ADM 303 Fundamentals of Management Chapters 5 & 6 Study Questions

Begun in 1976, _____ are designed to consolidate information from various disciplines and institutions, including technical and professional schools.

Small Business Development Centers * Small Business Development Centers (SBDCs) are designed to consolidate information from various disciplines and institutions, including technical and professional schools. Then they make this knowledge available to new and existing small businesses.

Which of the following is a true statement about small businesses?

Small businesses are the first to hire in times of economic recovery. * Although small firms often hire at a faster rate than large ones, they are likely to eliminate jobs at a far higher rate. Small firms are also usually the first to hire in times of economic recovery.

Enlightened Minds is a software services firm that uses routine training programs, seminars by eminent developers, and discussion forums to keep employees updated on the recent developments in the software field. Enlightened Minds is an example of a(n) _____.

learning organization * A learning organization is one that works to facilitate the lifelong learning and personal development of all its employees while continually transforming itself to respond to changing demands and needs.

Which of the following is a recent business trend?

Better survival rates of entrepreneurial ventures * More people are encouraged to test their skills as entrepreneurs because the failure rate among small businesses has been declining in recent years.

Gadgetbug Inc. manufactures home appliances. All the decisions are made by the top managers at the company. The middle and lower managers follow the instructions given by top managers rather than making decisions by themselves. Which of the following concepts is illustrated in the scenario?

Centralization * Centralization is the process of systematically retaining power and authority in the hands of higher-level managers.

_____ is the process of systematically delegating power and authority throughout the organization to middle- and lower-level managers.

Decentralization * Decentralization is the process of systematically delegating power and authority throughout an organization to middle- and lower-level managers.

_____ is the process of grouping jobs according to some logical arrangement.

Departmentalization * Departmentalization is the process of grouping jobs according to some logical arrangement.

​_____ is the degree to which the overall task of the organization is broken down and divided into smaller component parts.

Job specialization * Job specialization is the degree to which the overall task of the organization is broken down and divided into smaller component parts.

Which of the following is an accurate comparison between tall organizations and flat organizations?

Tall organizations foster more communication problems than flat organizations. * Researchers have argued that a tall structure is more expensive (because of the larger number of managers involved) and that it fosters more communication problems (because of the increased number of people through whom information must pass).

_____ encompasses the conversion processes used to transform inputs (such as materials or information) into outputs (such as products or services).

Technology * Technology consists of the conversion processes used to transform inputs (such as materials or information) into outputs (such as products or services).

Which of the following statements is true about a franchise agreement?

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.

Which of the following is an advantage of a franchising agreement?

The franchisee can easily establish a business with reduced risks. *Unlike the person who starts from scratch, the franchisee does not have to build a business step by step. Instead, the business is established virtually overnight. Moreover, because each franchise outlet is probably a carbon copy of every other outlet, the chances of failure are reduced.

The financial plan is made up of a cash budget, an income statement, balance sheets, and a _____.

break-even chart * The financial plan is made up of a cash budget, an income statement, balance sheets, and a break-even chart.

A(n) _____ is any advantage that comes to a firm because it exploits an opportunity before any other firm does.

first-mover advantage * A first-mover advantage is any advantage that comes to a firm because it exploits an opportunity before any other firm does.

Creating different teams for finance, production, and marketing is consistent with _____ departmentalization.

functional * Functional departmentalization groups together those jobs involving the same or similar activities. (The word function is used here to mean organizational functions such as finance and production, rather than the basic managerial functions, such as planning or controlling.)

Jimmy owns an ice cream parlor. He designs a schedule for the different tasks the employees have to perform in order to prevent monotony at work. According to the schedule, if an employee makes waffle cones on a day, he serves ice creams the next day and clears the tables on the day after that. Jimmy is using the _____ approach at his ice cream parlor.

job rotation * Job rotation is an alternative to job specialization that involves systematically moving employees from one job to another.

​Jordon owns a pet shop which sells specialty products like birthday cakes for dogs, canned cat food, and live food for fishes. He sources these animal foods from different manufacturers, and sells it to local residents. Jordon's shop operates in the _____ industry.

retail * The pet shop operates in the retail industry. A retail business sells directly to consumers products manufactured by other firms.

Johnson recently launched a new electronics store in Fremont. The store sells smartphones, laptops, and mobile accessories from companies like Apple, Samsung, Sony, and Philips. The store operates in the _____ industry.

retail *A retail business sells directly to consumers products manufactured by other firms.

The most significant disadvantage of a franchising agreement is that:

the franchisee may have to pay a high start-up cost. * The most significant disadvantage of owning a franchise is the high start-up cost.

According to Weber, in a bureaucracy:

there should not be any arbitrary dismissals. * According to Weber, in a bureaucracy, employment and advancement in an organization should be based on technical expertise, and employees should be protected from arbitrary dismissal.