Exam 2

Importance of the situation, the credibility of the information about it, and the urgency of it should be considered in the decision about whether to decide

TRUE

In an organization, culture exists on both visible and unobservable levels

TRUE

In general, organizations become more bureaucratic over their lifetimes

TRUE

In general, organizations become more bureaucratic over their lifetimes.

TRUE

In order for MBO to be successful, it must be implemented throughout the entire organization

TRUE

In the planning/control cycle, comparing the results with the plan is one of the control steps

TRUE

In the planning/control cycle, part of the control process can be to improve future plans

TRUE

In time-critical situations, satisficing may be a good approach to decision making

TRUE

Insisting on realism is among the leader behaviors that help a manager successfully execute a strategy

TRUE

Integration is the tendency of the parts of an organization to draw together to achieve a common purpose

TRUE

Integration is the tendency of the parts of an organization to draw together to achieve a common purpose.

TRUE

Intuition based on feelings rather than expertise, or the involuntary emotional response to those feelings, is known as automated experience

TRUE

Kraft Macaroni & Cheese is now challenged by new competitors such as Annie's and other store brands, which Porter's model for industry analysis calls the threat of new entrants

TRUE

Luxury carmaker Rolls-Royce has a focused-differentiation strategy

TRUE

The type of training provided to new hires and the frequency of performance evaluations contribute to their understanding of the organization's culture

TRUE

The type of training provided to new hires and the frequency of performance evaluations contribute to their understanding of the organization's culture.

TRUE

Too little or unreliable historical data may result in erroneous trend analyses

TRUE

Understanding how to use failure is an important implementation principle for evidence-based management

TRUE

When Pfizer Pharmaceuticals manages failure and disappointment and helps drug researchers live for the small victories in discovering new drugs for various diseases, it is focusing on the adhocracy aspects of its culture

TRUE

When QVC experiments with which products it will sell on its television shopping network and follows this up with analysis of why some sell and others don't, it is using evidence-based management

TRUE

When a manager makes a decision based on the strong beliefs she already has, she is guilty of a prior-hypothesis bias

TRUE

When employees are forced to adhere to an organization's values through extensive procedures and bureaucracies, its culture is said to be weak

TRUE

When employees are forced to adhere to an organization's values through extensive procedures and bureaucracies, its culture is said to be weak.

TRUE

When the National Football League annually presents the winners of the Super Bowl with rings in a ceremony, it is an example of a ritual

TRUE

When the National Football League annually presents the winners of the Superbowl with rings in a ceremony, it is an example of a ritual.

TRUE

Where time is of the essence, in most cases an individual should make the decision rather than a group

TRUE

Women investors make trades much less often than men, do a lot more research, and have better returns on average

TRUE

You can increase your ability to influence others by being aware of decision-making styles

TRUE

A ritual is a narrative based on true events, which is repeated and sometimes embellished upon to emphasize a particular value of an organization

FALSE

A ritual is a narrative based on true events, which is repeated—and sometimes embellished upon—to emphasize a particular value of an organization.

FALSE

A small florist most likely follows a diversification strategy

FALSE

A steady-state career entails a slow-but-steady growth in level of responsibility and compensation

FALSE

A strategic position may be based on serving the few needs of a few customers

FALSE

A transitory career path involves a series of alternating promotions and demotions

FALSE

A vision will be demoralizing to employees if it describes a future state that appears beyond the reach of the organization

FALSE

According to Burt Nanus, good vision statements are useful because they help people to consider all interesting elements in their environments

FALSE

According to Miles and Snow's basic strategy types, a defender protects its strong position in an industry by constantly seeking new opportunities for growth

FALSE

After the assessment of current organizational performance, the subsequent explanation of how its mission is to be accomplished is called a comprehensive strategy

FALSE

Allowing business-casual dress in the workplace is an example of the espoused values portion of organizational culture

FALSE

In an organization's approach to planning, its mission and vision statements should be created once the strategic planning process is complete

FALSE

In single-use plans, a program is another name for a project

FALSE

In the planning/control cycle, carrying out the plan is one of the control steps

FALSE

In this time of Internet connections and speedy-access computer databases, one typically has complete information for planning and decision making

FALSE

Keep in mind the importance of maintaining group relations; don't stand in the way of a group trying to reach consensus

FALSE

Lawrence and Lorsch's term for the tendency of an organization's parts to disperse and fragment is demarcation

FALSE

Lawrence and Lorsch's term for the tendency of an organization's parts to disperse and fragment is dissolution

FALSE

MBO was developed by Frederick Taylor as part of scientific management

FALSE

Managers who execute well insist on constant optimism

FALSE

Most managers have just one dominant decision-making style

FALSE

Nonrational models of decision making describe how managers should make decisions rather than how they actually do

FALSE

Obsolete technology and outdated facilities are examples of organizational threats

FALSE

One advantage of decentralized organizations is that procedures are uniform and thus easier to control

FALSE

One advantage of decentralized organizations is that procedures are uniform and thus easier to control.

FALSE

One of the ways to keep a strategic plan on track is to make it very comprehensive, covering as many scenarios for the future as you can

FALSE

Only for-profit organizations can be meaningfully represented by an organization chart

FALSE

Only for-profit organizations can be represented by an organization chart

FALSE

Operational goals are set by middle managers and focus on the actions needed to achieve strategic goals.

FALSE

Operational planning is normally performed by middle management

FALSE

Opportunities should be identified in the alternative evaluation stage of the decision-making process

FALSE

Organizational culture appears as three layers: observable artifacts, token values, and foundational beliefs

FALSE

Organizational culture appears as three layers: observable artifacts, token values, and foundational beliefs.

FALSE

Organizationwide, the best structure for objectives in MBO is known as a diversity pattern

FALSE

Participative management has a large effect on job performance and job satisfaction

FALSE

People with a low tolerance for ambiguity and an orientation toward task and technical concerns in making decisions have an analytical decision-making style

FALSE

Perpetuation objectives are one type of objective used in MBO

FALSE

Planning helps managers to cope with events that can be predicted but id not particularly helpful when conditions are uncertain

FALSE

Planning is usually a straightjacket for new ideas, since it effectively blocks peripheral vision in favor of a predetermined course

FALSE

Planning occurs only at the highest levels of an organizations, being done by top managers

FALSE

Policies, procedures, and rules are types of single-use plans

FALSE

Portfolio analysis is an example of the incremental model of decision making

FALSE

Power refers to the rights inherent in a managerial position to make decisions, give orders, and utilize resources

FALSE

Putting questions to a vote is a good method to help a group reach consensus

FALSE

Relaxed change is one type of effective response for a manager to take when confronted with a challenge

FALSE

SMART is an acronym that represents characteristics necessary to motivate employees in their periodic reviews

FALSE

Satisficing occurs when a manager takes small, short-term steps to alleviate a problem.

FALSE

Sharing stories, legends, or myths are good ways to develop an organizational structure

FALSE

Sharing stories, legends, or myths are good ways to develop an organizational structure.

FALSE

Sometimes an organizational structure can be strong enough to take the place of organizational culture

FALSE

Sometimes an organizational structure can be strong enough to take the place of organizational culture.

FALSE

Southwest Airlines' goal of being highly profitable is a tactical goal

FALSE

Strategic conservation attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

FALSE

Strategic management is the process of involving nonmanagerial employees in the formulation and implementation of strategies and strategic goals

FALSE

Strategic planning is appropriate for large companies, but does not help the performance of small companies

FALSE

Strategy actualization is the term for putting strategic plans into effect

FALSE

Synergy is one of the benefits of a single-product strategy

FALSE

Tactical planning is done by first-line managers, who look forward to the next 1-8 weeks

FALSE

The "R" in SMART goal stands for "reachable"

FALSE

The "social glue" that binds customers to a particular firm is called organizational culture

FALSE

The "social glue" that binds customers to a particular firm is called organizational culture.

FALSE

The BCG matrix is a means of evaluating strategic business units on the basis of both their business growth rates and their profitability

FALSE

The Red Cross is an example of a mutual-benefit organization

FALSE

The conceptual style of decision making is the most people oriented of the styles

FALSE

The division of labor means that an employee should report to no more than one manager

FALSE

The division of labor means that an employee should report to no more than one manager.

FALSE

The first stage of in an organization's life cycle is known as creation.

FALSE

The first stage of in an organization's life cycle is known as the creation stage

FALSE

The first step in an MBO program is for the manager to set objectives for her subordinate

FALSE

The first step in the rational decision making process is to think up alternative solutions

FALSE

The first step of the strategic-management process is to establish the grand strategy

FALSE

The fit perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes

FALSE

The fit perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes.

FALSE

The founder of McDonald's, Ray Kroc, intended that a Big Mac should taste the same anywhere, and accordingly the company has many specific procedures, making it a formulaic organization

FALSE

The four stages of organization life cycle include birth, growth, stability, and maturity

FALSE

The four stages of organization life cycle include birth, growth, stability, and maturity.

FALSE

The functional structure is the most typical type for small firms

FALSE

The functional structure is the most typical type for small firms.

FALSE

The hierarchy of authority, or who reports to whom, is shown with horizontal lines on an organization chart.

FALSE

The operating plan defines the course of action needed to achieve a stated goal

FALSE

The pink Cadillac that Mary Kay presents to the best salespeople of its cosmetic line is an example of an emblem

FALSE

The pink Cadillac that Mary Kay presents to the best salespeople of its cosmetic line is an example of an emblem.

FALSE

The planning/control cycle has three planning steps and three control steps

FALSE

The primary purpose of competitive intelligence is to challenge the thinking of employees to make them better equipped to produce novel ideas for business

FALSE

The process of a business cycling through decisions first to select products and markets, then about producing and delivering the products, and finally to establish roles and processes is known as the discovery cycle FALSE

FALSE

The process of fitting the organization to its environment is called incidental design

FALSE

The process of identifying and choosing between alternative courses of action is known as option evaluation

FALSE

The rational model of decision making assumes that managers will choose the available alternative that best supports their existing beliefs

FALSE

The rational model works well even with the incomplete information and uncertainty about consequences that managers often face

FALSE

The starting point in establishing a grand strategy is usually an analysis of Porter's competitive forces

FALSE

The tendency for group members to agree for the sake of unanimity and thus avoid accurately assessing the decision situation is called satisficing

FALSE

The use of hedging to manage the cost of aviation fuel is an example of trend analysis

FALSE

Those who found a business and the managers who follow them primarily use power and coercion to embed the culture into the organization.

FALSE

To be compliant with current federal legislation, all for-profit companies are required to have an ethics officer

FALSE

To effectively use evidence-based management, the more evidence you can gather, the better

FALSE

Two types of forecasting are trend analysis and competitive intelligence

FALSE

When evaluating alternatives in decision making, you must assess cost and quality and also ask the question, "Is it simple?

FALSE

When managers use information that is readily available from memory to make judgments, it is known as a confirmation bias

FALSE

When then-president of Chrysler Bob Lutz ordered the development of the Dodge Viper without supporting research but because it "just felt right," he was using the incremental model of decision making

FALSE

Management of a small company in an industry that is not very competitive should not engage in strategic planning because the small gains in performance may not be worth the effort

TRUE

Managers must be willing to make large, painful decisions to suddenly alter strategy

TRUE

Many good mission statements include descriptions of an organization's customers, as well as its major products or services

TRUE

Microsoft has been accused of adapting competitors' products after those firms spent the resources and took the risks to develop them. Companies with this strategy are known as analyzers by Miles and Snow

TRUE

Middle and supervisory managers may be a source of resistance in participatory management

TRUE

One problem with the incremental model is that temporary steps may actually impede a beneficial long-term solution

TRUE

Organizational culture can vary widely across organizations on dimensions of treatment of employees, teamwork, and risk taking

TRUE

Organizational culture can vary widely across organizations on dimensions of treatment of employees, teamwork, and risk taking.

TRUE

Organizational threats are the environmental factors that hinder an organization's ability to achieve a competitive advantage

TRUE

Organizations may turn to the strategic-management process after a crisis

TRUE

Pfizer Pharmaceuticals, with its culture that manages failure and disappointment, and of helping drug researchers live for the small victories in discovering new drugs for various diseases, is an example of an adhocracy.

TRUE

Planning and strategic management derive from an organization's mission and vision about itself

TRUE

Planning gives you expectations against which you can compare your performance

TRUE

Politics has provided evidence that appeals to emotion are more effective than appeals to logic in decision making

TRUE

Research shows that organizations with market cultures report higher profits and financial growth

TRUE

Research shows that organizations with market cultures report higher profits and financial growth.

TRUE

Risk propensity is the willingness to gamble or to undertake risk for the possibility of getting an increased payoff

TRUE

Roberto opened a new restaurant in Miami called Cuban Isle. He wanted to be sure a culture of service and excellence was embedded in his new organization so he posted the values of the organization in the kitchen and in the dining room. Roberto is teaching his organization the culture through this action

TRUE

SMART goals that are challenging yet can be met within the available scope of time, equipment, and financial support are known as attainable, the "A" in SMART

TRUE

SWOT analysis helps management to develop a realistic understanding of the organization in relation to internal and external environments

TRUE

Sandra did an Internet search for Jamaican hotels when she was setting up her vacation, but found over 7 million results, of which she could only handle looking at about two pages. Sandra is operating under conditions of bounded rationality

TRUE

Smaller-sized groups make higher-quality decisions

TRUE

Southwest Airlines' goal of making arrival times more reliable is a tactical goal

TRUE

Staff personnel have authority functions in that they provide advice, recommendations, and research to line managers

TRUE

Strategic goals focus on objectives for the organization as a whole

TRUE

Strategic planning determines goals for an organization for a period of 1-5 years

TRUE

Strategic positioning can be achieved by performing similar activities to rivals, but in different ways

TRUE

Strategy formulation is the process of choosing among different strategies and altering them to best fit the organization's needs

TRUE

Studies show that even severe life events have a negative impact on one's sense of well-being for no more than about three months

TRUE

The U.S. government space program is an example of a single-use plan

TRUE

The administrative part of the adaptive cycle focuses on establishing roles and organizational processes

TRUE

The career path that most resembles the traditional view of climbing the stairs in a corporate hierarchy is called the linear career

TRUE

The drawback of using the intuition model of decision making is that it can be difficult to convince others that your decision makes sense

TRUE

The final step in the rational decision-making process is to implement and evaluate the chosen solution

TRUE

The founder of McDonald's, Ray Kroc, intended that a Big Mac should taste the same anywhere, and accordingly, the company has many specific procedures, making it a mechanistic organization

TRUE

Eastman Kodak, though it actually invented the digital camera, was slow to move into the production of this product as well as digital printers. Its continued reliance untraditional 35mm film production and processing, which resulted in its bankruptcy, makes it a reactor accruing to Miles and Snow

TRUE

The incremental model is a nonrational model of decision making

TRUE

A sustainable competitive advantage is the ability of an organization to produce goods or services more effectively than its competitors and outperform them

TRUE

A vision has a clear sense of the future and the actions needed to get there

TRUE

Alaska Airline was profitable in 2011, prompting is to decide to remain a "smallish, specialized, regional airline in a world of global giants," which is an example of a stability strategy

TRUE

An adhocracy culture attempts to create innovative products by being adaptive, creative, and quick to respond to the environment

TRUE

An adhocracy culture attempts to create innovative products by being adaptive, creative, and quick to respond to the environment.

TRUE

The operating plan identifies clear targets such as revenues and cash flow

TRUE

An advantage in using centralized authority is that there is less duplication of work, because fewer employees perform the same task

TRUE

Experts may make irrational decisions because they are unable to see things from an outsider's perspective

TRUE

Facebook strives to be on the cutting edge of social media and is experiencing phenomenal growth. It encourages what it calls a "hacker" mindset, always looking to break down the old in favor of something better. Of Miles and Snow's basic strategy types, Facebook would be described as a prospector.

TRUE

For IKEA, whose vision is "to create a better life for the many," the inexpensive LACK side table would be considered a symbol

TRUE

For implementation of a chosen solution in decision making to be successful, you need to plan carefully and be sensitive to those affected

TRUE

Ford Motor Co. has what is known as a divisional structure because it has different divisions for passenger car dealers, large trucking customers, and farm products customers

TRUE

Forecasting is a strategic-planning tool used to make long-term strategy

TRUE

An advantage in using centralized authority is that there is less duplication of work, because fewer employees perform the same task.

TRUE

An investigation of companies with different organizational cultures showed that long-term financial performance was highest for those with an adaptive culture

TRUE

An investigation of companies with different organizational cultures showed that long-term financial performance was highest for those with an adaptive culture.

TRUE

An organization chart typically takes on a family-treelike pattern, with many boxes and lines showing official positions and reporting relationships

TRUE

An organization is said to be flat when there are only a few levels with wide spans of control.

TRUE

An organization should adopt strategic management and strategic planning to encourage new ideas

TRUE

An organization's basic assumptions are difficult to change

TRUE

An organization's basic assumptions are difficult to change.

TRUE

An organization's goals arranged in a hierarchy from low level to high level can be termed a means-end chain

TRUE

Analytics have been used in baseball and basketball to find undervalued players that could help teams that had limited resources to pay superstars

TRUE

Analyzing the underlying causes of a problem or an opportunity is called diagnosis

TRUE

As you are promoted to higher levels in an organization, you may have to actively resist isolation.

TRUE

At 3M the Gold Step award, a trophy for successful new products, is an example of a symbol.

TRUE

Because it is unrealistic for SMART goals to be accomplished overnight, they should have target dates

TRUE

Being "loss adverse" and hating to admit you're wrong can contribute to the escalation of commitment bias.

TRUE

Bombardier builds eight-passenger business jets from 12 separately sourced portions which can be put together in four days. This firm has a modular organizational structure

TRUE

Bombardier builds jets from 12 separately-sourced portions which can be put together in four days. This is an example of a modular organizational structure

TRUE

Brainstorming is a technique used to help groups generate multiple ideas and alternatives for solving problems.

TRUE

Burberry makes outerwear, accessories like umbrellas, and children's clothing, which is called a related diversification strategy.

TRUE

By definition, an organization can be composed of as few as two people

TRUE

Capital One uses predictive modeling by conducting experiments to evaluate which customers will sign up for credit cards and pay back their debt

TRUE

Cash cows in the BCG matrix have slow growth but high market share

TRUE

Companies that must respond to fast-changing customer tastes often favor an organic structure to a mechanistic one.

TRUE

Confidential matters and issues involving discipline cannot be effectively delegated

TRUE

Confidential matters and issues involving discipline cannot be effectively delegated.

TRUE

Consensus occurs when group members are able to express their opinions and reach agreement to support the final decision

TRUE

Contingency planning can also be called scenario analysis

TRUE

Culture exists on visible and unobservable levels.

TRUE

Danilo opened a new restaurant in Phoenix called El Barrancón. He wanted to be sure a culture of service and excellence was embedded in his new organization so he posted the values of the organization in the kitchen and in the dining room. Danilo is teaching his organization the culture through this action

TRUE

Groups make better decisions than most individuals acting alone

TRUE

Deadlines can help one concentrate the mind, in order to make decisions rather than put them off

TRUE

Decisions that are predictable, following a well-defined set of procedures, are typical of operational planning

TRUE

Determining an organization's mission is the responsibility of top management and the board of directors

TRUE

Harvard Business School professor Michael Porter is a leading authority on competitive strategy

TRUE

Heuristics are strategies that simplify the process of making decisions

TRUE

Hierarchy of authority is also referred to as the chain of command

TRUE

Hierarchy of authority is also referred to as the chain of command.

TRUE

If a chosen alternative is implemented and it does not appear to be working, you may need to give it more time

TRUE

The process of fitting the organization to its environment is called contingency design.

TRUE

The purpose of MBO is to motivate subordinates

TRUE

The reporting relationships on an organizational chart are known as the vertical hierarchy of authority.

TRUE

The strategic-management process has five steps and a feedback loop

TRUE

A recent study says that the world's information is doubling every seven years

FALSE

Identify the four general decision making styles. Explain the two primary characteristics which define each.

1. Directive: People with a directive style have a low tolerance for ambiguity and are oriented toward task and technical concerns in making decisions. 2. Analytical: People with an analytical style have a high tolerance for ambiguity and are oriented toward task and technical concerns in making decisions. 3. Conceptual: People with a conceptual style have a high tolerance for ambiguity and are oriented toward people and social concerns in making decisions. 4. Behavioral: People with a behavioral style have a low tolerance for ambiguity and are oriented toward people and social concerns in making decisions.

Explain the three core processes of business and how they relate to execution

A company's overall ability to execute is a function of effectively executing in terms of its people processes, strategic processes, and operational processes. People process: An effective leader tries to evaluate talent by linking people to particular strategic milestones, developing future leaders, dealing with nonperformers, and transforming the mission and operations of the human resource department. Strategic processes: A good strategic plan addresses nine questions. In considering whether the organization can execute the strategy, a leader must take a realistic and critical view of its capabilities and competencies. Operations processes: The strategy process defines where an organization wants to go, and the people process defines who's going to get it done. Operations or the operating plan provides the path for people to follow. The operating plan should address all the major activities in which the company will engage and then define short-term objectives for these activities, to provide targets for people at which to aim.

Which of the following cultural perspectives leads to the highest long-term financial performance? A. Adaptive perspective B. Fit perspective C. Market perspective D. Conditional perspective E. Strength perspective

A. Adaptive perspective

Which of the following is a stage in the life of an organization? A. Birth B. Decline C. Elderly D. Introduction E. Growth

A. Birth

Katsuro started a tax consulting business with his friend Carey. They have a small space in a strip mall and one administrative assistant. At which stage of the organizational life cycle is their business? A. Birth stage B. Introduction stage C. Adolescent stage D. Youth stage E. Midlife stage

A. Birth stage

Which of the following is not a stage in the strategic-management process? A. Conduct a trend analysis. B. Maintain strategic control. C. Establish the grand strategy. D. Establish the mission and vision. E. Carry out the strategic plans.

A. Conduct a trend analysis.

______ help you ignore extraneous matters in favor of focusing on what's important, which is realizing the goals on time and on budget. A. Deadlines B. Relationships C. Changes D. Networks E. Options

A. Deadlines

Which of the following is an assumption upon which the rational model of decision making rests? A. Decision makers can logically evaluate the alternatives. B. Consequences of any actions cannot be known. C. Decision makers typically have emotional blind spots. D. A decision maker will choose the option that is most ethical. E. Decision makers are unable to process all of the available information.

A. Decision makers can logically evaluate the alternatives.

______ values are the explicitly stated values and norms preferred by an organization. A. Espoused B. Inherent C. Enacted D. Expressed E. Internalized

A. Espoused

Which of the following carmakers pursues a focused-differentiation strategy? A. Ferrari B. Ford C. Volkswagen D. Honda E. Kia

A. Ferrari

Which of the following is NOT a rule for brainstorming suggested by IDEO? A. Go for quality over quantity. B. Defer judgment. C. Stay focused on the topic. D. Encourage wild ideas. E. Be visual.

A. Go for quality over quantity.

Because Greg and Karen were having an argument about the order of their respective projects on the website, they were unable to work with the rest of the management team to come up with a staffing schedule. This is an example of what potential problem that occurs in groups? A. Goal displacement B. Satisficing C. Groupthink D. Heuristics E. Availability bias

A. Goal displacement

Which of the following is not a question that Bossidy and Charan believe a strong strategic plan must address? A. How will deviations from the plan be handled? B. What is the assessment of the external environment? C. What are the critical issues facing the business? D. Can the business execute the strategy? E. Are the short term and long term balanced?

A. How will deviations from the plan be handled?

Diagnosis is used in which stage of the rational decision-making model? A. Identify the problem or opportunity B. Think up alternative solutions C. Evaluate alternatives D. Select a solution E. Implement a solution

A. Identify the problem or opportunity

Jenna manages a retail store and she has been noticing long lines at checkout lately. She is unsure about increasing staffing levels right now, so she chooses to reconfigure the physical orientation of the checkout space to alleviate the problem for the time being. Jenna is using the ________ model. A. Incremental B. coalition C. rational D. predictive E. intuition

A. Incremental

Many investment advisors attribute their successful outcomes to skill, even when it is more likely luck, which is an example of which bias? A. Overconfidence. B. Escalation of commitment bias. C. Hindsight. D. Availability. E. Framing.

A. Overconfidence.

Which of the following is an implementation principle for evidence-based management described by Pfeffer and Sutton? A. See yourself as outsiders do. B. If all else fails, speed the spread of good practices. C. Reserve evidence-based management for top executives. D. Treat your organization as a trophy. E. Understand what happens when people succeed.

A. See yourself as outsiders do

Faisal has been running a commercial real estate business for nearly 30 years. As he approaches retirement, he is content to simply lease the commercial space he currently has, rather than make new deals to develop additional properties. Faisal is using which grand strategy? A. Stability B. Retrenchment C. Inducement D. Defensive E. Growth

A. Stability

Which of the following is not an area in which a company needs to get and stay ahead in order to sustain a competitive advantage? A. Talented employees B. Quality C. Effectiveness D. Being responsive to customers E. Innovating

A. Talented employees

Which of the following is an example of a nonprofit organization? A. The Humane Society B. American Medical Association C. The Democratic party D. State Farm Insurance E. Teamsters Union

A. The Humane Society

Which of the following can be classified as a mutual-benefit organization? A. Trade association B. Hospital C. Financial company D. Retail company E. College

A. Trade association

Which of the following is characteristic of companies that use analytics? A. Use of predictive modeling B. Having a single, focused application for its use C. Information overload D. Use of competitive intelligence E. Making decisions intuitively

A. Use of predictive modeling

Charlie has a reputation for being slow to reach a final decision but being able to decide a reasoned course of action regardless of the uncertainty. He is very thorough in collecting information and evaluating more alternatives than other managers are. Charlie is most likely ______ in his decision-making style. A. analytical B. Behavioral C. Conceptual D. directive E. relaxed

A. analytical

Managers at Thomas Canyon Credit Union have given employees raises year after year based on what they had given the year before, even though now their employees were quite underpaid compared to similar positions with other credit unions. This is an example of a(n) A. anchoring and adjustment bias. B. escalation of commitment bias. C. sunk-cost bias. D. availability bias. E. representativeness bias.

A. anchoring and adjustment bias.

The stores of data so vast that conventional database management systems cannot handle them and which instead require very sophisticated analysis software and supercomputing-level hardware are known as A. big data. B. heuristics. C. information escalation. D. incremental diagnostics. E. boundless resources.

A. big data.

Turnbull Software is a medium-sized but growing company that works diligently to create a supportive and familylike atmosphere for its employees. It provides superior benefits and involves employees in decisions large and small. Turnbull has a(n) ______ culture. A. clan B. adhocracy C. market D. hierarchy E. espoused

A. clan

Creation of alternative hypothetical but equally likely future conditions is called A. contingency planning. B. trend analysis. C. balancing the scorecard. D. strategy formulation. E. forecasting.

A. contingency planning.

An organization is developing a low-cost line of environmentally friendly cleaning products that it intends to distribute internationally. Here, the organization is following a ______ strategy. A. cost leadership B. differentiation C. cost focus D. retrenchment E. focused-differentiation

A. cost leadership

Timex Group USA makes inexpensive but reliable watches sold throughout the United States and is an example of an organization pursuing a _________ strategy. A. cost-leadership B. differentiation C. cost-focus D. focused-differentiation E. retrenchment

A. cost-leadership

A graph of decisions and their possible consequences is known as a(n) A. decision tree. B. Gantt chart. C. results chart. D. outcome matrix. E. fishbone diagram.

A. decision tree.

A company that is an expert at producing and selling narrowly defined products or services, and which does not tend to seek opportunities outside its present market is known by Miles and Snow as a(n) A. defender. B. analyzer. C. adaptor. D. prospector. E. reactor.

A. defender

Organizational ________ is concerned with devising the optimal structures of accountability and responsibility that an organization uses to execute its strategies. A. design B. structure C. life cycle D. charting E. culture

A. design

When analyzing the "O" in SWOT analysis, a manager might take note of A. favorable government regulations. B. absenteeism among employees. C. good morale among workers. D. high service levels. E. good financial position.

A. favorable government regulations.

Among the jobs titles at Greensboro Regional Hospital are Chief of Medical Services, Director of Administrative Services, and Director of Outpatient Services. Greensboro has a ______ structure. A. functional B. network C. simple D. divisional E. matrix

A. functional

Amanda was asked by her boss to create a handbook for new hires because several employees had recently complained, saying they felt lost when they first started because procedures didn't seem to be formalized. Amanda herself had not felt that way, perhaps because she has a A. high tolerance for ambiguity. B. value orientation focused on people. C. conceptual decision style. D. high propensity for risk. E. low value orientation.

A. high tolerance for ambiguity.

With a ______ structure, the organization has a central core of key functions and outsources others to vendors who can do them cheaper or faster. A. hollow B. matrix C. spine D. hybrid E. mechanistic

A. hollow

Milo owns and manages a small bike repair store. In order to determine if strategic planning will be likely to help his business, Milo should primarily assess A. how many competitors he has. B. foot traffic by his location. C. his profitability in the prior six months. D. industry trends. E. how much he intends to grow in the next five years.

A. how many competitors he has.

If you do not have all of the information for a complete plan, you should A. make decisions based on what you have, since perfect information is rare. B. wait until you can get that information to take action you know will be appropriate. C. implement two or more courses of action simultaneously. D. shrink the plan to limit its scope to only areas where you have good information. E. disregard the plan and go with your intuition.

A. make decisions based on what you have, since perfect information is rare.

An organization that contains two command structures, and in which some people actually report to two bosses, is a ______ structure. A. matrix B. bifunctional C. team-based D. hybrid E. network

A. matrix

Which of the following comes LAST when an organization makes a plan? A. operational planning B. mission statement C. strategic planning D. tactical planning E. vision statement

A. operational planning

The skills and capabilities that give the organization advantages in executing strategies in pursuit of its mission are known as A. organizational strengths. B. organizational opportunities. C. organizational threats. D. organizational weaknesses. E. competitive strategies.

A. organizational strengths.

One type of standing plan, the __________, outlines the general response to a designated problem or situation. A. policy B. project C. rule D. procedure E. program

A. policy

After setting goals, managers should next A. prepare an action plan for accomplishing the goals. B. propose changes to the goals of same-level managers to bring all into alignment. C. supervise subrdinates closely. D. report failure to meet goals to superiors. E. begin the planning process anew.

A. prepare an action plan for accomplishing the goals.

A single-use plan encompassing a range of projects or activities is a(n) A. program. B. strategy. C. series. D. agenda. E. mission.

A. program.

When a manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk, it is called A. relaxed change. B. defensive avoidance. C. postponed action. D. relaxed avoidance. E. delayed decision.

A. relaxed change.

The obligation you have to perform the tasks assigned to you is called A. responsibility. B. accountability. C. delegation. D. authority.

A. responsibility.

A grand strategy that involves reduction in the organization's efforts is the ______ strategy. A. retrenchment B. reorganization C. downsizing D. growth E. stability

A. retrenchment

Montpellier Mediterranean Designs has decided that, as part of the fashion industry, it should move to a more organic structure. Montpellier should A. simplify and eliminate rules and procedures. B. centralize authority. C. clearly define job responsibilities. D. disband teams and task forces. E. focus on improving uniformity.

A. simplify and eliminate rules and procedures.

Apple's iPad has a very high percentage of the market for tablet computers, and this is also a quickly growing market. Thus, using the BCG matrix, the iPad would be classified as a A. star. B. cloud. C. question mark. D. cash cow. E. dog.

A. star.

If you are happiest being a "hands-on" professional rather than becoming a manager, you may prefer a(n) ______ career. A. steady-state B. portfolio C. spiral D. inclining E. linear

A. steady-state

The process of choosing among different strategies and altering them to best fit the organization is called A. strategy formulation. B. contingency planning. C. strategic control. D. strategy implementation. E. trend analysis.

A. strategy formulation.

An analytical decision-making style reflects a person who is ______ in his value orientation and ______ in his tolerance for ambiguity. A. task/technical; high B. task/technical; low C. people/social; high D. people/social; low E. managerial; low

A. task/technical; high

Productivity gains from MBO are higher when an organization has A. top-management commitment. B. few budget problems. C. team rather than individual performance reviews. D. union support. E. nonmanagerial employee support.

A. top-management commitment.

Public relations firm Crowley Communications has a single full-time employee, Jolene Crowley, who is in charge of contracting teams to work on projects as needed. Teams are spread throughout the United States and are made up of specialists linked by computers and telecommunications equipment. This is an example of a(n) ________ organization. A. virtual B. network C. outsourced D. modular E. hollow

A. virtual

Avon, the world's leading direct seller of beauty products, has a(n) ________ statement, which is "to be the company that best understands and satisfies the product, service, and self-fulfillment needs of women globally." A. vision B. intention C. goal D. mission E. rationale

A. vision

Define the four types of organization in the competing values framework, and describe the characteristics of each.

According to the competing values framework, organizational cultures can be classified into four types: (1) clan, (2) adhocracy, (3) market, and (4) hierarchy (see Figure 8.2). A clan culture has an internal focus and values flexibility rather than stability and control. Like a family-type organization, it encourages collaboration among employees, striving to encourage cohesion through consensus and job satisfaction through employee involvement. An adhocracy culture has an external focus and values flexibility. This type of culture attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace. Employees are encouraged to take risks and experiment with new ways of getting things done. A market culture has a strong external focus and values stability and control. Because market cultures are focused on the external environment and driven by competition and a strong desire to deliver results, customers, productivity, and profits take precedence over employee development and satisfaction. A hierarchy culture has an internal focus and values stability and control over flexibility. Companies with this kind of culture are apt to have a formalized, structured work environment aimed at achieving effectiveness through a variety of control mechanisms that measure efficiency, timeliness, and reliability in the creation and delivery of products.

Describe the typical organization chart. What is a horizontal relationship compared to a vertical one? A solid line versus a dotted one?

An organization chart is a box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specializations (see Figure 8.4). Two kinds of information that organization charts reveal about organizational structure are (1) the vertical hierarchy of authority—who reports to whom, and (2) the horizontal specialization—who specializes in what work. Line positions (authority to make decisions) are indicated on the organization chart by a solid line (usually a vertical line). Staff positions (authority functions that provide advice, recommendations, and research) are indicated on the organization chart by a dotted line (usually a horizontal line).

Which of the following is NOT a recommended option when you discover that an action is not working after a decision? A. Give the chosen solution more time. B. Abandon the solution in favor of the status quo. C. Try another alternative. D. Go back to the beginning of the decision-making process. E. Change the chosen solution slightly.

B. Abandon the solution in favor of the status quo.

__________ means that managers must report and justify work results to managers above them. A. Liability B. Accountability C. Delegation D. Hierarchical control E. Position power

B. Accountability

Which of the following is not one of the mechanisms used to embed culture into an organization? A. Slogans or sayings. B. Accounting practices. C. Leader reactions to crisis. D. Titles or bonuses. E. Organizational structure.

B. Accounting practices.

Which of the following is an example of an observable artifact of organizational culture? A. Mission statements B. Awards ceremonies C. Basic assumptions D. Codes of ethics E. Core beliefs

B. Awards ceremonies

Which of the following is a characteristic of a simple structure? A. Comprehensive set of rules. B. Centralized authority. C. High work specialization. D. Extensive division of labor. E. Tall hierarchy.

B. Centralized authority.

Jordan, a sales manager, met with his staff to discuss that they were only a third of the way to their sales goal, but halfway through the sales period. He was looking for suggestions to improve second-half performance. Which part of the planning/control cycle is Jordan doing? A. Benchmarking against competitors. B. Controlling the direction. C. Making the plan. D. Carrying out the plan. E. Updating the plan.

B. Controlling the direction.

Which of the following is an advantage of group decision making? A. Groupthink B. Deeper commitment to the decision C. Less thought required D. A quicker decision E. More flexibility in the final decision

B. Deeper commitment to the decision

Which of the following is a factor that helps participative management work? A. Top management is occasionally involved. B. Employees trust managers. C. PM is implemented without interference from TQM. D. Employees work in interdependent jobs. E. Employees need more training.

B. Employees trust managers.

The "HP Way" at Hewlett-Packard fostered a culture of integrity, teamwork, and innovation that complemented the high-technology industry of the time. This is an example of which perspective? A. Strength perspective B. Fit perspective C. Match perspective D. Conditional perspective E. Adaptive perspective

B. Fit perspective

Which of the following is a step in the rational decision-making model? A. Seek consensus among leadership. B. Identify the problem or opportunity. C. Improve the chosen solution. D. Test solutions on a small scale. E. Implement a holding pattern.

B. Identify the problem or opportunity.

Which of the following is not a typical cause of bad planning? A. Information overload. B. Inadequate planning budgets. C. Ineffective group dynamics. D. Poor assessment of an organization's capabilities. E. Faulty assumptions about the future.

B. Inadequate planning budgets.

Which of the following steps of the strategic-management process is the source of its feedback loop? A. Carry out the strategic plan. B. Maintain strategic control. C. Establish the grand strategy. D. Establish the mission and vision. E. Formulate the strategic plans.

B. Maintain strategic control.

MBO stands for A. Management by Observation. B. Management by Objectives. C. Management by Ownership. D. Management by Obligation. E. Management by Organization.

B. Management by Objectives.

Xerox Corporation is currently in what stage of its organizational life cycle? A. Decline stage B. Maturity stage C. Adolescent stage D. Youth stage E. Adult stage

B. Maturity stage

Research on the effects of participative management (PM) on employees' performance and satisfaction indicates that A. PM has no effect on either. B. PM has a small positive effect on both. C. PM has a large effect on satisfaction, but a small effect on performance. D. PM has a large positive effect on both. E. PM has a large effect on performance, but no significant effect on satisfaction.

B. PM has a small positive effect on both.

According to Bossidy and Charan, which business process is most important for effective execution? A. Strategy B. People C. Alignment D. Operations E. Research

B. People

Which of the following is a type of objective for MBO? A. Profitability B. Personal development C. Market share D. Social responsibility E. Ethics

B. Personal development

A situational analysis is also known as A. strategic control. B. SWOT analysis. C. trend analysis. D. contingency planning. E. forecasting.

B. SWOT analysis.

______ consists of monitoring the execution of strategy and making adjustments, if necessary. A. Mission translation B. Strategic control C. Strategy implementation D. Contingency planning E. SWOT analysis

B. Strategic control

__________ refers to the idea that the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately. A. Structural benefit B. Synergy C. Selective function D. Alignment E. Consolidation

B. Synergy

________ goals are set by and for middle managers and focus on the actions needed to achieve ________ goals. A. Strategic; operational B. Tactical; strategic C. Strategic; tactical D. Tactical; operational E. Operational; tactical

B. Tactical; strategic

According to productivity expert Odette Pollar, which of the following should a manager delegate? A. Emergencies. B. Tasks that challenge subordinates. C. Special tasks your boss has asked you to do. D. Personnel matters. E. Confidential matters.

B. Tasks that challenge subordinates.

Which of the following is an example of a mutual-benefit organization? A. Federal Bureau of Investigation B. United Steelworkers of America union C. University of California at Berkeley D. U.S. Postal Service E. Public Broadcasting System

B. United Steelworkers of America union

When analyzing the "T" in SWOT analysis, a manager might take note of A. the firm's cash flow problems. B. a competitor's new product. C. employee absenteeism. D. strong corporate culture. E. high service levels.

B. a competitor's new product.

Nicole and other managers in her firm have some ties to Europe and are investigating opportunities for global expansion. They are struggling to understand the risks, given the complexity of world markets today and recent global instabilities. The difficulty Nicole's team is facing prevents perfectly rational decision making, and is an example of A. risk aversion. B. bounded rationality. C. groupthink. D. defensive avoidance. E. anchoring and adjustment.

B. bounded rationality.

Rashid has examined the environment in which his organization operates and has determined that currently the market demands an organic and integrated structure. Rashid did this as part of his A. environmental analysis. B. contingency design. C. life-cycle analysis. D. diversification plan. E. integration plan.

B. contingency design.

Technical specialization and division of labor in an organization lead to ________ in an organization. A. bureaucracy B. differentiation C. integration D. conglomeration E. decentralization

B. differentiation

An organization that is offering unique, superior products or services to a wide market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. diversification. E. focused differentiation.

B. differentiation.

The arrangement of having discrete parts of a task done by different people is called an organization's A. coordinated effort. B. division of labor. C. span of control. D. chain of command. E. matrix structure.

B. division of labor.

The benefit of the single-product strategy for a company is A. synergy. B. focus. C. isolated systems. D. differentiation. E. lower costs.

B. focus.

A vision or projection of the future is called a(n) A. trend. B. forecast. C. contingency. D. strategy. E. opportunity.

B. forecast.

Computer technology corporation Dell recently acquired Quest software, an IT management software provider, in order to expand upon its software expertise and offerings. Dell is pursuing a(n) ______ strategy. A. escalation B. growth C. stability D. merger E. defensive

B. growth

Casey has a simple rule that he follows when it comes to new hiring; if four or more of his staff are working 20% or more overtime, he hires another employee. Casey is using A. relaxed change. B. heuristics. C. the Delphi technique. D. rational models. E. brainwriting.

B. heuristics.

The ______ a group is, the ______ the quality of the decision. A. more diverse; lower B. larger; lower C. more confident; higher D. more knowledgeable; lower E. more creative, lower

B. larger; lower

The goal to "improve the quality of customer service by instituting follow-up telephone calls this month" is not a SMART goal because it is A. unlikely to align with higher level goals. B. not measurable. C. too simplistic. D. not results oriented. E. unlikely to result in improvement to customer service.

B. not measurable.

Portia is meeting with her subordinates to determine which workers from her department need training in order to handle production increases expected during the next nine months. Portia is involved in A. vision development. B. operational planning. C. controlling. D. tactical planning. E. developing an MBO.

B. operational planning.

Environmental factors that the organization may exploit for a competitive advantage are known as A. organizational strengths. B. organizational opportunities. C. organizational threats. D. organizational weaknesses. E. competitive strategies.

B. organizational opportunities.

The constant feedback loop of the ______ is designed to ensure plans stay headed in the right direction. A. means-end chain B. planning/control cycle C. control system D. project management method E. project planning sequence

B. planning/control cycle

In the current broadband environment, consumers are able to download products like music, movies, and books. Netflix was aggressive in taking advantage of this fact, offering web streaming and game console access to its customers before competitors. According to Miles and Snow, Netflix would be a(n) A. reactor. B. prospector. C. analyzer. D. defender. E. executor.

B. prospector.

When a manager decides to take no action in the belief that there will be no great negative consequences, she is engaged in A. limited reaction. B. relaxed avoidance. C. relaxed change. D. decreased involvement. E. defensive avoidance.

B. relaxed avoidance.

Management instituted a new ______ in Yichao's workplace that "employees who are more than 15 minutes late to work without calling a supervisor will be given a written warning." A. policy B. rule C. procedure D. project E. program

B. rule

The tendency of a group to settle on a decision that is "good enough" is called A. goal displacement. B. satisficing. C. groupthink. D. heuristics. E. pseudo-optimization.

B. satisficing.

A SMART goal is one that is A. specific, maintainable, affordable, realistic, and timely. B. specific, measurable, attainable, results-oriented, and has target dates. C. specific, maintainable, achievement-oriented, in real time, and timely. D. specific, measurable, affordable, realistic, and has target dates. E. specific, maintainable, aligned with other goals, realistic, and timely.

B. specific, measurable, attainable, results-oriented, and has target dates.

Southwest Airlines employees all know about when CEO Herb Kelleher visited one of the airline's hangars in the middle of the night in a dress with a purple boa—just to liven things up. In fact, this is part of Southwest's history. This is an example of using a ________ to impart organizational culture. A. myth B. story C. ritual D. rite E. value

B. story

Because of the frequency with which world competition and information technology alter marketplace conditions, a company's ________ may have to be done closer to every 1 or 2 years than every 5. A. management planning B. strategic planning C. tactical planning D. operational planning E. implementation planning

B. strategic planning

Alita is participating with other division heads in a discussion about new international competition for the firm and what the organization's goals should be for the next three years. She is participating in A. tactical planning. B. strategic planning. C. operational planning. D. controlling. E. writing a mission statement.

B. strategic planning.

One of the typical devices for transmitting culture, a(n) ______ is an object, act, quality, or event that conveys meaning to others. A. icon B. symbol C. sign D. representation E. ritual

B. symbol

Anders has assembled a task force that is composed of people who don't know each other well. He should expect this group to make better decisions if A. it is a large group. B. the members have common knowledge. C. the group is very confident. D. time pressure is high. E. individuals have unique, specialized knowledge.

B. the members have common knowledge.

Amanda has just determined that her employees will require extensive training if they are to acquire the necessary technological expertise to produce a new product line. She has discovered one of her firm's A. strengths. B. weaknesses. C. opportunities. D. threats. E. market challenges.

B. weaknesses.

A small firm is likely to benefit significantly from strategic planning A. regardless of the nature of its industry or market. B. when it is in a very competitive industry. C. when it is in a very new industry. D. when it is in a very stable industry. E. when it has a very small market.

B. when it is in a very competitive industry.

Which of the following is not a description of organizational culture? A. A system of shared beliefs and values. B. "Social glue" binding members together. C. A system of reporting relationships. D. An organization's personality. E. A system that guides the behavior of organizational members.

C. A system of reporting relationships.

An example of a firm that pursues a differentiation strategy is A. Cartier. B. Lexus. C. Bic. D. A regional discount gas station chain. E. Home Depot.

C. Bic.

Which of the following statements about strategic planning and strategic management is true? A. Strategic planning is rarely used in the current environment of fast change because it does not allow for flexibility. B. Strategic management is a process completed by top managers. C. Both should be implemented because they can provide direction and momentum. D. Middle managers need not understand strategies; they simply follow them. E. Strategic planning is used to accomplish tactical goals.

C. Both should be implemented because they can provide direction and momentum.

Consumers can use a national company called Service Magic to receive bids from quality providers of a variety of services, including home remodel, landscaping, plumbing, and housecleaning. Service Magic charges service providers for the leads it provides to them monthly. Which of the following is the source of Service Magic's strategic position? A. Low-profit margin and many customers. B. Broad needs and few customers. C. Broad needs and many customers. D. High-profit margin and many customers. E. High-profit margin and few customers.

C. Broad needs and many customers.

Karl is very creative and prefers to look at the long-term issues when making a decision. He considers a wide variety of possible actions based on an open mind about the possibilities. Sometimes his coworkers find him indecisive because of these tendencies. Karl is probably ______ in his decision-making style. A. analytical B. Behavioral C. Conceptual D. directive E. relaxed

C. Conceptual

A fine luggage maker was struggling with heavy debt and a sharp decline in customers, and it eventually declared bankruptcy. The company followed which grand strategy? A. Growth B. Stability C. Defensive D. Reduction E. Reactive

C. Defensive

Which of the following best represents a currently popular strategy among big companies like Apple, Google, and Amazon? A. Become involved in the community. B. Seek niches where there is less competition. C. Get consumers tightly connected to the company's ecosystem. D. Offer personal or emotional connections to customers. E. Discourage price comparisons.

C. Get consumers tightly connected to the company's ecosystem.

Which of the following is a consequence of decentralized authority? A. Greater uniformity B. Decreased efficiency C. Greater flexibility D. Slower decisions E. Decreased duplication of work

C. Greater flexibility

High Peaks Skate and Snowboard is a small shop that provides equipment for Utah snowboarders in winter months. It has decided to increase advertising during this period in the Salt Lake Tribune and the Park Record in Park City, as well as to sponsor a new on-mountain competition. It is following which strategy? A. Inducement B. Defensive C. Growth D. Stability E. Enhancement

C. Growth

Elizabeth works with the gaming production team at her job, so the leader of that group often assigns her work, but she also has a boss in the marketing department. Which of the following is most likely true? A. There is likely to be a lack of common purpose among her managers. B. Her workplace has too much division of labor. C. Her work arrangement violates the unity of command principle. D. Because of her cross-functional team, her work can be done without coordinated effort. E. Her production team leader has too wide a span of control.

C. Her work arrangement violates the unity of command principle.

Kristi has been struggling with her weight, and one of her coworkers suggested that she make a SMART goal for herself. Which of the following is the best example of a SMART goal for Kristi? A. I want to lose a lot of weight. B. I want to look better in a swimsuit. C. I want to lose 20 pounds over the course of one calendar year. D. I want to start losing weight soon. E. I want to lose 30% of my body mass by next month.

C. I want to lose 20 pounds over the course of one calendar year.

Which of the following would best describe MBO? A. It works at the highest levels of an organization. B. It works at the lowest levels of an organization. C. Its purpose is to motivate employees. D. Its purpose is to control employees. E. It effectively benchmarks HR practices against competitors.

C. Its purpose is to motivate employees.

Which of the following statements is good advice for those transitioning upward in an organization? A. Don't try to manage upward or sideways. B. Invent your own kind of management style. C. Maintain good relationships with other departments. D. Enjoy the solitude of upper management positions. E. Focus on the rights and privileges of your new job.

C. Maintain good relationships with other departments.

At which stage of the organizational life cycles does lack of flexibility and innovation become the danger to the business? A. Adult stage B. Birth stage C. Maturity stage D. Adolescent stage E. Youth stage

C. Maturity stage

Which level of management is most often engaged in tactical planning? A. Working-level employees B. First-line managers C. Middle managers D. Top managers E. Consultants

C. Middle managers

Which of the following characteristics of groups may lead to groupthink? A. Too little information available to the group B. Errors in the information available to the group C. Overconfidence D. Disagreements among the members E. Diversity in the group \

C. Overconfidence

Which of the following is one of the organizational responses organizations make when confronted with uncertainty, as identified by Miles and Snow? A. Aggressor B. Investigator C. Reactor D. Planner E. Leader

C. Reactor

Which of the following responses to a challenge would be considered most like satisficing? A. Panic B. Relaxed avoidance C. Relaxed change D. Decreased involvement E. Defensive avoidance

C. Relaxed change

The concept of "bounded rationality" is most closely related to the _________ model of decision making. A. classical B. rational C. Satisficing D. Incremental E. intuition

C. Satisficing

Which of the following is not a device through which culture is typically transmitted to employees? A. Symbols B. Stories C. Strategic plan D. Heroes E. Rites and rituals

C. Strategic plan

Which of the following is NOT a reason why it is hard to bring the best evidence to bear on your decisions? A. Stories are more persuasive than evidence. B. People are trying to mislead you. C. The evidence leads to an unethical solution. D. The evidence doesn't quite apply. E. There's too much evidence.

C. The evidence leads to an unethical solution.

Which of the following is true about women investors? A. They tend to trade more often than men. B. They do less research before investing than men. C. Their portfolios have a higher average gain than men's. D. They are increasingly being drawn to careers in finance. E. They tend to chase "hot tips."

C. Their portfolios have a higher average gain than men's.

Rafaela is interested in learning more about what one of her competitors is doing so that she can anticipate its upcoming moves and react quickly. Which of the following would you suggest to her for this purpose? A. Go through the competitor's trash on its property. B. Pose as an applicant for a job with the competitor. C. Use investor information. D. Call the competitor, explain who you are, and ask directly. E. Pay the competitor's customers for information.

C. Use investor information.

Which of the following is the way culture becomes embedded in an organization? A. Writing a strategic plan. B. Performing competitive analysis. C. Using a teaching process. D. Conducting formal market research. E. Following legal requirements.

C. Using a teaching process.

Which of the following statements about biased decision making is true? A. Hindsight helps you correctly assess what you should have known beforehand. B. When you are making a decision and you have considerable experience in that area, you are then most likely to be overconfident. C. When confronted with a choice, people with strong prior beliefs tend to make their decisions based on their beliefs even if their beliefs are false. D. Sometimes a single event can allow you to determine the trend. E. You could confidently make a decision about something by asking 20 of your friends and deciding based on their preferences.

C. When confronted with a choice, people with strong prior beliefs tend to make their decisions based on their beliefs even if their beliefs are false.

In what stage of the organizational life cycle does a firm increase its hiring, create some division of labor, and begin setting rules? A. Midlife B. Maturity C. Youth D. Growth E. Birth

C. Youth

Cara was enthusiastic about the new decision technique being used at her office. Everyone gathered in a room with their computers and typed responses anonymously. These appeared on the screen in the front of the room. Cara felt comfortable participating fully even though she was new to the company, and by the great number of comments, it seemed that everyone else did, too. Cara participated in A. the Delphi technique. B. collaborative management. C. a group-driven computer-aided system. D. a chauffeur-driven computer aided system. E. brainstorming.

C. a group-driven computer-aided system.

Digital Globe is a technology company that provides advanced, high-resolution satellite pictures of the earth, digitalized for electronic use. As the military, governments, and others demand clear pictures, Digital Globe provides them immediately with its innovative and responsive products. Digital Globe is most likely an example of a(n) ______ culture. A. inventive B. clan C. adhocracy D. market E. hierarchy

C. adhocracy

A company producing cameras and video cameras prefers to focus its resources on a fast imitation program to reverse-engineer new features from competitors and add those, rather than implementing truly inventive features. Miles and Snow would call this company a(n) A. reactor. B. prospector. C. analyzer. D. defender. E. imitator.

C. analyzer.

Savannah is a warm and likeable manager who is extremely supportive of her employees, but she sometimes doesn't say no when she needs to and is somewhat passive in enforcing her decisions. Her decision-making style is most likely A. analytical. B. heuristic. C. behavioral. D. conceptual. E. directive.

C. behavioral.

At Caldwell Organic Grocers, all purchasing, hiring, and production decisions are made by top management. Caldwell has ______ authority. A. classical B. wide C. centralized D. for-profit E. matrix

C. centralized

In terms of difficulty, the best goals are A. just beyond what is achievable, to maximize motivation. B. easy to attain, so failure will not hurt morale. C. challenging but realistic. D. impossible to really reach, because they are meant only to be idealistic and inspirational. E. easy or hard, since both work equally well.

C. challenging but realistic.

An organization that keeps costs and prices low in targeting a narrow market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. stability. E. focused differentiation.

C. cost focus.

Porter's competitive strategies include A. prospector, defender, analyzer, and reactor. B. growth, stability, and retrenchment. C. cost leadership, differentiation, cost focus, and focused differentiation. D. strengths, weaknesses, opportunities, and threats. E. stars, questions marks, cash cows, and dogs.

C. cost leadership, differentiation, cost focus, and focused differentiation.

After film manufacturer Kodak failed to reinvent itself and declared bankruptcy in 2012, it decided to focus on its business of making inkjet printers as part of a ______ strategy. A. growth B. stability C. defensive D. reorganization E. reactor

C. defensive

Erik has been putting off a decision about firing several workers who have been ignoring safety regulations on the factory floor. After all, he thinks, his boss will eventually notice and take action. Erik is experiencing a(n) ______ reaction. A. relaxed change B. relaxed avoidance C. defensive avoidance D. unresponsive E. delayed change

C. defensive avoidance

The process of assigning meaningful authority and responsibility to managers and employees lower in the hierarchy is called A. designation. B. accountability. C. delegation. D. execution. E. allocation.

C. delegation.

Time Warner runs different divisions specializing in television, music, and publishing. Time Warner is using a(n) ______ strategy. A. stability B. defensive C. diversification D. differentiation E. infiltration

C. diversification

A recent survey found that the top concern among CEOs worldwide is A. profit growth. B. customer loyalty. C. excellence in execution. D. stimulating innovation. E. finding qualified employees.

C. excellence in execution.

Among the organizational cultures thought to enhance business performance, the ______ perspective assumes that the strength of a corporate culture is related to a firm's long-term financial performance. A. market B. strength C. fit D. objective E. adaptive

C. fit

Spencer talked with Allie after their task force meeting, and they discovered that neither of them had been in favor of dropping some items from next year's budget, yet neither spoke up. Both wanted to be supportive of the group instead. This is an example of A. goal displacement. B. satisficing. C. groupthink. D. heuristics. E. self-selection.

C. groupthink

The common grand strategies are A. star, question mark, cash cow, and dog. B. cost-leadership, differentiation, cost focus, and focused differentiation. C. growth, stability, and defensive. D. strengths, weaknesses, opportunities, and threats. E. defender, prospector, analyzer, and reactor.

C. growth, stability, and defensive.

An organization's ______ is a control mechanism for making sure the right people do the right things at the right time. A. central command B. division of labor C. hierarchy of authority D. span of control E. strategic plan

C. hierarchy of authority

When analyzing the "W" in SWOT analysis, a manager might take note of A. a decrease in consumer demand. B. a competitor's bankruptcy. C. high turnover of employees. D. good financial resources of the firm. E. institution of a tariff on foreign competitors.

C. high turnover of employees.

At Harvestar Farm Equipment, specialists from marketing, manufacturing, and engineering departments work closely together in cross-functional teams on new professional planting and harvesting equipment designs. Harvestar is an example of a ______ organization. A. highly differentiated B. centralized C. highly integrated D. mechanistic E. bureaucratic

C. highly integrated

Galen is temporarily working with a group with membership from different departments in his company on a special project, yet he still has all of responsibilities of his regular job and still reports to the same manager. This is an example of A. matrix structure. B. work dispersion. C. horizontal design. D. hybrid workgroups. E. network clustering.

C. horizontal design.

A formal chain of command, standardization of rules and procedures, and use of cross-functional teams enhance an organization's A. assimilation. B. differentiation. C. integration. D. decentralization. E. centralization.

C. integration.

Making a choice without the use of conscious thought or logical interference is called A. reactive decision. B. irrational insight. C. intuition. D. instinctual choice. E. heuristics.

C. intuition.

Rorschach Composites has precise requirements and very detailed procedures for creating small machine parts through an injection molding process. Because of the sensitive processes, employees are tightly monitored. Rorschach is a(n) ______ organization. A. hybrid B. integrated C. mechanistic D. flat E. organic

C. mechanistic

A system of consciously coordinated activities or forces of two or more people is known as a(n) A. operation. B. culture. C. organization. D. structure. E. adhocracy.

C. organization.

Robin is very worried about potentially having to lay off several of her staff. She can't sleep well, her stomach is bothering her, and she snaps at her employees. She doesn't know what to do but won't talk with anyone about it. Robin is experiencing a ______ reaction to a challenge. A. relaxed change B. defensive avoidance C. panic D. deciding to decide E. heuristic

C. panic

A person with a conceptual decision-making style is __________ in her value orientation and __________ in her tolerance for ambiguity. A. managerial; high B. task/technical; low C. people/social; high D. people/social; low E. managerial; low

C. people/social; high

NASA's Curiosity Rover, employed to investigate a large crater on Mars, is an example of a A. policy. B. rule. C. project. D. procedure. E. program.

C. project.

Alexis manages a clothing store in the mall. They were understaffed, and she thought she would have to work all day and help close the store that evening until a young man came in for an application around noon. Alexis told him he could have the job if he could come back at 4 p.m. to begin work. Here, Alexis was engaged in A. relaxed avoidance. B. confirmation bias. C. satisficing. D. heuristics. E. analytics.

C. satisficing.

In a functional structure, people with ______ are grouped together. A. similar levels of authority B. temporary jobs on the same project C. similar occupational specialties D. jobs related to similar products E. jobs in the same geographic region

C. similar occupational specialties

A career that is upwardly mobile, with a number of jobs that are fundamentally different yet still build on one another is known as a(n) ______ career. A. steady-state B. portfolio C. spiral D. inclining E. linear

C. spiral

On an organizational chart, a dotted line typically indicates a(n) A. outside company. B. line position. C. staff position. D. temporary employee. E. nonmanagerial employee.

C. staff position.

At which level of planning must managers be paying attention to the environment outside the organization, be future oriented, and deal with uncertain and competitive conditions? A. tactical B. organizational C. strategic D. front-line E. operational

C. strategic

A ______ represents an "educated guess" about what must be done in the long term for survival or the prosperity of the organization or its principal parts. A. trend analysis B. mission C. strategy D. forecast E. contingency plan

C. strategy

Actively selling strategic plans to middle and supervisory managers, rather than just announcing them, is helpful for A. situation analysis. B. strategy formulation. C. strategy implementation. D. contingency planning. E. strategic control.

C. strategy implementation.

Managers at Cimarron Saddlery expect to meet profitability goals for the company by cutting costs through a 70% increase in global sourcing of leather and other materials over the next two years. This is an example of a(n) A. supervision objective. B. operational goal. C. tactical goal. D. maintenance objective. E. strategic goal.

C. tactical goal.

In an organic organization, A. authority is centralized. B. bureaucracy is essential. C. the need to respond to unexpected tasks is common. D. many rules and procedures exist. E. success is possible only when the environment is stable. In an organic organization, authority is decentralized, there are fewer rules and procedure

C. the need to respond to unexpected tasks is common.

In deciding to decide about a problem or opportunity, a manager should evaluate the importance of the situation, the credibility of the information, and A. the equitability of the outcomes. B. the availability of heuristics. C. the urgency of the situation. D. the cost of the solution. E. the ethics of making no change.

C. the urgency of the situation.

A time-series forecast, which is used to predict long-term trends, cyclic patterns, and seasonal variations, is one type of A. organizational strength. B. contingency planning. C. trend analysis. D. balanced scorecard. E. strategy formulation.

C. trend analysis.

Define competitive intelligence and explain how you might go about obtaining it legally

Competitive intelligence means gaining information about one's competitors' activities so that one can anticipate their moves and react appropriately. Gaining competitive intelligence isn't always easy, but there are several avenues and most of them are public sources including (1) the public prints and advertising, (2) investor information like corporate annual reports, and (3) informal sources such as trade show gossip and information from company salespeople.

Describe what determines competitiveness within a particular industry using Porter's model for industry analysis. Provide an example for at least three of the five forces in the model

Competitiveness within a particular industry originates in the five primary competitive forces in the firm's environment: 1. Threats of new entrants: for Kraft, new entrants might be store brands or Annie's. 2. Bargaining power of suppliers: companies without multiple suppliers are at the mercy of the one. 3. Bargaining power of buyers: customers who use the Internet to shop around are more able to negotiate a better price. 4. Threats of substitute products or services: for big oil companies, firms making ethanol provide a substitute product. 5. Rivalry among competitors: for Coca-Cola, Pepsi is an established rival.

What is the time frame of an operational plan? A. 2-10 years B. 1-5 years C. 6-24 months D. 1-52 weeks E. 1-90 days

D. 1-52 weeks

Which of the following is a good reason to avoid delegating tasks? A. A wish to keep subordinates from taking risks. B. To avoid making subordinates deal with a difficult client. C. A desire to keep an enjoyable part of the job. D. A fear that sensitive personnel matters will not be kept private. E. A concern that subordinates could do a better job.

D. A fear that sensitive personnel matters will not be kept private.

Which of the following is most likely to use a diversification strategy? A. A tax preparation business B. A flower shop C. A lawn service D. A grocery store E. A shoe store

D. A grocery store

If a business lacks insight or fails to use the adaptive cycle properly, it is likely to be which of the following? A. A prospector B. An analyzer C. A defender D. A reactor E. An imitator

D. A reactor

Which of the following is not one of Bryan Barry's recommendations to keep a strategic plan on track? A. Keep moving. B. Engage people. C. Keep it simple. D. Avoid compromise. E. Stay focused.

D. Avoid compromise.

Which of the following is a decision-making style based on the dimensions of value orientation and tolerance for ambiguity? A. professional B. personal C. technological D. Behavioral E. Mechanical

D. Behavioral

The competing values framework classifies organizational cultures into which of the following? A. Stable, flexible, and laddered cultures. B. Observable, flexible, competitive, and driven cultures. C. Symbolic, heroic, and basic cultures. D. Clan, adhocracy, market, and hierarchy cultures. E. Observable, espoused, and core cultures.

D. Clan, adhocracy, market, and hierarchy cultures.

Which of the following is not a likely source of information for competitive intelligence? A. Competitors' press releases B. Industry gossip C. Competitors' annual reports D. Competitor's customer records E. Sales visits to customers

D. Competitor's customer records

Improving future plans is part of which step in the planning/control cycle? A. Making the plan. B. Carrying out the plan. C. Benchmarking against competitors. D. Controlling the direction. E. Updating the plan.

D. Controlling the direction.

An Iowa ethanol production company has been suffering from a combination of lower demand for gasoline (into which its product is mixed) and higher corn prices (which is the largest input cost). It has responded by selling off land, buildings, and some of its reserve product inventory. This is a variation of which of these grand strategies? A. Right-size B. Growth C. Stability D. Defensive E. Reorganization

D. Defensive

When managers must be closely involved with their subordinates, they should have a ______ span of control. A. flexible B. wide C. flat D. narrow E. lean

D. narrow

Recently ConocoPhillips, America's third-biggest oil company, spun off its refineries, pipelines, and chemicals division to form a new company called Phillips 66. Now ConocoPhillips will concentrate on its upstream operations. This is a variation of which of these grand strategies? A. Right-size B. Growth C. Stability D. Defensive E. Reorganization

D. Defensive

Which of the following is associated with operational planning? A. Determining the overall direction of the organization. B. Examining the environment outside of the organization. C. Implementing policies and plans of top management. D. Directing daily tasks of nonmanagerial personnel. E. Making decisions under highly uncertain conditions.

D. Directing daily tasks of nonmanagerial personnel.

Which of the following is one of the challenges of planning? A. Assigning the right people to tasks. B. Determining the correct budget. C. Measuring results with accuracy. D. Finding the time to plan. E. Motivating employees.

D. Finding the time to plan

Which of the following should be included in a good vision statement? A. Firm's attitude toward its employees. B. Geographical areas in which the firm will compete. C. Firm's basic technology. D. Firm's standards of excellence and high ideals. E. Firm's major products or services.

D. Firm's standards of excellence and high ideals.

Jerome's accounts payable department is behind schedule as the month-end close is approaching. This has been happening every month, but he hasn't found time to provide additional training. Instead he asks all of his employees to work eight hours of overtime that week and reassigns some tasks. This is an example of using the ________ model. A. rational B. predictive C. intuition D. Incremental E. coalition

D. Incremental

Which of the following is the correct order of planning steps within an organization? A. Strategic planning, mission statement & vision statement, operational planning, tactical planning B. Strategic planning, mission statement & vision statement, tactical planning, operational planning C. Strategic planning, operational planning, mission statement & vision statement, tactical planning D. Mission statement & vision statement, strategic planning, tactical planning, operational planning E. Mission statement & vision statement, strategic planning, operational planning, tactical planning

D. Mission statement & vision statement, strategic planning, tactical planning, operational planning

Which of the following is NOT one of the suggestions for decision making recommended by management consultant Odette Pollar? A. Decide in a timely fashion. B. Don't agonize over minor decisions. C. Separate outcome from process. D. Never stop gathering facts. E. When overwhelmed, narrow your choices.

D. Never stop gathering facts.

Goodwill Industries, a charity that provides training and employment services to the disabled, is which type of organization? A. Clan B. For-profit C. Mutual-benefit D. Nonprofit E. Market

D. Nonprofit

Which of the following is one of the nonrational models of decision making? A. Boundary B. Classical C. Goal displacement D. Satisficing E. Attitudinal

D. Satisficing

Apple has a plan to generate buzz for its new products by maintaining secrecy about them. Apple has learned that strong measures are required to protect such mysteries, so it has enhanced its security and even fired and sued employees for leaking news about the products. These efforts would be considered which part of the planning/control cycle? A. Making the plan. B. Carrying out the plan. C. Comparing results. D. Taking corrective action. E. Benchmarking competitors.

D. Taking corrective action.

Which of the following strategy tools suggests that an organization will do better in fast-growing markets in which it has a high market share rather than in slow-growing markets in which it has a low market share? A. SWOT analysis B. Porter's model for industry analysis C. Porter's competitive strategies D. The BCG matrix E. Trend analysis

D. The BCG matrix

Which of the following is not one of the forces that affects industry competition, according to Porter's model for industry analysis? A. Threats of new entrants. B. Threats of substitute products and services. C. Bargaining power of buyers. D. Threats of government interference. E. Bargaining power of suppliers.

D. Threats of government interference.

Which of the following would be considered a reason for adopting strategic management and strategic planning? A. To enhance employee loyalty. B. To keep corporate taxes at a minimum. C. To develop independent work from the staff. D. To provide develop a sustainable competitive advantage. E. To increase market dominance with repeat purchase.

D. To provide develop a sustainable competitive advantage.

Which of the following is a practical guideline in determining whether to use group decision making? A. When it can encourage satisficing B. When it can increase speed C. When it can produce groupthink D. When it can increase development E. When a decision occurs infrequently

D. When it can increase development

Good job design requires matching the level of responsibility to the level of A. liability. B. dependability. C. delegation. D. authority. E. position power.

D. authority.

As Janine prepares to perform Ian's performance review, she carefully reviews notes she made throughout the year, rather than relying just on what she remembers. Janine is attempting to avoid the ______ bias. A. sunk-cost B. adjustment C. representativeness D. availability E. escalation of commitment

D. availability

Managers tend to give more weight to more recent behavior. This is due to the A. heuristic bias. B. halo effect. C. recency effect. D. availability bias. E. representativeness bias.

D. availability bias.

Hollow, modular, and virtual structures lead to a ________ organization. A. functional B. network C. simplistic D. boundaryless E. matrix

D. boundaryless

Redbox uses the large amount of data that it collects at its video and game rental kiosks to determine ways to improve customer retention and to encourage multiple rentals at the same time. The chain is using A. quantitative decision making. B. data correlation. C. heuristics. D. business analytics. E. the Delphi technique.

D. business analytics.

Daniel is assessing his company's portfolio of products. One of them is the best-selling brand of mayonnaise, although this is now a slow-growing market. If Daniel uses the BCG matrix, he would classify this product as a star. B. cloud. C. question mark. D. cash cow. E. dog.

D. cash cow.

The rational model of decision making is also called the ______ model. A. Balanced B. satisficing C. Incremental D. classical E. intuitional

D. classical

Management at the De la Garza Recreational Products has recognized that the firm is much slower than the competition at getting new designs to market. The problem seems to stem from coordination problems between the various functional departments involved in the recreational vehicle design process. De la Garza should A. improve technical training for employees. B. formalize the division of labor. C. relax its rules and procedures. D. create cross-functional teams for development. E. cancel all social events for employees.

D. create cross-functional teams for development.

According to Harvard professor Constance Bagley, ethical decisions can be facilitated with a(n) A. goal statement. B. improved legal department. C. cross-department task force. D. decision tree. E. brainstorming session.

D. decision tree.

A person who is oriented toward task and technical concerns and has a low tolerance for ambiguity is ______ in his decision-making style. A. analytical B. Behavioral C. Conceptual D. directive E. heuristic

D. directive

Hiromi started a new job with a growing consulting firm and was surprised to find that most employees had no job titles. A coworker explained that the founders wanted to create a level playing field, allowing motivated employees to seek leadership roles on a project-by-project basis. No job titles, here, is an example of A. stabilizing structure. B. measuring activities. C. increasing accountability. D. embedding culture. E. reinforcing hierarchy.

D. embedding culture.

In the final stage of the rational model of decision making, you should A. provide justification for the choice. B. select a solution. C. seek high-level support. D. evaluate the results. E. identify the winners and losers.

D. evaluate the results.

According to Bossidy and Charan, effective ______ requires managers to build a foundation for it within three core process: people, strategy, and operations. A. tactical planning B. strategy C. follow-through D. execution E. controlling

D. execution

The Federal Reserve Bank has 12 separate districts around the United States, which means it is using ______ in its organizational structure. A. functional constituencies B. locality divisions C. site networks D. geographic divisions E. matrix regions

D. geographic divisions

A Ritz-Carlton beach attendant who surprised a couple with flowers, candles, and champagne for the man's proposal was able to transmit the culture of the luxury hotel to other employees, so he would be considered a A. champion. B. key employee. C. potential manager. D. hero. E. superior.

D. hero.

Kia Motors takes a very aggressive stance to fire executives who don't meet sales goals, which makes the company an example of a(n) ______ culture. A. clan B. target-driven C. adhocracy D. market E. hierarchy

D. market

Arnos Engineering has a functional structure throughout the company but also has a second chain of command based on the part of the United States where one works. This organization has a ______ structure. A. bifunctional B. hybrid C. network D. matrix E. team-based

D. matrix

Hilton Hotel's statement expressing its purpose as "to fill the earth with the light and warmth of hospitality" is a(n) A. vision statement. B. intention statement. C. goal statement. D. mission statement. E. rationale statement.

D. mission statement.

In a ______ structure, a firm assembles portions of product provided by outside contractors. A. compilation B. network C. outsourced D. modular E. hollow

D. modular

Information-technology companies such as Motorola favor a(n) ______ structure because they constantly have to adjust to technological change. A. mechanistic B. bureaucratic C. formalized D. organic E. tall

D. organic

Bossidy and Charan believe that to excel at execution, a leader should A. be hands-off once the strategy is set. B. micromanage the tactics. C. empower employees to take over the execution. D. probe for weaknesses in the substance and details. E. let the plan run its course before attempting to revise it.

D. probe for weaknesses in the substance and details.

Dayton Construction has a ________ for processing invoices, which includes coding them by job number and construction phase, and matching them with the correct purchase order. A. program. B. policy. C. rule. D. procedure. E. project.

D. procedure.

When White Castle specifies exactly how to dress a hamburger, including the order of the condiments, this is called a A. program. B. policy. C. rule. D. procedure. E. project.

D. procedure.

When a firm responds to uncertainty in its environment as a(n) ________, its continual pursuit of product and market innovation may lead to a loss of efficiency, but is likely to make competitors nervous. A. reactor B. analyzer C. defender D. prospector E. executor

D. prospector

Carla heard from a client that a product similar to a popular one at her retail store was now at Walmart, imported from China, and costing just over half of her sales price. But Carla isn't really worried because she believes in her customers' loyalty, so she has no plans to make changes. Carla is practicing A. relaxed change. B. defensive avoidance. C. postponed action. D. relaxed avoidance. E. delayed decision.

D. relaxed avoidance.

It has been discovered that an overseas manufacturing facility your company uses has been employing child labor despite your position against it. You are contemplating relocating your manufacturing to another country where costs are somewhat higher but workplace standards are more tightly controlled. In using Bagley's ethical decision tree, you determine it would be unethical NOT to relocate, so you should A. relocate the facility, but don't tell shareholders about potentially smaller profits. B. warn the manufacturer that you will relocate should a violation occur again. C. continue to use the facility, despite your objections, because this will maximize shareholder value. D. relocate the facility, and tell the shareholders how this will affect their returns. E. continue to use the facility, because it is benefitting your company, and all workers, even underage ones.

D. relocate the facility, and tell the shareholders how this will affect their returns.

Angelina is interviewing for an open position since she recently let go an employee for excessive absenteeism. Though she thinks that Ivy is the best candidate for the job, she has small children, which seemed to be the source of the last employee's absenteeism. Angelina is reluctant to hire Ivy, which is a(n) ______ bias. A. anchoring and adjustment B. confirmation C. availability D. representativeness E. escalation of commitment

D. representativeness

Sultan is a new manager, and he is using MBO for the first time with his subordinates. It is essential for Sultan to A. decide on goals for employees and clearly inform them of these goals. B. ask the employee to commit the goals to memory. C. set goals that are just out of the subordinate's reach. D. reward employees when they meet objectives. E. review an employee's performance once, at the end of the performance period.

D. reward employees when they meet objectives.

The activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization's life are known as A. myths. B. stories. C. conventions. D. rites and rituals. E. values.

D. rites and rituals.

Planning is defined as A. formulating a method to allocate resources effectively. B. motivating employees. C. coping with obstacles to past performance. D. setting goals and deciding how to achieve them. E. implementing strategic goals.

D. setting goals and deciding how to achieve them

According to Lawrence and Lorsch, the ______ determine(s) the degree of differentiation or integration that is appropriate. A. resources available to an organization B. governmental pressures on an organization C. organization's culture D. stability of an organization's environment E. size of the organization

D. stability of an organization's environment

"Find out what customers want, then provide it to them as cheaply and quickly as possible" is Walmart's A. growth plan. B. technical plan. C. synergy. D. strategy. E. forecast.

D. strategy.

When analyzing the "S" in a SWOT analysis, a manager might take note of A. a decrease in the size of the market. B. competitors' new products. C. high turnover of employees. D. strong financial resources of the firm. E. lifting of governmental regulations.

D. strong financial resources of the firm.

The incremental model of decision making suggests that managers make decisions by A. using processes that have worked in past experience. B. experimenting with alternatives in a controlled setting, one by one. C. choosing something that is "good enough." D. taking small steps to alleviate a problem. E. involving several lower-level employees.

D. taking small steps to alleviate a problem.

In a mechanistic organization, A. most communication is informal. B. many teams and task forces are operating simultaneously. C. authority is decentralized. D. tasks and rules are clearly specified. E. employees are joined through technology.

D. tasks and rules are clearly specified.

The idea that decision makers find the notion of an actual loss more painful than giving up the possibility of a gain is called A. a heuristic. B. an availability bias. C. a representativeness bias. D. the prospect theory. E. satisficing.

D. the prospect theory.

Alexis has prepared a report that details how prices for several raw materials her firm uses in production have risen by up to 30% in the last year. Her report would be an input into the __________ part of a SWOT analysis. A. strengths B. weaknesses C. opportunities D. threats E. structure

D. threats

Another term for the chain of command within an organization, as represented on an organizational chart, is A. reporting linkage. B. span of control. C. horizontal specialization. D. vertical hierarchy. E. network structure.

D. vertical hierarchy.

Miles and Snow suggest that organizations responding to uncertainty in the environment do so with one of four approaches. Name and describe these approaches, and provide an example of each.

Defenders are expert at producing and selling narrowly defined products or services. Often they are old-line successful enterprises, such as Macy's and JCPenney, which in the 2010 era of consumer frugality found themselves losing customers to discounters like Walmart. They do not tend to seek opportunities outside their present markets. They devote most of their attention to making refinements in their existing operations, such as slashing prices. A company described as "aggressive" is often a Prospector organization. Prospectors focus on developing new products or services and in seeking out new markets, rather than waiting for things to happen. An example of a Prospector company is Gap, which announced it would look for new sales by expanding abroad. Another such company is Apple. Analyzers take a "me too" response to the world. Analyzers let other organizations take the risks of product development and marketing and then imitate (or perhaps slightly improve on) what seems to work best. For years, Microsoft has been accused of taking this approach. Reactors make adjustments only when finally forced to by environmental pressures. In the worst cases, they are so incapable of responding fast enough that they suffer massive sales losses and are even driven out of business. Kmart, for instance, failed to respond to Walmart's development of its distribution and inventory management competencies, resulting in stalled growth and a significant reduction in market share. Kmart's core business never recovered from this reactive strategy.

Give at least four reasons that it is difficult to use evidence-based decision making

Despite your best intentions, it's hard to bring the best evidence to bear on your decisions. Among the reasons: (1) There's too much evidence. (2) There's not enough good evidence. (3) The evidence doesn't quite apply. (4) People are trying to mislead you. (5) You are trying to mislead you. (6) The side effects outweigh the cure. (7) Stories are more persuasive, anyway

Which of the following is a disadvantage of group decision making? A. Lower commitment to the decision B. Lower levels of confidence in judgments C. Different perspectives D. Greater discomfort with the final decision E. Satisficing

E. Satisficing

What cultural perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes? A. Strength perspective B. Fit perspective C. Adjustment perspective D. Conditional perspective E. Adaptive perspective

E. Adaptive perspective

Hard-working people at insurance giant AIG joked that "thank heavens it's Friday because that means there are only two more working days until Monday." This is characteristic of which layer of organizational culture? A. Enacted norms B. Invisible artifacts C. Symbolic culture D. Heroic mores E. Basic assumptions

E. Basic assumptions

A person who is oriented toward people and social concerns and has a low tolerance for ambiguity is ______ in her decision-making style. A. analytical B. relaxed C. Conceptual D. directive E. Behavioral

E. Behavioral

Anne runs a small bakery on the main street of a resort town. Though hers was the only bakery around, the business had been suffering during the economic slowdown, and she was contemplating whether she should attempt strategic planning. Anne should be aware of what research finding regarding strategic planning? A. Only large firms show performance gains from strategic planning. B. Only small firms show performance gains from strategic planning. C. Performance gains from strategic planning are equal among small and large firms. D. Both small and large firms benefit from strategic planning, but small firms get a larger boost in performance. E. Both small and large firms benefit from strategic planning, but the small improvement in performance may not be worth the effort for small firms.

E. Both small and large firms benefit from strategic planning, but the small improvement in performance may not be worth the effort for small firms.

Passing the buck or procrastinating about a decision are examples of which type of reaction to a challenge? A. Panic B. Relaxed avoidance C. Relaxed change D. Decreased involvement E. Defensive avoidance

E. Defensive avoidance

When evaluating a solution in decision making, answering yes to which of the following questions should cause you to reconsider choosing it? A. Is there enough time? B. Are the costs reasonable? C. Is it ethical? D. Is the technology available? E. Do you consider it merely "good enough"?

E. Do you consider it merely "good enough"?

Which of the following statements about strategy and strategic positioning is false? A. Many customers with broad needs can be a source of strategic position. B. A company has to choose not only what strategy to follow but what strategy not to follow. C. Few customers with broad needs can be a source of strategic position. D. Strategy involves creating a "fit" among activities. E. Few customers with narrow needs can be a source of strategic position.

E. Few customers with narrow needs can be a source of strategic position.

Which type of culture has an internal focus and values stability and control over flexibility? A. Clan B. Adhocracy C. Market D. Classical E. Hierarchy

E. Hierarchy

Megan met with her supervisor for a formal review of her job performance over the past year. Though Megan had agreed to complete five training modules during the course of the year, she only did two. At this stage, which part of the planning/control cycle would be applicable to her manager going forward? A. Carry out the plan. B. Improve feedback. C. Correct deviations in the plan. D. Benchmark against other employees. E. Improve future plans.

E. Improve future plans.

Which of the following is NOT a hindrance to perfectly rational decision making? A. Conflicting goals B. Imperfect information C. Information overload D. Limited cognitive capacity E. Lack of intuition

E. Lack of intuition

Which of the following statements about group decision making is true? A. Individuals are always better than groups in decision making. B. Groups are always better than individuals in decision making. C. Groups minimize satisficing. D. Groups are faster at making decisions. E. Managers should utilize groups for decision making on a selective basis.

E. Managers should utilize groups for decision making on a selective basis.

During which managerial function do you make a blueprint for action that describes what you need to do to realize your goals? A. Organizing B. Leading C. Controlling D. Defining E. Planning

E. Planning

Which of the following is a benefit of planning? A. Planning allows you to spend little time preparing for the future. B. Planning allows you to make all decisions without consulting superiors. C. Planning helps you compare your results to your competitors'. D. Planning helps the company to be spontaneous. E. Planning helps you cope with uncertainty.

E. Planning helps you cope with uncertainty

_______ group activities around similar products or services. A. Output structures B. Matrix organizations C. Offering divisions D. Functional structures E. Product divisions

E. Product divisions

Which of the following is not a behavior of a leader who executes? A. Reward the doers. B. Insist on realism. C. Follow through. D. Know yourself. E. Respect others' limitations.

E. Respect others' limitations.

Which of the following questions about a proposed action is NOT a key question in Bagley's ethical decision tree? A. Is it legal? B. Does it maximize shareholder value? C. Is it ethical? D. Would it be ethical not to do it? E. Should the effect of it be disclosed to shareholders?

E. Should the effect of it be disclosed to shareholders?

__________ means performing different activities from rivals or performing similar ones in different ways. A. Competitive planning B. Distinctive positioning C. Collaborative planning D. Strategic segmentation E. Strategic positioning

E. Strategic positioning

In which type of culture do employees adhere to the organization's values because they believe in its purpose? A. Fit B. Strategic C. Conditional D. Adaptive E. Strong

E. Strong

Which of the following best represents the strategic planning time frame that Jeff Bezos of Amazon prefers? A. Six months or less B. One to two years C. Three to five years D. Five to seven years E. Ten to twenty years

E. Ten to twenty years

_________ uses physically dispersed experts who fill out questionnaires to generate ideas and the judgments are combined into an expert consensus. A. Brainstorming B. PM C. TQM D. Brainwriting E. The Delphi technique

E. The Delphi technique

Oil companies must be aware of other firms' development of ethanol products since this is an example of which one force in Porter's model for industry analysis? A. Bargaining power of buyers. B. Rivalry among competitors. C. Bargaining power of suppliers. D. Threats of new entrants. E. Threats of substitute products and services.

E. Threats of substitute products and services.

Which of the following is a question that should be answered by a company's mission statement? A. Will it inspire enthusiasm and encourage commitment? B. Does it set standards of excellence? C. Is it appropriate for the organization? D. Is it well articulated? E. Who is our customer?

E. Who is our customer?

As an organization goes through the stages of the life cycle, it becomes more A. informal. B. centralized. C. unstable. D. organic. E. bureaucratic.

E. bureaucratic.

A person with high tolerance for ambiguity has A. a high need for structure or control. B. a strong people orientation. C. an analytical mind. D. defensive avoidance tendencies. E. comfort with uncertain situations.

E. comfort with uncertain situations.

Gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately is called A. strategic forecasting. B. corporate espionage. C. contingency planning. D. trend analysis. E. competitive intelligence.

E. competitive intelligence.

Among the functions of organizational ________ are that it gives members an organizational identity and it promotes social-system stability. A. design B. structure C. life cycle D. charting E. culture

E. culture

Durant Security operates across Florida and Georgia with a variety of products and services. It has a unit located in Tampa that provides home security to its clients, and another unit in Atlanta that provides security for businesses, in particular banks and high-technology firms. This is a ______ structure. A. functional B. simple C. geographic divisional D. matrix E. customer divisional

E. customer divisional

Jennifer's staff enjoys working for her but thinks she is a perfectionist. She often thinks that she is the only one who can handle her division's difficult clients or handle some of the most sensitive issues, so she frequently has problems with A. responsibility. B. allocation. C. accountability. D. authority. E. delegation.

E. delegation

Ryan is an efficient manager who is very good at meeting his deadlines and quite decisive. Still, his employees find him to be too controlling at times and unable to see the long-term consequences of his actions. Ryan is most likely ______ in his decision-making style. A. analytical B. autocratic C. Behavioral D. Conceptual E. directive

E. directive

Although managers may wish to affect employees with explicitly stated values, they are frequently more influenced by ______ ones. A. subversive B. expressed C. espoused D. adopted E. enacted

E. enacted

The adaptive cycle portrays businesses as continuously cycling through three kinds of business decisions: entrepreneurial, ______, and administrative A. leadership B. alignment C. organization D. production E. engineering

E. engineering

Careful monitoring of an organization's internal and external environment to detect early signs of opportunities and threats that may influence the firm's plans is called A. competitive intelligence. B. forecasting. C. contingency planning. D. trend analysis. E. environmental scanning.

E. environmental scanning.

Having just spent $1,500 for a new engine for his old car, Danilo now learns his transmission needs to be replaced. He decides to junk the car now, rather than repair it. Danilo has avoided the __________ bias. A. anchoring and adjustment B. confirmation C. availability D. representativeness E. escalation of commitment

E. escalation of commitment

An organization that offers unique, superior products or services to a narrow market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. diversification. E. focused differentiation.

E. focused differentiation.

The tendency for decision-makers to be influenced by the way a situation or problem is presented to them is known as the ________ bias. A. overconfidence. B. escalation of commitment bias. C. hindsight. D. availability. E. framing.

E. framing

Fonseca Construction Supply has product divisions for lumber, hardware, electrical supplies, and plumbing supplies. Each has its own production facility and sales staff. Fonseca is A. tightly integrated. B. bureaucratic. C. functionally organized. D. a matrix organization. E. highly differentiated.

E. highly differentiated.

The first step in the MBO process is to A. determine rewards for meeting goals. B. give a performance appraisal. C. develop an action plan. D. periodically review performance. E. jointly set objectives.

E. jointly set objectives.

Effective strategic management involves A. only top management. B. only top and middle management. C. only middle and lower management levels. D. only lower management level. E. managers from all parts of the organization.

E. managers from all parts of the organization.

McKesson Corp., a U.S. pharmaceutical distributor, has a(n) ________ statement, which is "to provide comprehensive pharmacy solutions that improve productivity, profitability and result in superior patient care and satisfaction." A. purpose B. vision C. intention D. goal E. mission

E. mission

The statement which expresses the purpose of an organization is called a(n) A. goal statement. B. rationale statement. C. vision statement. D. intention statement. E. mission statement.

E. mission statement.

Analysis of changing demographics of the U.S. population would be part of the assessment of a company's A. strengths. B. weaknesses. C. opportunities. D. threats. E. opportunities or threats depending on the outcome of the analysis.

E. opportunities or threats depending on the outcome of the analysis.

The process of involving employees in setting goals, making decisions, solving problems, and making changes is called A. conjoint management. B. escalation of commitment. C. satisficing. D. goal displacement. E. participative management.

E. participative management.

Meg hired a great candidate from UCLA who has a big career ahead, and every year since Meg insists on going on a recruiting visit to that campus. Meg is convinced that hiring from UCLA in the future will produce the same level of success. This is an example of a(n) A. heuristic bias. B. professional effect. C. anchoring effect. D. availability bias. E. representativeness bias.

E. representativeness bias.

MBO works by cascading objectives down through the organization, and these objectives become more ______ at lower levels of the organization. A. measurable B. challenging C. results-oriented D. attainable E. specific

E. specific

Cimarron Saddlery expects to improve profitability of the organization by 15% over the next three years. This is an example of a(n) A. supervision objective. B. operational goal. C. tactical goal. D. maintenance objective. E. strategic goal.

E. strategic goal.

There are three levels of planning. Their order, from first to last, is A. operational, tactical, and strategic. B. strategic, operational, and tactical. C. tactical, operational, and strategic. D. tactical, strategic, and operational. E. strategic, tactical, and operational.

E. strategic, tactical, and operational.

A manager assessing the organization's access to capital is involved in analysis of A. strengths. B. weaknesses. C. opportunities. D. threats. E. strengths or weaknesses depending on the outcome of the assessment.

E. strengths or weaknesses depending on the outcome of the assessment.

When managers add up all the money already spent on a project and conclude it is too costly to simply abandon it, it is known as a(n) ________ bias. A. anchoring and adjustment B. confirmation C. availability D. representativeness E. sunk cost

E. sunk cost

Southwest Airlines acquisition of rival AirTran Airways may have been responsible for a sharp decline in on-time arrivals, which is one of Southwest's ________ goals, supporting a larger goal of being highly profitable. A. dependant B. strategic C. operational D. facilities E. tactical

E. tactical

Executive management has recently decided to acquire a small company with a complementary product line, so Craig, a marketing manager, is meeting with other managers to discuss how to implement policies to support the acquisition over the next year. He is participating in A. mission development. B. strategic planning. C. controlling. D. operational planning. E. tactical planning.

E. tactical planning.

A supervisor of an assembly line has 45 employees that report to her; this would be considered a(n) ______ span of control. A. unsustainable B. tall C. deep D. complex E. wide

E. wide

Explain evidence-based decision making. Name at least four of the seven implementation principles identified by Pfeffer and Sutton to help companies that are committed to evidence-based management

Evidence-based decision making means managers make decisions based on what actually works. They face the hard facts and use the best evidence to help navigate the competitive environment. Pfeffer and Sutton identify seven implementation principles to help companies that are committed to using evidence-based management: 1. Treat your organization as an unfinished prototype. 2. No brag, just facts. 3. See yourself and your organization as outsiders do. 4. Evidence-based management is not just for senior executives. 5. Like everything else, you still need to sell it. 6. If all else fails, slow the spread of bad practice. 7. The best diagnostic question: what happens when people fail?

A bike messenger company that operates in the downtown area of a large city recently set the following goal: "All deliveries should be completed as quickly as possible." This example meets the criteria for a SMART goal

FALSE

A business plan is a document with the purpose of outlining a proposed firm's profit and loss statements for its first operating cycle

FALSE

A clan culture has an external focus and values flexibility rather than stability and control

FALSE

A clan culture has an external focus and values flexibility rather than stability and control.

FALSE

A company must be able to execute three core processes of business including people, products, and administration

FALSE

A company with a formalized, structured work environment aimed at achieving efficiency, timeliness, and reliability in the creation and deliver of products has a clan culture.

FALSE

A company with a formalized, structured work environment aimed at achieving efficiency, timeliness, and reliability in the creation and delivery of products has a clan culture

FALSE

A continuity strategy is the common grand strategy that involves little or no significant change

FALSE

A corporation that uses a network structure is often called matrix corporation

FALSE

A cost-benefit matrix is a graph of decisions and their possible consequences and is used to create a plan to reach a goal

FALSE

A development strategy is the common grand strategy that involves expansion

FALSE

A directive individual takes longer to make a decision than an analytical one

FALSE

A disadvantage of group-aided decision making is that groups tend to suppress an individual's intellectual stimulation and creativity

FALSE

A formal system of task and reporting relationships that coordinate and motivate an organization's members is known as an organizational configuration.

FALSE

A good vision statement should describe a company's major strengths and competitive advantage in its industry

FALSE

A hospital is an example of a mutual-benefit organization

FALSE

A mission statement expresses what the organization should become and where it wants to go strategically

FALSE

A mission statement should be ambitious

FALSE

A policy includes more specifics that does a rule

FALSE

Amazon's statement in which it states its desire to "be the earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online" is a mission statement

FALSE

An organization chart it is most often illustrated with a tall, slender rectangle showing each level of the company.

FALSE

An organization is said to be flat when there are only a few levels with wide spans of control.

FALSE

An organization with different grouping of people based on its products, customers, or geographic regions has a functional structure

FALSE

An organization with different groupings of people based on its products, customers, or geographic regions has a functional structure

FALSE

As part of the planning process, businesses set what are known as targets, which are specific commitments to achieve measurable results within a stated period of time

FALSE

Bad planning is usually a result of top managers' inability to gather enough information

FALSE

Blockbuster Video was slow to adapt to the latest trends in its industry, such as DVD-by-mail and movie downloads online. When it tried to incorporate the same into its business model, it was well behind competitors like Netflix. Blockbuster might be defined as a defender, according to Miles and Snow

FALSE

Business founders and subsequent managers primarily use power and coercion to embed the culture into the organization

FALSE

By definition, an organization includes 10 or more people.

FALSE

Companies that must respond to fast-changing customer tastes often favor a mechanistic structure to an organic one

FALSE

Contingency planning is a hypothetical extension of a past series of events into the future

FALSE

Corporate culture is as also known as organizational structure

FALSE

Customers who experience poor customer service are more likely to tell the company about it than to tell family or friends

FALSE

Director of accounting is an example of a staff position

FALSE

Director of operations is an example of a staff position

FALSE

Espoused values represent the values and norms actually exhibited in the organization

FALSE

Espoused values represent the values and norms actually exhibited in the organization.

FALSE

Evidence shows that firms that announce layoffs have higher stock prices than their peers, both in the near term and over time

FALSE

Execution is tactical in nature, rather than part of a company's strategy

FALSE

Fawaz is contemplating a couple of new options for the order takers that he manages. There is no great urgency in the situation; he just needs to have a procedure in place within a couple of months. Fawaz would be wise to make this decision by himself

FALSE

Ford's Sync in-dash communications platform, despite its high level of technology, has been unable to provide the company with a distinct competitive advantage

FALSE

Formal business plans can be dangerous to the survival of new businesses; many who try them fail because of the resources required to write and agree upon the plan.

FALSE

General Electric sells lighting products and is also involved in plastics, broadcasting, and financial services. GE uses a related diversification strategy

FALSE

Good strategy allows a company to be everything to everyone

FALSE

Group-driven computer-aided decision systems ask participants to answer predetermined questions on electronic keypads or dials

FALSE

Guthrie Community College has done a SWOT analysis and discovered that the number of college-bound high-school juniors in its state has grown by nearly 20% in the past few years. This is a strength for Guthrie

FALSE

Heuristics is a technique in which members of a group come together over a computer network to generate ideas and alternatives

FALSE

Horizontally on an organizational chart are the various companies outside of the firm, such as suppliers and distributors

FALSE

If a marketing person reports to both the Vice President of Marketing and also to the project manager for the Ford Mustang, she works in a network organization.

FALSE

If a marketing person reports to both the vice president of marketing and also to the project manager for the Ford Mustang, she works in a network organization.

FALSE

If your boss asked you to take care of a task, productivity expert Odette Pollar says it is still OK to delegate it

FALSE

If your boss asked you to take care of a task, productivity expert Odette Pollar says it is still OK to delegate it.

FALSE

In MBO, objectives that employees fail to meet should be put aside for the next period in favor of ones that they can achieve

FALSE

In Porter's model for industry analysis, there are three primary competitive forces in a firm's environment

FALSE

In a cost-leadership strategy, an organization targets a wide market and offers products or services of unique and superior value compared to competitors

FALSE

In a world of rapid and discontinuous change, the ability to please nonmanagerial employees has been called the golden trait among managers

FALSE

Yichao, a manager of a downtown hair salon, has been procrastinating about a problem. Over the past year, his company has seen a high rate of customer defections, and even the loss of some of its best stylists. Still, he hasn't even begun to investigate the issue. This is an indicator of relaxed avoidance.

FALSE

You have surveyed all of your close friends, and they all prefer ice cream to frozen yogurt. Thus you should be confident that everyone prefers ice cream; that is, this is a representative sample of adequate size

FALSE

Discuss the three things that must happen for MBO to be successful.

For MBO to be successful, three things have to happen: 1. Top management must be committed. "When top-management commitment [to MBO] was high," said one review, "the average gain in productivity was 56%. When commitment was low, the average gain in productivity was only 6%." 2. It must be applied organizationwide. The program has to be put in place throughout the entire organization. That is, it cannot be applied in just some divisions and departments; it has to be done in all of them. 3. Objectives must "cascade." MBO works by cascading objectives down through the organization; that is, objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization. Top managers set general organizational objectives, which are translated into divisional objectives, which are translated into departmental objectives. The hierarchy ends in individual objectives set by each employee.

Define forecasting and discuss its importance. Describe the two types of forecasting described in the text.

Forecasting is developing a vision or projection of the future, which is a necessary component of strategic planning. The two types are trend analysis and contingency planning. Trend analysis is a hypothetical extension of a past series of events into the future. Contingency planning is the creation of alternative hypothetical but equally likely future conditions.

What are a manager's options if the action she decided to take isn't working? Why should a manager resist the urge to "stick it out" when feedback is negative?

If the action is not working, a manager should consider giving it more time, changing the decision or its implementation slightly, trying another alternative, or starting over. But a manager should recognize that "sticking it out" may reflect a sunk-cost or escalation of commitment bias.

Explain the positive and negative aspects of pursuing a single-product strategy versus a diversification one. Provide an example of a company that uses each type of strategy

In a single-product strategy, a company makes and sells only one product within its market. Making just one product allows you to focus your manufacturing and marketing efforts just on that product. This means that your company can become savvy about repairing defects, upgrading production lines, scouting the competition, and doing highly focused advertising and sales. The risk, of course, is that if you do not focus on all aspects of the business, if a rival gets the jump on you, or if an act of God intervenes (for a florist, roses suffer a blight right before Mother's Day), your entire business may go under. The single-product strategy is seen all the time as you drive past the small retail businesses in a small town: There may be one shop that sells only flowers, one that sells only security systems, and so on. Diversification is operating several businesses in order to spread the risk. Diversification may be related or unrelated. Related diversification has three advantages: reduced risk—because if one product is weak, others may take up the slack, management efficiencies—because administration is spread over several businesses, and synergy, that the sum is greater than the parts. You see the diversification strategy at the small retailer level when you drive past a store that sells gas and food and souvenirs and rents DVD movies

What is MBO? Describe the process by which MBO is done as well as its purpose.

Management by objectives (MBO) is a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee's performance, and (4) the manager makes a performance appraisal and rewards the employee according to results. The purpose of MBO is to motivate rather than control subordinates.

Explain the concepts of mechanistic and organic organizations. What kind of organization should be in place when an organization's environment is changing quickly and unpredictably?

Mechanistic organizations are characterized by: centralized authority, many rules and procedures, specialized tasks, formalized communication, few teams or task forces, narrow spans of control, and taller structures. Organic organizations are characterized by: decentralization of authority, few rules and procedures, shared tasks, informal communication, many teams and task forces, wider span of control, and flatter structures. For a changing environment, organizations are best served by an organic structure, which is more flexible and can react more quickly as needed

Explain the four common elements of organizations proposed by Edgar Schein

Organizational psychologist Edgar Schein proposed the four common elements of (1) common purpose, (2) coordinated effort, (3) division of labor, and (4) hierarchy of authority. The common purpose unifies employees or members and gives everyone an understanding of the organization's reason for being. The common purpose is realized through coordinated effort, the coordination of individual efforts into a group or organizationwide effort. Division of labor, also known as work specialization, is the arrangement of having discrete parts of a task done by different people. The hierarchy of authority, or chain of command, is a control mechanism for making sure the right people do the right things at the right time.

List the four benefits of planning.

Planning provides a means to check on progress toward goals. Planning helps to coordinate activities between people and/or departments. Planning helps in thinking ahead and anticipating problems or opportunities. Planning helps one cope with uncertainty.

In general, planning has many benefits. However, planning also has two cautions of which one must be aware. Discuss these.

Planning requires time, including that to involve others (subordinates, peers, staff, competitors, markets, etc.). Also, some decisions have to be made without a lot of time. While you shouldn't shoot from the hip in making decisions, often you may have to "go with what you've got" and make a decision based on a plan that is perhaps only three-quarters complete. Sometimes the need to make a decision quickly outweighs the benefit of having more complete information.

Describe Porter's four competitive strategies and explain how they differ from each other. Provide an example of a firm that might use each

Porter identified two "wide" strategies (cost-leadership and differentiation) that deal with broad markets, and two "narrow" strategies (cost-focus and focused-differentiation) that target specific markets. 1. Cost-leadership focuses on keeping costs and prices low for a wide market, and examples are Dell, Timex, Home Depot, and Bic. 2. Differentiation stresses offering unique and superior products and services to a wide market and examples include Ritz-Carlton, Lexus, and PepsiCo. 3. Cost-focus emphasizes keeping low costs and prices, but to a narrow market and examples include low-cost products sold at discount store and discount regional gas station chains. 4. Focused-differentiation stresses unique and superior products to a narrow market and examples include Rolls Royce, Cartier, Turnbull & Asser, and niche books.

Explain strategy implementation, including the role of resistance

Putting strategic plans into effect is strategy implementation. Strategy implementation is the stage of the strategic management process where managers determine possible roadblocks within the organization and see if the right people and control systems are available to execute the plans. Resistance may be encountered when people feel the plans threaten their livelihoods or their influence. This is especially true when plans are being implemented quickly, as delays (a form of resistance) can easily be constructed and these delays may heavily damage a plan. Thus, top managers can't just announce the plans; they have to actively sell them to middle and supervisory managers

Define the components of the acronym SMART in goal setting. Provide an example of a SMART goal and demonstrate that it meets all criteria.

SMART goals are: specific (rather than vague), measurable (quantifiable), attainable (challenging but realistic and attainable), results-oriented (support the vision), and with target dates (deadlines). An example of a SMART goal is "Ninety percent of planes should arrive within 15 minutes of the scheduled arrival time by December 2013."

What are the fundamental differences in examining internal and external environments when conducting a situation analysis?

SWOT analysis, also called a situation analysis, looks at internal strengths and weaknesses and external opportunities and threats. The internal environment looks at organizational strengths—the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission, and organizational weaknesses—the drawbacks that hinder an organization in executing strategies in pursuit of its mission—are also part of the internal environment. The external environment includes organizational opportunities—environmental factors that the organization may exploit for competitive advantage. It also includes organizational threats—environmental factors that hinder an organization's achieving a competitive advantage.

Give examples of what managers might look at in performing each element of a SWOT analysis. SWOT analysis—also known as a situational analysis—is a search for the strengths, weaknesses, opportunities, and threats affecting the organization. Examples of a firm's strengths and weaknesses: work processes, organization, culture, staff, product quality, production capacity, image, financial resources and requirements, service levels, other internal matters.

SWOT analysis—also known as a situational analysis—is a search for the strengths, weaknesses, opportunities, and threats affecting the organization. Examples of a firm's strengths and weaknesses: work processes, organization, culture, staff, product quality, production capacity, image, financial resources and requirements, service levels, other internal matters. Examples of a firm's opportunities and threats: market segment analysis, industry and competition analysis, impact of technology on organization, product analysis, governmental impacts, other external matters (see Figure 6.2).

A marketing plan is an example of an action plan

TRUE

A person with a directive decision style is efficient, logical, practical, and systematic in her approach to solving problems

TRUE

A procedure is a standing plan that outlines the response to particular problems or circumstances

TRUE

Explain the difference between standing plans and single-use plans. Define the three types of standing plans, the two types of single-use plans and give examples of each.

Standing plans are plans developed for activities that occur repeatedly over a period of time. Standing plans consist of policies, procedures, and rules. A policy is a standing plan that outlines the general response to a designated problem or situation. Example: "This workplace does not condone swearing." This policy is a broad statement that gives managers a general idea about what is allowable for employees who use bad language, but gives no specifics. A procedure (or standard operating procedure) is a standing plan that outlines the response to particular problems or circumstances. Example: White Castle specifies exactly how a hamburger should be dressed, including the order in which the mustard, ketchup, and pickles are applied. A rule is a standing plan that designates specific required action. Example: "No smoking is allowed anywhere in the building." This allows no room for interpretation. Single-use plans are plans developed for activities that are not likely to be repeated in the future. Such plans can be programs or projects. A program is a single-use plan encompassing a range of projects or activities. Example: The U.S. government space program (which was to be closed by the end of 2010) had several projects, including the Challenger project and the Hubble Telescope project. A project is a single-use plan of less scope and complexity than a program. Example: The space shuttle Discovery was one project in the government's space program.

Explain the different types of planning for the different levels of management. Include the typical time frame for which each plan is created.

Strategic planning is done by top management. Using their mission and vision statements, top managers do strategic planning—they determine what the organization's long-term goals should be for the next 1-5 years with the resources they expect to have available. It should communicate not only general goals about growth and profits but also ways to achieve them. Tactical planning is done by middle management. The strategic priorities and policies are then passed down to middle managers, who must do tactical planning—that is, they determine what contributions their departments or similar work units can make with their given resources during the next 6-24 months. Operational planning is done by first-line management. Middle managers then pass these plans along to first-line managers to do operational planning—that is, they determine how to accomplish specific tasks with available resources within the next 1-52 weeks.

A single-product strategy can be described as focused but vulnerable

TRUE

A spiral career path depends on having jobs that, while fundamentally different, build on one another

TRUE

A strategy is a large-scale action plan that sets direction for an organization

TRUE

Define strategic positioning. Explain the three principles that underlie strategic positioning

Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. It means, according to Porter, "performing different activities from rivals, or performing similar activities in different ways." Three key principles underlie strategic positioning: Strategy is the creation of a unique and valuable position, which emerges from three sources: few needs, many customers; broad needs, few customers; or broad needs, many customers. Strategy requires trade-offs in competing. A company has to choose not only what strategy to follow but what strategy not to follow. Strategy involves creating a "fit" among activities. "Fit" has to do with the ways a company's activities interact and reinforce one another.

Explain the three perspectives of organizational culture that may enhance economic performance. Which perspective was found to provide the highest level of long-term financial performance?

Strength, fit, and adaptive culture may enhance economic performance. The strength perspective assumes that the strength of a corporate culture is related to a firm's long-term financial performance. The fit perspective assumes that an organization's culture must align, or fit, with its business or strategic context. A correct fit is expected to foster higher financial performance. The adaptive perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes. An investigation of 207 companies from 22 industries during the years 1977-1988 partly supported the strength and fit perspectives. However, findings were completely consistent with the adaptive perspective. Long-term financial performance was highest for organizations with an adaptive culture.

A common challenge to strategy implementation is resistance by people within the organization

TRUE

A defensive strategy is sometimes called a retrenchment strategy

TRUE

A formal vertical hierarchy shows a company's most typical channels of communication

TRUE

A formal vertical hierarchy shows a company's most typical channels of communication.

TRUE

A functionally organized company can also use cross-functional teams to work on particular problems

TRUE

A functionally-organized company can also use team-based structure to work on particular problems.

TRUE

A good organizational culture can facilitate a low turnover rate

TRUE

A good organizational culture can facilitate a low turnover rate.

TRUE

A grand strategy can be established using tools like SWOT analysis and forecasting

TRUE

A hero is a person whose accomplishments embody the values of the organization.

TRUE

A hollow structure is often called a network structure

TRUE

A market culture has a strong external focus and values stability and control

TRUE

A market culture has a strong external focus and values stability and control.

TRUE

Identify the assumptions of the rational decision-making model. Do these hold true in most situations?

The assumptions are: 1. There is complete information and no uncertainty. 2. Logical and unemotional analysis is possible. 3. The best decision for the organization will be chosen. The assumptions may not hold true in most situations. According to the research by Herbert Simon, managers cannot truly act logically because of bounded rationality. Constraints include complexity, time, cognitive capacity, and imperfect or too much information, among others

Describe the boundaryless organization and three organizational structures that are common forms of it.

The opposite of a bureaucracy, with its numerous barriers and divisions, a boundaryless organization is a fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks. The collaborators may include not only coworkers but also suppliers, customers, and even competitors. This means that the form of the business is ever-changing, and business relationships are informal. Three types of structures in this class of organizational design are hollow, modular, and virtual structures. In the hollow structure, often called the network structure, the organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster. The modular structure differs from the hollow structure in that it is oriented around outsourcing certain pieces of a product rather than outsourcing certain processes (such as human resources or warehousing) of an organization. In a modular structure, a firm assembles product chunks, or modules, provided by outside contractors. One consequence of the Internet is the virtual organization, an organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections, while often appearing to customers and others to be a single, unified organization with a real physical location

Describe the planning/control cycle.

The planning/control cycle has two planning steps (1 and 2) and two control steps (3 and 4), as follows: (1) Make the plan. (2) Carry out the plan. (3) Control the direction by comparing results with the plan. (4) Control the direction by taking corrective action in two ways—namely, (a) by correcting deviations in the plan being carried out, or (b) by improving future plans.

List at least five of the seven essential types of leader behaviors that are needed to fuel the engine of execution

The seven essential types of leader behaviors are: 1. Know your people and your business: engage intensely with your employees. 2. Insist on realism: don't let others avoid reality. 3. Set clear goals and priorities: focus on a few rather than many goals. 4. Follow through: establish accountability and check on results. 5. Reward the doers: show top performers that they matter. 6. Expand people's capabilities: develop the talent. 7. Know yourself: do the hard work of understanding who you are.

Identify the steps of rational decision making

The steps are: Identify the problem/opportunity. Think up alternative solutions. Evaluate the alternatives and make a decision. Implement and evaluate the solution chosen.

Describe the strategic management process. Explain what the "feedback loop" is and why it is important. The strategic management process involves five steps: 1. Establish the mission and vision. 2. Establish the grand strategy. 3. Formulate the strategic plans. 4. Carry out the strategic plans. 5. Maintain strategic control.

The strategic management process involves five steps: 1. Establish the mission and vision. 2. Establish the grand strategy. 3. Formulate the strategic plans. 4. Carry out the strategic plans. 5. Maintain strategic control. The feedback loop comes out of strategic control. Through control, managers monitor progress and take corrective action early and rapidly when things go awry, returning to earlier steps to fix problems.

Explain what centralization and decentralization of authority mean. Would you rather be a manager in a centralized or a decentralized organization? Why?

The student should define both terms and then give a logical explanation of their preference. With centralized authority, important decisions are made by higher-level managers; while with decentralized authority, important decisions are made by middle-and supervisory-level managers. An advantage in using centralized authority is that there is less duplication of work, because fewer employees perform the same task; rather, the task is often performed by a department of specialists. Another advantage of centralization is that procedures are uniform and thus easier to control; all purchasing, for example, may have to be put out to competitive bids. An advantage in having decentralized authority is that managers are encouraged to solve their own problems rather than to buck the decision to a higher level. In addition, decisions are made more quickly, which increases the organization's flexibility and efficiency.

Explain what a matrix structure is, and draw an organization chart that depicts a matrix (including appropriate job titles). Explain what you think it would be like to be a manager in a matrix organization

The student should explain the matrix structure, draw a chart similar to the one shown in the text, and give his or her opinion of working in a matrix. In a matrix structure, an organization combines functional and divisional chains of command in a grid so that there are two command structures, vertical and horizontal. The functional structure usually doesn't change It is the organization's normal departments or divisions, such as finance, marketing, production, and R&D. The divisional structure may vary, as by product, brand, customer, or geographic region. One of the difficulties of the matrix is reporting to two managers who may have different priorities, or as a manager, to compete with another manager for an employee's services. This is a violation of the unity of command principle. For an example of a drawing of a matrix organization, see Figure 8.9 (students may vary labels, but should still show a similar matrix reporting structure).

Define organizational culture, and explain three layers in which it appears. Choose an organization with which you have some experience (for example, an employer, one of your schools, your church, a club) and use it to illustrate the layers of culture

The student should first define organizational culture and then provide examples for the visible and invisible levels of culture of the organization he or she chooses. Organizational culture is the system of shared beliefs and values that develops within an organization and guides the behavior of its members. Organizational culture appears as three layers: (1) observable artifacts, (2) espoused values, and (3) basic assumptions. Each level varies in terms of outward visibility and resistance to change, and each level influences another level. At the most visible level, organizational culture is expressed in observable artifacts—physical manifestations such as manner of dress, awards, myths, and stories about the company, rituals and ceremonies, and decorations, as well as visible behavior exhibited by managers and employees. Espoused values are the explicitly stated values and norms preferred by an organization, as may be put forth by the firm's founder or top managers. Basic assumptions, which are not observable, represent the core values of an organization's culture—those that are taken for granted and, as a result, are difficult to change.

Name the three common grand strategies and provide an example of how a company might use each.

There are the three common grand strategies: 1. A growth strategy is a grand strategy that involves expansion—as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served. Examples: It can improve an existing product or service to attract more buyers. It can increase its promotion and marketing efforts to try to expand its market share. It can expand into new products or services. It can acquire similar or complementary businesses. 2. A stability strategy is a grand strategy that involves little or no significant change. Examples: It can go for a no-change strategy (if, for example, it has found that too-fast growth leads to foul-ups with orders and customer complaints). It can go for a little-change strategy (if, for example, the company has been growing at breakneck speed and feels it needs a period of consolidation). 3. A defensive strategy, or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. Examples: It can reduce costs, as by freezing hiring or tightening expenses. It can sell off (liquidate) assets—land, buildings, inventories, and the like. It can gradually phase out product lines or services. It can declare bankruptcy.

Give five examples of mechanisms used by organizations to embed its culture

Those who found a business, and the managers who follow them, essentially use a teaching process to embed the values, beliefs, expectations, behaviors, and business philosophy that constitute the organization's culture. Among the mechanisms used are the following: Formal Statements: The first way to embed preferred culture is through the use of formal statements of organizational philosophy, mission, vision, and values, as well as materials used for recruiting, selecting, and socializing employees. Slogans & Sayings: The desirable corporate culture can be expressed in language, slogans, sayings, and acronyms. Stories, Legends, & Myths: These can illustrate values. Leader Reactions to Crises: How top managers respond to critical incidents and organizational crises sends a clear cultural message. Role Modeling, Training, & Coaching: They illustrate goals and values. Physical Design of workplaces is often complementary to the culture. Rewards, Titles, Promotions, & Bonuses: These demonstrate what is valued. Organizational Goals & Performance Criteria: Many organizations establish organizational goals and criteria for recruiting, selecting, developing, promoting, dismissing, and retiring people, all of which reinforce the desired organizational culture. Measurable & Controllable Activities: An organization's leaders can pay attention to, measure, and control a number of activities, processes, or outcomes that can foster a certain culture. Organizational Structure: The hierarchical structure found in most traditional organizations is more likely to reinforce a culture oriented toward control and authority compared with the flatter organization that eliminates management layers in favor of giving employees more power. Organizational Systems & Procedures: Companies are increasingly using electronic networks to increase collaboration among employees, to increase innovation, quality, and efficiency.

In making decisions, ethical concerns need to be considered. Identify and explain how a decision tree would assist the manager in making ethical decisions

decision tree is a graph of decisions and their possible consequences, and is used to help with ethical decision making. The manager would ask several questions: Is the proposed action legal? If yes, does the proposed action maximize shareholder value? If yes, is the proposed action ethical? If no, would it be ethical NOT to take the proposed action?

Why is it important for a manager to understand organizational culture? What functions does organizational culture serve?

t is important for a manager to understand organizational culture for two reasons: culture can powerfully shape an organization's long-term success, and culture can serve as a control mechanism, substituting for organizational structure. An organization's culture has four functions: It gives members organizational identity. It facilitates collective commitment. It promotes social-system stability. It shapes behavior by helping employees make sense of their surroundings.