MBA 704 - kungu - chapter 3&4

The stock option plan allows senior-level managers to buy company stock in the future at a/ the _____ price. A. predetermined fixed B. spot C. current D. future market

A. predetermined fixed

According to the text, which of the following is regarded as the most powerful ongoing training program in strong-culture firms? A. Role models B. On-site training procedures C. Reward systems D. Organizational fundamentals

A. role models

The role of the leader in a learning organization constitute all these responsibilities EXCEPT: A. to prescribe appropriate rewards and punishments. B. to inspire commitment. C. to encourage effective decision making. D. to build a shared vision.

A. to prescribe appropriate rewards and punishments

Which of the following is another more all encompassing design besides the network organization? A. Virtual organization B. Hollow design C. Modular design D. Horizontal organization

A. virtual organization

Most of the management literature dealing with money has focused on money as pay and the ways in which pay affects all of the following EXCEPT: A. job attitudes. B. work ethics. C. motivation. D. retention.

B. Work ethics

The Old Age Survivors and Disability Insurance Program provides limited income to retired people to supplement all of the following EXCEPT: A. personal savings. B. individual retirement account. C. part-time work earnings. D. private pensions.

B. individual retirement account.

The systems in which step of the socialization process are comprehensive and consistent, and focus on those aspects of the business that are most crucial to competitive success and to corporate values? A. Adherence to important values B. Measuring and rewarding performance C. Job mastery D. Placement on the job

B. measuring and rewarding performance

Which of the following covers individuals who suffer from job-related illness or accidents? A. Economic Recovery Act of 1981 B. Life Insurance C. Worker's compensation D. Social Security

C. Worker's compensation

The virtual organization is a company outside a company created to specifically respond to an exceptional market opportunity that is often: A. unstructured. B. random. C. temporary. D. clustered.

C. temporary

Which of the following is NOT a disadvantage associated with merit pay? A. The criteria for determining merit are often nebulous. B. It is difficult to quantify merit pay criteria. C. It can end up being "catch-up" pay. D. It allows the employer to differentiate pay given to high performers.

D. It allows the employer to differentiate pay given to high performers.

Apart from social security, another major category of traditional benefits consists of life-cycle benefits.

FALSE

As organizations seek to determine the effectiveness of pay on performance, the huge pay package most CEO's of large firms received is justified with the performance of their firms.

FALSE

Base pay is often determined by productivity.

FALSE

Creativity includes the willingness to accept personality clashes.

FALSE

Empathy is reflected by the genuine concern for and the interest in employee suggestions and innovations that can be operationalized through a feedback systems.

FALSE

The word virtual as used in virtual organizations comes from the popular 'virtual reality.'

FALSE

Under single-loop, the organization is learning with significant changes in its basic assumptions.

FALSE

When parts of the product or service are outsourced, it's called the "Hollow Organization" design.

FALSE

Agency theory involves a new approach to understanding behavior by individuals and groups both inside and outside the organization.

TRUE

Behavioral performance management focuses on social recognition as an effective contingent reinforcer that supervisors/ managers can use as a style in interpersonal relations.

TRUE

The first step to helping solidify the acceptance of core values and ensuring that the culture maintains itself within an organization is: A. placement on the job. B. job mastery. C. selection of entry-level personnel. D. measuring and rewarding performance.

c. selection of entry-level personnel

In the socialization process, "measuring and rewarding performance" is followed by which step? A. Adherence to important values B. Job mastery C. Reinforcing the stories and folklore D. Selection of entry-level personnel

A. Adherence to important vlaues

Which of the following is the practice of collapsing the traditional large number of salary levels into a small number of salary grades with broad pay ranges? A. Broad-banding B. Skill pay C. Commissions based beyond sales to customers D. Rewarding leadership effectiveness

A. Broad-banding

In which of the following system, besides sales volume, the reward is determined by customer satisfaction and sales team outcomes such as meeting revenue or profit goals? A. Commissions based beyond sales to customers B. Rewarding new goals C. Pay for knowledge workers in teams D. Competency pay

A. Commissions based beyond sales to customers

Which of the following allows employees to make tax-deductible contributions to a pension, savings, or an individual retirement account (IRA)? A. Economic Recovery Act of 1981 B. Employee Retirement Income Security Act of 1974 C. Family and Medical Leave Act of 1993 D. Civil Rights Act of 1991

A. Economic Recovery Act of 1981

Which of the following typically involves the company taking out a loan to buy a portion of its own stock in the open market? A. Employee stock ownership plan B. The use of stock options C. Profit sharing group incentive plan D. Current profit sharing

A. Employee stock ownership plan

Under which of the following arrangement does an organization establish a budgeted amount that it is willing to spend per employee, and the individual is then allowed to decide how to spend this money? A. Flexible, cafeteria-style benefits B. Noninsured benefit programs C. Prepaid legal plans D. Concierge services

A. Flexible, cafeteria-style benefits

Which of the following are designed to share with the group or team the net gains from productivity improvements? A. Gain-sharing B. ESOPs C. Spot bonus awards D. Group sales commissions

A. Gain-sharing

Which of the following radical organizational redesign involves breaking completely from the classical structure and establishing a totally different design? A. Green-field redesign B. Network design C. Demand redesign D. Rediscovery redesign

A. Green-field redesign

Agency theory seeks to explain: A. how owners and managers may vary in their approach to risk taking. B. how owners are more effective than managers in using pay and other forms of compensation to effectively run the organization. C. differences in time horizons between managers and lower-level employees. D. how owners and managers are similar while making decisions during a high stress situation.

A. How owners and managers may vary in their approach to risk taking

Which of the following plans were particularly popular during the height of the scientific management movement over a hundred years ago? A. Individual incentive pay plan B. Base pay plan C. Merit pay plan D. Group incentive pay plan

A. Individual incentive pay plan

_____ consist(s) of a global network of independent companies that act as a single company with a common mission. A. Relationship enterprises B. In-sourcing C. Commercial lending D. Outsourcing

A. Relationship enterprises

The _____ bonus is one of the biggest incentives for athletes and upper-level managers. A. signing B. profit sharing C. performance D. retention

A. SIGNING

Which of the following factors have led many companies to institute a combination payment plan where the individual receives a guaranteed amount of money, regardless of how the person performs? A. Uncertain economy B. Aggressive union demands C. Labor laws D. Excessive competition

A. Uncertain economy

The Employee Retirement Income Security Act of 1974 is characterized by all of the following EXCEPT: A. compulsory setting up of a pension fund for its employees. B. guidelines restricting the firm's freedom to take money out of the fund. C. guidelines providing formulas for employee vesting. D. guidelines providing formulas for portability.

A. compulsory setting up of a pension fund for its employees.

High product quality, low absenteeism, and high efficiency are examples for which organizational characteristics? A. Dominant values B. Philosophy C. Organizational climate D. Rules

A. dominant values

Double-loop learning: A. involves changing the organization's culture. B. is associated with routine and behavioral learning. C. involves improving the organization's capacity to achieve known objectives. D. is learning without significant change in the organization's basic assumptions.

A. involves changing the organization's culture.

Partnerships forged through informational networks in a virtual organization are based on electronic contracts to speed the linkups and: A. keep the lawyers away. B. maintain professionalism. C. maintain confidentiality. D. prevent excessive bandwidth consumption.

A. keep the lawyers away

The guidelines on how much work to do, is a part of which of the following characteristics of an organizational culture? A. Norms B. Rules C. Philosophy D. Organizational climate

A. norms

Which of the following focuses on social recognition as an effective contingent reinforcer that supervisors/managers can use as a style in interpersonal relations? A. Social cognition B. Behavioral performance management C. Classical management D. Efficiency wage theory

B. Behavioral performance management

Which of the following is NOT a type of radical redesign of organizations identified by Miles? A. Green-field redesign B. Demand redesign C. Rediscovery redesign D. Network design

B. Demand redesign

In these organizations, fragmented tasks are combined, and work that fails to add value is eliminated. A. Network B. Horizontal C. Virtual D. Vertical

B. Horizontal

Identify the characteristic of organizational culture where participants interact with another, using common language, terminology, and the rituals related to deference and demeanor. A. Norms B. Observed behavior regularities C. Rules D. Organizational climate

B. Observed behavior regularitiies

Two of the most popular types of accounts of _____ include the individual retirement accounts (IRAs) and 401(k). A. life, disability, and health insurance B. pension benefit C. time-off benefit D. life insurance

B. Pension benefit

Information processing and organizational theory approaches to organizations are largely based on the _____ theory. A. situational B. systems C. trait D. behavioral

B. Systems

According to Kerr, which one of the following is NOT mentioned as a consideration for an organization that is planning an effective pay system for rewarding people? A. The organization must ask itself what outcomes it is seeking. B. The organization must plan to sustain the improved results, if any. C. The organization must tie its rewards to these outcomes. D. The enterprise must be able to measure these results.

B. The organization must plan to sustain the improved results, if any.

_____ are a special type of benefit program that focuses on keeping employees from becoming physically and/or mentally ill. A. Immunization programs B. Wellness programs C. Nutritional programs D. Cardiovascular programs

B. Wellness programs

According to the text, which of the following is given as one of the major reason for the recent economic crisis? A. The owners of a corporation minimize costs and work to increase the stock value of the enterprise. B. Managers have much shorter time horizons and their bonuses or merit pay may be tied closely to how well they performed in the last four quarters. C. Managers are willing to accept losses in return for the increased opportunity for greater profits and market share. D. Managers are more interested in expending corporate resources on activities that do not directly contribute to owner wealth.

B. managers have much shorter time horizons and their bonuses or merit pay may be tied closely to how well they performed in the last four quarters

Two critical dimensions of creativity, which promote and help unleash creativity, are _____ and a willingness to take risks. A. personal integrity B. personal flexibility C. confidence D. self-discipline.

B. personal flexibility

Which among the following is a potentially powerful, and importantly, much less expensive form of organizational reward systems? A. Affiliation B. Recognition C. Benefits D. Money

B. recognition

Which of the following approach rewards competencies of the employees such as those related to the international business context, social skills etc? A. Broad-banding B. Skill pay C. Competency pay D. Pay for knowledge workers in teams

C. Competency pay

Which of the following holds that firms can save money and become more productive if they pay higher wages and better benefits because they are able to hire and leverage the best talent? A. Classical management theory B. Behavioral performance management C. Efficiency wage theory D. Agency theory

C. Efficiency wage theory

Which one of the following theories equates money as being only as important as the most basic requirements of employees? A. Classical management theory B. Classical motivational theory C. Maslow's hierarchy theory D. Organizational theory

C. Maslow's hierarchy theory

When Steve Kerr, noted that "Nobody refuses it, nobody returns it, and people who have more than they could ever use do dreadful things to get more," what was he referring to? A. Power B. Recognition C. Money D. Control

C. Money

Which of the following challenges the contingency approach which suggests that organizations change through internal transformation and adaptation? A. Behavioral approach theory B. Situational approach theory C. Organizational ecology theory D. Trait approach theory

C. Organizational ecology theory

Which of the following approach includes an employee-satisfaction measure to recognize a manager's people-management skills? A. Skill pay B. Pay for knowledge workers in teams C. Rewarding leadership effectiveness D. Competency pay

C. Rewarding leadership effectiveness

What is the basic idea behind the stock option plan in relation to the value of the company's stock? A. The executives can be held accountable for the decrease in value of the stock. B. The executives are guaranteed participation in the board meetings. C. The executives will strive to increase organizational performance. D. The company can hold on to the executives for as long as it is necessary.

C. The executives will strive to increase organizational performance.

Which one of the following is considered as a criterion for money to be effective in the organizational reward system? A. The system must be uniform. B. The system must be as objective as possible. C. The system must be administered contingently on the employee's exhibiting critical performance behaviors. D. The system must be administered contingently on the employee's experience.

C. The system must be administered contingently on the employee's exhibiting critical performance behaviors.

When Val joined Brent Marketing Solutions as marketing research executive, he was flooded with work. He also realized that some of this work was beneath his ability. Given that Brent Market Solutions has a very strong culture, which of the following can be a reason for this? A. To teach Val the importance of time management. B. To make Val realize the importance of patience. C. To make Val vulnerable and to cause him to move emotionally closer to his colleagues. D. To teach Val the importance of hard-work so that he can handle the intense pressure that is an integral part of his job.

C. To make Val vulnerable and to cause him to move emotionally closer to his colleagues

When may an organization find it difficult to hire and retain many of their personnel? A. When the organization seeks to internally train their employees. B. When the merit pay is not in line with the market rate. C. When the base pay is not in line with the market rate. D. When the job requirements include specifications to able to deal with dynamism.

C. When the base pay is not in line with the market rate.

Learning organizations use collaborative learning and the integration of diverse viewpoints of personnel throughout the organization for which of the following? A. Determination of overall direction B. Formulation and implementation of ideas C. Conflict resolution D. Leadership and motivation

C. conflict resolution

Organizational theorists Miles and Snow identified what they call a "_____ network" involving a unique combination of strategy, structure and management processes. A. evolved B. integrated C. dynamic D. advanced

C. dynamic

The logic behind gain-sharing plans is that: A. reward systems such as pay for performance are practical only when performance can be easily and objectively measured. B. those who are making lower salaries get larger percentage increases, whereas those earning higher salaries get a flat raise. C. if everyone works to reduce cost and increase productivity, the organization will become more efficient and have more money to reward its personnel. D. individuals who do superior work can be given increases greater than the rest of their colleagues.

C. if everyone works to reduce cost and increase productivity, the organization will become more efficient and have more money to reward its personnel.

Which of the following has been recognized as being central to competitive advantage in the new paradigm shift? A. Financial capital B. Market value C. Intellectual/human capital D. Technology

C. intellectual/human capital

All of these are disadvantages of the group incentive plan EXCEPT: A. it de-emphasizes individual performance and rewards the non-productive as well. B. the rewards may be realized decades later reducing the day-to-day performance motivation. C. it focuses the group on specific performance targets. D. employees may come to regard the quarterly or annual group rewards as part of their base salary and expect them every year.

C. it focuses the group on specific performance targets.

The key challenge for contemporary organizations is to instill and sustain a corporate-wide culture that encourages _____. A. similar values and beliefs B. delegation of tasks C. knowledge sharing D. projection of a strong brand image

C. knowledge sharing

In a horizontal organization, employees are rewarded for _____ skill development rather than specialized expertise. A. communicative B. interpersonal C. multiple D. organized

C. multiple

Today's individual incentive plans pay people based on two factors, namely: A. behavior or quality. B. quality or education. C. output or quality. D. performance or skills.

C. output or quality.

Texas Instruments reverted to some highly formalized, bureaucratic procedures in their product development process. This is an example of: A. demand redesign. B. network design. C. rediscovery redesign. D. green-field redesign.

C. rediscovery redesign

The industry in which the partners come from and the one in which they now reside are factors that fall under which one of these categories? A. Politics B. Finances C. Structure D. Emotions

C. structure

Which of the following changes are organization's making when implementing programs such as the Six Sigma, total quality management, etc.? A. Competency B. Technical C. Generative D. Adaptive

D. Adaptive

Which of the following theory is concerned with the diverse interests and goals that are held by a corporation's stakeholders and the methods by which the enterprise's reward system is used to align these interests and goals? A. Social cognition theory B. Behavioral theory C. Classical management theory D. Agency theory

D. Agency Theory

According to the text, which of the following is proving unpopular in education compensations? A. Merit pay plan B. Group incentive pay plan C. Stock options D. Bonuses

D. Bonuses

When the appropriate organization culture is in place, _____ can be welcomed and accommodated with as little disruption and as few problems as possible. A. diversity B. continuity C. authority D. change

D. Change

Which among the following is an ability which is most widely acknowledged as a requisite skill and ability in a generative learning organization? A. Communication B. Leadership C. Decision making D. Creativity

D. Creativity

Which of the following approaches involves giving an employee an option to take money and then repay it out of the commissions? A. Impromptu loan B. Current account C. Over-draw account D. Drawing account

D. Drawing account

The clash between two cultures in a merger and acquisition environment can be focused into all of the following areas EXCEPT: A. structure. B. politics. C. emotions. D. finances.

D. Finances

Relationship enterprises are emerging as a trend over formal merger and acquisitions because of all these factors EXCEPT: A. legalities. B. political nationalism. C. organizational cultural values. D. financial leverage.

D. Financial leverage

With the increased use of teams, pay is being linked to professional employees who are being organized into all of the following types of teams EXCEPT: A. virtual. B. product development. C. inter-functional. D. inter-dependent.

D. Inter-dependent

The pay package of several CEOs of large companies are not reflected in their performance. To counter this, a growing number of corporate shareholders have proposed resolutions that tie a CEO's pay to a multiple of the _____ pay. A. equilateral B. performance oriented C. mid-range worker's D. lowest worker's

D. Lowest work's

Firms that are undergoing efforts to disaggregate and partner are employing which type of redesign? A. Rediscovery redesign. B. Green-field redesign. C. Demand redesign. D. Network design.

D. Network Design

The way members of the organization conduct themselves with customers or other outsiders is one indicator of which of the organizational characteristics? A. Observed behavior regularities B. Dominant values C. Norms D. Organizational climate

D. Organizational climate

All of the following can be accomplished by the new pay techniques EXCEPT: A. satisfied employees. B. customer satisfaction. C. new competencies. D. promotions.

D. Promotions

A growing number of firms that have implemented a well-structured, formal recognition system have experienced a dramatic improvement in the _____ of their best employees. A. productivity B. ethical behavior C. feedback D. retention

D. Retention

_____ learning is associated with routine and behavioral learning. A. Second-order B. Dentero C. Double-loop D. Single-loop

D. Single-loop

Which of the following is NOT a characteristic or method of paying out a profit sharing group incentive plan? A. The amount from the profit-sharing pool is distributed immediately. B. The amount from the profit-sharing pool is distributed annually. C. The amount from the escrow account is invested until employee retirement. D. The amount from the escrow account is increased by personal contributions from all the employees.

D. The amount from the escrow account is increased by personal contributions from all the employees.

To avoid disintegration and attain effective needed focus, the lead virtual organization must have all these characteristics EXCEPT: A. shared vision. B. strong brand. C. high-trust culture. D. an independent legal corporation.

D. an independent legal corporation

Mastery over the individual's job is typically done by extensive and carefully reinforced: A. mentoring. B. theories. C. guest-speaker lectures. D. field experience.

D. field experience

Buying and selling to each other at prices equal to those that can be obtained by outsourcing partners is called _____. A. value-addition B. in-house trading C. collaboration D. in-sourcing

D. in-sourcing

Which of the following is the final step in the socialization process? A. Job Mastery B. Adherence to Important Values C. Reinforcing the Stories and Folklore D. Recognition and Promotion

D. recognition and promotion

All of these are characteristics of a horizontal organization EXCEPT: A. that teams are used to manage everything. B. that customer's drive performance. C. that supplier and customer contact is maximized. D. that employees are provided information on a 'need to know basis'.

D. that employees are provided information on a 'need to know basis'

Which among the following is NOT a contention put forth by Chester Barnard? A. The human participant's ability to communicate towards a common purpose. B. The human participant's willingness to serve towards a common purpose. C. The human participant's willingness to strive towards a common purpose. D. The human participant's willingness to readily accept change.

D. the human participant's willingness to readily accept change

Groups such as the National Association for Employee Recognition have concluded that human resource professionals and managers have realized the importance of recognition in motivating employees to achieve goals.

FALSE

In a learning organization, the vision is provided by the top management.

FALSE

In network redesign, established companies return to a previously successful design by eliminating unproductive structural additions and modifications.

FALSE

Managers at a learning organization encourage risk-taking, creative behavior by providing a challenging environment.

FALSE

Organizations use rewards to motivate employee performance and encourage their loyalty, but it is not effective in retention of these employees. FALSE Money is associated with achievement and recognition, status and respect, and power but not with achievement and recognition.

FALSE

Pay is inversely proportional to morale.

FALSE

Subcultures are typically a result of religions or personal beliefs that are shared by members of a department or a unit.

FALSE

Subcultures do not weaken or undermine an organization even when they are in conflict with the dominant culture and/or the overall objectives.

FALSE

The base pay form of compensation is as competitive at the entry level as it is thereafter.

FALSE

The compensation theory seeks to explain how managers differ from owners in using pay and other forms of compensation to effectively run the organization.

FALSE

The contingency approach challenges the organizational ecology theory.

FALSE

The first major development in organization theory was to view the organization as a system made up of independent parts.

FALSE

The motivational effect of the group incentive plans, on a day-to-day performance basis, may be very large.

FALSE

The option of a 'drawing account' is available for employees under the group incentive plan.

FALSE

The skill pay approach rewards the more abstract knowledge or competencies of employees, such as those related to technology, the international business context, customer service, or social skills.

FALSE

Bonuses and stock options reward systems are practical only when performance can be easily and objectively measured.

TRUE

Creative tension stems from the gap between the organizations' continually upwardly upgraded vision and the reality and suggests the learning organization's continually questioning and challenging the status quo.

TRUE

Double-loop learning involves changing the organization's culture.

TRUE

Gain-sharing plans are designed to share with the group or team the net gains from productivity improvements.

TRUE

Greenfield redesign means breaking completely from the classical structure and establishing a totally different design.

TRUE

Horizontal, hollow and modular organization designs are sometimes subsumed under the single term "Network Designs."

TRUE

In a learning organization, managers learn how to encourage their people to redirect their energies toward the substance of disagreements rather than toward personality clashes or political infighting.

TRUE

In horizontal organizations, the primary driver and measure of performance is customer satisfaction, not profits or stock appreciation.

TRUE

In the social cognitive theory, the reward consequences play an important role in organizational behavior.

TRUE

Intrinsic motivation is usually measured in the laboratory by time spent on a task following the removal of the reward.

TRUE

Life-cycle benefits are based on a person's stage of life and include things such as child care and elder care.

TRUE

New product development and information technology changes can be welcomed and accommodated with as little disruption and as few problems as possible if the appropriate organization culture is in place.

TRUE

One network approach is to require internal units of a firm to interact at market prices - buy and sell to each other at prices equal to those that can be obtained by outsourcing partners.

TRUE

One of the disadvantages of a merit pay is that the criteria for determining merit are often nebulous since organizations do not clearly mention the conditions for earning the pay.

TRUE

Organizational climate is an overall "feeling" that is conveyed by the physical layout, the way participants interact, and the way members of the organization conduct themselves with customers or other outsiders.

TRUE

Owners are usually risk averse and may prefer conservative courses of action that minimize their chances of loss.

TRUE

Owners may have longer time horizons because their goal is to maximize their value over time.

TRUE

Pride and pragmatic needs are driving the new form of global alliance, namely, relationship enterprises.

TRUE

Taken at a more individual employee, organizational behavior level, employees would react to environmental changes in a standard, routine response in the adaptive organization, often resulting in short-run solutions.

TRUE

The efficiency wage theory is particularly useful in explaining the importance of offering benefits that appeal to and are needed by today's employees to make them satisfied, stress free, and productive.

TRUE

The modern approach to organization theory and design consists of very flexible networks, and recognizes the interaction of information technology and people.

TRUE

The organizational ecology approach to organization theory suggests that organizations change as a process of 'survival of the fittest.'

TRUE

The pay-for-performance plans have the ability to punish low performance.

TRUE

The socialization process can help solidify the acceptance of core values and ensure that the culture maintains itself.

TRUE

Under the employee stock ownership plan, the employees gradually gain a major stake in the ownership of the firm.

TRUE

Under the flexible, cafeteria-style benefits arrangement, the organization will establish a budgeted amount that it is willing to spend per employee, and the individual is then allowed to decide how to spend this money.

TRUE

When the decision taken by a manager is incorrect, the impact may be less than it would be on the owners, and thus, the manager's willingness to take risks is usually undiminished.

TRUE