MGMT Exam 2 Quiz Questions

Which of the following statements about franchises is NOT true?

-A franchise's high start-up costs are followed with monthly payments to the franchisor that can run from 2% to 15% of gross sales -The powerful advantage of a franchise is the management help is provided by the owner -Franchisors who want every business managed in exactly the same way typically fail** -With a franchise, the franchisee owns the business but does not have to develop a new product, create a new company, or test the market

In formulating corporate strategy, Harrison would like to prevent the organization from becoming too dependent on one business. Therefore, Harrison has chosen a number of product lines that fit together in a synergistic way and provide an overall competitive advantage for the organization. These product lines are unique businesses known as _______

-A matrix -Strategic Business Units** -Functional-level strategies -Consulting groups

Kairos works for a company whose main strategic goal is one of differentiation. The organization atmosphere values innovation and flexibility. Which of the following best fits with the description of Kairos's company?

-A mechanistic system with a functional structure -An organic system with horizontal teams** -An organic system with interdepartmental task forces -A mechanistic system with a divisional structure

You are thinking about opening an insurance company in Norway that sells insurance to Norwegians who have moved to different countries. Your job will be easier than it would have been in the past because of _____

-Advances in types of insurance available -The number of Norwegians who have moved to other countries -Advances in technology**

A manager who uses persuasion and motivational techniques to encourage their employees to meet the corporate goals associated with a strategic plan is using which of the following techniques?

-Appropriate HR practices -Clear roles and accountability -Candid communication -Visible leadership**

Which of the following is NOT an effective tool for use by managers to help execute strategic planning?

-Appropriate HR practices -Visible leadership and candid communication -Clear roles and accountability -Micromanagement and public reprimands**

Strategy formulation includes ________

-Assessing the external environment and internal problems to identify strategic issues and then integrating the results into goals and strategy** -The administration and implementation of the strategic plan -The use of managerial and organizational tools to direct resources toward accomplishing strategic results -Specific plans for department managers, supervisors, and individual employees

The plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals is known as a(n) _______

-Big picture -Explicit strategy** -Competitive advantage -Contingency plan

During a board meeting the CEO of Tesla, Elon Musk, and his directors discussed whether the company should get into the renewable energy business, along with producing cars. While working on this _____ strategy, the directors were considering what proportion of the firm's portfolio of businesses should be in different industries.

-Business-Level -Functional-Level -Corporate-Level** -Forward Thinking-Level

Managers at Annie's, a company that makes organic foods, are considering the best ways for the company to position its products after a great IPO. They decide on a focus strategy, targeting sales at people who care about what's in their food. What type of strategy is this?

-Business-Level Strategy -Functional-Level Strategy -Corporate-Level Strategy

The popularity of its newest personal fitness tracker spurred members of Carly's team to consider developing variations of the tracker. Their concerns about development, advertising, and necessary production facilities fall within the ______

-Business-Level Strategy** -Corporate-Level Strategy -Functional-Level Strategy -Operational-Level Strategy

At which point in the planning process for starting a new business would you be likely to start thinking about your target customers for the business?

-Choosing a legal structure -Thinking up a business idea** -Writing the business plan -Arranging financing

What management tools are managers using to put strategy into action when they openly and avidly promote their strategic ideas, listen to others and encourage disagreement and debate, and create a culture based on openness and honesty that encourages teamwork and collaboration?

-Clear roles and accountability -Visible leadership -Candid communication** -Appropriate HR practices

Indira is working to flatten out the structure of the organization by introducing horizontal teams. The goal of the teams is to help the organization achieve dramatic improvements in the company's costs and product quality. Indira is engaged in _______

-Collaboration -Reengineering** -Virtual networking -Span of management

The owners of Charlottes Fine Chocolates research current trends to come up with new flavors for their chocolates. They are concerned with _____ strategy.

-Corporate-Level -Functional-Level** -Synergistic-Level -Business-Level

When you are thinking about starting an online business, you should find a group of people with an unsolved problem, and then create a product that solves that problem. What step in the process of setting up the business is this?

-Creating a domain name -Knowing when to pivot -Using social media -Finding a market niche**

Which of the following types of investors are most likely to provide debt funding?

-Crowdfunding platforms -Friends and family and banks** -Angels -Venture capitalists

With a team-based structure ______

-Departments are grouped together based on similar organizational outputs -Aspects of both functional and divisional structures are combined simultaneously, in the same part of the organization -The entire organization is made up of horizontal teams that coordinate their work and work directly with customers to accomplish the organization's goals** -Departmentalization occurs by organizational resources because each type of activity represents specific resources for performing the organization's task

The primary difference between divisional and functional structures is that in a divisional structure ______

-Differences of opinion among R&D, marketing, manufacturing and finance would be resolved by top executives -The structure encourages centralization -The chain of command from each function converges lower in the hierarchy** -Economies of scale and efficient resource use are greater

An organizations attempts to develop innovative products unique to the market with a _______

-Differentiation strategy** -Bottom-Up strategy -Collaboration strategy -Cost leadership strategy

Which of the following statements accurately compares entrepreneurs and successful managers in established organization?

-Entrepreneurs often have backgrounds, demographic characteristics, and personalities that are quite similar to successful managers in established organizations -Entrepreneurs often have backgrounds, demographic characteristics, and personalities that are identical to successful managers in established organizations -Entrepreneurs often have backgrounds, demographic characteristics, and personalities that are not highly distinguishable from successful managers in established organizations -Entrepreneurs often have backgrounds, demographic characteristics, and personalities that distinguish them from successful managers in established organizations**

As a strategic manager in a manufacturing company, Kofi knows that making structural decisions must take into consideration pressures from the bottom up. These pressures would include ______

-Environmental conditions -Technology and work processes** -Organizational goals -Strategic direction

When the need for global integration is highest, a corporate global strategy should aim toward ______

-Export strategy or glocalization strategy -Multi-domestic strategy or globalization strategy -Export strategy or multi-domestic strategy -Globalization strategy or glocalization strategy**

If an organization's strategy includes measuring the cost of providing its product or service and maintaining customer loyalty, compiling frequent detailed control reports, and using characteristics of a cost leadership approach directed at a particular target customer, its strategy is one of ______

-Focused cost leadership** -Focused differentiation -Differentiation -Diversification

In order to provide maximum flexibility to meet customer needs and adapt to shifts in the environment, most organizations today encourage managers to ______

-Forgo line authority in favor of staff authority -Eliminate a chain of command -Delegate authority to the lowest possible level** -Maintain taller rather than flatter structures

After a review of the company's mission and goals, Karmen finds that the company is losing market share to several companies in the industry. Karmen's next step would be to _____

-Formulate the company's functional-level strategies -Engage in the process of strategy formulation** -Change the company's leadership -Define a new strategy for the company

Coulson's company has an exceptional research and development department with several of the industry's preeminent researchers. Coulson would rather focus efforts on facilitating the work of these researchers rather than to manufacture and distribute the products. He outsourced those functions, along with the accounting and human resource functions to companies that do those functions well and at a lower cost than his company could. Coulson's company is an example of a _______

-Geographic-based divisional structure -Team-based structure -Virtual network** -Matrix organization

Which of the following strategies would be best to use if your company wanted to sell different products in different locations all around the world and not worry about having one set of policies for the company as a whole?

-Globalization -Multidomestic** -Export -Glocalization

Which of the following is NOT a benefit to buying a franchise over starting your own business?

-Guaranteed larger immediate profits** -National advertising to stimulate local demand -A shorter time to get started -Management help is provided by the franchisor

Manufacturing technologies differ in terms of technical complexity which refers to the degree to which complicated machinery is involved in the production process to the exclusion of people; therefore, a continuous process would be _____

-High in this category -Low in this category -Medium in this category -More mechanistic in this category

In making choices about how to position her organization in the environment with respect to rival companies, as a top-level manager, Cadence would most likely ask all of the following questions EXCEPT ______

-How can we change our environment so that it better fits with our goals for the organization?** -What products or services should we offer, and how can we offer them most efficiently? -What does the future hold for our industry, and how can we change the rules of the game? -Who are our competitors, and what are their strengths and weaknesses?

Which of the following questions should Lucia, a budding entrepreneur, answer "no" based on the characteristics of successful entrepreneurs?

-Instead of using your own money to start the business, would you be willing to sell your idea to someone else and work for them?** -Do you think your success will be based on hard work rather than luck? -Are you willing to give up spending time with friends and family to work on the business? -Are you driven by a desire to accomplish goals?

Which of the following statements about a star is true?

-It exists in a mature, slow-growth industry but has a large market share -It has only a small market share of a slow-growth market -It has only a small market share, but it is in a new, rapidly growing industry -It has additional growth potential, and profits should be plowed into this business as investment for future growth and profits**

Which of the following individuals would be considered an entrepreneur?

-Javier, a hospital nurse, is writing a manual for improving the protocols for the hospital's recovery room activity -Hunter, a visiting nurse, left the practice to open and operate an in-home well-check service for the elderly** -Shakira, a lawyer, does some pro bono work for small-business owners -Fatima, a professor, offers "Homework in a Hurry" sessions outside of scheduled class periods

Which of the following is NOT one of the steps in setting up an online business covered in the text?

-Knowing when to pivot -Finding a market niche -Contacting a bank about a loan** -Choosing a domain name

The purpose of incorporating your company as a benefit corporation is to protect yourself from ____

-Legally needing to turn profits over to shareholders** -High prices charged by suppliers -Lawsuits brought by customers -Lawsuits brought by competitors

If Justin wants to avoid duplication of activities among various business divisions, he would choose _____

-Less centralization -Greater diversification -Neither centralization nor decentralization -Greater centralization**

Shante manages the payroll function for her company. She advises other managers about ranges for pay raises for employees and changes in various benefits offered by the company. In this role, Shante exercises ________

-Line authority -Staff authority** -Span of management -Delegation

Kelly would like to build relational coordination into the fabric of the organization. Which of the following statements best expresses what relational coordination looks like?

-Managers resolve cross-departmental conflicts based on shared goals rather than emphasizing goals of their separate departments** -Rewards are based on individual efforts and accomplishments -Strict work rules guide interactional and the format that individuals and team contributions take -Frontline supervisors typically have larger spans of control so they can increase horizontal coordination

In the production department, the management is always looking at potential suppliers to find quality ingredients at the best price. This scenario is an example of a ______

-Mission Statement -Corporate-Level Strategy -Business-Level Strategy -Functional-Level Strategy**

Managers who want their companies to have high levels of global integration and high levels of national responsiveness should choose which of the following strategies?

-Multidomestic -Glocalization** -Globalization -Export

If Juyoung's company wants to reap efficiencies by standardizing product design and manufacturing, using common suppliers, introducing products around the world faster, coordinating prices, and eliminating overlapping facilities, she should choose a _______

-Multidomestic strategy -Globalization strategy** -Differentiation strategy -Diversification strategy

When Nicole was nursing her second child, she discovered a certain combination of ingredients that stimulated milk production. She began making these lactation brownies for friends who were also nursing. She obtained a license to sell the brownies and is in the process of using her savings to establish a small production facility. Which of the following statements is true?

-Nicole faces large risks and little rewards in this scenario -Nicole took the risks and is now reaping the rewards of entrepreneurship -Nicole faces rewards but no risks in this scenario -Nicole is assuming the financial and legal risks of this entrepreneurial venture**

Using your knowledge of minority and women - owned businesses, which of the following suggestions would NOT be effective in helping your intended audience?

-Offer $15,000 grants to women who have innovative product ideas -Ask local banks to present information on small business loans to program participants -Partner with local technology firms that can offer advice and mentor program participants -Host networking events with small business owners and larger, more established firms looking to do business with minority -and-women-owned businesses

Social media platforms like Instagram, TikTok, and Snapchat are helpful when building an online business because they allow entrepreneurs to ______

-Offer products that wouldn't be noticed otherwise -Build a community of followers** -Get information out in a more understandable way -Communicate without worrying about grammar

Annalise and Mariah worked as foreign correspondents for a large news organization. In thinking about getting married and starting a family, the two decided to settle in the midwest and start an editorial service. This beginning allowed them to stay involved with journalism and publishing and yet work from their home in order to raise their family. Their commitment to balancing the demands of work and family put them in which of the following categories of entrepreneurs?

-Optimizers -Jugglers -Idealists -Sustainers**

Alejandro is conducting SWOT analysis. In order to obtain information about opportunities and threats from the external environment, which of the following sources would he use?

-Organization budget -Professional journals** -Company's annual report -Employee surveys

Which of the following statements is NOT part of the definition of organizational structure?

-Organizational structure is the set or formal tasks assigned to individuals and departments -Organizational structure is the design of systems to ensure effective coordination of employees across departments -Organizational structure is the creation of a shared culture and values that communicate goals and infuses employees with the desire to perform at a high level** -Organizational structure is the formal reporting relationships, including lines of authority and decision responsibility

One of the fastest - growing segments of small business in both the US and Canada is a ____

-Professional service business -Sole proprietorship** -Manufacturing facility -Limited Liability corporation

A corn processing plant is adding a new building for starch conversion processes. Coordinating the construction of the building and its integration into the functioning of the company has been assigned to Trae. His position is located outside of the departments and is responsible for coordinating several departments to achieve desired project outcomes. Trea's job title is _______

-Project manager** -Reengineer -Matrix boss -Top leader

Because the focus of reengineering is on horizontal workflow rather than functions _______

-Reengineering generally leads to a shift toward a strong vertical structure -Reengineering generally leads to a shift away from a strong vertical structure to one emphasizing stronger horizontal coordination** -The radical redesign of business processes achieves dramatic enhancements to the organization's vertical structure -The organization hierarchy remains vertical, but with more senior executives in traditional support functions such as finance and HR

A large fire broke out in the main warehouse at Tess's company. No one was hurt, but the fire did a lot of damage. To deal with the questions from suppliers, customers, and employees, Tess created a team with members from various departments across the company to address important issues and make immediate plans for moving forward. This is known as a _______

-Reengineering team -Task force** -Project manager -Virtual network

The strategic management process begins when executives ______

-Scan the organization's internal and external environments -Identify strengths and weaknesses and other strategic forces -Evaluate their current position with respect to mission, goals, and strategies** -Scan the organization to identify strategic issues that might require change

Which of the following is a disadvantage of the functional structure?

-Separating people into distinct departments shrinks communication and coordination across functions, deterring response to environmental changes** -Grouping employees by common task permits economies of scale and efficient resource use -The convergence of the chain of command at the top of the functional structure offers a way to centralize decision-making and provide unified direction from top managers -Functionally based departments enhance the development of in-depth skills because people work on a variety of related problems

Cary manages a production department. Operators within the department simply read dials, fix machines that break down, and manage the production process that has no starting and stopping. Carly manages a _______

-Small-batch production -Mass production -Large-batch production -Continuous process production**

In the matrix structure, which of the following provides traditional control within functional departments?

-Staff authority -Accountability -Dual lines of authority -The vertical structure**

The stuffed animals division of a toy manufacturer has only a small share of a slow-growth market, which provides little profit for the corporation. Where would this business fit in the BCG matrix?

-Star -Dog** -Question Mark -Cash Cow

_____ is when organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone

-Strategy -Competitive Advantage -Synergy**

In which of the following situations would a small span of control be more appropriate?

-Subordinates perform similar work tasks -A great deal of time is required in nonsupervisory activities** -Subordinates are highly trained and need little direction in performing tasks -Rules and procedures defining tasks activities are available

Fiona's company is involved in an intensely competitive market. This company's strategy involves ways to maintain and enhance customer loyalty, which is beneficial in fighting off the threat of substitute products. Fiona's company follows a _______

-Synergistic approach -Cost leadership strategy -Differentiation strategy** -Focus strategy

As a manager of the Marketing Department, Renault is guiding his team to use creative advertising in order to better highlight distinctive product features. This type of competitive strategy to better compete is known as ______

-Synergy -Differentiation** -Cost leadership -Focus strategy

Strategic managers normally think in terms of which of the following three levels of strategy?

-Synergy, tactical level, and operational level -Strategic level, core competence, and synergy -Contingency plans, scenario plans, and functional plans -Corporate level, business level, and functional level**

All of the following are ways in which managers scan the environment and identify strengths and weaknesses that may affect an organization's ability to compete EXCEPT _______

-Talking with people at all levels of the hierarchy -Through company budgets and annual reports -Through government reports** -Through assessments of human resource functions

According to the 2018-2019 GEM report, in Thailand this demographic segment showed an increasing number of _____ becoming entrepreneurs

-Tech Savvy millennials -Disabled people -Bilingual citizens -Women**

The primary benefit of using the legal structure of a corporation for a business is _____

-That the manager has total control of the company -Its simplicity -The limits on owners' liability** -The paperwork requirements to incorporate

Which of the following is NOT a reason typically given by immigrants for opening a business in the US?

-The U.S. offers more opportunities for the individual than does their home country -Costs of labor are lower in the U.S.** -The economy in the U.S. is more stable than the economy in their home country

When Uber was experiencing its first wave of tremendous growth, ____ was a concern as people still use public transportation such as buses and subways.

-The bargaining power of buyers -The threat of substitutes** -The bargaining power of suppliers -Rivalry among competitors

Which of the following statements about strategy execution within the strategic management process is true?

-The biggest barriers to strategy execution are related to the inability of people to adopt new behaviors rather than the lack of resources or planning** -The first step in the strategic management process is strategy execution -Many strategy experts agree that execution is the most important and easiest part of strategic management -An excellent strategy formulation can overcome poor execution to the benefit of the organization

Taber is deciding between applying to become a GameTruck franchisee or to start up his own mobile gaming business. He understands there are benefits and drawbacks. Which item could be a significant drawback for Taber as an entrepreneur?

-The franchisor can dictate prices and product selection** -A shorter time to get started -Management help is provided by the franchisor -The franchisor provides national advertising to stimulate local demand

Last summer, you started a dog walking business in your small town. Demand has been steady, but you are concerned about ______ because startup costs are low

-The threat of substitutes -Potential new entrants** -The bargaining power of buyers -The bargaining power of suppliers

When creating a global strategy, effective managers do which of the following activities?

-They consider the use of local managers to run foreign operations and take time to study the culture and language of the country -They begin exporting to test the market -Before they create the structure for foreign operations, they test that structure in domestic operations -They view the international market as an extension of the domestic market

Georgina decided that the best way to get hats and mittens to children was to start a business that sells hats and mittens. For every hat or pair of mittens she sells, she plans to give away a hat or pair of mittens to an elementary school child. Why would she choose to set up this business as a benefit corporation?

-To prevent a takeover by a for-profit business -To minimize the paperwork associated with starting the business -To grow the business more rapidly -To prevent lawsuits designed to return profits to shareholders**

Ernest manages a modular furniture manufacturer. The organization Ernest works for also owns a plastics manufacturer, which makes mostly storage containers. The organization recently purchased a smaller home goods retainer. This purchase takes the organization another step toward greater _____

-Unrelated diversification -Use of single-use plans -Vertical integration** -Use of business incubators

United Technologies is the parent company for several manufacturing concerns. United Technologies has two divisions: (1) Otis manufactures elevators and escalators and (2) UTC Climate, Controls & Security deals with air conditioning and refrigeration, fire safety, surveillance, and security. This is an example of _______

-Use of single-use plans -Use of business incubators -Vertical integration -Unrelated diversification**

When you think about starting an online business, you need to call your website something that is easy to pronounce and memorable. What step in the process of setting up the business is this?

-Using social media -Creating a domain name** -Knowing when to pivot -Finding a market niche

Pozible is an Australian company that provides an online resource from which entrepreneurs can solicit funds for a creative project and ideas; it also doubles as a community-building tool for those looking to raise money and build communities around their projects. Individuals who provide funds become part owners in the venture. Pozible is an example of a _____

-Venture capital firm -Virtual Incubator -Benefit Corporation -Crowdfunding platform**

As an entrepreneur, Quinn connects virtually with a wide range of experts and mentors through a service that offers lower overhead and cost savings for cash-strapped small-business owners. This is known as a ____

-Venture capital firm -Virtual Incubator** -Pivot -Benefit corporation

An organization must make sure that recruiting, selecting, training, compensating, transferring, promoting, and laying off employees are aligned with its strategy to achieve its strategic goals. These activities are part of which of the following primary tools that managers use to implement strategy effectively?

-Visible leadership -Appropriate HR practices** -Candid communication -Clear roles and accountability

Which of the following groups of people have seen increasing entrepreneurship in recent years?

-Women** -Men -Caucasians -Native American

Starting and growing your own business requires a combination of many skills and qualities. One essential quality is______

-a passion for an idea** -legal experience with starting a business -a proven product -access to significant financial resources

At work, Jordan realized the new merchandise for the store opening would not arrive in time. Without getting discouraged, she got on the phone with several suppliers and worked the entire day to arrange for samples to be available and several tablets on which customers could place orders for merchandise during the opening event. Jordan showed entrepreneurial characteristics of ____

-external locus of control and autonomy -logistical sense of financial savvy -self-sacrifice and perseverance -high energy and self-confidence**

social entrepreneurs are interested in _______, not ________

-maximizing financial returns, providing social benefits -providing social benefits, maximizing financial returns** -mass production of cheap products, maximizing financial returns

Julio has developed a mobile app that connects professionals looking to carpool to work in large cities. This is an example of ______

-using social media -finding a market niche** -knowing when to pivot -creating a professional Web site