CIA PT 3

Which of the following would increase understanding of a complex and ambiguous situation confronted by an organization? 1. Brainstorming 2. Polling 3. Lateral Thinking

1 and 3 Brainstorming is a method of group decision making that nonjudgmentally records all ideas offered. By encouraging groups to identify novel or unusual contributions, brainstorming helps make all of the elements of a problem and its resolution visible. Lateral thinking explores different ways of viewing an issue. Taking alternative perspectives increases the likelihood of finding better solutions. However, by identifying views without further analysis, polling does not increase understanding of a complex situation.

Which of the following channel structures have the best means of managing channel conflict? 1. Conventional 2. Vertical 3. Horizontal 4. Multichannel

2, 3, & 4 In vertical distribution systems, channel conflict is managed through common ownership, contractual relationships, or administration by one or a few dominant channel members. The joint nature of horizontal distribution efforts is the tool for managing channel conflict. In a multichannel system, because such a system is managed by a single entity, channel conflicts can be evaluated and managed internally. Conventional distribution systems consist of one or more independent producers, wholesalers, and retailers, each of which is a separate profit-maximizing business. The profit objective of each independent channel member may result in actions that are not profit-maximizing for the system as a whole, and the conventional distribution system offers no means for controlling channel conflict.

The business case for a project A. Addresses the economic feasibility of the project B. Consists of project documents included in the project management plan C. Is prepared during the planning phase of the project D. Is included in the benefits management plan

A. Addresses the economic feasibility of the project A project should realize an opportunity consistent with an entity's strategic goals. A business case for the project is a feasibility study prepared prior to the project to document its objectives, investments, and success criteria. The sponsor ordinarily is accountable for the business case document.

A manager that manages "by the book" exhibits which form of leadership style? A. Bureaucratic B. Democratic C. Free-rein D. Autocratic

A. Bureaucratic A bureaucratic manager must do everything according to procedure and policy. If no policy covers a situation, the manager refers to the next management level above.

Physical distribution is the moving of finished products to A. Consumers B. Retail outlets C. Shipping point D. Warehouses

A. Consumers Physical distribution is the efficient management of supply chains. It controls value-added flows from suppliers to consumers.

According to the leadership grid developed by Blake and Mouton, which of the following reflects primary concern for people and little concern for production? A. Country club management B. Authority-compliance management C. Team management D. Middle-of-the-road management

A. Country club management Concern for production emphasizes output, cost control, and profit. Concern for people emphasizes friendship, aiding employees in accomplishing tasks, and addressing employee issues (e.g., compensation). Country club management (x-coordinate 1 and y-coordinate 9) has primary concern for people and little concern for production.

Advantages of life cycle methodologies are A. Enhanced management and control of the development process. B. Ability to give users a functioning system quickly C. Lower overall development costs when requirements change frequently D. Reduced application development time to achieve a functioning system

A. Enhanced management and control of the development process. The systems development life cycle approach is the most common methodology applied to the development of large, highly structured application systems. The life cycle approach is based on the idea that an information system has a finite life span that is limited by the changing needs of the organization. This cycle is analytically divisible into stages. A new system life cycle begins when the inadequacy of the current system leads to a decision to develop a new or improved system. This method is a structured process for controlling the creative activity required to devise, develop, and implement an information system. The process is described in varying terms by different writers, but the nature and sequence of the steps are essentially the same. Life cycle methodologies provide enhanced management and control of the development process because they provide structure for a creative process by dividing it into manageable steps and specifying what must be produced in each phase.

Strategic management includes establishment of appropriate controls. Control measurements are made to determine whether organizational objectives are being achieved. One category of strategic control measures concerns external effectiveness. A measurement relating to external effectiveness is A. Flexibility B. Productivity C. Waste D. Cycle time

A. Flexibility Strategic control measures apply to external effectiveness or internal efficiency. Flexibility overlaps these categories. It relates to effectiveness and efficiency. Thus, an organization must be externally flexible in responding to changing customer needs and internally flexible in reordering its structural arrangements, retraining employees, etc.

The least risky method of entering a market in a foreign country is by A. Indirect exports B. Licensing C. Direct exports D. Direct investments

A. Indirect exports An indirect export strategy operates through intermediaries, such as home-country merchants who buy and resell the product, home-country agents who negotiate transactions with foreign buyers for a commission, cooperatives that represent groups of sellers, and export-management firms that receive fees for administering the firm's export efforts. Indirect export requires lower investment than direct export and is less risky because of the intermediaries' expertise.

Which of the following is one of the four perspectives of a balanced scorecard? A. Innovation B. Justin in time C. Activity-based costing D. Benchmarking

A. Innovation The balanced scorecard is an accounting report that connects the firm's critical success factors determined in a strategic analysis with measures of its performance. The critical success factors (and appropriate measures thereof) are assigned to four perspectives on the business: financial, customer, internal business processes, and learning and growth. Innovation is a facet of the learning and growth perspective.

Strategic control measurements of financial results relate to A. Internal efficiency at the business-unit level B. External effectiveness at the business-operating-system level. C. External effectiveness at the business-unit level. D. Internal efficiency at the departmental level.

A. Internal efficiency at the business-unit level Strategic controls should be established to monitor progress, isolate problems, identify invalid assumptions, and take prompt corrective action. As plans are executed at each organizational level, control measurements are made to determine whether objectives have been achieved. Thus, objectives flow down the organizational hierarchy, and control measures flow up. One category of strategic control measures relates to external effectiveness. A second category of strategic control measures relates to internal efficiency. At the business-unit level, the latter measures concern financial results.

In testing controls over cash disbursements, an auditor most likely would determine that the person who signs checks also A. Is responsible for mailing the checks B. Reviews the monthly bank reconciliation C. Returns the checks to accounts payable D. Is denied access to the supporting documents

A. Is responsible for mailing the checks The person responsible for signing the checks also should be responsible for assuring that the checks are mailed. This precaution assures limited access to the checks once they are signed.

Cost focus is the generic strategy of a firm that seeks competitive advantage through lower costs but with a narrow competitive scope (e.g., a regional market or a specialized product line). The reason for a cost focus strategy is that the narrower market can be better served because the firm knows it well. A. It is consistent with the trend away from authoritarian managerial styles. B. It prevents budget overruns. C. It ensures industry dominance. D. It is most useful for entities that have already formulated their mission statements.

A. It is consistent with the trend away from authoritarian managerial styles. Strategic thinking helps employees understand and implement managerial decisions. Moreover, it is consistent with the modern trend toward cooperation and teamwork and away from authoritarian managerial styles.

The project management process groups are sets of processes used to achieve objectives. According to the ANSI standard on project management, A. Outputs of processes generally are inputs to other processes. B. A process is a sequential set of activities that may or may not have an output. C. Monitoring processes are reported as required. D. Some processes, such as obtaining resources, are continuous throughout the project.

A. Outputs of processes generally are inputs to other processes. A process is a sequential set of activities intended to produce a result so that at least one input is acted on to generate at least one output. Ordinarily, outputs of processes (e.g., the project management plan and project documents resulting from the planning processes, such as a risk register of outputs of risk management processes) are inputs to other processes (e.g., executing processes).

A strategic business unit (SBU) has a low relative market share (RMS) and a high business growth rate (BGR). According to the portfolio model for competitive analysis (the growth-share matrix) created by the Boston Consulting Group, the SBU is considered a A. Question mark B. Dog C. Cash cow D. Star

A. Question mark Question marks (low RMS, high BGR) are weak competitors and poor cash generators in high-growth markets. They need large amounts of cash not only to finance growth and compete in the market but also to increase RMS. If RMS increases significantly, a question mark may become a star. If not, it becomes a dog.

The CEO of a rapidly growing high-technology firm has exercised centralized authority over all corporate functions. Because the company now operates in four geographically dispersed locations, the CEO is considering the advisability of decentralizing operational control over production and sales. Which of the following conditions probably will result from and be a valid reason for decentralizing? A. Quicker and better operating decisions. B. Greater local control over compliance with governmental regulations. C. Less overall operating costs. D. More efficient use of headquarters staff officials and specialists.

A. Quicker and better operating decisions. Decentralization results in greater speed in making operating decisions because they are made by lower-level managers instead of being referred to top management. The quality of operating decisions should also be enhanced, assuming proper training of managers, because those closest to the problems should be the most knowledgeable about them.

An important function of a database administrator is A. Redefining and restructuring the database. B. Scheduling daily database operations. C. Evaluating internal controls for hardware. D. Reviewing database output for errors and omissions.

A. Redefining and restructuring the database. The database administrator is the individual with overall responsibility for developing and maintaining the database. (S)he uses data definition language to define, create, redefine, and restructure the database. The database administrator also establishes controls over the integrity of the database.

A company's decisions are made solely by one person, who is the CEO and major shareholder. Which of the following powers is this person least likely to have? A. Referent power B. Legitimate power C. Reward power D. Coercive power

A. Referent power A person who is the head of a company may exert influence through five types of power. Referent power is the capacity of the individual's personality and style to cause others to identify with or like him or her. Thus, it is the one type of power not necessarily held by a CEO and major shareholder. This person has the ability to reward others and apply pressure. (S)he also has the right to expect cooperation.

Change control typically includes procedures for separate libraries for production programs and for test versions of programs. The reason for this practice is to A. Segregate incompatible duties B. Facilitate user input on proposed changes C. Permit unrestricted access to programs D. Promote efficiency of system development

A. Segregate incompatible duties Separating production and test versions of programs ensures operators use the programs to fulfill their everyday responsibilities and do not have access to change programs. The effect is to segregate the incompatible functions of operators and programmers.

A project is an undertaking with a specific beginning and end, but it may have a long duration. A project A. Should be documented in a business case B. May be part of a phase consisting of related projects C. May contain multiple programs and related activities D. Has deliverables that include a benefits management plan

A. Should be documented in a business case A project should realize an opportunity consistent with an entity's strategic goals. A business case therefore is prepared prior to the project to document its objectives, investments, and success criteria.

An organization must manage its flows of materials, components, finished goods, services, or information through intermediaries to ultimate consumers. These flows may occur across the functions in an organization's A. Value chain B. Integrated chain C. Supply Chain D. Full-function chain

A. Value Chain The SUPPLY chain consists of flows from sources of (1) materials, (2) components, (3) finished goods, (4) services, or (5) information through intermediaries to ultimate consumers. These flows and the related activities may occur across the functions in an organization's VALUE chain (R&D, design, production, marketing, distribution, and customer service). These flows and the related activities also may occur across separate organizations.

Which of the following is an example of technological synergy? A. Transferring a former finance officer to the internal audit activity. B. A cosmetics manufacturer branching out into pharmaceuticals. C. Selling rejected products at a reduced price after minimal rework. D. An airline merging with an auto-rental company.

B. A cosmetics manufacturer branching out into pharmaceuticals. The firm is applying its production technology to the generation of a new family of products.

Internal auditors can be considered leading agents for change within an organization. Which of the following is not a good way to promote this concept? A. Bulletins that highlight widespread or universal applications of engagement observations. B. A directive from top management stating that internal auditors will be used for all process-improvement projects. C. Post-engagement questionnaires to obtain information on how engagement clients perceive the internal audit activity. D. A brochure describing what internal auditing can do and the qualifications of the internal auditors.

B. A directive from top management stating that internal auditors will be used for all process-improvement projects. A directive does not promote, but requires, the use of internal auditors. The result may be resentment towards the internal auditors and resistance to beneficial change. Education, communication, participation in decisions by those affected, facilitation and support, and negotiation are means of overcoming resistance to change.

Leaders of work groups tend to be primarily task-motivated (getting the job done) or relationship-motivated (getting people to work effectively together). Studies have shown that either type of leader can be effective in certain situations. In which of the following situations is the relationship-motivated leader likely to be more effective than the task-motivated leader? A. A highly favorable situation, in which group members enjoy working together and have clearly defined tasks, and in which the leader exercises absolute authority over promotions and other rewards. B. A moderately favorable situation, with a combination of favorable and unfavorable factors. C. A highly unfavorable situation, in which group members do not enjoy working together and have vaguely defined tasks, and in which the leader lacks formal authority to control promotions and other rewards. D. All of the answers are correct

B. A moderately favorable situation, with a combination of favorable and unfavorable factors. According to the contingency approach, the effective leadership style or behavior depends on the situational requirements. The situational factors are leader-member relations, task structure, and position power. Thus, the leader's style has to be matched with the situation by either changing the leader or changing the leader's behavior. The task-motivated leader performs best when the situation is very favorable or unfavorable (relations are very good or bad, tasks are well or poorly defined, and the leader has or lacks clear formal authority). But, in a moderately favorable situation, the relationship-motivated leader can build on the favorable factors and work to help group members cope with the unfavorable factors.

Leaders may use influence tactics to achieve their goals. Influence most likely A. Is the potential to influence the behavior of others B. Affects the attitudes of others C. Results from application of learning and skills D. Requires control of rewards

B. Affects the attitudes of others Influence is the effect of actions on not only the behaviors but also the attitudes and values of others.

Job enrichment is a motivational approach used by management that A. Emphasizes the need for close supervision. B. Applies the principle of worker participation. C. Is based on Herzberg's analysis of factors extrinsic to the work. D. Is based on Maslow's analysis of survival needs.

B. Applies the principle of worker participation. Job enrichment increases the scope of boring, repetitive tasks by using more of the employee's skills and allowing the employee more power to make decisions concerning the job, such as order of tasks, etc. Thus, it encourages worker participation in decisions previously made by management.

Developing brand equity in a foreign market may be desirable but is subject to considerable risk. A global firm launching a new product in a new market most likely should A. Initially place most of the firm's emphasis on advertising geared to the local culture. B. Balance standardization and customization of the product. C. Fully decentralize control of the marketing process. D. Avoid creating partnerships with local distribution channels to avoid dilution of the brand.

B. Balance standardization and customization of the product. The firm should determine the ratio of standardization and customization. Products that can be sold virtually unchanged throughout several markets provide a greater profit opportunity for a global firm. However, cultural differences may require extensive customization to appeal to markets in different countries.

One of the keys to successful redesigning of jobs in order to motivate employees is A. Enlarging jobs by adding more tasks similar to tasks being performed. B. Changing the content of jobs so that the jobs fit each worker's need for growth. C. Rotating workers to different jobs to provide the workers with variety. D. Creating autonomous work teams.

B. Changing the content of jobs so that the jobs fit each worker's need for growth. One of the major principles of successful job design and redesign is to consider employee needs and skills and match them with jobs. An alternative is to change the jobs to fit those needs and skills. The objective is to conform to strengths and to avoid weaknesses.

A manager implementing the directive leader approach should A. Clearly signal that the employee is expected to be successful B. Closely supervise each employee C. Work with the employee when developing goals D. Display confidence in each employee's ability

B. Closely supervise each employee The situational approach to leadership (called path-goal theory) allows a manager to choose one of four approaches for implementing his or her leadership style. Using the directive leader approach, a manager provides close guidance to the employee through the use of specific rules, policies, and procedures.

Conformity is A. A favorable view from the outside B. Compliance with roles and norms C. The tendency of members to adhere to the group and unite against outside pressures D. The tendency of individuals to ignore input that varies from the group opinion

B. Compliance with roles and norms Conformity is compliance with roles and norms. Its benefit is predictable behavior. Its cost may be illegal, unethical, or incompetent behavior.

Davian Wood Products produces customized products for each country it operates in. As a result, it can be said that A. Davian is using a global strategy and is incurring higher production costs. B. Davian is using a multinational strategy and incurring higher production costs. C. Davian is using a multinational strategy and is saving production costs. D. Davian is using an international strategy, resulting in centralized decision making.

B. Davian is using a multinational strategy and incurring higher production costs. A multinational strategy adopts a portfolio approach. Under this approach, the product is customized for each market, and higher production costs are incurred.

Which of the following is not a characteristic of decentralized organizations? A. Decentralized organizations have fewer decisions made lower in the hierarchy that are monitored by senior management. B. Decentralized organizations have reduced costs through resource sharing. C. Decentralization has a positive influence on morale. D. Decentralized organizations are usually more flexible.

B. Decentralized organizations have reduced costs through resource sharing. The main benefits of centralization are more effective control and reduced costs through resource sharing. In a centralized organization, senior management is able to direct control over subordinates and direct the flow of resources. Senior management is able to allocate costs most effectively because they are aware of where expenses can be reduced across departments within an organization.

A production team has been together for several years and has worked well together. However, severe arguments have recently occurred between two members of the group, and other members have begun to take sides. This problem has had a negative effect on production performance. The best leadership style for the manager in this situation is A. Achievement-oriented B. Directive C. Supportive D. Participative

B. Directive Directive leadership provides highest subordinate satisfaction when a team encounters substantive internal conflict. Thus, directive leadership is the appropriate complement to the environmental factors. The leader should intervene to compensate for the stress and strife in the workplace.

Organizational development (OD) is a structured process for assisting adaptation to environmental change. An objective of OD is to A. Establish procedures and policies that result in consistent organizational behavior. B. Encourage a problem-solving approach. C. Apply co-optation methods to overcome employee resistance. D. Dissolve tightly bonded work groups.

B. Encourage a problem-solving approach. The objectives of OD are to (1) deepen the sense of organizational purpose and align individuals with it; (2) promote interpersonal trust, communication, cooperation, and support; (3) encourage a problem-solving approach; (4) develop a satisfying work experience; (5) supplement formal authority with authority based on expertise; (6) increase personal responsibility; and (7) encourage willingness to change.

Party X and Party Z are negotiating an agreement. Believing that a contract has been formed, X transfers property to Z. However, Z does not manifest an intent to form a contract despite accepting the property. On what legal theory may X recover the property? A. Unilateral contract B. Implied-in-law contract C. Implied-in-fact contract D. Executed contract

B. Implied-in-law contract An implied-in-law contract (restitution or quasi-contract) may be asserted to prevent unjust enrichment when both parties did not intend to form a contract.

The disadvantage of a multifocal or multidomestic strategy is that the company A. Uses subsidiaries in the home country to control operations. B. Incurs higher costs and lower economies of scale. C. Makes decisions at a centralized location in the home country. D. Adapts the product for the global market but not for each country.

B. Incurs higher costs and lower economies of scale. A multilocal strategy has the disadvantage of increasing costs and decreasing economies of scale.

Which of the following actions taken by management would not be effective in motivating an employee to superior performance? A. Job rotation B. Job security C. Job enlargement D. Job enrichment

B. Job security Frederick Herzberg's two-factor theory of human behavior postulated that there are two classes of factors in the job situation. Dissatisfiers (maintenance or hygiene factors) are found in the job context. Their presence will not especially motivate people, but their absence will lead to diminished performance. They include company policy and administration, supervision, working conditions, interpersonal relations, salary, status, and job security.

Under the balanced scorecard concept, employee satisfaction and retention are measures used under which of the following perspectives? A. Financial B. Learning and growth C. Customer D. Internal business

B. Learning and growth The level of employee satisfaction and retention directly relates to the learning and growth perspective.

Paul Hersey and Ken Blanchard developed a situational leadership model with two dimensions: task and relationship behaviors. In this model, a participating leadership style has which dimensions? A. High task and low relationship. B. Low task and high relationship. C. High task and high relationship. D. Low task and low relationship.

B. Low task and high relationship. A participating leadership style encourages the sharing of ideas and facilitates decision making. The leader must therefore be an effective communicator. The participating leadership style is appropriate when followers have moderate to high maturity, that is, when they are able but not willing to perform the desired actions.

In which of the following situations would a narrower span of control be more appropriate? A. Subordinates work in the same area rather than being geographically dispersed. B. Managers must spend a great deal of time coordinating with other managers. C. Work performed by subordinates is substantially identical. D. Managers do not spend a great deal of time on planning or strategic management.

B. Managers must spend a great deal of time coordinating with other managers. If substantial coordination is required, a manager benefits from reduced supervision requirements. In addition, increased coordination implies that the work done by subordinates is not standardized. As spans of control move from wider to narrower, the work done becomes less similar and more complex.

Victor Vroom's expectancy theory is based on the intuitively appealing idea that people have expectations of rewards derived from their unique personal motive structure, from their beliefs as to what are important rewards to them, and from their expectations of getting these incentives if they exert effort. The perceived equity of rewards leads to satisfaction or dissatisfaction and thus feeds into the next cycle's expectancies. For example, an employee who believes (s)he is compensated less than another worker performing the same task with the same degree of skill may become dissatisfied. An important concept in expectancy theory is A. The management grid B. Motivation = Valence × Expectancy. C. Theory X and Theory Y. D. The two-factor theory of behavior.

B. Motivation = Valence × Expectancy. Victor Vroom's expectancy theory holds that the force with which an individual is motivated is a function of the valence of a motivator (whether it has a positive or negative value to the individual) and the expectancy, which is that individual's estimation of the probability that a particular action will lead to a desired outcome. Thus, motivation equals the valence times the expectancy.

A student aircraft mechanic scored 90% on her midterm exam on electronic systems, but her employer wanted a perfect score on every exam, stating, "Nothing less than perfection works in aviation." Because the mechanic is required to make a test flight in every airplane she repairs, how would the 10% error rate be classified in a cost of quality analysis? A. Conformance - prevention. B. Nonconformance - internal. C. Nonconformance - external. D. Conformance - appraisal.

B. Nonconformance - internal. Because the mechanic must fly in every aircraft she repairs, the cost of an in-flight failure of an electrical system could be serious. Thus, the 10% error rate is nonconformance (failure of the system) and internal. The mechanic could incur personal consequences from failure of the electrical system.

A work breakdown structure typically is developed in which project management process group? A. Executing B. Planning C. Directing and managing project work D. Monitoring and controlling project work

B. Planning Creating a work breakdown structure (WBS) reduces the deliverables and work to manageable parts by developing a framework for what is to be done. It is an example of a process in the planning project management process group.

Progressive elaboration occurs in which project management process group? A. Validating scope and controlling scope B. Planning C. Directing and managing project work D. Monitoring and controlling

B. Planning Planning processes define the project scope, objectives, and actions to achieve those objectives. Also, the project management plan and project documents are developed. As more information is obtained, planning and initiating processes may need to be repeated to revise the project management plan. This iterative approach is known as progressive elaboration.

Psychologist Geert Hofstede's research identified 5 distinct dimensions of cultural differences. Which of the following best demonstrates a high degree of collectivism? A. Tolerance for unpredictability and lack of structure. B. Protection of members in return for their loyalty. C. Personal steadiness and stability and respect for tradition. D. Centrality of cooperation and relationships.

B. Protection of members in return for their loyalty. An organization protecting its members in return for their loyalty displays a high degree of the individualism-collectivism dimension. The individualism-collectivism dimension addresses the group versus the individual. A high degree of individualism-collectivism dimension includes (1) individuals that help one another and (2) an organization that protects its members in return for their loyalty. A low degree indicates that the individual must meet his or own security needs.

The project management process groups are sets of processes used to achieve objectives. Examples of processes in the planning process group are A. Managing project knowledge and definition of activities. B. Qualitative risk analysis and quantitative risk analysis. C. Scope processes and cost processes. D. Estimating activity durations and quality processes.

B. Qualitative risk analysis and quantitative risk analysis. Planning processes define the project scope, objectives, and actions to achieve those objectives. Examples are qualitative risk analysis and quantitative risk analysis. Qualitative risk analysis establishes risk priorities based on probabilities and potential effects. Quantitative risk analysis mathematically aggregates the effects of uncertainties on project objectives as a basis for (1) estimating total risk exposure and (2) responding to risks.

Which of the following strategies combines elements of multinational, international, and multilocal strategies? A. All-encompassing strategy. B. Regional strategy. C. Multidomestic strategy. D. Transnational strategy.

B. Regional strategy. A regional strategy combines elements of multinational, international, and multilocal strategies. The goal of this strategy is to create regional products and a regional value chain.

A leader who explains decisions and provides opportunity for clarification is described as having which leadership style? A. Participating B. Selling C. Delegating D. Telling

B. Selling According to Hersey and Blanchard, a selling style of leadership provides a high degree of task orientation and a high degree of relationship orientation. This type of leader explains decisions and provides opportunities for clarification. Thus, upward and downward two-way communication is active. This approach is more democratic than authoritarian.

According to Fred E. Fiedler's contingency theory of leadership, A. The relationship-motivated style is most effective when a situation is very unfavorable. B. The task-motivated style is most effective when a situation is very favorable or unfavorable. C. The assumption is that an individual's leadership style is adaptable to the situation. D. The dimensions of leadership style are initiating structure and consideration.

B. The task-motivated style is most effective when a situation is very favorable or unfavorable. The task-motivated style is most effective when the situation is very favorable or very unfavorable. The situation is very favorable when the leader's position of power is high, tasks are well defined, and leader-member relations are good. The situation is very unfavorable when the reverse is true. In a favorable situation, a leader has little need to address relationship issues and should therefore concentrate on the work. In an unfavorable situation, the leader must emphasize close supervision.

Which of the following is least likely to be an example of synergy? A. Military Humvees being converted into sports utility vehicles for sale to civilians. B. A shopping mall with several businesses providing different products and performing different services. C. A car dealership providing warranties on automobile parts to maximize customer value. D. A manufacturing company hiring a new manager with technological experience lacking in the company.

C. A car dealership providing warranties on automobile parts to maximize customer value. Synergy occurs when the combination of formerly separate elements has a greater effect than the sum of their individual effects. However, a car dealership's provision of warranties reflects an operational strategy designed to provide post-purchase services to gain a competitive advantage and maximize customer value. It does not reflect the complementary sharing of resources, technology, or competencies. In contrast, synergy arises from selling a line of cars that share some components or a brand identification.

An advantage of a direct investment strategy when entering a foreign market is A. Avoidance of interaction with the local bureaucracy. B. Shared control and responsibility. C. Assurance of access when the foreign country imposes domestic content rules. D. Reduction in the capital at risk.

C. Assurance of access when the foreign country imposes domestic content rules. Direct investment has many advantages: (1) cheaper materials or labor, (2) receipt of investment incentives from the host government, (3) a strong relationship with interested parties in the host country, (4) control of the investment, (5) a better image in the host country, and (6) market access when domestic content rules are in effect. However, direct investment is risky because of exposure to currency fluctuations, expropriation, potentially high exit barriers, and restraints on sending profits out of the country.

Which of the following best describes a market synergy? A. Production of multiple products at one facility. B. Use of complementary management skills to achieve entry into a new market. C. Bundling of products distributed through the same channels. D. Technology transfer from one product to another.

C. Bundling of products distributed through the same channels.

Strategic control measures that relate to external effectiveness apply to customer satisfaction at the A. Departmental level B. Business-unit level C. Business-operating-system level D. Work-center level

C. Business-operating-system level Strategic controls should be established to monitor progress, isolate problems, identify invalid assumptions, and take prompt corrective action. As plans are executed at each organizational level, control measurements are made to determine whether objectives have been achieved. Thus, objectives flow down the organizational hierarchy, and control measures flow up. One category of strategic control measures relates to external effectiveness. At the business-operating-system level, these measures concern satisfaction and flexibility.

Which of the following procedures in the cash disbursements cycle should not be performed by the accounts payable department? A. Approving the voucher for payment by an authorized person. B. Verifying the mathematical accuracy of the vendor's invoice. C. Canceling supporting documentation after payment. D. Comparing the vendor's invoice with the receiving report.

C. Canceling supporting documentation after payment. Checks for disbursements should be signed by a responsible person in the cash disbursements department after necessary supporting evidence has been examined. This individual therefore should be responsible for canceling the supporting documentation after payment.

Which form of power not associated with a specific person or individual may be accessed by a nonleader? A. Expert B. Soft C. Control of information D. Legitimate

C. Control of information Leaders and nonleaders may access certain power sources. For example, access to, and control over, information confers power. Access and control depend in part on a person's status in the managerial hierarchy. This form of power is not based on a particular person or position but on how the individual is involved in the overall work of the entity.

A manufacturing company produces plastic utensils for a particular segment at the lowest possible cost. The company is pursuing a cost A. Leadership strategy B. Differentiation strategy C. Focus strategy D. Containment strategy

C. Focus strategy Cost focus is the generic strategy that seeks competitive advantage through lower costs but with a narrow competitive scope (e.g., a regional market or a specialized product line). The reason for a cost-focus strategy is that the narrower market can be better served because the firm knows it well.

Which of the following is an advantage of strategic management? A. It prevents budget overruns B. It ensures industry dominance C. It is consistent with the trend away from authoritarian managerial styles. D. It is most useful for entities that have already formulated their mission statements.

C. It is consistent with the trend away from authoritarian managerial styles. Strategic thinking helps employees understand and implement managerial decisions. Moreover, it is consistent with the modern trend toward cooperation and teamwork and away from authoritarian managerial styles.

Consideration consists of A. Each party's receiving an actual benefit only. B. Something with monetary value. C. Legal sufficiency and bargained-for exchange. D. Two promises.

C. Legal sufficiency and bargained-for exchange. Consideration must be legally sufficient and intended as a bargained-for exchange. A promisee has provided legally sufficient consideration if (s)he incurs a legal detriment or if the promisor receives a legal benefit. An essential aspect of consideration is that it be bargained for, and given in exchange for, the consideration provided by the other party. That is, consideration is mutual.

Bulez Widgets, Inc., operates globally and has been praised for its ability to understand the needs and wants of the local market while retaining global control of certain elements of the marketing process and strategy. Bulez is A. None of the answers are correct. B. Establishing local guidelines so that local sales and profit goals are met. C. Maintaining a good ratio of local to global control. D. Maintaining a good ratio of standardization and customization.

C. Maintaining a good ratio of local to global control. Bulez is maintaining a good ratio of local to global control. Local managers may understand the wants and needs of their market, but the global firm must still retain control of certain elements of the marketing process and strategy.

One party was fraudulently induced by a second party to enter into a contract. The agreement A. Is valid if executory B. Is void ab initio C. May be recognized by the law D. Is valid but unenforceable

C. May be recognized by the law The contract is voidable, not void. The innocent party may choose to enforce the contract. The fraudulent party may not.

The necessary elements of a contract include A. Some form of writing, equal consideration, and legal capacity. B. Bilateral promises, legal capacity, and legality of purpose. C. Mutual assent, consideration, legal capacity, and legality of the agreement. D. Formal execution, definite terms, and a valid offer and acceptance.

C. Mutual assent, consideration, legal capacity, and legality of the agreement. Contracts require each of the following: Mutual assent (offer and acceptance) Consideration (bargained-for exchange) Capacity of parties (legal ability) Legality (legal purpose)

Which of the following strengthens and increases acceptable behavior by termination or withdrawal of undesirable consequences? A. Reward B. Postive reinforcement C. Negative reinforcement D. Punishment

C. Negative reinforcement Negative reinforcement removes an existing unpleasant condition when the desired behavior occurs. In contrast, positive reinforcement rewards the desired behavior. For example, a crying child negatively reinforces a parent's behavior when (s)he stops crying after receiving what (s)he wants.

Which of the following factors is least likely to affect a manager's optimal span of control? A. The manager's willingness to delegate authority. B. The manager's training and communication skills. C. Number of people in the organization. D. Frequency of supervisor-subordinate contact.

C. Number of people in the organization. The optimal span of control is the number of subordinates a manager can effectively supervise. It is a function of many situational factors. However, the total number of people in an organization has no bearing on the optimal span of control of a particular manager.

Fred E. Fiedler's contingency theory of leadership depends on which situational factors? A. Emotional intelligence, expert power, and rational persuasion. B. Legitimate power, initiation of structure, and intelligence. C. Position power, task structure, and leader-member relations. D. Aspiration to lead, drive to excel, and judgment.

C. Position power, task structure, and leader-member relations. Whether a leadership style is favorable for a leader depends on three situational factors. Position power is based on the formal authority structure. It is the degree to which the position held enables a leader to evaluate, reward, punish, or promote group members. It is independent of other sources of power, such as personality or expertise. Task structure is how clearly and carefully members' responsibilities for various tasks are defined. Quality of performance is more easily controlled when tasks are clearly defined. Leader-member relations reflect the extent to which group members like, trust, and are willing to follow a leader.

Which of the following strategies combines elements of multinational, international, and multilocal strategies? A. Transnational strategy B. All-encompassing strategy C. Regional strategy D. Multidomestic strategy

C. Regional strategy A regional strategy combines elements of multinational, international, and multilocal strategies. The goal of this strategy is to create regional products and a regional value chain.

CASE applies computers to software design and development. It permits creation and maintenance of systems documentation on the computer and the automation of a part of the programming effort. Using CASE would improve management of the development process because the CASE software maintains the links between the different components, provides built-in project management tools, and supplies automated testing aids. A. Network structure B. Hierarchical structure C. Relational structure D. Single flat file structure

C. Relational structure A relational structure organizes data in conceptual tables. One relation (a table or file) can be joined with (related to) another by the DBMS without pointers or linked lists if each contains one or more of the same fields (also known as columns or attributes). This database has a relational structure because it includes no links that are not contained in the data records themselves.

In the Boston Consulting Group (BCG) growth-share matrix, which strategic business units are strong competitors in high growth markets but usually have modest net cash flow? A. Cash cows B. Dogs C. Stars D. Question Marks

C. Stars A star is a strong competitor in a high growth industry. It is profitable but needs large amounts of cash for expansion, R&D, and meeting competitors' attacks.

A manager in a government agency supervises a section of clerical employees who review license applications for approval or denial. The clerical jobs are well-defined procedurally and are covered by government regulations. In this case, what is the best leadership style for the manager? A. Participative B. Achievement-oriented C. Supportive D. Directive

C. Supportive A supportive style is best when tasks are highly structured and the authority relationships are clear and bureaucratic. This approach depends on people who want to work, grow, and achieve. The supportive style may be best when tasks are unsatisfying.

Which of the following database models is considered to be the most versatile? A. The hierarchical model B. The tree model C. The relational model D. The network model

C. The relational model Because data are organized in two-dimensional tables, a relational database is easier to construct than the complex architectures that result when using the hierarchical and network models. The tables (relations) provide flexibility because they can be combined (joined) in many ways to permit a wide variety of inquiries. They also permit data to be more readily added to or omitted from the data structures.

In a regional strategy, an organization has which of the following goals? A. To combine the various operating segments of the organization based on the region in which they operate. B. To create a universal product and value chain that serves the needs of all countries in which the firm operates. C. To create regional products and a regional value chain. D. To combine the elements of multinational and international, but not multilocal, strategies.

C. To create regional products and a regional value chain. The goal of a regional strategy is to create regional products and a regional value chain.

Certain contracts have absolutely no effect and are not recognized under law. If two or more parties enter into such an agreement, it is A. Valid B. Voidable C. Void D. Unenforceable

C. Void Contracts that are of no effect and not recognized under law are void. Neither party has a legal obligation to the other based on the contract. The parties may go through with their performance, but the law provides no remedy for a breach.

Strategic management includes developing the organization's grand strategy. This strategy is based on A. Strategic planning. B. Existing strategic business units (SBUs). C. Portfolio management of the organization's businesses. D. A SWOT analysis.

D. A SWOT analysis. Strategic management is a process that includes development of a grand strategy that describes how the organization's mission is to be achieved. This strategy is based on a situational analysis that considers organizational strengths and weaknesses (a capability profile) and their interactions with environmental opportunities and threats. Such an evaluation is also called a SWOT analysis. Strengths and weaknesses (the internal environment) are usually identified by considering the firm's capabilities and resources. What the firm does particularly well or has in greater abundance are known as core competencies. Opportunities and threats (the external environment) are identified by considering macroenvironment factors (economic, demographic, political, legal, social, cultural, and technical) and microenvironment factors (suppliers, customers, distributors, competitors, and other competitive factors in the industry).

Which of the following is an example of an outcome of strategic planning? A. A set of general guides for action that channel thinking and allow a certain amount of discretion in execution. B. A formal statement of the organization's definition of the fundamental truths that guide its actions. C. A document specifying a sequence of steps detailing the exact manner in which a certain activity must be accomplished. D. A broad statement of concepts that emphasizes the implementation of organizational objectives over the long term.

D. A broad statement of concepts that emphasizes the implementation of organizational objectives over the long term. The strategic plan states the means by which an entity expects to achieve its stated mission. Achieving the mission is predicated on implementing long-term objectives.

Organizational development (OD) is one of the major approaches to proactive management of change in organizations. One of the major objectives of OD is to A. Increase the power of leaders B. Provide the organization and its managers with ways to increase efficiency C. Attract better employees to the organization D. Align the organization's and the employee's goals

D. Align the organization's and the employee's goals The objectives of OD are to (1) deepen the sense of organizational purpose and align individuals with it; (2) promote interpersonal trust, communication, cooperation, and support; (3) encourage a problem-solving approach; (4) develop a satisfying work experience; (5) supplement formal authority with authority based on expertise; (6) increase personal responsibility; and (7) encourage willingness to change.

Egan, a minor, purchased Baker's used computer for Egan's personal use. Egan paid US $200 down on delivery and was to pay US $200 thirty days later. Twenty days later, the computer was damaged seriously as a result of Egan's negligence. Five days after the damage occurred and 1 day after Egan reached the age of majority, Egan attempted to disaffirm the contract with Baker. Egan will A. Not be able to disaffirm because Egan had failed to pay the balance of the purchase price. B. Be able to disaffirm only if Egan does so in writing. C. Not be able to disaffirm because the computer was damaged as a result of Egan's negligence. D. Be able to disaffirm even though Egan was not a minor at the time of disaffirmance.

D. Be able to disaffirm even though Egan was not a minor at the time of disaffirmance. Most contracts entered into by a minor may be disaffirmed if (s)he acts during minority or a short time thereafter. Tender of goods is usually required. However, a minor may disaffirm even though (s)he cannot return the property or can return it only in damaged condition.

Performance appraisal systems might use any of three different approaches: (1) who did the job, (2) how the job was done, or (3) what was accomplished. Which approach is used by a system that places the focus on how the job was done? A. Employee-oriented B. Goal-oriented C. Trait-oriented D. Behavior-oriented

D. Behavior-oriented Behavior-oriented performance evaluation rewards the behavior that is desired by management. Behavior control involves examining work processes rather than work output.

In the project management context, a benefits management plan is an artifact best described as a A. Project document B. Business case C. Organizational process asset D. Business document

D. Business document The source of a business document is external to the project. But it may be an input to the project. Project documents are artifacts not included in the project management plan but that may be used to manage the project. The choice of such documents is a function of the requirements of the project and the project manager's judgment. Updated project documents are outputs of processes. A benefits management plan is prepared prior to the project. It states how and when benefits will be delivered and the measurement methods. Consequently, a benefits management plan is a business, not a project, document.

What is an advantage of direct investment over indirect investment? A. A better image in the home country B. Exposure to currency fluctuations C. The host country's control over the investment D. Cheaper materials

D. Cheaper materials The advantages of direct investment over indirect investment include (1) cheaper materials or labor, (2) receipt of investment incentives from the host government, (3) a strong relationship with interested parties in the host country, (4) control of the investment, (5) a better image in the host country, and (6) market access when domestic content rules are in.

On the first day of the month, Thomas and Moore orally agreed that Thomas was to deliver to Moore's place of business a case of fruit on each Monday of the current month. Moore was to pay the US $100 price on the first of the following month. On the 15th of the month, the agreement should be classified as A. Cancelable at any time. B. Unexecuted because the agreement was oral. C. Executed. D. Executory.

D. Executory. An executed contract is one in which the parties have completed their performance. A contract is executory to the extent it has not been fully performed. As of the 15th, Thomas had partially performed, but Moore had not performed at all. The contract was therefore executory.

Which strategy for a global marketing organization balances local responsiveness and global integration A. Global B. Transnational C. Multinational D. Glocal

D. Glocal A glocal strategy seeks the benefits of localization (flexibility, proximity, and adaptability) and global integration. Successful telecommunications firms are examples of balancing these elements. Local responsiveness is indicated when local product tastes and preferences, regulations, and barriers are significant. Global integration is indicated when demand is homogeneous and economies of productive scale are large.

Minimizing the likelihood of unauthorized editing of production programs, job control language, and operating system software can best be accomplished by A. Database access reviews B. Effective network security audits C. Compliance reviews D. Good change control procedures

D. Good change control procedures Effective change control procedures include the requirement that every change be properly authorized.

Gudrun owned a 2,000-acre country estate. She signed a written agreement with Johann, selling the house on the property and "a sufficient amount of land surrounding the house to create a park." The price was stated to be US $200,000. When Gudrun refused to honor the agreement, Johann sued. Who will prevail and why? A. Johann will win because the quantity of land is implied. B. Johann will win because the parties intended to make a contract. C. Gudrun will win because no financing term was included in the agreement. D. Gudrun will win because the agreement is not reasonably definite.

D. Gudrun will win because the agreement is not reasonably definite. For an agreement between the parties to be enforceable, it must be reasonably definite and certain (not ambiguous). A court must be able to determine with reasonable accuracy what the parties agreed upon. In this case, the writing is not reasonably clear as to what amount of land Gudrun agreed to sell.

Paul Hersey and Ken Blanchard developed a situational leadership model with two dimensions: task and relationship behaviors. In this model, the delegating leadership style is appropriate when followers have A. Low to moderate maturity. B. Low maturity. C. Moderate to high maturity. D. High maturity.

D. High maturity. The dimensions of the delegating leadership style are low task and low relationship. Consequently, task- and relationship-related behaviors are low. The leader provides little direction or support because the maturity of followers is high. They are willing and able to do what is necessary. When followers have low to moderate maturity, the selling leadership style is appropriate. When followers have low maturity, the telling leadership style is appropriate. When followers have moderate to high maturity, the participating leadership style is appropriate.

A project charter is most likely developed in which project management process group? A. Defining scope B. Planning C. Definition of activities D. Initiating

D. Initiating Initiating processes define a new project or phase by securing authorization to begin. Stakeholder expectations should be consistent with the project's objectives and scope. The initial scope and financial investment are defined, and stakeholders who will influence outcomes are identified. For example, a project charter is developed to authorize the use of resources for project activities.

Which of the following is a project management knowledge area? A. Project documents B. Organizational process assets C. Monitoring and controlling processes D. Integration processes

D. Integration processes Project management knowledge areas are sets of processes required for most projects most of the time. For example, integration processes define, combine, and coordinate the processes and activities within the project management process groups.

Both Maslow and Herzberg have developed popular motivational theories. Which statement best distinguishes Herzberg's theory? A. Job esteem improves as physiological needs are met. B. Job performance improves as physiological needs are met. C. Job esteem improves as job satisfaction increases. D. Job performance improves as job satisfaction increases.

D. Job performance improves as job satisfaction increases. Frederick Herzberg's two-factor theory of human behavior postulates that there are two classes of factors in the job situation. Maintenance or hygiene factors are those whose presence will not especially motivate people but whose absence will diminish performance. These factors are extrinsic to the work itself. They include supervision, working conditions, interpersonal relations, salary, and status. Motivational factors are those the absence of which will not diminish performance but the addition or availability of which will motivate employees. Intrinsic to the work itself, these include achievement, recognition, challenging work, advancement, growth in the job, and responsibility.

Consideration consists of A. Something with monetary value B. Two promises C. Each party's receiving an actual benefit only D. Legal sufficiency and bargained-for exchange

D. Legal sufficiency and bargained-for exchange Consideration must be legally sufficient and intended as a bargained-for exchange. A promisee has provided legally sufficient consideration if (s)he incurs a legal detriment or if the promisor receives a legal benefit. An essential aspect of consideration is that it be bargained for, and given in exchange for, the consideration provided by the other party. That is, consideration is mutual.

A bank was considering its first use of computer-aided software engineering (CASE) to develop an inquiry system for account representatives to access consolidated profiles of customers' accounts. A benefit of using CASE in this situation is that A. The need for testing would be reduced B. No training of programmers would be required. C. No new software development tools would be needed. D. Management of the development process would be improved.

D. Management of the development process would be improved. CASE applies computers to software design and development. It permits creation and maintenance of systems documentation on the computer and the automation of a part of the programming effort. Using CASE would improve management of the development process because the CASE software maintains the links between the different components, provides built-in project management tools, and supplies automated testing aids.

One party was fraudulently induced by a second party to enter into a contract. The agreement A. Is valid but unenforceable B. Is valid if executory C. Is void ab initio D. May be recognized by the law

D. May be recognized by the law The contract is voidable, not void. The innocent party may choose to enforce the contract. The fraudulent party may not.

Strategic management is a five-step process. In what order should the five steps be accomplished? A. Strategy, SWOT analysis, mission and goals, controls and feedback, implementation. B. SWOT analysis, mission and goals, strategy, controls and feedback, implementation. C. Mission and goals, strategy, implementation, SWOT analysis, controls and feedback. D. Mission and goals, SWOT analysis, strategy, implementation, controls and feedback.

D. Mission and goals, SWOT analysis, strategy, implementation, controls and feedback. Strategic management is a five-step process: 1. The board of directors drafts the organization's mission statement, a general statement of what the organization intends to accomplish and its reason for existing. The statement may be accompanied by one or more goals, which are concrete targets for measuring the organization's success. 2. The organization performs a situational analysis, also called a SWOT analysis, involving identification of its strengths, weaknesses, opportunities, and threats. 3. Based on the results of the situational analysis, upper management develops a group of strategies describing how the mission statement will be fulfilled. 4. Strategic plans are implemented through the execution of component plans at each level of the entity. 5.Strategic controls and feedback are used to monitor progress, isolate problems, and take corrective action. Over the long term, feedback can be used to adjust the original mission and goals.

Which of the following is a financial measure of success in a balanced scorecard? A. Cycle time B. Staff morale C. Market share D. Sales growth

D. Sales growth Sales growth is a financial measure of success under the critical success factor of sales.

The belief that successful leadership occurs when the leader's style matches the situation is the basis for A. An achievement-oriented approach to leadership theories. B. A behavioral approach to leadership. C. The managerial-grid model of leadership. D. The contingency approach to leadership.

D. The contingency approach to leadership. According to Fred E. Fiedler's contingency theory, people become leaders not only because of personality attributes, but also because of various situational factors and the interaction between the leaders and the situation. Thus, the right person at the right time may rise to a position of leadership if his or her personality and the needs of the situation complement each other. The same person might not become a leader in different circumstances because of failure to interact successfully with that situation. The contingency theory model has three dimensions. (1) Position power is a function of the formal authority structure. It is the degree to which the position held enables a leader to evaluate, reward, sanction, or promote the group members independent of other sources of power, such as personality or expertise. (2) Task structure is how clearly and carefully members' responsibilities for various tasks are defined. Quality of performance is more easily controlled when tasks are clearly defined. (3) Leader-member relations reflect the extent to which group members like, trust, and are willing to follow a leader.

An organization has operations in the United States, as well as in several other countries. Management of operations for organizations that are in more than one country should consider economic, political, legal, social, and cultural issues. Which of the following is an example of an economic issue? A. To avoid misunderstanding and conflict, the organization has invested time and resources in educating its employees on the distinct set of values and beliefs that guide behavior for each country in which they operate. B. The organization faces many challenges as compliance with labor laws, tax and financial regulations, intellectual property rights, and consumer protection is different for each country. C. Management spends a considerable amount of time following changes in government policy, government involvement in trade unions, and agreements for each country and local jurisdiction. D. The organization experienced serious disruption when a major seaport was closed for several months due to an oil spill.

D. The organization experienced serious disruption when a major seaport was closed for several months due to an oil spill. Infrastructure, which includes the transportation network, the communications network, and utilities, would be considered economic issues. Economic issues in the global environment include the degrees of development and interconnections between countries.

Which of the following is true with regard to the contingency perspective to solving problems within an organization? A. The organization may be less adaptive when the environment is more uncertain. B. The contingency approach is a scientific management perspective. C. The organization should search for a solution that can be used in all cases. D. The organization's environment plays the largest role in finding situationally determined answers.

D. The organization's environment plays the largest role in finding situationally determined answers. The contingency approach is that solutions are situationally determined. The key is finding the relevant factors in the organization's environment.

The project life cycle is the set of phases of a project. During the life cycle, A. Costs of changes decrease as the project nears completion. B. Risk increases as deliverables are accepted. C. Stakeholders' ability to influence results without affecting schedules materially is lowest at the start. D. The project may be terminated or changed at the control point.

D. The project may be terminated or changed at the control point. At the control point (also called a phase gate, phase review, or control gate), the project's charter (formal authorization by the initiator or sponsor) and business documents (e.g., business case and benefits management plan prepared before project initiation) are reviewed to compare performance with the project management plan. The result is the project's change, cancellation, or continuation.

Which of the following is not a recognized firm orientation? A. Customer-centered B. Competitor-centered C. Product-centered D. Time-centered

D. Time-centered The phrase "time-centered" is not meaningful in this context.

Which management principle is violated when an employee answers to several bosses? A. Division of work B. Authority C. Span of control D. Unity of command

D. Unity of command Under the unity-of-command principle, each subordinate should have only one superior (although a superior may have as many subordinates as allowed by the superior's span of control). Violation of the principle of unity of command may result in confusion and frustration for the subordinate.

Gameco is a corporation formed to provide sports betting services to the public. For this purpose, it enters into employment contracts with various individuals. But the state where Gameco plans to operate does not permit sports betting services. Accordingly, these contracts are A. Valid but unenforceable B. Unilateral C. Voidable D. Void

D. Void A void contract is not binding and is considered void ab initio. It is void at its inception and cannot be ratified and enforced. The sports betting agreements are void. They do not meet the legality requirement for a valid contract.

Certain contracts have absolutely no effect and are not recognized under law. If two or more parties enter into such an agreement, it is A. Unenforceable B. Valid C. Voidable D. Void

D. Void Contracts that are of no effect and not recognized under law are void. Neither party has a legal obligation to the other based on the contract. The parties may go through with their performance, but the law provides no remedy for a breach.

Which of the following is correct regarding the impacts of a global strategy on an organization? Slower product Development (Yes / No) Higher production costs (Yes / No) Global firms managed through one central country (Yes / No)

No, No, Yes A global strategy regards the world as one market. In a global strategy, faster product development and lower production costs are typical. Additionally, global firms are primarily managed from one central country, even though their products may be sold throughout the world.