One of the most influential books about management and leadership, “Functions of the
Executive” was written by Chester Barnard in 1938.

Rationale: page 113
5. Behavioral theory supports the assertion that individuals can learn to be leaders through
readings, education and training programs.

Rationale: page 113
6. Because of the changing health care environment the best theory of leadership for health care
is transactional leadership theory.

Rationale: page 114
7. According to Lussier and Achua, transformational leaders are capable of transforming the
needs of followers from desires revolving around their own self-interest to wants that focus on
collective organizational issues.

Rationale: page 115
8. Transformational leadership qualities is found in most managers with long tenure with the
health care facility.

Rationale: page 116
9. The concept of servant leadership originated with research conducted by Burns almost 30
years ago.

Rationale: page 118
10. The organizational vision is capable of bringing everyone together in a quest to make that
vision a reality.

Rationale: page 121
hapter 5
C
MULTIPLE CHOICE
1. A bureaucratic organization structure will usually exhibit many of the following components
a. Rigid rules and regulations for employees
b. Employees are not empowered to change procedures
c. The organization is not capable of recognizing environmental change
d. All of the above
Correct Answer: d
Rationale: page 136
2. How do bureaucratic organizations block necessary change from occurring

a. Through a power structure designed to keep things the same
b. Reducing staff
c. Budgetary reductions
Correct Answer: a
Rationale: page 136
3. The root of many problems found in how we deliver health services is

a. Unionized workers
b. Government funding cuts
c. Inefficiency in the use of scarce resources
Correct Answer: c
Rationale: page 138
4. In order to begin the change process in health care services delivery the first step should be
a. Collaboration
b. Understanding the necessary change
c. Provide education for employees
d. Sustain simplexity
Correct Answer: b
Rationale: page 139
5. Status quo management usually exhibits the following qualities

a. Threatened by change
b. Bothered by uncertainty
c. Waits for things to happen
d. All of the above
Correct Answer: d.
Rationale: page 140
6. In delivering health care services the most important player is

a. Health care manager
b. Health care provider
c. Health care employee
Correct Answer: d
Rationale: page 143
7. Research into motivation has discovered that the most important motivator has become
a. Job security
b. Wages and benefits
c. Retirement plans
d. Various intrinsic motivators
Correct Answer: d.
Rationale: page 145
8. Theory I individuals are motivated by

a. Freedom
b. Challenge
c. Money and benefits
d. A & b
Correct Answer: d.
Rationale: page 147
9. Which of the following is not true concerning innovation?

a. Innovation can result from creativity from anyone in the organization
b. Innovation is started by the organizations leadership
c. Innovation does not just happen
d. Innovation requires real effort
Correct Answer: b
Rationale: page 148
10. The key elements of disruptive innovation

a. A technology enabler
b. A business model innovation
c. Development of a value network
d. All of the above
Correct Answer: d.
Rationale: page 151
TRUE/FALSE
1. Health care organizations generally have a bureaucratic structure held together by the
legitimate power of those in charge.

Rationale: page 136
2. The majority of health care consumers are satisfied with the services that they receive.
Correct Answer: false

Rationale: page 136
3. Those who are responsible for the change process in health care delivery must do what matters
most.

Rationale: page 138
4. Recent research into motivation has discovered that extrinsic motivation is more important
than intrinsic motivation.

Rationale: page 142
5. Health care managers and their staff have to recognize the beauty of the team approach to
delivering health care services.

Rationale: page 144
6. According to Pink (2009), research into individuals demonstrating Type I behavior has shown
that they more motivated by money and benefits in their chosen work profession.

Rationale: page 147
7. Innovation refers to the creation of better or improved products or services.

Rationale: page 148
8. Improvement in the performance of staff in a health care facility is dependent on the staff
changing their attitude toward their work.

Rationale: page 150
9. The most important component found in organizations that seek out change is disruptive
innovation.

Rationale: page 154
10. Cultures in organizations are built by the new manager

Rationale: page 155
hapter 6
C
MULTIPLE CHOICE
1. The delivery of health services in the United States has become disorganized. This
disorganization has affected the
a. Trust of patients
b. Reduced morale
c. Reduced positive health outcomes
d. All of the above
Correct Answer: d
Rationale: page 161
2. The major cause of the disorganization in health care delivery today is

a. Poor management
b. Conflict
c. Poor communication
d. Both a & b
Correct Answer: c
Rationale: page 161
3. According to Tracy (2010) 95 percent of the problems affecting an organization are a direct
result of
a. Bureaucracy
b. Having a poor communication system
c. Having no communication system
d. Both b & c
Correct Answer: d
Rationale: page 162
4. According to Champy and Greenspun (2010) points out that one of the most important
functions of a manager is
a. Communicating to lower-level employees
b. Communication with customers
c. Communication with the Board of Directors
d. Both b & c
Correct Answer: d
Rationale: page 163
5. Effective communication between the manager and subordinates has the ability to
a. Increase trust
b. Improve respect
c. Increase market share
d. All of the above
Correct Answer: a
Rationale: page 165
6. In the process of communication decoding by the receiver can result from

a. Educational level
b. Poor training
c. Semantic problems
Correct Answer: c
Rationale: page 166
7. Many health care facilities have a bureaucratic organizational structure which

a. Dictates to employees rather than listens to employees
b. Does not allow feedback from employees
c. Does not allow open communication
d. All of the above
Correct Answer: d.
Rationale: page 169
8. In order for health care managers to become good communicators they need to
a. Listen more and talk less
b. Develop trust with those receiving the communications
c. Utilize electronic communication
d. Both a & b
Correct Answer: d
Rationale: page 170
9. Trust is one of the most important ingredients of successful health care organizations.
Communication can improve trust by
a. Increasing transparency
b. Reduces stress in organizations
c. Reduces conflict
Correct Answer: a
Rationale: page 172
10. Open communication involves making good and bad news immediately available to the
entire organization. Which of the following is not true of open communication?
a. The sense of ownership of the work process increases
b. It is now part of most health care organizations
c. Allows for an improvement of collaboration
Correct Answer: b
Rationale: page 175
TRUE/FALSE
1. One of the major problem areas found in health care service delivery today is poor
communication between those providing and receiving health care services.

Rationale: page 161
2. The process of communication, if properly undertaken, can facilitate the sharing of

information and can provide meaning to the members of an organization.

Rationale: page 163
3. In the process of communication the problem of cultural differences is called encoding.

Rationale: page 166
4. The process of determining the meaning of a communication is called noise.

Rationale: page 166
5. In bureaucratic organizations a major communication problem occurs with the manager not
listening to employees.

Rationale: page 167
6. It is a sad commentary on the state of an entire organization when it suffers from fear and
distrust that could have been eliminated with simple communication skills.

Rationale: page 168
7. The health care manager must realize that the content of the message is the most critical part
of the communication process.

Rationale: page 170
8. The health care industry has moved into information technology at a much faster rate than
most industries.

Rationale: page 171
9. Building trust can lead to empowerment and better performance, and has the potential to help
assimilate the health care manager into the culture of the organization.

Rationale: page 173
10. Szollose (2011) argues that most creative cultures are found in older organizations where
trust has developed over time.

Rationale: page 176
hapter 7
C
MULTIPLE CHOICE
1. Physicians need to be considered for key managerial positions because of the following skill
a. Problem-solving
b. Ethical decision-making skills
c. Medical knowledge
d. All of the above
Correct Answer: d
Rationale: page 192
2. The real power of physician results from their ability to

a. Admit and discharge patients from hospitals
b. Order medications
c. Determine reimbursement rates from insurers
d. Both a & b above
Correct Answer: d
Rationale: page 195
3. The most important member of a successful health care team is

a. Physician
b. Board of directors
c. CEO
d. All of the above
Correct Answer: a
Rationale: page 196
4. Electronic Medical records (EMR) have increased in use by some major health care systems.
What are the potential difficulties with this form of patient record keeping?
a. The hiring of additional staff
b. Potential fraud and abuse
c. Physician lack of cooperation
d. All of the above
Correct answer: d
Rationale: Page 199
5. The forces that have led to specialization include all of the following except
a. The growth in medical information
b. The growth in treatment options
c. The growth in fee for service reimbursement
Correct Answer: c
Rationale: Page: 201
6. Which practice model is the traditional model of professional physician practice

a. Private practice
b. Corporate practice
c. Salary model
Correct Answer: a
Rationale: page 205
7. Management in the academic environment

a. Provides value adding dimensions to health care
b. Improves patient care
c. Keeps research high on the value list
d. All of the above
Correct Answer: d
Rationale: Page 205
8. Which reimbursement model for physicians is the most popular in health care today
a. Salary model
b. Fee for service
c. Capitation
d. Outcome reimbursement
Correct Answer: b
Rationale: Page 209
9. Which is the most important physician concern in today’s health care environment?
a. Personal and family concerns
b. Patient care
c. Appropriate reimbursement
d. All of the above
Correct Answer: d
Rationale: Page 215
10. A plethora of organizations are involved in physician management. Which organization

plays the lowest role in the management of physicians
a. Third party payers
b. Public health
c. Accrediting organizations
d. Community hospitals
Correct Answer: b
Rationale: Page 218
TRUE/FALSE
1. The physician should not be considered for key managerial positions across the full spectrum
of health care facilities.

Rationale: page 191-192
2. Physicians quite often are the supplier of medical services and also the demander of the same
services.

Rationale: page 195
3. Managed care organizations are attempting to take power away from physicians.

Rationale: page 195
4. The physician is no longer one of the most important players in the delivery of health care
services.

Rationale: page 196
5. The physician practice specialty represents a major barrier to manager’s successful adoption of
a blanket physician management strategy.

Rationale: page 201
6. Group model is the traditional model of professional physician practice.

Rationale: page 203
7. The most used reimbursement method for physicians today is capitation.

Rationale: page 145
8. Relative risks, odds ratios, and attributable risks all are ratios.

Rationale: page 209
9. A fee for service payment mechanism pays for physician activities rather than patient
outcomes.

Rationale: page 208
10. Salary reimbursement models for physicians have had slow growth in most health care
systems.

Rationale: page 209
hapter 8
C
MULTIPLE CHOICE
1. A personnel approach to management viewed workers as
a. Expense
b. Cost to be minimized
c. Part of the production process
d. All of the above
Correct Answer: d
Rationale: Page 246
2. The function of job analysis includes:

a. Conducting interviews and surveys
b. Making observations
c. Examining work products to produce accurate job descriptions
d. All of the above
Correct Answer: d
Rationale: Page 247
3. There are numerous approaches to job design. Which of the following methods is not used.
a. Leadership skill inventory approach
b. Ergonomics approach
c. Industrial engineering approach
Correct Answer: a
Rationale: Page 248
4. The human resources department has responsibilities in regard to managing the performance
of the organization’s workforce. These functions include:
a. Provision of orientation and training
b. Provide daily direction to employees
c. Evaluate employees
Correct Answer: a
Rationale: Page 249
5. Employee rights include:

a. Statutory
b. Contractual
c. Right to work
d. A & b above
Correct Answer: d
Rationale: Page 250
6. The employment contract

a. Specifies compensation and benefits
b. Specifies conditions of employment
c. The employee’s right to work for another employee
d. All of the above
Correct Answer: d
Rationale: Page 252
7. Psychological contract is a concept that has an impact on employee attitudes. This contract
refers to
a. An employee discloses an employer’s wrongdoing
b. An employee believing that he or she was fired for the wrong reason
c. Formed based on the perceived, unwritten expectations held by the employee and
employer concerning employment
Correct Answer: c
Rationale: Page 257
8. A traditional psychological contract

a. Indicates that the employee has a long-term expectation to remain with his or her employer
b. Indicates that the employee understands his or her job a basically a simple transaction
c. a & b above
Correct Answer: b
Rationale: Page 258
9. Numerous studies have revealed that job satisfaction in the United States is at its lowest level
in years because
a. Higher health care costs
b. Lack of growth opportunities
c. Pay raises not keeping up with inflation
d. All of the above
Correct Answer: d
Rationale: Page 259
10. Organizational commitment warrants attention in the workplace. What are the major types of
organizational commitment?
a. Affective commitment
b. Continuance
c. Normative
d. All of the above
Correct Answer: d
Rationale: Page 261
TRUE/FALSE
1. Human resources management is the process by which an organization manages its
employees.
Rationale: Page 246
2. The most significant challenge for health care organizations is creating and sustaining a
productive workforce is attracting and retaining top talent.

Rationale: Page 246
3. One approach to job design is industrial engineering, which entails the study of person-
machine interface in the workplace.

Rationale: Page 248
4. Human resources professionals work with employee relations which deals with compensation
and benefit issues.

Rationale: Page 250
5. Employee rights can be broken down into three main categories: statutory, contractual, and
implied.

Rationale: Page 250
6. In Pennsylvania, a new statutory right has banned mandatory overtime for nurses.

Rationale: Page 251
7. Implied rights are not considered contractual in nature.

Rationale: Page 252
8. Employment-at-will is one area in which the rights of employees and employer intersect

Rationale: Page 253
9. In the field of human resources management there is an important concept referred to as the
psychological contract which is formed based on the perceived, unwritten expectations held by
the employee and the employer concerning employment.

Rationale: Page 257
10. there are three major types of organizational commitment that include Normative, Attitudinal
and Affective.

Rationale: Page 260
hapter 9
C
MULTIPLE CHOICE
1. Who has the authority to authorize the hiring of a new employee in a health care organization?
a. The team leader
b. The health care manager
c. Vice president or chief financial officer
Correct Answer: d
Rationale: Page 282
2. What are the alternatives to hiring full-time staff?

a. Outsourcing
b. Employee leasing
c. Part-time employees
d. All of the above
Correct Answer: d
Rationale: Pages 284, 285
3. In order to have a high-quality workforce the health care organization needs to

a. Attract
b. Retain
c. Motivate
d. All of the above
Correct Answer: d
Rationale: Page 285
4. From a human resources perspective, the first step in the staffing process should be
a. Align the job specifications with the job description
b. Recruit internally
c. Clearly define the job opening and the type of person best suited for the position
d. Be cognizant of the laws pertaining to hiring
Correct Answer: c
Rationale: Page 286
5. The cognitive capabilities that are inferred from behaviors are called
a. Skills
b. Abilities
c. Educational attainment
d. Job training
Correct Answer: b
Rationale: Page 287
6. Job analysis is critical to guide numerous decisions that will be made in the recruiting and
selection of applicants. These areas of concern include
a. Accurate job description
b. Clearly defined job requirements
c. Review and revising these documents
d. All of the above
Correct Answer: d
Rationale: Page 288
7. There are several important recruiting decisions that need to be made before the new position
is advertised. These first decision should be:
a. How to present the job opening to potential applicants
b. Who will supervise the new hire
c. Compensation issues
Correct Answer: a
Rationale: Page 289
8. Internal recruitment has many positive aspects including:

a. Sending a positive message to employees about advancement opportunities
b. Cost effective
c. Succession planning
d. All of the above
Correct Answer: d
Rationale: Page 290
9. There are many selection methods to choose from including

a. Application form and references
b. Testing
c. a & b
Correct Answer: c
10. Research on the employment interview has led to some key recommendations. They are
a. Use a structured employment interview
b. Ask applicants behaviorally based and situationally based questions
c. a & b
Correct Answer: c
Rationale: Page 311
TRUE/FALSE
1. There are usually no alternatives to hiring full time staff in health care organizations.

Rationale: Page 282
2. Instead of filling a position with an employee, some companies may enter a contract with a
third party to obtain various services.

Rationale: Page 283
3. All of the available research shows that outsourcing can lead to improvements in patient
satisfaction in regard to the quality of services offered to patients.

Rationale: Page 283
4. The term Locum tenens means permanent part time workers who are usually physicians or
nurses.

Rationale: Page 284
5. From a human resources perspective, the first step in the staffing process should be to clearly
define the job opening and the type of person best suited for this position.

Rationale: Page 286
6. Abilities are directly observable capabilities such as operating a piece of equipment.

Rationale: Page 287
7. The primary goal of recruitment is to create a pool of qualified applicants for a given job
opening.

Rationale: Page 289
8. A realistic job preview (RJP) indicates that applicants will be informed of both the positive
and negative aspects of a job opening.

Rationale: Page 289
9. One of the worst approaches to assessing the effectiveness of recruiting methods is called a
yield ratio.

Rationale: Page 301
10. A bona fide occupational qualification (BFOQ) is a necessary job qualification for the safe
and efficient operation of a business. Overall, most employers would be unable to prove a
BFOQ for the vast majority of jobs.

Rationale: Page 304
Chapter 10
MULTIPLE CHOICE
1. Most formal orientation programs are intended to
a. Introduce new hires to key company policies and procedures
b. Educate them on significant company features
c. Provide them with an overview of the organization
d. All of the above
Correct Answer: d
Rationale: Page 318
2. The following statement is not true of mentoring programs in organizations

a. They usually involve a relationship between a junior employee and a seasoned employee
b. Mentoring can occur informally in an organization
c. Goals are usually established for the mentoring process
d. Experienced employees are always directed to act as mentors
Correct Answer: d
Rationale: Page 320
3. The following statement is true concerning training programs provided by the organization
a. Most employees require some training to learn the specifics of the organization
b. Employees require training in order to adapt to constant changes in the workplace
c. Employee training deserves considerable training after being disciplined
Correct Answer: b
Rationale: Page 321
4. The following statement is true concerning employee education programs

a. These programs are designed to increase the overall competence of employees
b. The education may or may not be job specific
c. Many organizations will supply aid for employees receiving college education
d. All of the above
Correct Answer: d
Rationale: Page 322
5. The following represents the steps usually followed in the ADDIE model of training
a. Needs assessment
b. Program development
c. Program implementation and evaluation
d. All of the above
Correct Answer: d
Rationale: Page 323
6. In the design component of training, the employer makes numerous critical decisions. These
decisions include all of the following:
a. Determination of training objectives
b. A training objective will indicate what the trainee will be able to do after the training is
completed
c. There needs to be an understanding of how employees learn
d. A & b above
Correct Answer: d
Rationale: Page 326
7. Research on learning yields several practical suggestions for training design. The following
statement is not true of this research
a. Make the training meaningful to trainees
b. Allow for active learning rather than making the training purely passive
c. Never use modeling to help trainees see desired behaviors
d. Incorporate a variety of training methods to accommodate various learning styles
Correct Answer: c
Rationale: Page 327
8. The implementation phase of the ADDIE model involves a series of decision for the employer.
These decisions include:
a. Utilize a massed approach or a distributed approach
b. Selection of a training location
c. Conduct the training session
d. All of the above
Correct Answer: d
9. Performance appraisal has many uses that include:

a. Can help establish a baseline for use in benchmarking initiatives
b. Can be utilized to determine the best employees
c. Performance appraisal systems benefits never go beyond the individual employee
d. A & b above
Correct Answer: d
10. The most common approach to scoring in performance appraisal is

a. The graphic rating scale (GRS)
b. The behavioral observation scale (BOS)
c. The behaviorally anchored rating scale (BARS)
d. The narrative method
Correct Answer: a
TRUE/FALSE
1. A large number of the large health care organizations in the United States do not have some
type of employee orientation program.

Rationale: Page 318
2. In addition to attending a formal orientation, which is usually coordinated by the human

resources department, new hires also receive an informal orientation from their coworkers and
immediate supervisor once they begin work.

Rationale: Page 319
3. Mentoring programs have never been used with physicians joing health care systems.

Rationale: Page 321
4. Employee training is a systematic process to enhance an employee’s capabilities with the goal
of promotion of the employee at a later date.

Rationale: Page 321
5. A key standard in achieving and maintaining from the Joint Commission in health care is
ensuring staff competence.

Rationale: Page 322
6. Research in andragogy, the study of adult learning, has shown that adults prefer learning
events that have clear practical value to their job or their lives.

Rationale: Page 327
7. The first step in the ADDIE model involves the design and development of staff training
programs.

Rationale: Page 333
8. Conducting a performance appraisal of one’s staff can help establish a baseline for use in
benchmarking initiatives that are intended to improve job performance.

Rationale: Page 334
9. Just by receiving performance information employees will usually not be motivated to

improve on their weaknesses.

Rationale: Page 335
10. In general, performance appraisals are conducted for lower level employees every six
months.

Rationale: Page 336
hapter 11
C
MULTIPLE CHOICE
1. A marketing department can accomplish
a. Create public awareness by developing a brand
b. Generate leads and encourage consumer action
c. Provide support to allow salespeople to close the sale
d. All of the above
Correct Answer: d
Rationale: Page 352
2. For an individual private practice in health care, a target market might focus on
a. geography
b. Type of patients according to gender or age
c. The nature of the care received
d. All of the above
Correct Answer: d
Rationale: Page 353
3. The newest form of market segmentation in health care involves looking at

a. Income
b. Gender
c. Generational targeting
Correct Answer: C
Rationale: Page 353
4. One of the most important concepts in marketing today is

a. Market segmentation
b. Marketing plan
c. Marketing research
d. Marketing mix
Correct Answer: d
Rationale: Page 355
5. The term product refers to

a. Goods
b. Services
c. Ideas
d. All of the above
Correct Answer: d
Rationale: Page 356
6. Who does not play a role in determining the price of health services?
a. Government
b. Third party payers
c. Consumer
d. Hospitals and physicians
Correct Answer: c
Rationale: Page 357
7. The advantages of in-house advertising include:

a. Costs less
b. Information can be kept confidential
c. It is objective
d. A & b above
Correct Answer: d
Rationale: Page 359
8. The use of newspapers in advertising does not

a. Provide a great deal of information
b. Work well with local audiences
c. Offer a variety of ad sizes
d. Cost a great deal
Correct Answer: d
Rationale: Page 360
9. The use of nontraditional promotional methods to attract attention, increase memorability and
make sales is called
a. Second engine marketing
b. Internet marketing
c. Guerilla marketing
Correct Answer: c
10. What is not true about public relations?

a. Public relations is a form of communication with both internal and external audiences
b. It delivers a message to the target audience
c. It is a high cost operation
d. A public relations department is usually in charge of the web site
Correct Answer: d
TRUE/FALSE
1. Identifying the target market or target audience is crucial to the success of any marketing
strategy.

Rationale: Page 352
2. Market segmentation involves looking at the large affluent market clusters that may have
similar needs.

Rationale: Page 353
3. When making decisions about segmentation the only concern for managers is that the
segments are profitable.

Rationale: Page 354
4. One of the most important concepts in marketing is the marketing mix.

Rationale: Page 355
5. The term product only refers to goods and services produced by the health care organization.

Rationale: Page 356
6. The challenge for hospitals and physicians is to determine the right formula to offer high-
quality care that is also cost effective.

7. The major problem with the use of in-house advertising is that it is too expensive compared to
using an advertising agency.

Rationale: Page 359
8. Guerilla marketing can be very effective in the marketing of health care organizations because
it does not require creativity.

Rationale: Page 363
9. In health care public relations is seen as a relatively low cost and credible way to interact with
the community.

Rationale: Page 367
10. sales promotion is a long-term strategy designed to boost sales by rewarding the buyer for
making a purchase.

Rationale: Page 369
hapter 12
C
MULTIPLE CHOICE
1. The new health care market place exhibits:
a. Efficiency
b. Scarce resources
c. Tightened debt markets
d. b and c above
Correct Answer: d
Rationale: Page 390
2. Health care organizations may be formed via

a. Joint ventures
b. Contractual basis
c. Leased basis
d. All of the above
Correct Answer: d
Rationale: Page 391
3. The VA system provides health care to veterans. Their primary health needs are:
a. Chronic illnesses
b. Drug and alcohol dependency
c. Cardiovascular disease
d. A & b above
Correct Answer: d
Rationale: Page 392
4. The most important goals of our health care system should be:
a. Influencing healthy behaviors
b. Reducing high-risk health behaviors
c. Facilitating improved outcomes
d. All of the above
Correct Answer: d
Rationale: Page 394
5. Total health care expenditures in 2009 were:

a. $2.5 trillion
b. $ 4.0 Trillion
c. $ 2.0 Trillion
Correct Answer: a
Rationale: Page 395
6. Health care expenditures in 2006 totaled what percent of our Gross Domestic Product (GDP)?
a. 12 percent
b. 16 percent
c. 18 percent
Correct Answer: b
Rationale: Page 397
7. The legislation that formalized the practice of financing health care for the welfare population
was
a. The Hill Burton Act
b. The Kerr-Mills act
c. The health Professionals Education Act
Correct Answer: b
Rationale: Page 403
8. The Patient Protection and affordable care Act of 2010 authorized the following:
a. The elimination of screening for preexisting conditions
b. Removed annual and lifetime coverage limits
c. Created health insurance exchanges
d. All of the above
Correct Answer: d
Rationale: Page 408
9. According to Chernichovsky and Leibowitz (2010) an integrated health care organization must
a. Foster coordination among stakeholders
b. Formulate incentives to create efficiencies
c. Formulate fiscal discipline and cost containment measures
d. All of the above
Correct Answer: d
Rationale: Page 410
10. A perverse health care financing system in our country has created inherent inefficiencies that
include:
a. Paying providers for activities rather than outcomes
b. Open ended entitlement programs that does not consider costs and benefits of technology
c. Rewards education and prevention initiatives
d. a & b above
Correct Answer: d
Rationale: Page 413
TRUE/FALSE
1. Passing accountability and the associated economic impact from health care providers and
third-party payers to consumers has the potential to promote the efficient use of the health care
system and reduce total health care costs.

Rationale: Page 391
2. Health care organizations in our country are all private organizations.

Rationale: Page 391
3. Members of the middle class are generally employed and either receives health insurance
through employers or purchase individual policies.

Rationale: Page 392
4. The largest health care provider in the United States is the Medicare system.

Rationale: Page 392
5. Providers of health care services may create their own demand.

Rationale: Page 393
6. The key driver to the increase in health care costs today is the use and abuse of technology.

Rationale: Page 394
7. The attempts to control health care costs in health care over the years have failed.

Rationale: Page 394
8. Based on current trends, health care spending in the united states is expected to increase to 5
trillion dollars a year by 2015.

Rationale: Page 399
9. America spends, on average, twice as much as other industrialized nations on health care, but
it does not have outcomes twice as good.

Rationale: Page 400
10. The legislation that provided a commitment by the federal government to the renovation of
existing hospitals and the construction of new facilities was the Kerr-Mills Act of 1960.

Rationale: Page 403
Chapter 13
MULTIPLE CHOICE
1. Ethical behavior by health care managers can only improve relations with
a. Employees
b. Community
c. Patients
d. All of the above
Correct Answer: d
Rationale: Page 424
2. The following statement is not true about ethics

a. Ethics is more than simply obeying the law
b. It is theoretically possible for one to obey the law but at the same time to not be ethical
c. Much of regulatory law and tort law is not based on the standards of practice that the
professions have chosen to set for themselves
Correct Answer: c
Rationale: Page 425
3. The central principles of ethics do not include:

a. Autonomy
b. Informed consent
c. Justice
d. Morality
Correct Answer: b
Rationale: Page 427
4. Beauchamp and Childress (2009) suggest a model for us to use in fulfillment of the informed
consent dimension of autonomy. This model does not include:
a. The patient must be competent
b. The patient is supplied with honest and complete information
c. The patient must be in agreement with the treatment plan
d. All of the above are correct
Correct Answer: d
Rationale: Page 428
5. One of the following is not true about fidelity

a. The keeping of your promises
b. Holding true to your word
c. Fidelity is an expectation in health care
Correct Answer: d
Rationale: Page 429
6. The following statement(s) are true of nonmaleficence

a. Do no harm
b. Benefits must outweigh suffering
c. This principle does not apply to staff
d. a & b above
Correct Answer: d
7. Which of the following make justice a struggle for health care managers
a. The complexities of mission and margin
b. Technological advancement
c. Varying levels of access to care
d. All of the above
Correct Answer: d
Rationale: Page 433
8. Where do justice concerns exist in health care?

a. Remaining compassionate while maintaining an acceptable bottom line
b. Managerial decision making
c. Employee hiring
d. a & b above
Correct Answer: d
9. The concept of morality does not include:

a. Everyday behaviors that allow us to live successfully with one another
b. includes our duties and our values
c. Does not include duties and values that you hold independent of others
d. All of the above
Correct Answer: c
Rationale: page 435
10. Moral integrity is developed over time through

a. Education
b. Life experiences
c. Informed decision making
d. All of the above
Correct Answer: d
Rationale: Page 436
TRUE/FALSE
1. Ethics is concerned with standards of behavior in terms of right or wrong that may or may not
exceed the basic requirements of the law.
Correct Answer: F
Rationale: Page 424
2. It is essential that both health care managers and physicians and nonphysician care providers
develop a clear understanding of personal and professional ethics.

Rationale: Page 424
3. It is not possible for one to obey the law but at the same time to not be ethical.

Rationale: Page 425
4. Ethical issues have arisen over time not only because of substantive controversial issues that
are inherent in health care but also because of shifts in the manner and location of the provision
of health services.

Rationale: Page 426
5. Autonomy does not assume that a person has the capability to make his or her own decisions,
and that this person is free from the control of others.

Rationale: Page 427
6. Because the patient has the right to choose what happens to his or her body, care providers
have the ethical duty to obtain consent for testing and treatment.

Rationale: Page 427
7. Fidelity as a portion of autonomy refers to the keeping of your promises and holding true to
your word.

Rationale: Page 429
8. If the benefits of health care outweigh the harm, the care is probably ethical.

9. Nonmaleficence includes acting for the good or benefit of the patient, and on good values.

Rationale: Page 431
10. Justice refers to doing what is perceived to be deservedor fair in a given situation.

Rationale: Page 433
Chapter 14
MULTIPLE CHOICE
1. The health care manager of the future will have to spend the bulk of his or her time on
a. Meetings with staff
b. New training programs
c. Quality improvement
Correct Answer: c
Rationale: Page 456
2. In order to improve the quality of health services the health care manager must
a. Empower all employees
b. Utilize constant communication with staff and customers
c. Develop better team work among all staff
d. All of the above
Correct Answer: d
Rationale: Page 457
3. In order to produce positive outcomes for patients the health care manager must
a. Focus on what the consumer values
b. The manager must be removed from the service production process
c. The manager must require team work from all employees
d. a & c above
Correct Answer: d
Rationale: Page 457
4. Reengineering health care delivery will require an emphasis on
a. Leadership
b. Culture
c. Innovation
d. All of the above
Correct Answer: d
Rationale: Page 459
5. Errors in health care delivery include:

a. Lack of caring for patients
b. Nosocomial outbreaks
c. information
d. All of the above
Correct Answer: d
Rationale: Page 459
6. The starting point for any reengineering effort in health care should be
a. Development of new training programs for staff
b. Leadership development programs
c. Expansion of information technology
d. Redesign of the work process
Correct Answer: d
Rationale: Page 460
7. According to Dlugacz (2010) the key to patient-focused care is

a. Electronic medical records
b. Constant management involvement in the care delivered
c. Better communication by staff with the patient
d. All of the above
Correct Answer: c
Rationale: Page 462
8. The improvement of health services will require dealing with the complicated issues of
a. Finance
b. Multiple professions
c. Many ethical dilemmas
d. All of the above
Correct Answer: d
Rationale: Page 467
9. The requirements of the manager in the reengineering effort include:

a. Beginning the process of change
b. Provision of discipline
c. Evaluation of the process
d. a & c
Correct Answer: d
Rationale: Page 468
10. In order to make the reengineering effort successful the organization’s culture must
a. Be thick and positive
b. Become patient-centered
c. Understand that the manager is key to culture building
d. All of the above
Correct Answer: d
Rationale: Page 470
TRUE/FALSE
1. The most important definition of management found in this text centers on getting things done
through people.

Rationale: Page 456
2. The vast majority of health care facilities and their managers finally realize that they exist for
the benefit of their patients.

Rationale: Page 456
3. Gittell (2009) argues that individuals working in our current health care system demonstrate
far too little cooperation in the pursuit of quality and need to develop better team work in their
work process.

Rationale: Page 457
4. The adaption process to rapid change in the environment must begin at the top of the
organization and filter down to lower level employees.

Rationale: Page 457
5. The most important goal in health care delivery must become growth and improved profits.

Rationale: Page 458
6. Another way to reduce the costs associated with the delivery of health services is to improve
productivity.
Rationale: Page 459
7. One aspect in health care delivery that requires immediate change is the current epidemic of
medical errors in many health care facilities throughout the country.

Rationale: Page 460
8. The Institutes of Medicine (1999) reports that 60 percent of medical that could harm patients
in the emergency room are a direct result of the cramped size of the unit.

Rationale: Page 461
9. The majority of health care facilities in our country are still protected with monopoly power.

Rationale: Page 463
10. The most important characteristic of a high-velocity organization is experienced managers.

Rationale: Page 464

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Foundations of Health Care Management: Principles and Methods

Exam Questions & Answers

4. The Obama administration is focusing on health care cost savings from

9. Bureaucratic management is being replaced in health care by organic management requires

Correct Answer: True

Correct Answer: False

Correct Answer: True

Correct Answer: True

Correct Answer: False

Correct Answer: True

7. There are now cures for many chronic diseases.

Correct Answer: False

Correct Answer: False

Correct Answer: False

2. The management skills include:

3. The theory of administrative principles was a management theory developed by

4. The theory of bureaucratic management was developed by

7. Members of a self-managed work team could include:

Correct Answer: False

Correct Answer: True

3. Management is also concerned with leadership and motivation of people.

Correct Answer: True

4. The theory of scientific management was developed by Max Weber in 1911.

Correct Answer: False

Correct Answer: False

6. Adaptive organizations thrive on teamwork and employee empowerment to accomplish their

Correct Answer: True

Correct Answer: False

Correct Answer: False

Correct Answer: False

Correct Answer: True

2. Strategic management involves the following activities:

4. For a health care organization the stakeholders can be

6. In order to be effective objectives must include:

8. Organizational design issues include all of the following except

9. Flatter organization structures include:

Correct Answer: True

Correct Answer: False

Correct Answer: False

Correct Answer: True

Correct Answer: False

Correct Answer: true

Correct Answer: False

Correct Answer: False

3. High performing organizations concentrate their efforts on

4. The type of reward power that is granted by the organization is

6. Behavioral leadership focusses on

7. Transformational leadership involves

8. Servant leadership involves all of the following except

Correct Answer: True

Correct Answer: False

Correct Answer: False

Correct Answer: True

Correct Answer: True

Correct Answer: False

Correct Answer: True

Correct Answer: False

Correct Answer: False

Correct Answer: True

2. How do bureaucratic organizations block necessary change from occurring

3. The root of many problems found in how we deliver health services is

5. Status quo management usually exhibits the following qualities