MGMT Exam 1

Approximately what percent of U.S. workers are employed by companies that have fewer than 20 people?

25%

Reflecting a recent trend in small-business start-ups, the number of African-American-owned businesses has increased by approximately what percent since 2007?

35%

Most experts recommend that a new business should have enough capital on hand to operate for at least how long without earning a profit?

6 months

How is an organization threat different from an organizational weakness?

Threats are uncovered by analyzing the organization's environment; while weaknesses are internal to the organization.

Which of the following is one of the basic questions that is answered in a business plan?

What strategies will the entrepreneur used to obtain his or her goals and objectives?

Tactical plans must flow from and be consistent with _____.

a strategic plan

Most U.S. businesses employ:

fewer than 20 people.

A(n) _____ comes to a firm because it exploits an opportunity before any other firm.

first-mover advantage

After years of decline, the town of Middleboro, VT has experienced a recent upsurge in new business development. Some of the economic progress has been the result of a community partnership with the local college that was created to stimulate entrepreneurship in the community. The choice of creating an entrepreneur-friendly environment is good public policy because small businesses _____.

generate more jobs than large businesses

Once a decision situation is defined, the next step in the decision-making process is to _____.

identify alternatives

The number of businesses owned by women ______ from 2007 to 2012.

increased by 26.8%

Jones International is a large organization with holdings in the U.S., Europe, and Southeast Asia. The corporation's mix of strategic business units (SBUs) allows the company to exploit its strengths and capabilities in more than one line of business and to exploit synergies across business lines. One of the disadvantages of Jones International's strategy is that it _____.

increases management complexity

Sources of advice regarding management include all EXCEPT:

information technology professionals.

Taylor owns and manages a franchise sandwich shop in rural Texas. Most of his employees earn minimum wage. Recently, there has been much attention on how difficult it is for workers to support themselves on a minimum wage salary. The organization is under public scrutiny nationally, and pressure to raise salaries for lower-end employees is escalating. The corporate office has created a task force made up of influential and engaged franchise owners. The goal of the task force is to propose a national policy that will be presented to all franchise owners. Members of the task force have been instructed to openly discuss and consider the ramifications of increasing the minimum wage for all franchise employees. The group has two months to agree upon the best course of action. The task force is an example of a(n) _____ group.

interacting

Kevin started a new lawn care business. He had a lot of experience in this field before starting out on his own, he did his research and knew what services to offer at what prices, and he was willing to put in the time and effort needed to succeed. In spite of all this, his business failed. What reason for success is missing from this picture?

luck

Lighthouse Cinema has enjoyed a successful history in the town of Battle Ridge, VA. The movie theater has remained a popular entertainment option for the surrounding area, but sales have been stagnant over the past few years. The theater is currently in the _____ stage of the product life cycle.

maturity

Kevin was tired of his office job and wanted a way out. He started a new lawn care business on the side, with the hopes that it would someday become his full-time work. He had a lot of experience in this field before launching his company. He did his research and knew what services to offer at what prices. Kevin lined up a number of clients and hired workers to service the accounts. In spite of all this, his business failed. What led to this business failure?

neglect

Lighthouse Cinema has enjoyed a successful history in the town of Battle Ridge, VA. Despite the growth of multiplex theaters in most population centers, Lighthouse Cinema has remained a popular entertainment option for the surrounding area, but sales have been stagnant over the past few years. A national theater chain recently announced that it will build a 10-theater facility on the outskirts of Battle Ridge. This development calls for Lighthouse Cinema to pursue a strategy that will _____.

neutralize the impending threat

Alpha Corp needs to make some serious budget cutbacks in order to remain profitable. If the CFO want to get innovative and creative alternatives, what type of group should be used?

nominal

Leader Books Inc. sponsors the Fairfax Public Library's summer reading program every year. The Fairfax Public Library holds a summer reading program to encourage children to read, and gives prizes based on how many hours or pages the participants read during each week of the program. The Fairfax regional manager of Leader Books sends a check to the Fairfax Public Library in February of each year in order for them to prepare for the reading program. This year, the Fairfax Public Library wants to hold a special reading marathon for adults and children during winter break, and has asked Leader Books to sponsor that event as well. The Leader Book's decision about whether to sponsor this marathon is a(n) _____ decision.

nonprogrammed

ZeroBreeze Inc. is an outerwear manufacturer that caters to a large customer base. In addition to the high volume of coats and jackets that it manufactures, the company sells simple-designed light jackets for low prices. Many customers buy ZeroBreeze jackets because they are durable and inexpensive. Which of the following strategies is illustrated in the scenario?

overall cost leadership

Jack loves to cook. He makes several unique dishes that his friends and family all really enjoy. He would like to start a business to sell them in grocery stores and is looking for sources of financing. Jack did his research and learned that the most important source of money for people starting up a new business is _____.

personal resources

Decisions about when to reorder standard supplies based on quantity-on-hand information are most likely to be _____ decisions.

programmed

Ron and Linda Adams participated in an entrepreneurship program in their local community with the intention of starting their own business. At its conclusion, they decided to go into computer software manufacturing. What is the first step to starting their new business?

Assess their commitment to becoming business owners

Eastside Community Center (ECC) operates to "foster inclusiveness and empower teens" in the underprivileged neighborhoods of East Dalton, MN. Jane, the center's Executive Director, is one year into a 3-year plan to double ECC membership. At this point, she has seen only a 10% increase in membership. Which of the following is the best tactical plan to better achieve the organization's goals?

Assigning two key employees as liaisons to the local high schools for the next year

Which of the following is a recommendation made by the proponents of evidence-based management?

Avoid basing decisions on what has been done in the past.

Which of the following statements about large and small businesses is false?

Companies like Dell Computers buy most of their parts and components from other large companies. Small businesses are the last to lay off workers during economic downswings.

Which of the following best explains what occurs at the step of selecting the best alternative when completing the rational decision-making process?

Consider all situational factors, and choose the alternative that best fits the situation.

_____ is the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets.

Corporate-level strategy

Alpha Corp needs to make some serious budget cutbacks in order to remain profitable. In order to gather all the information needed to make the budget decisions, the CFO has asked the managers of each division and an independent accountant to each submit their cost-cutting proposals in writing. The CFO will then review their proposals to reach a consensus decision. What type of decision-making group is the CFO using?

Delphi

_____ describes the number of different businesses that an organization runs and the extent to which these businesses relate to one another.

Diversification

Light On! Power Company (LO!PO) is nearing capacity at its current St. Doraldo plant. One option being considered by the general manager is the acquisition and conversion of a nearby production facility to increase LO!PO's output. To determine if this is a feasible option, he is currently calculating the costs of acquiring and converting the property and estimating the power generation potential of the new operation. At what stage of the decision-making process is the general manager?

Identifying alternatives

Bonafide Fresh is an expanding brand of personal care products that are made with all-natural ingredients. The company has an organizational goal to increase the number of product lines that it offers. Which of the following is the best example of a tactical plan for achieving this objective?

Increasing efforts over the next year to develop a line of children's skin protection products

After years of decline, the town of Middleboro, VT has experienced a recent upsurge in new business development. Some of the economic progress has been the result of a community partnership with the local college. The partnership sponsors an entrepreneur preparedness program for members of the community. Ron and Linda Adams participated in the program with the intention of starting their own business. At its conclusion, they decided to go into computer software manufacturing. What is one of the advantages of choosing manufacturing for their new venture?

It is not uncommon for small manufacturers to outperform big business in innovative-driven industries.

Light On! Power Company (LO!PO) is nearing capacity at its current St. Doraldo plant. For the past three months, the general manager has been considering the acquisition and conversion of a nearby production facility to increase LO!PO's output. This decision is an uncommon one for the general manager to make, and he does not have a formula to follow for making this decision. Why is the classical model of decision making an unsuitable approach for the general manager to use in this situation?

It rests on the assumption that managers are logical and rational.

Ron and Linda Adams participated in an entrepreneurship program in their local community with the intention of starting their own business. At its conclusion, they decided to go into computer software manufacturing. While selecting their strategy, Ron and Linda discovered a profitable niche in children's educational software. How will pursuing this niche help the Adamses outperform their competitors?

It will give them a distinctive competency.

Lack of effective control systems leads to what problem that causes businesses to fail?

Managers may be in serious trouble before more visible difficulties alert them.

What is the difference between an SOP and rules and regulations?

Rules and regulations typically describe a sequence of activities, whereas an SOP focuses on one activity.

Which of the following is true of small businesses' role in the economy?

Small business is a strong presence in the U.S. economy as well as in virtually all of the world's mature economies.

A store manager noticed that monthly sales have been down 5% each of the last three months. The manager thinks he can increase sales by increasing advertising in the local paper, cutting prices on selected items, or implementing a loyalty program. What step has this manager reached in the rational decision-making process?

Step 2: Identifying alternatives

Why do people who start small retail businesses tend to favor specialty shops?

They can focus limited resources on narrow market segments.

Which of the following is true of decision makers in the classical decision model?

They have complete information about the decision situation.

What model reflects the subjective considerations that often impact decision making and explain why, when a decision is made with little regard for logic, it can still turn out to be correct?

administrative

Organizational opportunities:

are areas in the environment that may generate higher performance.

The administrative model of decision making found that decision makers _____ when making decisions.

are limited by unconscious reflexes

Taylor owns and manages a franchise sandwich shop in rural Texas. Most of his employees earn minimum wage. Recently, there has been much attention on how difficult it is for workers to support themselves on a minimum wage salary. The organization is under public scrutiny nationally, and pressure to raise salaries for lower-end employees is escalating. The corporate office has requested that each franchise owner submit policy recommendations based on conditions in their independent locations. By seeking knowledge that will produce a fully informed decision, top management is attempting to reduce the potentially negative impact of _____ rationality.

bounded

Once an entrepreneur has chosen an industry to compete in and determined which distinctive competencies to emphasize, these choices are usually included in a document called a _____.

business plan

An organization that competes in dozens or even hundreds of markets is called a(n) _____.

conglomerate

Product differentiation, low costs, and the development of new products or services are key to a company's success at what stage of the product life cycle?

decline

Firms that successfully implement what type of strategy are generally able to charge more than competitors because customers are willing to pay more to obtain the extra value they perceive?

differentiation

Using a _____ strategy, Pepsi promotes its Aquafina brand on the basis of its purity.

differentiation

Camille's Coffee Shop has a very small share of the market and has no plans for growth. According to the BCG matrix, this business is a _____.

dog

Carduci Corporation is a food processing company that specializes in a complete line of artisan sausage products. The top leaders in the organization have established a strategy that involves increasing the marketing budget to grow sales. Neal is the head of the marketing department. Under his guidance, marketing supervisors have developed a 3-stage operating plan to support the organization's goals. Stage 1 is a three-month national media blast to pump information into the market for the purpose of increasing brand awareness. This operational plan has a narrow focus and involves only a few key activities. Stage 1 is a _____, which is a single-use plan intended to carry out a course of action that is unlikely to be repeated in the future.

project

The market for memory chips for electronic devices is growing at an incredible rate, and Whizz Industries has a small share of that market. According to the BCG matrix, Whizz Industries is a _____.

question mark

Jones International is a large organization with holdings in the U.S., Europe, and Southeast Asia. The corporation's mix of strategic business units (SBUs) allows the company to exploit its strengths and capabilities in more than one line of business and to exploit synergies across business lines. Jones International employs a(n) _____ corporate-level strategy.

related diversification

The best strategies include all of the following EXCEPT what?

require resource deployment

Jeremy owns This'n'That, a shop in which nothing costs more than five dollars. He buys his products from a number of distributers for sale in his store. His customers are primarily people who live or work in the neighborhood. Jeremey's shop operates in what industry?

retail

Entrepreneurs are drawn to the _____ industry to open their new business because this industry offers the highest return on time invested and appeals to the talent and innovation that many small enterprises typify.

services

The market for memory chips for electronic devices is growing at an incredible rate, and GloTech has the largest share of that market. According to the BCG matrix, GloTech is a _____.

star

A ___ refers to a condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimates.

state of risk

Eastside Community Center (ECC) operates to "foster inclusiveness and empower teens" in the underprivileged neighborhoods of East Dalton, MN. The center's board of directors has instructed Jane, the center's Executive Director, to devise a way to expand the impact of ECC in the community. Together they have decided that the center would like to double its membership within 3 years. It will be up to Jane to develop a plan for achieving this _____.

strategic goal

Steve has been tasked with the job of outlining decisions about resource allocation, priorities, and action steps that are necessary to reach one of his company's strategic goals. What is Steve developing?

strategic plan

A decision-making _____ has members who openly discuss, argue about, and agree on the best alternative.

team

In the growth stage of the product life cycle, _____.

the sales of the product increase

An organizational _______is an area that increases the difficulty of an organization performing at a high level.

threat

Light On! Power Company (LO!PO) is nearing capacity at its current St. Doraldo plant. For the past three months, the general manager has been considering the acquisition and conversion of a nearby production facility to increase LO!PO's output. He is only partially aware of the risks and consequences associated with this option and has not yet evaluated all of his options. The general manager is making a decision under conditions of _____.

uncertainty

Not too long ago, Michelle was employed by the local hospital. Financial difficulties led to the closing of her department, so Michelle decided to start her own business. She was not surprised that she would be able to make use of her extensive experience, but she was amazed at how many new ways of _____ was contributing to the success of small businesses.

using electronic commerce

Lighthouse Cinema has enjoyed a successful history in the town of Battle Ridge, VA. Despite the growth of multiplex theaters in most population centers, Lighthouse Cinema has remained a popular entertainment option for the surrounding area, but sales have been stagnant over the past few years. A national theater chain recently announced that it will build a 10-theater facility on the outskirts of Battle Ridge. The owner of Lighthouse Cinema has learned that the new competitor's prices will be 20% higher than his theater admissions. The new chain's higher price will be a(n) _____ for the new rival.

weakness

At what point should an entrepreneur ask the questions, "who are my customers and where are they?"

when seeking an opening in the market for a start-up

Andy opened a business called Quality Textiles. He imports linen, silk, and high thread count cotton sheets and distributes them to bedding stores in the Midwest. Quality Textiles is a business in the _____ industry group.

wholesale

For a given volume of business, a firm in which industry group would typically need the fewest employees?

wholesale

Jack wants to open a diner in his community, but first he wants to learn more about the market, including the types of customers to expect and the food they might order. What is the best way for Jack to gain this knowledge?

work in a diner before starting his own