Management of Organizations Sample Questions Study Guide for Exam 1 (Ch. 1-5)

Top Managers

Top managers make up the relatively small group of executives who manage the overall organization. Top managers create the organization's goals, overall strategy, and operating policies.

Uncertainty

A state of uncertainty is a condition in which the decision maker does not know all the alternatives, the risks associated with each, or the likely consequences of each alternative.

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

Administrative

Philanthropic Giving

a formal organizational dimension of managing social responsibility

Corporation

a legal entity that is separate and distinct from its owners

Classical decision model

a prescriptive approach that tells managers how they should make decisions It rests on the assumptions that managers are logical and rational and that they make decisions that are in the organization's best interests.

The actual physical environment, such as an office or a warehouse, and the work that people do are all part of the _____.

internal environment The internal environment is the conditions and forces within an organization, including the actual physical environment and the work that people do. Some firms have their facilities in downtown skyscrapers, usually spread across several floors. Others are located in suburban or rural settings and may have facilities more closely resembling a college campus.

Quota

permissions given by administrators that set limits on the user, workgroups, or other groups of storage space

venture capitalism

private equity investor that provides capital to companies with high growth potential in exchange for an equity stake

The exact description of how specific activities are to be carried out would be found in which type of plan?

Rules and regulations

Apoorva's organization makes decisions using evidence-based management. What can Apoorva do to support a culture in which facts are encouraged?

Allow people to tell the truth, even if it is unpleasant.

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

Avoid basing decisions on what has been done in the past. The supporters of evidence-based management recommend that you treat your organization as an unfinished prototype—encourage experimentation and learning by doing. They also recommend that you avoid basing decisions on untested but strongly held beliefs, what you have done in the past, or uncritical "benchmarking" of what winners do.

Which type of decision-making approach assumes that managers are logical, that they have complete information, that they can eliminate uncertainty, and that all of the decisions they make will be in the best interests of the organization?

Classical The classical model of decision making assumes that managers will be logical and rational and act in the best interest of the organization.

Several managers agreed that the current course of action in the firm was leading to disaster. The managers submitted a plan to the CEO suggesting an alternative they think will be significantly more effective, and they have agreed to continue to work together until this new plan is put in place. Which of the following have these managers used to promote the new goal?

Coalition A coalition is an informal alliance of individuals or groups formed to achieve a common goal. This common goal is often a preferred decision alternative. For example, coalitions of stockholders often band together to force a board of directors to make a certain decision. The impact of coalitions can be either positive or negative. They can help astute managers get the organization on a path toward effectiveness and profitability, or they can strangle well-conceived strategies and decisions.

In light of recent ethical standards in which the boards of major companies have approved loans or bonuses to CEOs or board members, increased attention has been paid to _____.

Corporate governance Corporate governance means that the board of directors of a public corporation is expected to ensure that the business is being properly managed and that the decisions made by its senior management are in the best interests of shareholders and other stakeholders.

What is the term that describes differences among people?

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.

external environment

Everything outside an organization's boundaries that might affect it

Export restraint agreement

Export restraint agreements are designed to convince other governments to voluntarily limit the volume or value of goods exported to or imported from a particular country. They are, in effect, export quotas.

True or false: Firms in complex and dynamic environments consistently add more jobs regarding job creation.

False. Most firms, especially those in complex and dynamic environments, go through periods of growth when they add new jobs but also have periods when they cut jobs. Jobs are created by entrepreneurial companies of all sizes, all of which hire workers and all of which lay them off.

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?

Increasing efforts over the next year to develop a line of children's skin protection products Tactical plans, devised to carry out a strategic plan, clearly determine resources that are to be used and a timeline for completion.

What is a characteristic of the art, rather than the science, of management?

Intuition Even though managers may try to be scientific as often as possible, they must frequently make decisions and solve problems on the basis of intuition, experience, instinct, and personal insights. These are all part of the art of management.

Dezmon works for a large company, but lately he has been thinking about starting his own small manufacturing company. What should Dezmon keep in mind about the ability of small business owners to succeed in the manufacturing field?

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

Which of the following is true regarding job creation?

Jobs are created by entrepreneurial companies of all sizes.

Organizational culture

Organizational culture is an informal dimension of managing social responsibility.

Dajhia is currently a first-line manager, and wants to move up into middle management. What job title should she look for when looking at her company's internal job postings?

Plant manager Common titles for first-line managers are supervisor, coordinator, and office manager. Common middle-management titles include plant manager, operations manager, and division head.

rules and regulations vs. standard operating procedure

Rules and regulations and SOPs are similar in many ways. They are both relatively narrow in scope, and each can serve as a substitute for decision making. An SOP typically describes a sequence of activities, whereas rules and regulations focus on one activity. A standard operating procedure (SOP) is a type of operational plan that details the process to be followed for specific circumstances. Rules and regulations describe exactly how specific activities are to be carried out.

Which business segment is the fastest-growing segment of small-business enterprise, with fewer than 20 employees?

Service

task environment

Specific organizations or groups that affect the organization The task environment includes competitors, customers, suppliers, strategic partners, and regulators.

When training new salespeople, Dezmon teaches the employees a step-by-step process, and the sequence of activities, for qualifying prospects and arranging credit. What does Dezmon use to facilitate this process so he is certain the correct steps are followed in the correct order, every time?

Standard operating procedure An SOP typically describes a sequence of activities, whereas rules and regulations focus on one activity.

Which type of plans are an organized sequence of steps designed to execute which type of plans?

Strategic

Geert would like to open a cafeteria to provide meals to workers at the local hospital. However, he needs to find a source of financing. He has approached the hospital to discuss them providing and building the cafeteria. Which source of financing is Geert pursuing?

Strategic alliances A strategic alliance is a partnership with another firm. Strategic alliances are a popular method for financing business growth. For instance, commercial real estate developers occasionally develop alliances with regional restaurant chains. The restaurant chain may commit to opening new dining establishments in different new developments.

In the introduction stage of the product life cycle, what do managers typically need to focus on?

Supply

internal environment

The conditions and forces within an organization

Economic Environment

The economic environment is a dimension of the general environment.

Which of the following best summarizes the relationship between necessary resources and the prevalence of small businesses in an industry group?

The more resources an industry requires, the harder it is to start a business and the less likely it is that the industry is dominated by small firms.

general environment

The set of broad dimensions and forces in an organization's surroundings that determines its overall context

Why do operational plans tend to be narrowly focused with short time horizons?

They support tactical goals. Operational plans are derived from tactical plans and are aimed at achieving operational goals. Thus, operational plans tend to be narrowly focused, have relatively short time horizons, and involve lower-level managers.

Product life cycle - Keeping costs low

This period of maturity is essential if an organization is going to survive in the long run. Product differentiation concerns are still important during this stage, but also keeping costs low and beginning the search for new products or services are important strategic considerations.

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

Work in a diner before starting his own. The best way to gain knowledge about a market is to work in it before going into business in it.

Management can best be defined as _____.

achieving organizational goals in an efficient and effective manner Management can be defined as a set of activities (including planning and decision making, organizing, leading, and controlling) directed at an organization's resources (human, financial, physical, and information), with the aim of achieving organizational goals in an efficient and effective manner.

One advantage of team decision making is that _____.

better decisions generally emerge A group or team represents a variety of education, experience, and perspective. 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.

When entering into a new business, having established supplier relationships is an advantage to _____.

buying an existing business If successful, an existing business has already proved its ability to draw customers at a profit. It has also established working relationships with lenders, suppliers, and the community.

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

conglomerate Conglomerates are organizations that compete in dozens or even hundreds of markets.

Enterprise

way of conducting and controlling the business, process, information and IT capabilities, system and service offerings, resources and activities of the enterprise

If a company creates a committee to review its guidelines concerning selection and promotion, it is attempting to manage social responsibility through what?

d.Ethical compliance These activities serve as vehicles for enhancing ethical compliance. Many organizations also establish formal ethics committees, which may be asked to review proposals for new projects, to help evaluate new hiring strategies, or to assess a new environmental protection plan. They might also serve as a peer-review panel to evaluate alleged ethical misconduct by an employee.

When the right decisions are made and implemented, the management process is considered to be _____.

effective A management process is considered to be effective when the right decisions are made and implemented. In general, successful organizations are both efficient and effective.

The site manager for a company is negotiating for a new site to build an office complex. After several counter offers, the seller gave the company a final offer. The manager has the option to accept or reject the offer. If the manager accepts the offer, he gets a site in time to meet the relocation schedule, but at a price above budget. If he rejects the contract, he may get a more favorable price if the seller is bluffing. But he may lose out on the location and not be able to find another one in time if he does not get a more favorable price. The manager is making a decision in a state of _____.

risk

Logan Chemicals has a long history of dumping waste in a local stream. Recently, it has made major efforts to reduce pollution in order to help clean up the environment. Logan Chemicals is responding to which contemporary management challenge?

social responsibility From a social responsibility perspective, increasing attention has been focused on pollution and business's obligation to help clean up our environment, business contributions to social causes, and so forth.

Sabine just submitted a bid to take over the paper supply contract for a large firm in town. She knows that another firm bid as well, and only one of them will win the contract. These two firms exist in each other's _____.

task environment The task environment includes competitors, customers, suppliers, strategic partners, and regulators.

crowdfunding

the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet.

Corporate-level strategy

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

An argument against social responsibility in organizations is that _____.

there is potential for conflicts of interest