ENT Full Practice Exam

While brainstorming ideas for a new business venture, Shane's first suggestion is opening a new pizza parlor. Which of the following is the most appropriate response to Shane's suggestion: A. "What if we served pizza and gelato?" B. "There are already too many pizza chains." C. "That's a great idea! Let's do it!" D. "I'm not sure there's a market for that."

A; "What if we served pizza and gelato?" During brainstorming, ideas can be blended into one to create new ideas, such as combining a pizza parlor with gelato. It is important not to assess or critique ideas. Instead, all ideas should be accepted and encouraged. Therefore, even if there are too many pizza chains, or if there is no market for a pizza parlor, these criticisms should not be voiced during brainstorming. While Shane's idea might be a good one, it's important to keep brainstorming ideas rather than going with the first one that is suggested. SOURCE: EN:006

A unique selling proposition answers which of the following customer questions: A. "Why should I buy from you instead of someone else?" B. "What is the name of this product?" C. "Who makes this product?" D. "Why is this good or service a great value for me?"

A; "Why should I buy from you instead of someone else?" A unique selling proposition answers this question for a customer—"Why should I buy from you instead of someone else?" It demonstrates what is special about the product, what benefits it provides that competitors can't. A USP doesn't necessarily include the name of the product, the maker of the product, or the reasons why the product is a good value. SOURCE: PM:272

A mission statement can be thought of as the __________ of the business strategy. A. "why" B. "who" C. "when" D. "how"

A; "Why." A mission statement outlines the business's purpose, including what the company does for customers, employees, and owners. It is the "why" of the business strategy—why the business exists. The mission statement is not the "who," "when," or "how" or the business strategy. SOURCE: SM:009

What is an example of an amplified word-of-mouth strategy? A. A company asks customers to share product reviews on a website. B. Fans share the release date for a new product on Facebook. C. Customers post comments about a company on Twitter. D. A customer shares her opinion of a new product with a friend.

A; A company asks customers to share product reviews on a website. Amplified word-of-mouth strategy involves a business asking others to help spread the word about its products, such as requesting customers to share product reviews on a website. Customers sharing the release date for a new product on Facebook, posting comments about a company on Twitter, and sharing their opinions of a new product with a friend are examples of organic word-of-mouth because they were created by consumers, not the company. SOURCE: PR:247

A car company has decided to invest less in its successful pickup truck and to use those funds instead on the development of its new hybrid vehicle. This is an example of A. a harvest strategy. B. a marketing plan. C. risk mitigation. D. the discovery process.

A; A harvest strategy. A harvest strategy is the way an entrepreneur or investor extracts money from a business or product after it has become successful in order to invest it in something else. For example, if a car company's pickup truck is already successful, it does not need the same level of funding that it once did. Those funds can be extracted and put into a new product, such as hybrid vehicles. This is not an example of a marketing plan, risk mitigation, or the discovery process. SOURCE: EN:035

When marketers face a new set of circumstances or run into obstacles, what is the best course of action? A. Adapt their marketing mix. B. Avoid the situation. C. Use their original marketing mix. D. Get rid of their marketing mix.

A; Adapt their marketing mix. Since situations vary, marketers must adapt their marketing mix to suit each unique set of circumstances. Marketers don't want to avoid the situation, use their original marketing mix, or get rid of their marketing mix. SOURCE: MP:001

An organization-wide system that businesses use to ensure that products meet quality standards is known as quality A. assurance. B. control. C. management. D. improvement.

A; Assurance. Quality management is the ongoing process of planning, implementing, and integrating quality into every aspect of an organization. There are three main aspects of quality management—quality control, quality assurance, and quality improvement. Quality control is a process that measures products against predetermined standards after the products have already been created. Quality improvement involves an organization's willingness to change and adapt for the purpose of maintaining quality. Finally, quality assurance is an organization-wide system that businesses use to ensure that products meet quality standards. SOURCE: QM:001

Well-executed corporate governance ensures that an organization is managed in a way that is A. beneficial for all stakeholders. B. most helpful for company leaders. C. detrimental for competitors. D. irrelevant to the public eye.

A; Beneficial for all stakeholders. Corporate governance refers to the way an organization is managed at the highest level. Well-executed corporate governance has many benefits, including corporate success and economic growth, investor confidence, and positive brand development. Good corporate governance also ensures that an organization is managed in a way that is most beneficial and least detrimental for everyone—employees, management, shareholders, as well as the general public—not most helpful for company leaders, detrimental for competitors, or irrelevant to the public. SOURCE: PD:213

Business analysis is essentially the process of helping companies A. change. B. form. C. grow. D. communicate.

A; Change. Business analysis is the practice of identifying needs and recommending solutions to help businesses change and adapt. Business analysis does not necessarily help companies form, grow, or communicate, though these might be aspects of the business analysis process depending on the company's needs. SOURCE: OP:327

Which of the following activities would be most useful in building a corporate brand: A. Creating a logo and tagline to identify a company B. Advertising a new product in magazine ads C. Creating an online store to sell products D. Surveying customers to identify wants and needs

A; Creating a logo and tagline to identify a company. Creating logos, taglines, symbols, and names are branding strategies used to help create an identity and image for a company to present to consumers. Advertising products and creating online stores help create awareness but are not necessarily ways to build a corporate brand; instead, they are common activities businesses use to promote products. Surveying customers to identify wants and needs is a marketing research activity. SOURCE: PM:126

If a business's main goal in conducting research is to implement the marketing concept, it is most likely to attempt to identify A. customer wants and needs. B. effective advertising methods. C. appropriate product prices. D. sales lost to the competition.

A; Customer wants and needs. The marketing concept is a philosophy of conducting business that is based on satisfying customer wants and needs while achieving company goals. Determining effective advertising methods, appropriate product prices, and sales lost to competitors may also be goals in conducting research, but they are not as directly related to implementing the marketing concept as identifying customer wants and needs. SOURCE: IM:010

What type of insurance provides monetary payments to an independent business owner running a business from his/her home in the event that s/he develops a personal illness and is unable to work? A. Disability B. Worker's compensation C. Health D. Homeowner's

A; Disability. Disability insurance provides temporary and partial financial relief by issuing monetary payments to individuals in case they become injured or ill. Worker's compensation insurance is used to cover costs incurred by employees who are injured in the line of work and does not cover personal illness not caused by an employee's work environment. Health insurance is used to cover health-care costs by reimbursing health-care providers and does not typically offer monetary payments to ill individuals. Homeowner's insurance is used to protect a homeowner's property such as buildings and possessions from loss. SOURCE: FI:082

n which of the following situations are you most likely to pay excise taxes: A. Filling up your car with gasoline B. Purchasing a new condominium C. Ordering coffee from another country D. Inheriting money from your grandfather

A; Filling up your car with gasoline. Excise taxes are indirect taxes charged on specific goods, such as gasoline and alcohol. A business that sells these products charges the consumer more to account for excise taxes. Excise taxes are not levied on real estate, imported coffee, or inheritance. SOURCE: EC:072

Haleigh attends a conference focused on the use of recyclable materials and renewable energy throughout the world. The conference gives her the idea to invent a shower mat that conserves water. This is an example of how A. global trends can be a source of new business ideas. B. new business ideas must solve a social or political issue. C. global trends often fade quickly and leave little impact. D. entrepreneurs struggle to find time to explore global trends.

A; Global trends can be a source of new business ideas. Global trends are developments or changes in situations that affect many countries. They can be a great source of entrepreneurial discovery. Haleigh learned about the global trend toward "going green" at a conference, and she was therefore able to identify a new business venture. New business ideas do not necessarily need to solve a social or political issue. Global trends sometimes fade quickly without impact, but they also sometimes create valuable opportunities and leave lasting impact. Finally, entrepreneurs do not necessarily struggle to find time to explore global trends; exploring global trends is a must for successful entrepreneurs. SOURCE: EN:003

Which of the following must occur for supply chain management to be successful: A. Goods and communication should flow both ways. B. Producers should be in contact with final customers. C. Emphasis should be placed on internal activities. D. Few people should be involved in operations.

A; Goods and communication should flow both ways. In a supply chain, goods and information should flow back and forth among all supply chain members, rather than merely going in one direction. Producers should not necessarily be in contact with the final consumer. Emphasis is placed more on internal activities in operations management, rather than in supply chain management. Finally, there is no set number of people that should be involved in operations; it depends on the nature of the company. SOURCE: OP:303

When Victoria received her first paycheck from her job at the grocery store, she was expecting to have earned $800—$10 hourly for 80 hours of work. However, she was surprised to find that she only received around $610. This discrepancy is most likely due to A. income tax. B. unethical payroll practices. C. self-employment tax. D. the rate of inflation

A; Income tax. All employees must pay income tax, which is deducted from their paychecks. So, even though Victoria's pay rate is $10 an hour, she will not actually receive that much after income taxes are taken out. There is no indication that unethical payroll practices are occurring. Victoria is not self- employed, so she does not have to pay self-employment taxes. The rate of inflation does not affect the amount Victoria earns per paycheck. SOURCE: BL:009

If a company's decision makers all require different information concerning sales transactions to make business decisions, the company relies on __________ accounting. A. managerial B. financial C. quality management D. cost

A; Managerial. Managerial accounting reports financial and nonfinancial information that helps managers make decisions to fulfill a company's goals and objectives. It is especially helpful when different decision makers require different financial information. Financial accounting reports business transactions and provides financial information to external parties. Quality management involves overseeing business activities, tasks, and products to ensure excellence and conformance to standards. Quality management is not focused on sales transactions. Cost accounting refers to the recording of all costs related to production and operation and is not focused on sales data. SOURCE: FI:657

A good manager recognizes each employee's unique strengths and talents and gives employees work that suits their skills. This is because a strengths-based work culture leads to greater product/service A. quality. B. recognition. C. credibility. D. publicity.

A; Quality. Company management often has a large impact on the quality of the company's products and services. When a manager effectively harnesses his/her employees' skills, products and services can be created more efficiently, more effectively, and with greater attention to quality. A strengths-based work culture does not necessarily lead to greater product/service recognition, credibility, or publicity. SOURCE: OP:020

Which of the following is an inexpensive source of information that entrepreneurs can use during concept development: A. Researching similar products B. Creating a product prototype C. Conducting an observational study D. Introducing the product to a test market

A; Researching similar products. While developing concepts, entrepreneurs must be careful to avoid wasting time and money on a new business idea that will not be successful. To evaluate a concept's viability without actually developing it into a product, businesses can research similar products to learn how and why they have been successful. Creating a product prototype, conducting an observational study, and introducing the product to a test market are all expensive and should not be undertaken at the concept development stage. SOURCE: EN:011

What is an example of a company using a direct marketing channel? A. Responding to customer ideas and requests via email B. Hiring a research company to conduct marketing surveys C. Advertising products in a popular magazine D. Creating an ad that is promoted on social media

A; Responding to customer ideas and requests via email. Direct marketing occurs when a company connects with the end user or customer. Hiring a research company to conduct marketing surveys, advertising products in magazines, and creating ads to promote on social media are considered indirect marketing because the company is not directly interacting with the end user. SOURCE: PR:089

Electrical hazards, slipping and tripping, and violence are all examples of potential __________ in the workplace. A. safety issues B. compromises C. non-negotiables D. success indicators

A; Safety issues. There are plenty of safety issues that companies must consider when planning a new workspace or evaluating a current one, including electrical hazards, slipping and tripping from obstacles or slippery floors, and workplace violence. These are all examples of safety issues, not compromises, non-negotiables, or success indicators. A compromise is an agreement between two parties where each side must make sacrifices to reach an outcome that is acceptable for everyone. A non-negotiable is something that is deemed too important not to have. A success indicator is a sign that suggests that a person or organization is achieving success. SOURCE: OP:151

Which of the following is a question that businesses can use cost-benefit analysis to help answer: A. Should our business expand to an overseas market? B. Who should star in our new promotional campaign? C. What should we name our business? D. What colors should our new product come in?

A; Should our business expand to an overseas market? The decision of whether or not to expand overseas is a question that a business can help answer by conducting a cost-benefit analysis. Cost-benefit analysis is "running the numbers"—it doesn't answer questions such as who should star in a commercial, what a business name should be, or what colors products should come in. SOURCE: FI:357

An organization would use cost accounting to identify the efficient use of A. supplies and resources. B. business strategies. C. intellectual property. D. motivational techniques

A; Supplies and resources. Cost accounting is a method of accounting used to measure all the costs and to identify and evaluate the efficient use of cost objects such as supplies and resources used to produce products. While some kinds of intellectual property are considered capital assets, intellectual property is typically not taken into consideration in cost accounting. Business strategies refer to plans for managing a business that are not usually measured using cost accounting. Motivational techniques are strategies used to motivate employees and consumers and cannot be measured for efficiency with cost accounting. SOURCE: FI:657

Because of coordinated efforts to deliver products on time and manage inventory levels, Carolina's Clothing Company has built up a loyal brand following. This is an example of how A. supply chain management can increase customer satisfaction. B. customer service efforts often have little impact on sales. C. value is added at each stage of the supply chain. D. quality customer service has an impact on cash flow.

A; Supply chain management can increase customer satisfaction. Supply chain management includes coordinating on-time delivery efforts and managing inventory levels to get the products where they need to be at the right time. Carolina's Clothing Company has a loyal brand following due to customer satisfaction, which is a result of supply chain management. Customer service efforts do not often have little impact on sales. While value can be added at each stage of the supply chain, this example is not related to that concept. Finally, this example is not related to the impact of quality customer service on cash flow. SOURCE: OP:477

A department manager reviews her budget and finds that she spent much less on office supplies than the budget had estimated. She has discovered a(n) A. variance. B. revenue. C. mistake. D. expense.

A; Variance. A variance occurs when an estimate in the budget differs from the actual outcome. It isn't necessarily a mistake, but managers should check for variances regularly so they can adjust the budget to be as accurate as possible. A variance may mean there's additional money left in the budget, but it isn't considered a revenue. Another type of variance may mean there's additional money taken out of the budget, but it isn't called an expense. SOURCE: FI:099

Risk should be managed A. on a case-by-case basis. B. as a part of business strategy. C. after an incident has occurred. D. through the purchase of insurance.

B; As a part of business strategy. Enterprise risk management is a plan-based business strategy that aims to identify, assess, and prepare for risks across the organization. Therefore, according to this concept, risk should be managed as a part of overall business strategy. Risk should not be managed on a case- by-case basis because it will not be unified toward supporting the business's overall goals. After an incident has occurred, it is too late to manage risks. While purchasing insurance is one way to manage some risks, it does not cover all of the risks that can affect a business. SOURCE: RM:062

Which of the following financing strategies is considered a form of bootstrapping that an entrepreneur might use to help with the cost of starting a business: A. Taking out a personal loan to initially fund the business B. Bartering to exchange services with suppliers C. Using personal savings to pay for start-up costs D. Forming a partnership with a family member

B; Bartering to exchange services with suppliers. Bootstrapping refers to cost-saving measures taken to reduce business expenses and operate on as little cash as possible. Bartering to exchange services with suppliers is a way to help eliminate the cash needed to pay for essential services. Taking out a personal loan and using personal savings are examples of using start-up capital to finance the cost of starting a business. Forming a partnership is a way to create funding and capital by sharing the responsibility of starting and running a business. SOURCE: FI:031

What does it mean to coordinate a business's resources? A. Using all of a company's resources at the same time B. Being strategic about how resources are used C. Ordering raw materials from the same suppliers D. Saving some resources each month for later use

B; Being strategic about how resources are used. The coordination of a business's resources means strategically planning how each resource will be utilized so that the business can reach its goals. For example, a company must determine how many employees to hire and how many products to make so that the company can make a profit. Coordinating company resources does not mean using all of a company's resources at the same time, ordering raw materials from the same suppliers, or saving some resources each month for later use. SOURCE: HR:508

A magazine has recently shifted to an all-digital product. This decision has most likely led to the need for A. increased revenue. B. business process changes. C. new employees. D. a shift in the mission statement.

B; Business process changes. Businesses change their processes for a variety of reasons. One of those might be technological developments that increase efficiency and productivity. Because the magazine responded to a technological development, it would then need to update its processes to fit the new product. This decision would not necessarily lead to the need for increased revenue, new employees, or a shift in the mission statement. SOURCE: OP:476

Before acquiring a smaller company, Goldenstone Bank created a plan to deal with expected shifts in company culture. This is an example of how A. acquiring another business requires resources. B. change management can reduce risk. C. change management increases costs. D. day-to-day operations are unaffected by change.

B; Change management can reduce risk. One of the benefits of change management is the reduction of risk. When risks associated with change are identified and dealt with, risks will have less impact. Goldenstone Bank identified the risks associated with acquiring a smaller company, so it was able to create a plan to reduce and manage those risks. This example is not related to the resources required to acquire another business. It is also not related to the costs associated with change management; in addition, change management generally reduces costs rather than increasing them. Finally, day-to-day operations can be affected by change. SOURCE: SM:095

If a hurricane impacts production at a company's Atlanta plant, it will shift production demands to its plant in Arkansas. This is an example of A. risk assessment. B. continuation planning. C. SWOT analysis. D. sales forecasting.

B; Continuation planning. Continuation planning is the creation of a strategy to handle threats and risks so that the company can resume operations and functionality without much resource loss. A hurricane is an example of the type of risk that can affect operations and that must be handled in a continuation plan. Moving production demands to a different plant is a way to reduce the loss associated with that risk. This is not an example of a risk assessment, SWOT analysis, or sales forecasting. SOURCE: EN:034

Gary works for a computer software company. He always keeps up on the technological advances in his industry, and he also makes sure he knows what products his competitors are developing. When Gary gathers this external information, he is participating in A. threat appraisal. B. environmental scanning. C. competition assessment. D. information collecting.

B; Environmental scanning. When Gary collects information about the environment surrounding his business, he is participating in environmental scanning. This process of gathering external information is an important part of SWOT analysis and the strategic-planning process. External information can include technological advances, competitors' developments, the needs of customers, economic trends, and new laws or policies. Threat appraisal, competition assessment, and information collecting are not terms that apply to gathering external information. SOURCE: MP:010

To evaluate how well your vendors are performing, you must first A. maintain good relationships. B. establish standards of success. C. focus on cost reduction. D. compare vendors across the industry.

B; Establish standards of success. To evaluate vendor performance, the first step is to set up standards that can be used to measure performance. These standards should be set at the beginning of the interaction so the vendor has a clear understanding of expectations. Maintaining good relationships is an important aspect of working with vendors, but it does not necessarily help you evaluate their performance. While cost reduction might be a goal, it is not necessarily the first step to take when evaluating vendor performance. Comparing vendors across the industry is one way to evaluate performance, but it is difficult to do so when you have not first established standards of success. SOURCE: OP:162

Why is it important for an organization to consult external data when trying to determine a new pricing strategy? A. External data are more reliable. B. External data provide information about competition and market demand. C. Internal data are not reliable. D. External data provide information about a company's forecasted and actual sales.

B; External data provide information about competition and market demand. It is important for companies to consult a variety of data, including both internal and external data, when trying to determine a new pricing strategy. External data are facts and figures such as information about competition and market demand that are available outside the company. External as well as internal data have to be evaluated for reliability. Information about forecasted and actual sales is more easily obtained from a company's internal data. SOURCE: IM:012

What should a company review to determine whether the business is profitable? A. Accounts receivable ledger B. Income statement C. Cash flow statement D. Monthly sales receipts

B; Income statement. Since an income statement records income and expenses over the accounting period, it indicates whether the business has experienced a net loss or a net profit. An accounts receivable ledger is not a good indicator of whether a business is profitable because it only records transactions for payments expected and received and does not reflect a company's outgoing payments. A cash flow statement helps a business predict cash inflows and outflows and is a good indicator of liquidity, but it is not a good indicator of profitability because it does not account for cash items that are not identified as income or expense such as the purchase of and depreciation of capital assets. Monthly sales receipts help a business to determine its sales revenue over time, but they do not indicate the company's outgoing payments, which are necessary to determine profitability. SOURCE: FI:542

Which of the following is the most likely reason why some established, successful companies with popular consumer products don't use coupons to increase sales: A. Coupons are expensive to create and distribute. B. Loyal customers purchase products without coupons. C. Customers equate discounts with lower quality. D. Customers become angry when coupons expire.

B; Loyal customers purchase products without coupons. Coupons are considered ineffective for promoting many established, popular consumer products because the coupons are usually redeemed by loyal users who would purchase the product even without a coupon. Coupons can be created and distributed digitally for little cost. Many consumers seek a discount on products they purchase regardless of the quality. Customers are typically accustomed to coupons and understand that they expire. SOURCE: PR:249

An investor is looking at a company's business plan for a new product launch and wants to find information on the industry trends that inspired the new product's development. This investor would probably turn to the __________ section. A. product(s) offered B. market analysis C. appendices D. strategy and implementation

B; Market analysis. The market analysis includes industry trends and market insights that support the business plan's main purpose. The product(s) offered section describes the business's products and services but doesn't detail the industry trends or market research. The appendices hold extra bits of information that support points already made in the business plan. Strategy and implementation explain how the company will put the business plan into action. SOURCE: SM:013

Rae hired engineers to develop her new robotic coffee maker. Before the product is released, how can Rae keep the engineers from sharing her idea with others? A. Patents B. Non-disclosure agreements C. Copyright D. Trademarks

B; Non-disclosure agreements. A non-disclosure agreement is a legal contract that outlines confidential material between two parties and binds each in agreement not to disclose that information. A non- disclosure agreement could prevent the engineers from sharing Rae's new idea with others. Patents, copyrights, and trademarks are all forms of intellectual property protection, but they are not effective at keeping ideas confidential. SOURCE: EN:013

How can a company stop competitors from using its logo on their products? A. Create a unique design B. Obtain trademark protection C. Implement knowledge management D. Purchase an insurance policy

B; Obtain trademark protection. A trademark is a symbol, design, or word used by a producer to identify a good or service that is registered with the government to prevent use by others. It is a form of legal protection that is appropriate for logos. If you have a trademarked logo, competitors cannot use it on their products. Creating a unique design won't necessarily stop competitors from using it. Implementing knowledge management will not stop competitors from using your logo. Finally, insurance does not protect your logo from use by competitors. SOURCE: OP:155

Arnold is building a display to place in a high traffic area of his store. Arnold is most likely creating a A. trade show promotion. B. point of purchase display. C. promotional product. D. sales incentive display.

B; Point of purchase display. A point of purchase (POP) display is a specially designed display intended for placement in a high traffic area of a store to help products stand out and to increase sales. A trade show promotion is a display at an exhibition or convention that brings industry buyers and sellers together in one location. Promotional products are products labeled with the brand or company name to serve as reminders of the actual product. Sales incentives are activities planned to stimulate sales activity by providing benefits like cash or prizes to employees or sales staff who meet a company's sales requirements. SOURCE: PR:249

Evan is an introverted, thoughtful employee who likes structure and routine in his workday. Which of the following actions would help Evan's boss, Allison, bring out the best in him: A. Assigning Evan to be the leader for a large group of employees that he doesn't know B. Providing Evan with plenty of notice each time she asks him to present in a meeting C. Putting Evan in a shared cubicle with an outgoing, extroverted employee who enjoys chatting D. Asking Evan to work on a new and different project every day to keep things interesting for him

B; Providing Evan with plenty of notice each time she asks him to present in a meeting. Since introverts usually like to plan what they say before they say it, it would be wise to give Evan plenty of advance notice before asking him to present in a meeting. Advance notice would also help Evan adjust to the idea of a change in his routine for that day, allowing him to plan accordingly. It would be unwise to assign Evan as the leader for a large group of employees that he doesn't know, since introverts tend to prefer small groups of people that they are familiar with. Similarly, putting Evan in a shared cubicle with an outgoing, extroverted employee may not be the best decision for either employee, since introverted people "energize" themselves by being alone, while extroverts "energize" themselves by being with other people. Asking Evan to work on something different every day would likely make Evan frustrated and uncomfortable, since he prefers structure and routine in his workday. SOURCE: EI:105

When businesses fail to make profits for an extended period of time, they usually A. produce more. B. shut down. C. expand facilities. D. hire employees.

B; Shut down. If a business fails to make profits for a long time, it has no way to pay its employees, suppliers, or creditors and has to shut down. If a company is not making profits, it has no reason to produce more. Businesses only expand their facilities when increased business requires it or when they have money available to invest in the business. When a business fails to make profits, it usually reduces its staff to reduce expenses. SOURCE: EC:010

Which management function includes providing professional development for employees? A. Organizing B. Staffing C. Controlling D. Planning

B; Staffing. Staffing involves providing professional development for existing employees, in addition to determining staffing needs, interviewing, hiring, and training new employees. Organizing is the management function of setting up the way the business's work will be done. Controlling is the management function that monitors the work effort. Planning is the management function of deciding what will be done and how it will be accomplished. SOURCE: SM:001

Which of the following is important to keep in mind when creating a schedule for the day: A. Break up related activities. B. Stick to your set time limits. C. Keep your schedule in several different places. D. Schedule as many top-priority objectives as you can.

B; Stick to your set time limits. When creating a schedule, you should set an amount of time to spend on each activity and try not to go over that time. If you don't limit your time on individual activities, you might get caught up in the details and struggle to manage all that you have to do. When creating a schedule, you should try to group related activities rather than breaking them up to save time and improve efficiency. You also should keep your schedule in one place, rather than in several different places. Finally, the maximum number of top-priority objectives that you should schedule is three so you do not get overwhelmed. SOURCE: PD:019

Anthony has worked as an IT professional at his company for three years. This year, he hopes to be moved to the social media department so that he can learn new skills and expand his professional network. After doing some research, he finds an employee within the department that he thinks he could learn a lot from. In return, he figures, he can help the employee clean up her computer and teach her the new company software. He decides to contact the employee to set up a lunch meeting. In other words, Anthony is trying to initiate a A. mentorship program. B. strategic relationship. C. relational analysis. D. private partnership.

B; Strategic relationship. A strategic relationship is a relationship that is formed because it is beneficial for all parties involved. In this example, Anthony has identified an individual who he thinks could help him learn about working in the social media department. In return, Anthony will provide the employee with technical assistance. This is an example of a strategic relationship, not a mentorship program, relational analysis, or private partnership. A mentorship program generally involves an older and/or more experienced person helping a younger and/or less experienced person learn about his/her field. The difference between a strategic relationship and mentoring, however, is that mentees generally have nothing to provide in return for the mentoring. Relational analysis and private partnership are not terms used to describe this type of relationship. SOURCE: EI:114

A company has taken a political stance on a controversial issue to target certain consumers and increase sales, even though doing so may offend other consumers with opposing views. What type of risk is the company taking? A. Pure B. Strategic C. Operational D. Hazard

B; Strategic. A company making a marketing decision to target specific customers is taking a strategic risk to increase sales. A pure risk only produces loss or no loss, but never potential gain such as increased sales. An operational risk results from regular business processes and activities. A hazard risk occurs when the safety of employees, customers, or property is at risk. SOURCE: SM:075

Which of the following best describes the relationship between learning and innovation: A. The ability to innovate is essential for learning. B. The ability to learn is essential for innovation. C. Innovation is stifled by continuous learning. D. Learning and innovation are essentially the same

B; The ability to learn is essential for innovation. Organizations with a focus on learning are places where people expand their knowledge, develop new ways of thinking, and obtain new skills. Learning is essential for innovation, which is the creation or discovery of something new, such as a new product, strategy, or process. The ability to innovate is not necessarily essential for learning. Innovation is not stifled by continuous learning. Learning and innovation are not essentially the same. SOURCE: SM:094

Zander owns a company that buys tea from other companies in China and sells it to grocery stores. Zander's company is a(n) A. retailer. B. wholesaler. C. producer. D. industrial user.

B; Wholesaler. A wholesaler is a channel member who helps to move goods between producers and retailers by buying them from producers and selling them to retailers. Zander is buying tea from the Chinese companies (the producers) and selling it to grocery stores (retailers). A retailer is a business that buys consumer goods or services and sells them to ultimate consumers. A producer is someone who makes or provides goods and services. An industrial user is a business that buys materials, goods, or services that will be used to make other goods or used in company operations. SOURCE: CM:001

Which of the following best describes the relationship between buyers and sellers when it comes to product pricing: A. Like night and day B. How bees are to honey C. A game of tug-of-war D. A one-sided relationship

C; A game of tug-of-war. The relationship between buyers and sellers is like tug-of-war when it comes to product pricing. Both sides want to gain the most value—the sellers want to get a good price for their products, while the buyers want to get the best product for their money. The relationship between buyers and sellers is not best described as "how bees are to honey," "like night and day," or "a one-sided relationship." SOURCE: PI:001

What is a proactive strategy a company can use to help prevent its customers' private information from being exposed to the dangers of a data breach? A. Deal with data breaches immediately B. Maintain personal data forever C. Avoid collecting unnecessary data D. Train employees how to handle data breaches

C; Avoid collecting unnecessary data. Avoiding the collection of unnecessary data is a proactive strategy that a company can use to prevent customers' private information from being exposed to the dangers of a data breach. Personal data should be destroyed when they are no longer needed to eliminate the risk of exposure or loss. Dealing with data breaches immediately and training employees on how to handle them do not prevent those data breaches from occurring. SOURCE: OP:473

Which of the following financial records would you use to identify discrepancies within the general accounting ledger: A. Owner's equity statement B. Income statement C. Balance sheet D. Statement of cash flow

C; Balance sheet. The balance sheet provides a snapshot of a business's financial situation at a specific point in time. It can be used to help find discrepancies within the general accounting ledger such as negative balances, which may indicate payments have been misapplied or misallocated. An income statement reports a company's overall financial performance in terms of cash flow, income, and profits. An owner's equity statement reports the changes in the equity section of the balance sheet. A statement of cash flow reveals a company's predicted cash inflows and outflows and therefore is not useful in identifying discrepancies in a general accounting ledger. SOURCE: FI:653

What is an example of out-of-home media? A. Television B. Magazines C. Billboards D. Digital blogs

C; Billboards. Billboards are considered a form of out-of-home media because they are encountered outside of consumers' homes. Magazines, television, and digital blogs can all be used within a consumer's home and are not considered out-of-home media sources. SOURCE: PR:007

To protect a company's website and social media accounts from being hacked, the company should make sure that employees with authorized access A. sign a user agreement. B. use the same password. C. change passwords frequently. D. cannot post digital content.

C; Change passwords frequently. By requiring employees to change passwords frequently, a company can help prevent unauthorized access from occurring and avoid potential hacking and cyberattacks. Rather than requiring every employee to use the same password, each individual should be assigned his/her own unique log in and password. Asking employees to sign a user agreement can help inform employees of proper internet and computer use and offer a company some legal protection, but they do not necessarily prevent unauthorized activity from occurring. An employee with authorized access is often required to post digital content on behalf of his/her company. SOURCE: OP:473

When hiring new employees, it is important to A. ask applicants their marital status. B. finish hiring as quickly as possible. C. communicate with your team first. D. request that only minorities apply.

C; Communicate with your team first. Before you begin the hiring process, it's a good idea to sit down with your team members and figure out the team's overall needs and wants. By doing this before you begin screening applicants, you can determine what you are really looking for in a candidate. It's not necessarily a good idea to finish hiring as quickly as possible. Rather, you should proceed through the hiring process carefully and with intention. It's illegal and unethical to ask applicants about their marital status during the hiring process, or to request that only minorities apply. SOURCE: HR:353

Which of the following statements regarding customer relations is true: A. Company management has no power to create a culture of customer service. B. Low-level employees of a company have little influence on customer relations. C. Company management has the most power to create a culture of customer service. D. Low-level employees of a company have the most influence on customer relations.

C; Company management has the most power to create a culture of customer service. A company's executives are ultimately responsible for setting the standard for customer care. If an organization's management doesn't treat its own employees well, how can the organization expect its employees to treat customers well? Company management, therefore, has the most power to create a culture of customer service by respecting and valuing its employees, demonstrating organizational values, and communicating the importance of good customer relations to its workers. Even though management has the most power to influence customer relations, all employees have the ability to influence the culture surrounding customer service—even low-level employees. SOURCE: CR:008

Premiere Office Supplies used to make enough revenue through existing customer reorders, but lately, many customers have begun ordering from YourOffice, a new retailer. Therefore, Premiere Office Supplies had to change its sales process to increase revenue due to A. technology. B. growth. C. competition. D. regulation.

C; Competition. Competition is one reason that businesses might need to change their processes. When YourOffice entered the market, Premiere Office Supplies had to change its sales process because it can no longer rely on its previous process (relying on reorders). While growth, technology, and regulation are also reasons that a business might need to change its processes, these reasons are not related to the given situation. SOURCE: OP:476

Carson has an exciting idea for a new product and needs to acquire funding to start building a prototype. He does not have strong credit, but he does have a wide circle of acquaintances and contacts. What method is best suited for Carson to obtain financial resources? A. Angel investors B. Small business loan C. Crowdfunding D. Credit card

C; Crowdfunding. Crowdfunding is a practice of funding a venture by raising small amounts of money from a large number of people, typically online. Crowdfunding is appropriate for Carson because he has a large number of acquaintances and contacts who could help him spread the word about his product. Small business loans, angel investors, and credit cards might not be as well suited for Carson due to his lack of strong credit. SOURCE: EN:015

Diamond Select Credit Cards recorded a 90% customer satisfaction rating for the last fiscal year. What is one way to translate this measure into a financial outcome? A. Track the changes in operating margin over time B. Measure the number of customer complaints C. Determine the amount of revenue from repeat customers D. Turn customer satisfaction ratings into employee ratings

C; Determine the amount of revenue from repeat customers. It is important to show the financial value of performance measures that are not directly tied to finances. For example, customer satisfaction is a measure of performance, but how does it translate into dollars? One way to translate customer satisfaction into a financial income is to measure the revenue generated from repeat customers. Repeat customers likely had a positive customer service experience. Therefore, highly satisfied customers are bringing financial value to Diamond Select. Measuring the number of customer complaints is not directly related to a financial outcome. There is no connection between operating margin and customer satisfaction. Finally, turning customer satisfaction ratings into employee ratings is not related to financial outcomes. SOURCE: MP:021

Which of the following actions by a manager would most likely contribute to a positive work environment: A. Giving prizes for most hours worked B. Fostering hyper-competitiveness C. Engaging in meaningful dialogue D. Allowing employees to eat at desks

C; Engaging in meaningful dialogue. Open communication is an important part of maintaining a positive work environment. Managers that engage in meaningful dialogue with their employees are fostering a positive workplace culture and saying to their team members, "You are worth my time." Fostering hyper- competitiveness and giving prizes for most hours worked may promote a culture of individualism rather than a culture of teamwork and mutual respect. Allowing employees to eat at their desks may make certain employees happy, but it would not necessarily contribute to a positive work environment. Rather, requiring employees to eat in a shared space during meals would foster greater communication and comradery. SOURCE: HR:403

Objective setting, risk assessment, risk response, and the distribution of an action plan are all components of which of the following business practices: A. Quality assurance B. Managerial accounting C. Enterprise risk management D. Entrepreneurship

C; Enterprise risk management. Enterprise risk management is a business strategy that involves identifying, assessing, and preparing for any potential dangers or hazards. Enterprise risk management also involves making the company's plan of action available to stakeholders. These activities are not components of managerial accounting or quality assurance. While an entrepreneur may engage in enterprise risk management, entrepreneurship as a whole is much broader than a single business practice. SOURCE: RM:062

The first step in an organizational risk assessment is A. pinpointing who might be harmed. B. recording and implementing your findings. C. identifying the potential hazards. D. evaluating the risks and making a plan.

C; Identifying the potential hazards. A risk assessment is a careful assessment of what could cause harm within an organization, along with determining whether the organization is doing enough to prevent those risks or not. The first step in a risk assessment is identifying the potential hazards. After the risks are identified, the next steps include determining who might be harmed by the risks, evaluating the risks and making a plan, and recording and implementing your findings. SOURCE: RM:059

When you're craving your favorite potato chips, you can find them at the grocery store, the gas station, the coffee shop, or the local market. Which distribution strategy is used by the potato chip company? A. Selective B. Exclusive C. Intensive D. Vertical

C; Intensive. Intensive distribution uses as many available distribution outlets as possible. It is often used for products such as potato chips that are low-cost and often bought on impulse. The potato chip company is using as many outlets as possible (the grocery store, gas station, coffee shop, local market, etc.), so it is using intensive distribution. Exclusive distribution is limiting distribution to a single outlet. Selective distribution is using a limited number of outlets in a geographic area to sell products. A vertical marketing system is one in which the distribution channel members work together as a unified group to meet consumer needs. SOURCE: CM:009

In corporate governance, oversight of management, segregation of control, and policy development are all examples of A. external control mechanisms. B. tasks of the board of directors. C. internal control mechanisms. D. transparency in management.

C; Internal control mechanisms. Internal control mechanisms monitor the progress and activities of an organization and make corrections when the company goes off track. Examples of internal control mechanisms include oversight of management, segregation of control, independent internal audits, and policy development. These are not examples of tasks of the board of directors—rather, internal control mechanisms are intended to make sure that the board of directors behaves in accordance with company values and goals. These are also not examples of transparency in management or external control mechanisms. External control mechanisms are controlled by people outside of an organization and are designed to serve the objectives of regulators, governments, trade unions, and financial institutions, for example. SOURCE: PD:214

What is one reason to lease a work space rather than purchasing one? A. Appreciating land values B. High credit rating C. Limited cash flow D. Control over maintenance

C; Limited cash flow. If your business does not have extensive cash flow, you might not have the means to make a purchase, and therefore would be better off leasing. A high credit rating is generally used to secure a mortgage rather than to lease. Appreciating land values are a reason to purchase rather than lease. Leasing generally does not give you control over maintenance. SOURCE: OP:028

When a bank evaluates a company's capital to determine the company's ability to repay a loan, what does the bank consider? A. The personal reputation of the business owner B. The financial value of the company's assets C. Money the owner has invested into the company D. Whether the business's industry is stable or not

C; Money the owner has invested into the company. A bank considers any money the owner has invested into the company as a source of capital and as a positive indication that the business owner is committed to achieving success. The financial value of a company's assets is called collateral and is not used to evaluate capital. The personal reputation of a business owner is often evaluated by a bank but is unrelated to capital. Banks do not typically consider the stability of a company's industry when evaluating that company's capital. SOURCE: FI:034

Which of the following business strategies is appropriate for a bakery to use if it wants a long product mix: A. Eliminating gift-item merchandise from its store inventory B. Only selling muffins and cookies custom ordered by customers C. Offering 24 different muffin and cookie varieties for sale D. Offering only one kind of muffins and one kind of cookies

C; Offering 24 different muffin and cookie varieties for sale. Length refers to the total number of products the product mix. For example, a bakery that offers 24 different muffin and cookie varieties has a long product mix. Only selling muffins and cookies custom ordered by customers is an indication of product mix consistency, which refers to how closely a business's product lines are related in terms of the products' end use, methods of distribution and production, target market, and/or price range. A bakery that only offers one kind of muffins and one kind of cookies has a short, narrow product mix. Eliminating gift item merchandise from its inventory narrows a bakery's product mix because it is limiting the types of items for sale. SOURCE: PM:003

Why are news releases considered one of the most effective public relations tools? A. News sources have a broader reach than social media. B. People are willing to pay for quality news. C. People consider news sources as more trustworthy. D. News sources only report factual information.

C; People consider news sources as more trustworthy. Since most people consider information communicated by mainstream media sources to be trustworthy, news releases are a very effective public relations tool. Whether people pay for news or not does not impact its effectiveness. Social media often has a broader reach than news sources. News sources contain factual information as well as opinions and paid advertising. SOURCE: PR:250

Busy mothers have been identified as frequent consumers of energy drinks. This is an example of behavioral market segmentation based on A. occasion response. B. loyalty response. C. rate of use. D. economic status.

C; Rate of use. Busy mothers have been identified as frequent consumers or users of energy drinks; their rate of use is an example of shared behavior. Loyalty response refers to a consumer's preference for a particular brand. Occasion response refers to purchases that occur at specific times (e.g., birthdays, holidays). Economic status refers to a person's wealth. SOURCE: MP:003

Lilian is starting a new business, and she needs a marketing director. Lilian's friend Tanisha recommends her husband, Diego, who has worked in marketing for over a decade. What was Lillian's recruiting source? A. Job board B. Recruiting agency C. Referral D. Digital networking

C; Referral. One way that companies can recruit employees is through referrals. Referrals occur when a contact recommends another person for a position. Diego was referred to Lilian through Tanisha, who is a friend of Lillian's, so this is a referral. Referrals are a good way to find employees when a business is just getting off the ground. This is not an example of using a recruiting agency, job board, or digital networking to find an employee. SOURCE: EN:017

Which of the following is an external factor that might affect sales forecasting: A. A social media advertising push B. A new product release C. Regulatory changes D. Shifts in pricing strategy

C; Regulatory changes. Many factors, both inside and outside of the organization, can affect your sales forecast. An external factor is a regulatory change—a change in law or governmental policy that affects your business. These are external because they are outside of the control of your company. Releasing a new product, pushing social media advertising, or shifting pricing strategy are all internal because they are under the control of the company. SOURCE: MP:014

Which of the following statements regarding the selling function is true: A. Selling is unplanned communication. B. Selling is not personalized to the customer. C. Selling is planned communication. D. Selling usually doesn't result in future purchases.

C; Selling is planned communication. Selling is a marketing function that involves determining client needs and wants and responding through planned, personalized communication. Selling is a planned and personalized communication, meaning that salespeople spend time becoming experts on their products as well as customer needs and wants. Successful selling often results in repeat customers. SOURCE: SE:017

What is a possible downside of obtaining investment from venture capitalists? A. The slow rate of growth B. Repaying the money C. Sharing company ownership D. The increased chance of failure

C; Sharing company ownership. When a start-up receives funding from a venture capitalist, investors own equity shares in the company. This means there are less shares to sell, and the investors might also have a share in decision-making. Start-ups do not have to repay the money from venture capitalists. Venture capital can help a start-up grow quickly, rather than slowly. Obtaining investment from venture capitalists does not increase the chance of failure. SOURCE: EN:019

The goal of most marketing promotions is to communicate with A. all consumers. B. business partners. C. target audiences. D. competitors.

C; Target audiences. Marketing promotions are designed to communicate with specific, identified target audiences to persuade them to buy or to form an opinion. Business partners are more likely to be involved in devising the strategy for a marketing promotion. Marketing promotions are usually designed to appeal to a specific, targeted audience, not to all general consumers. Competitors are not typically the intended audience of a marketing promotion. SOURCE: PR:001

A company wants to implement a new automated time-tracking process. Which of the following factors is most likely to affect the design of this process: A. Increased stress and fatigue B. Changes in regulation C. The cost of technology D. The company leadership

C; The cost of technology. When designing new business processes, it is important to consider the factors that will affect them. In the case of implementing a new automated time-tracking process, the cost of technology would likely be a factor. This example is not necessarily related to changes in regulation, increased stress and fatigue, or the company leadership. SOURCE: OP:475

Which of the following explains why monthly financial statements do not accurately show how much a company is worth: A. They don't show what a company spends and earns on a monthly basis. B. The data based on projected sales forecasts are not reliable. C. They do not reflect how much a company owes on unpaid liabilities. D. Earned income is not balanced by data on paid expenses.

C; They do not reflect how much a company owes on unpaid liabilities. Monthly financial statements do not show how many unpaid liabilities are currently in a company's name, so those financial statements can be unreliable indicators of a company's actual worth. Monthly financial statements are not based on projected sales forecasts but instead contain data about earnings from actual sales. Monthly financial statements show how much a company spends and earns each month. Financial statements show paid expenses as well as earned income. SOURCE: FI:655

Logan has a great idea for a new software program. However, for Logan's idea to be considered an entrepreneurial discovery, there must be A. a team of employees ready to create it. B. no existing competition. C. limited need for research. D. a market of customers willing to pay for it.

D; A market of customers willing to pay for it. Entrepreneurial discovery is the phase of the entrepreneurial process in which the entrepreneur identifies a possible new product or service to introduce to the market for profit. Not all inventions or ideas are entrepreneurial discoveries. For Logan's idea to be considered an entrepreneurial discovery, there must be a market of customers willing to pay for it. Every product, including entrepreneurial discoveries, has some sort of competition. Most entrepreneurial discoveries require research. Finally, Logan does not need to have a team of employees already in place for his idea to be considered an entrepreneurial discovery. SOURCE: EN:002

Which of the following is true regarding risk taking: A. Risk related to staffing can be largely controlled. B. Smart businesspeople avoid risk. C. Financial risks primarily affect new businesses. D. All entrepreneurs must take risks.

D; All entrepreneurs must take risks. Risk taking is an essential aspect of entrepreneurship. If you want to become a successful entrepreneur, you must learn to take risks and seek out risk-taking opportunities. Smart businesspeople do not necessarily avoid risks. Financial risks affect all businesses, not just new ones. Finally, risks related to staffing cannot necessarily be largely controlled. SOURCE: EN:024

Ever since Marley received an undercooked burger from Quick n' Fresh Restaurant, she just can't bring herself to support the business again. She's concerned she'll get another undercooked sandwich—and she can't get rid of the negative feeling she gets when she sees the restaurant. Marley's distaste for Quick n' Fresh is an example of a(n) A. falsehood. B. belief. C. statement. D. attitude.

D; Attitude. An attitude is a good or bad feeling toward something that forms over time and is unlikely to change. Marley's negative feelings toward Quick n' Fresh are an example of an attitude, not a belief. A belief is an idea that one holds to be real or true. While Marley may also have beliefs about Quick n' Fresh, her beliefs are not clear from this example—only her attitude. Marley's distaste toward Quick n' Fresh is not an example of a statement or a falsehood. SOURCE: MK:014

Javon's coffee shop has finally started to make money, and he wants to invest in product innovation. Javon should A. advertise on social media. B. hire two new baristas. C. keep the café open an hour later. D. begin selling pastries and baked goods.

D; Begin selling pastries and baked goods. Product innovation includes improving current products or creating new ones. Investing resources in product innovation is a great way to grow your business. Adding pastries and baked goods to the menu is a way that Javon can begin to invest resources into product innovation. Hiring two new baristas, keeping the café open an hour later, and advertising on social media are not examples of investing resources into product improvement or creation. SOURCE: EN:032

The makers of Bliss luxury bath soaps have chosen to sell their products through retail stores, online e-tailors, and direct-to-consumer through their website. In other words, Bliss has chosen its A. manufacturing model. B. business model. C. pyramid scheme. D. channels of distribution

D; Channels of distribution. Channels of distribution are the paths or routes that goods or services take from the producer to the ultimate consumer or industrial user. A business model is a company's overall plan for how it intends to operate and achieve profitability. A pyramid scheme is an unethical sales practice that involves participants recruiting other people to buy into the scheme with the promise of future monetary gain. This is not an example of a business model or a pyramid scheme. Manufacturing model is not a term generally used in marketing. SOURCE: CM:003

Business owners who finance their businesses with secured loans face the risk of losing A. owner capital withdrawals. B. full control of the business. C. access to cash flow. D. collateral offered.

D; Collateral offered. Secured loans require applicants to pledge assets that will be claimed as collateral by the lender if the loans are not repaid. Owners who finance their businesses with secured loans maintain their ability to control the business unless they have signed legal agreements with business partners or investors to share ownership. Secured loans do not limit or deny business owners' access to cash flow and owner capital withdrawals. SOURCE: FI:041

Risks that are associated with government regulations are classified as __________ risks. A. operational B. financial C. strategic D. compliance

D; Compliance. Risks associated with rules and regulations such as employee protection laws or environmental regulations are classified as compliance risks, not financial, strategic, or operational risks. Financial risks have to do with how a business handles its money. Strategic risks result from operating within a specific industry at a specific time. Operational risks are risks that result from internal failures, such as a process failing unexpectedly. SOURCE: RM:094

Kajal owns a small business that makes homemade candles. During the past few months, the company has been struggling to pay the bills from the suppliers the company purchases from. On top of that, Kajal recently had to let go two of her employees because she couldn't afford to pay them anymore. Which of the following actions should Kajal take to produce the most positive outcome: A. Hire more effective employees to work for her B. File for bankruptcy and close down her business C. Produce fewer candles and raise the price of each D. Coordinate her company's resources more effectively

D; Coordinate her company's resources more effectively. Managing a business of any size requires strategic coordination of resources: human, capital, and fiscal. Based on the information provided in this example, it sounds like Kajal needs to reevaluate how she is coordinating her company's resources to meet her goals—not file for bankruptcy and close down her business, produce fewer candles and raise the price of each, or hire more effective employees. None of these actions would result in the most positive outcome: a company that is thriving because of the effective coordination of its resources. SOURCE: HR:508

The owner of a specialty bakery recently came across a social media post by a mother looking for a dinosaur-themed birthday cake for her son. In her post, the mother outlined the specific things she was looking for in the cake. The owner of the bakery thinks he can create the type of cake the mom is looking for. What should he do? A. Wait for the woman to contact his bakery before taking any further action B. Contact the woman via social media and ask her what she's willing to pay C. Bake the cake she described and then ask her where she would like it delivered D. Create a proposal outlining how his bakery would satisfy the client's needs

D; Create a proposal outlining how his bakery would satisfy the client's needs. A business proposal is a document that describes how a particular business intends to satisfy the needs and wants of a customer. By creating a proposal for the woman seeking a birthday cake, the baker could potentially win a new customer for his shop. It would be inappropriate to contact the woman and ask her what she is willing to pay before making any sort of initial introduction or proposal. It would also be inappropriate to bake the cake before confirming that the woman actually wanted it. The baker might lose the customer if he does nothing and simply waits for the woman to contact his bakery, so it's a better idea to create a proposal. SOURCE: CO:062

One of the customer profiles for Bea's Bookstore is a college student purchasing textbooks. Which of the following is a psychographic description of this typical customer: A. Works part-time or is unemployed B. Lives in a dorm or apartment C. Between the ages of 18-23 D. Eager to save money

D; Eager to save money. When building customer profiles, it is important to research both demographics and psychographics. Psychographics are mental characteristics including beliefs and interests. One example that describes college students is that they are eager to save money. Living situation, age, and employment status are demographic descriptors. SOURCE: MP:031

Which of the following techniques is the best example of leveraging existing business relationships: A. Deleting negative client reviews B. Avoiding meeting new people C. Calling clients just to say hello D. Sending holiday cards to clients

D; Sending holiday cards to clients. "Leveraging" means making the most out of something. In business, leveraging a relationship means maximizing the benefits of the relationship for your company. Leveraging business relationships is important for retaining current customers and continuing to obtain new customers. One example of leveraging an existing business relationship is sending holiday cards to clients. Sending a card is a thoughtful gesture that says to the client, "We care about you." Avoiding meeting new people would not help an individual leverage his/her existing relationships. Calling clients just to say hello would be unwise, since many customers are annoyed by unexpected and unimportant phone calls. Deleting negative client reviews is not only unethical, but would also not help leverage an existing relationship. SOURCE: EI:116

A hotel discovers that 60% of consumers prefer to book directly with a hotel versus via an online travel agency (OTA) listing with the same price. The hotel's research findings also indicate that 55% of consumers still prefer to book directly with a hotel when the hotel option is up to 20% higher than the price listed on an OTA site. Based on this information, which of the following business strategies should the hotel adopt to increase direct hotel bookings and maintain its profitability: A. Increase direct hotel room rates 30% to ensure the hotel is profitable B. Gather consumer opinions about the hotel's amenities to improve them C. Discontinue business relationships with OTAs to increase direct booking rates D. Gather consumer opinions about the hotel's booking process to improve it

D; Gather consumer opinions about the hotel's booking process to improve it. Since price doesn't seem to be the driving factor in consumer choice when booking a hotel, the hotel should gather more information about the hotel's booking process to discover the factors that impact consumers' booking preferences. Gathering consumer opinions about its amenities can help the hotel increase overall business but fails to determine ways to increase direct bookings. Discontinuing business relationships with OTA sites would likely result in a huge decline in overall bookings, which would negatively impact profits. A significant increase of 30% for direct hotel room rates may reach consumers' price thresholds resulting in fewer direct bookings. SOURCE: NF:216

Which of the following is a true statement about giving recognition: A. It results in relatively low returns for the high cost. B. It decreases loyalty and harms relationships. C. It contributes to a competitive work environment. D. It increases morale among group members.

D; It increases morale among group members. Giving recognition is a great way to increase motivation and enthusiasm among group members. When people are recognized, they feel valued and respected, leading them to feel better about their work and their overall position within the group. Giving recognition does not harm relationships or decrease loyalty; in fact, giving recognition usually results in increased loyalty and deeper relationships. Giving recognition does not necessarily contribute to a competitive work environment; it would more likely contribute to a positive and inclusive work environment. Giving recognition yields high returns for relatively little cost, not the other way around. SOURCE: EI:014

When businesses take the time to study their competition, they can A. hurt their competitors' reputations. B. ensure that their competitors lose sales and go out of business. C. help their competition attract more customers. D. learn which customer service strategies work and which don't.

D; Learn which customer service strategies work and which don't. Studying your competition may help you learn what customer service strategies work well and what you should avoid. Studying your competition will not ensure that competitors lose sales and go out of business, and it will not hurt competitors' reputations. The purpose of studying your competition is not to help the competition attract more customers. SOURCE: PM:013

Widget Industries is a new company that is coming out with a new product. A similar product is in the market but has not yet caught on with most consumers. Widget Industries should price its product __________ than its competitors in an attempt to __________. A. higher; gain as much of the market as possible B. lower; create an exclusive image C. higher; create a discount image D. lower; gain as much of the market as possible

D; Low; gain as much of the market as possible. Some new companies set lower prices to get as much of the market as possible right from the start. If the company was trying to create an exclusive image, it would price higher than the competition. If the company was trying to create a discount image, it would price lower than the competition. SOURCE: PI:002

Using a locked mailbox, implementing a "last person out" policy, and numbering building keys are all examples of policies and procedures designed to A. determine which employees can and can't be trusted. B. prevent employees from stealing from the workplace. C. foster a positive workplace culture for employees. D. maintain the physical security of a workplace.

D; Maintain the physical security of a workplace. Maintaining the physical security of the workplace is important for businesses of all shapes and sizes. Using a locked mailbox, implementing a "last person out" policy, and numbering building keys are all ways that companies can keep their workspaces secure. Using a locked mailbox protects sensitive company information from being stolen or damaged. A "last person out" policy ensures that the workplace is shut down properly and securely at the end of each workday. Numbering building keys helps companies keep track of their keys and prevent them from being copied. These policies and procedures are not designed to prevent employees from stealing from the workplace, foster a positive workplace culture for employees, or to determine which employees can and can't be trusted. SOURCE: OP:157

Every __________ is the result of a process. A. project B. activity C. input D. outcome

D; Outcome. Process thinking is a philosophy that emphasizes a documented, standardized set of steps to accomplish an outcome. Every outcome is the result of a process. Activities are breakdowns of processes. Inputs go into a process, rather than being the result of a process. A project can be made up of many processes, but every project is not necessarily the result of a process. SOURCE: OP:474

A company analyzing data from past holiday sales periods to make decisions concerning release dates for new products is using __________ analytics. A. descriptive B. big data C. prescriptive D. predictive

D; Predictive. Predictive analytics is used to analyze trends in past consumer behavior to predict future behavior. Descriptive analytics is used to condense big data into smaller, more useful pieces of information. Big data analytics refers to analyzing large amounts of data to discover patterns or trends and is not likely to describe specific holiday sales period data. Prescriptive analytics is used to go beyond descriptive and predictive models by recommending one or more courses of action and showing the likely business result of each decision. SOURCE: NF:139

Why is it important for new businesses to use resources productively? A. It improves marketing efforts. B. Investors expect immediate returns. C. It builds brand loyalty. D. Resources are often limited.

D; Resources are often limited. When a venture is first starting out, resources are usually limited because the company is not yet making a profit or generating revenue. Therefore, it's important to use resources productively to keep the venture going. Investors do not necessarily expect immediate returns. Using resources productively does not necessarily build brand loyalty or improve marketing efforts. SOURCE: EN:030

Ellie is opening her own daycare and hiring three teachers. She interviews Jeff as a potential candidate but chooses not to hire him. Ellie could be violating regulations if she chose not to hire Jeff because A. her friend Larissa is more qualified for the position. B. he is too experienced and overqualified for the position. C. she was not impressed by his grooming and appearance. D. she does not feel comfortable hiring a man as a teacher.

D; She does not feel comfortable hiring a man as a teacher. Human resources regulations prevent hiring discrimination based on race, color, religion, national origin, or sex. Ellie cannot deny Jeff the job simply because he is male. It is not against regulations to refrain from hiring someone who is too experienced and overqualified. It is also permissible to deny someone a job because s/he does not have a professional appearance. Finally, it is not against regulations to hire a friend who is more qualified for the position. SOURCE: BL:007

Before launching a new product, marketers should obtain the support of top company leadership. This is an example of which aspect of change management? A. Readiness B. Involvement C. Impact D. Sponsorship

D; Sponsorship. One key aspect of change management is sponsorship, which involves gaining support for the change at the top executive level of the company. It is important to gain this support, as the marketers in this case are doing, for a change to be successful. Involvement means including the right people in the design and implementation of the chance. Impact means assessing and addressing how changes will affect people. Readiness is preparing people to adapt to the changes. SOURCE: SM:095

Which of the following statements regarding a company's board of directors is true: A. A company's board of directors represents the interests of company management. B. Individuals on the board of directors are elected by employees of the company. C. The board of directors has very little influence on a company's major decisions. D. The board of directors has the greatest influence on corporate governance.

D; The board of directors has the greatest influence on corporate governance. The board of directors has the largest influence on a company's policies, procedures, and other important organizational decisions. Individuals on the board of directors are elected by shareholders or appointed by other board members; they are not elected by employees of the company. A company's board of directors represents the interests of the company's shareholders, not the interests of company management. SOURCE: PD:302

Nora wants to manage an organization that is focused on growth, but for years, her company's board of directors has been focused on merely staying afloat. Nora must slowly introduce her ideas for growth due to the influence of A. her own limitations. B. the market. C. the external macro-environment. D. the company's internal environment

D; The company's internal environment. Many factors can influence strategic management, including a company's internal environment. The board of directors is an example of an internal environmental factor that affects management, such as in Nora's case. The market, the external macro-environment, and a manager's own limitations can also influence his/her management strategy, but these are not related to the given example. SOURCE: SM:028

Which part of a business plan can help define how a new venture will reach its customers? A. The product description B. The executive summary C. The competitive analysis D. The market analysis

D; The market analysis. The market analysis section of a business plan focuses on defining the market and determining how to reach them. Developing the market analysis section of the business plan will help the business figure out how to reach customers. The executive summary, competitive analysis, and the product description do not help define how the new venture will reach its customers. SOURCE: EN:014

One way to ensure that compliance is adequately implemented is to A. separate compliance by department. B. avoid changing the compliance strategy. C. discuss compliance with customers. D. train all employees on compliance strategy.

D; Train all employees on compliance strategy. When employees are not trained on compliance, risks are much more likely to occur. It is important to provide all employees with detailed training so they are more likely to be aware of compliance strategies and how to abide by them. Compliance strategies should be adaptable because regulations and laws are always changing. Discussing compliance with customers does not necessarily ensure that compliance will be adequately implemented. Finally, separating compliance by department is not necessarily a good idea because departments working together are much more successful at achieving compliance. SOURCE: BL:011