exam 1 quiz 1-5 questions

What can be described as the number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another? a. Diversification b. Divestiture c. Entropy d. Competency e. Economy of scale

a. Diversification (The most important strategic issue at the corporate level concerns the extent and nature of organizational diversification. Diversification describes the number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another.)

Which perspective states that effective managerial behavior in one situation cannot always be generalized to other situations? a. Scientific management b. The contingency perspective c. The systems perspective d. Administrative management e. The behavioral management

b. The contingency perspective (The contingency perspective suggests that appropriate managerial behavior in a given situation depends on, or is contingent on, unique elements in that situation. Stated differently, effective managerial behavior in one situation cannot always be generalized to other situations.)

Bonafide Fresh offers an expanding brand of personal care products that are made with all-natural ingredients. The company has an organizational goal to increase the number of product lines that it offers. Which of the following is the best example of a tactical plan for achieving this objective? a. Introducing six new product lines to the marketplace over the next two years b. Assigning a cross-department project team to research the market potential for a new hair product c. Increasing production of the company's most popular toothpaste d. Eliminating cash cows and question marks from the portfolio e. Increasing efforts over the next year to develop a line of children's skin protection products

a. Introducing six new product lines to the marketplace over the next two years (Tactical plans, devised to carry out a strategic plan, clearly determine resources that are to be used and a timeline for completion. Supporting new product development efforts with organizational resources over a 12-month period is a valid tactical plan to increase the company's number of product lines.)

As the head of Human Resources, Woojin has assembled a team to consider ways to manage the cost of health care and other benefits. He made sure to include a variety of employees—single, married, single parents, and older workers—on the team. Which of the following advantages will this team provide? a. More alternatives can be identified and evaluated. b. The team will take as much time as needed to reach a decision. c. There will be no undesirable compromises. d. There will be a high degree of cohesiveness. e. No one person will dominate the group.

a. More alternatives can be identified and evaluated. (This team represents a variety of education, experience, and perspectives. Partly as a result of this increased information, groups and teams typically can identify and evaluate more alternatives than can one person. The people involved in a group or team decision understand the logic and rationale behind it, are more likely to accept it, and are equipped to communicate the decision to their work group or department.)

A disadvantage of group decision making is that _____. a. groupthink may occur b. too many choices may be generated, wasting time c. there will be less acceptance by the group d. most members will be unwilling to compromise e. poor decisions generally emerge

a. groupthink may occur (Groupthink is a situation that occurs when a group or team's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision.)

A good deal of money is usually needed to start a(n) _____ business because of the investment normally required in equipment, energy, and raw materials. a. manufacturing b. wholesaling c. insurance d. services e. retail

a. manufacturing (Because of the investment normally required in equipment, energy, and raw materials, a good deal of money is usually needed to start a manufacturing business.)

Mica was employed by the regional hospital system and decided to start her own business in the medical support field. She plans to make use of her extensive experience to succeed at this small-business start-up. Which type of entrepreneurial trend does this represent? a. Franchising agreement b. Crossover from big business c. Emergence of e-commerce d. Collaborative networking e. Creating a niche market

b. Crossover from big business (Crossover from big business is a significant trend in small-business start-ups. It is becoming more common to see people take the experiences and capabilities gained from a large organizational setting and use them to go to work for themselves.)

Which of the following statements is true about the administrative model of decision making? a. It suggests that political forces do not exist in business scenarios. b. It suggests that managers may not always make decisions that best serve the interests of their organizations. c. It suggests that decisions should only be made individually and not in groups. d. It suggests that decisions made by groups are better than decisions made by individuals. e. It suggests that managers use a blend of subjective knowledge and analysis to choose the best alternative.

b. It suggests that managers may not always make decisions that best serve the interests of their organizations. (The administrative model suggests that managers may not always make decisions that best serve the interests of their organizations. The model holds that decision makers (1) use incomplete and imperfect information, (2) are constrained by bounded rationality, and (3) tend to satisfice when making decisions.)

The idea that the manufacturing costs per unit decrease as the number of units produced increases is known as_______. a. venture capitalism b. economy of scale c. Reed's law d. the network effect e. the first-mover advantage

b. economy of scale (Research has shown that manufacturing costs often fall as the number of units produced by an organization increases. This relationship between cost and production is called an economy of scale.)

One disadvantage of hiring management consultants to solve problems in business is that_______. a. management consultants can be of little help to businesses in the manufacturing industry b. management consultants are expensive and charge high fees for their services c. most management consultants do not provide objective opinions d. management consultants can only provide suggestions for general administrative issues e. it is very difficult to find consultants who specialize in one area

b. management consultants are expensive and charge high fees for their services (Opinions vary widely about the value of management consultants—experts who charge fees to help managers solve problems. They can be quite expensive as some consultants charge $3,000 or more for a day of assistance.)

Nokia and Samsung make cell phones. They operate in the ____ industry. a. finance b. manufacturing c. wholesale d. construction e. service

b. manufacturing (Nokia and Samsung operate in the manufacturing industry.)

Mortgage companies, and pawnshops operate in the _____ industry. a. ​wholesale b. ​finance c. ​services d. ​retail e. ​manufacturing

b. ​finance (Some local savings-and-loan-operations, mortgage companies, and pawnshops also fall into the finance and insurance industry.)

What is a commitment to finding and using the best theory and data available at the time to make a decision? a. Rational management b. Bounded rationality c. Evidence-based management d. Rational decision making e. Classical decision making

c. Evidence-based management (Evidence-based management is a commitment to finding and using the best theory and data available at the time to make decisions.)

SuperWheels is a large firm that manufactures bicycles. The company sells a line of basic children's bicycles targeted at a specific market segment. Because of its economies of scale, the amount SuperWheels spends per unit in production is extremely low, and it is able to price these bicycles lower than the competition. Which of the following strategies is illustrated in the scenario? a. Cost leadership strategy with differentiation focus b. Differentiation strategy c. Focus strategy with cost leadership focus d. Focus strategy with differentiation focus e. Overall cost leadership strategy

c. Focus strategy with cost leadership focus (A firm pursuing a focus strategy concentrates on a specific regional market, product line, or group of buyers. This strategy may have either a differentiation focus or a cost leadership focus. This scenario depicts a cost leadership focus.)

Which of the following statements is true about the decision-making process? a. It exclusively applies to problem situations. b. It typically involves only one individual and seldom applies to groups. c. It requires that the nature of a particular situation be defined. d. It results in the generation of only one alternative. e. It seldom applies to situations that are positive.

c. It requires that the nature of a particular situation be defined. (The decision-making process includes recognizing and defining the nature of a decision situation, identifying alternatives, choosing the "best" alternative, and putting it into practice.)

Which of the following statements is true about small businesses in the United States? a. Small businesses hire at a slower rate than big companies. b. There are very few small firms in the United States. c. Most U.S. workers are employed by small firms. d. Small businesses are the last to lay off workers during economic downswings. e. Technology is the only sector in which small firms have no presence.

c. Most U.S. workers are employed by small firms. (Small business—especially in certain industries—is an important source of new (and often well-paid) jobs in the United States.)

Which of the following is a Theory Y assumption? a. People are not internally motivated to achieve their goals. b. People prefer to be directed, to avoid responsibility, and to want security. c. People do not naturally dislike work. d. Social processes do not influence the performance of workers. e. People perform better when they are threatened by the manager.

c. People do not naturally dislike work. (Theory Y takes a positive view of workers and assumes that people do not naturally dislike work; work is a natural part of their lives.)

Lucia bought a particular brand of laptop even though it does not support the software that is required for her business. She did this because all her family members have used that same brand and like it. This is an example of how decision makers are constrained by _____. a. political forces b. logic c. bounded rationality d. Lucia's high-risk propensity e. organizational strategies

c. bounded rationality (This scenario illustrates bounded rationality. Bounded rationality is a concept suggesting that decision makers are limited by their values and unconscious reflexes, skills, and habits.)

The ability to motivate others is a(n) _____ skill. a. technical b. conceptual c. interpersonal d. diagnostic e. communication

c. interpersonal (Interpersonal skills are the ability to communicate with, understand, and motivate both individuals and groups.)

When the low-indicator light turns red on the frozen drink machine, Kareem follows an established set of procedures to refill and reset the machine. In doing so, he's making a(n) _____ decision. a. unstructured b. intuitive c. programmed d. irrational e. strategic

c. programmed (A programmed decision is a decision that is relatively structured or recurs with some frequency (or both).)

The skills necessary to accomplish or understand the specific kind of work done in an organization are called _____ skills. a. decision-making b. diagnostic c. technical d. conceptual e. time management

c. technical (Technical skills are necessary to accomplish or understand the specific kind of work done in an organization. These are especially important for first-line managers. To be effective managers, they must know how to perform the tasks assigned to those they supervise.)

Which of the following focuses on the management of the entire organization as opposed to the jobs of individual workers? a. Scientific management b. The behavioral management perspective c. Theory X d. Administrative management e. The contingency perspective

d. Administrative management (Administrative management is a classical management perspective that focuses on managing the total organization.)

Which concept can be used by managers to develop a better understanding of their inherent biases and limitations? a. Classical model b. Intuition c. Ethics d. Bounded rationality e. Satisficing

d. Bounded rationality (Bounded rationality suggests that decision makers are limited by their values and unconscious reflexes, skills, and habits. They are also limited by less-than-complete information and knowledge. The administrative model can be used by managers to develop a better understanding of their inherent biases and limitations.)

According to the BCG matrix, what should a company do with the cash that is generated by cash cows? a. Return it to shareholders. b. Invest it in question marks. c. Use it to incentivize employees. d. Invest it in stars. e. Apply it to R&D for new products.

d. Invest it in stars. (Cash generated by cash cows should be invested in stars to ensure their preeminent position.)

Which of the following statements is true about a differentiation strategy? a. It enables a firm to sell products at lower prices and still make profits. b. It cannot be used by companies that offer services only. c. It involves making simple, low-priced products for the mass market. d. It enables a firm to charge more for its products. e. It is aimed at reducing production costs by using inexpensive raw materials.

d. It enables a firm to charge more for its products. (An organization that pursues a differentiation strategy seeks to distinguish itself from competitors through the quality (broadly defined) of its products or services. Firms that successfully implement a differentiation strategy are able to charge more than competitors because customers are willing to pay more to obtain the extra value they perceive.)

Which management function is considered to be the most important and the most challenging of all managerial activities? a. Organizing b. Time management c. Soldiering d. Leading e. Controlling

d. Leading (The third basic managerial function is leading. Some people consider leading to be both the most important and the most challenging of all managerial activities. Leading is the set of processes used to get members of the organization to work together to further the interests of the organization.)

Which of the following is most closely associated with an overall cost leadership strategy? a. Manufacturing highly-customized products b. Using expensive raw materials c. Selling products at high prices d. Manufacturing products in bulk e. Providing highly efficient customer service that is better than any other competitor

d. Manufacturing products in bulk (An organization implementing an overall cost leadership strategy attempts to gain a competitive advantage by reducing its costs below the costs of competing firms. By keeping costs low, the organization is able to sell its products at low prices and still make a profit.)

Each summer the local running club hosts a marathon and looks for sponsors to support the event. This year, the club contacted the local water bottling plant. The manager of the plant can see the benefits of this event, but the plant has never participated in something like this. Which type of decision needs to be made about the potential sponsorship of the local marathon? a. Bounded rationality b. State of risk c. Programmed d. Nonprogrammed e. State of uncertainty

d. Nonprogrammed (The manager of the bottling plant is making a nonprogrammed decision in this scenario. Nonprogrammed decisions are relatively unstructured and occur much less often than programmed decisions.)

Zereth is looking for ways to increase foot traffic into her brick-and-mortar locations. She has decided to open up a small coffee shop with free Wi-Fi in her store. This is an example of which type of decision? a. Standard b. Programmed c. Operational d. Nonprogrammed e. Risk

d. Nonprogrammed (This scenario illustrates a nonprogrammed decision. Nonprogrammed decisions are relatively unstructured and occur much less often than programmed decisions.)

What are the unique skills and capabilities that enable an organization to create and implement its strategies? a. Organizational opportunities b. Environmental strengths c. Market strengths d. Organizational strengths e. Market opportunities

d. Organizational strengths (Organizational strengths are skills and capabilities that enable an organization to create and implement its strategies. They include things like a deep pool of managerial talent, surplus capital, a unique reputation and/or brand name, and well-established distribution channels.)

Which of the following is NOT one of the basic factors usually cited to explain new business success? a. Careful analysis of market conditions b. Luck c. Combination of hard work, drive, and dedication d. Sufficient capital e. Managerial competence

d. Sufficient capital (Sufficient capital is not one of the basic factors often cited to explain new business success.)

Zereth recently made a lateral move in the company and now oversees a new department. She mentioned to a friend that the management style she used in her former department is falling flat with her new staff. They do not seem to respond to the same sorts of incentives, and she is looking for new ways to motivate and encourage them. Zereth's experience is consistent with which view of management? a. The systems perspective b. The classical theory c. The humanistic perspective d. The contingency perspective e. The behavioral theory

d. The contingency perspective (The contingency perspective suggests that appropriate managerial behavior in a given situation depends on, or is contingent on, unique elements in a given situation. Effective managerial behavior in one situation cannot always be generalized to other situations.)

Which of the following statements is true about a franchise agreement? a. The franchisee does not have to pay a start-up cost for the venture. b. The franchisee is free to modify the franchisor's products. c. The franchisee and not the franchiser takes the responsibility of marketing and advertising activities. d. The franchisee can consult the franchiser for managerial and financial help. e. The franchisee can keep all the profits made by the venture.

d. The franchisee can consult the franchiser for managerial and financial help. (A franchise is an arrangement that permits the franchisee (buyer) to sell the product of the franchiser (seller, or parent company). Franchisees can thus benefit from the selling corporation's experience and expertise. They can also consult the franchiser for managerial and financial help.)

The purchasing department at a printing business begins buying higher quality and more expensive paper. This leads to higher costs and cash flow problems identified by the finance department. Marketing notes that prices must be increased slightly, but that customer satisfaction improves, leading to more sales. According to the systems perspective, this scenario is an illustration of a subsystem with _____. a. entropy b. independence c. efficiency d. interdependence e. synergy

d. interdependence (Because they are interdependent, a change in one subsystem can affect other subsystems as well. Managers must therefore remember that although organizational subsystems can be managed with some degree of autonomy, their interdependence should not be overlooked.)

What is the term that describes differences among people? a. Culture b. Synergy c. Ethics d. Norms e. Diversity

e. Diversity (The term diversity refers to differences among people. Diversity may be reflected along numerous dimensions, but most managers tend to focus on age, gender, ethnicity, and physical abilities and disabilities.)

Why are lending institutions such as banks more likely to help finance the purchase of an existing business than a new business? a. Eligibility guidelines are more flexible b. Loan amounts for purchases tend to be smaller c. The borrower of a loan for a new business has nothing to offer as collateral d. The government backs loans for purchases e. The risks are better understood

e. The risks are better understood *(Lending institutions are more likely to help finance the purchase of an existing business than a new business because the risks are better understood.)

When a manager writes an email to their employees that provides details about the upcoming annual company picnic, the manager is most likely to be using _____ skills. a. conceptual b. spatial c. technical d. abstract e. communication

e. communication (The manager is most likely to be using communication skills. Communication skills help the manager listen to what others say and understand the real meaning behind emails, letters, reports, and other written communication.)

According to the GE Business Screen, a business with a service network and low operating costs is likely to be_______. a. more diversified b. more attractive c. a star d. a cash cow e. in a favorable competitive position

e. in a favorable competitive position (In general, businesses with large market share, technological know-how, high product quality, a quality service network, competitive prices, and low operating costs are in a favorable competitive position.)

An organization's _____ is a statement of its fundamental, unique purpose that sets a business apart from other firms of its type and identifies the scope of the business's operations in product and market terms. a. tactical plan b. operational goal c. code of ethics d. article of incorporation e. mission

e. mission (An organization's mission is a statement of an organization's fundamental, unique purpose that sets a business apart from other firms of its type and identifies the scope of the business's operations in product and market terms.)

Sabina is responsible for building the day-to-day work schedules for her subordinates. She assigns specific tasks to her subordinates and designs activities according to the objectives that she receives from her seniors. Sabina works on _____ goals. a. organizational b. tactical c. divestiture d. strategic e. operational

e. operational (Operational goals are goals set by and for an organization's lower-level managers. Their concern is with shorter-term issues associated with the tactical goals.)