MGMT 371 Test 3

ISO 9000 is a program that focuses on improving the firm's products but not the processes involved. a. True b. False

False

In a focus strategy, a firm seeks to be unique in its industry along a dimension or a group of dimensions that are valued by consumers. a. True b. False

False

In switching jobs, individuals should always be going "from" rather than "to." a. True b. False

False

Once a behavior has become an assumption, it is even more visible. a. True b. False

False

Over time, the process of cultural socialization can result in a decreased level of commitment to an organization. a. True b. False

False

Strong cultures lead to increased performance in both stable and turbulent environments. a. True b. False

False

The balanced scorecard promotes competition and reveals best practices so that they can be analyzed, adopted, and implemented throughout an industry. a. True b. False

False

The functional integration stage of organizational growth is characterized by informal management. a. True b. False

False

The key advantage of the matrix structure is that it creates clarity for managers who are simultaneously accountable to distinct units that don't always share the same objectives. a. True b. False

False

The only way to increase pay in skill-based pay systems is to switch jobs. a. True b. False

False

Transaction costs refer to the costs a firm incurs to coordinate activities between business units. a. True b. False

False

Progressive organizations view human resources as a valuable resource that can be optimized to create competitive advantage. a. True b. False

True

Realistic job preview provides information to job candidates highlighting the most important conditions of a job including its positive and negative aspects. a. True b. False

True

Spot contracts involve a firm's commitment to buy a commodity product at a specific price. a. True b. False

True

The 5-Forces Model is one of the most important tools for evaluating the attractiveness of industries. a. True b. False

True

Which of the following belongs to the support activities of a firm's value chain? a. Marketing b. Procurement c. Logistics d. Service

b

Which of the following evolves over three stages—from compliance to identification to internalization? a. Internal integration b. Organizational commitment c. Cultural socialization d. External adaptation

b

_____ refer to the meanings that members of an organization attach to visible aspects of a firm. a. Artifacts b. Values and beliefs c. Assumptions d. Objectives

b

A cosmetics company owns a patent for a particular kind of shampoo, which is a bestseller in the market. It enables the firm to extract a high level of discretion over product pricing. The patent for the shampoo is an example of a firm's _____ resource. a. tangible b. human c. natural d. intangible

d

A buyer industry will tend to have less power relative to the supplier industry when the buyer purchases in very large volumes. a. True b. False

False

According to one key study, a firm's performance decreases as it shifts from single-business strategies to related diversification. a. True b. False

False

According to one key study, performance increases as firms change from related diversification to unrelated diversification. a. True b. False

False

As firms expand and grow in complexity, they are likely to reorganize into a functional structure. a. True b. False

False

Firms pursuing related diversification to increase market power are attempting to decrease the price at which they sell their products to levels below the normal prices found in the market. a. True b. False

False

Firms that have excess capacity or potential in their physical assets or their intangible assets tend to pursue unrelated diversification. a. True b. False

False

One of the most important benefits of the functional structure is the efficiency it creates. a. True b. False

True

One of the primary mechanisms by which the objectives of a firm are achieved is through the way the firm is organized. a. True b. False

True

Organizations that focus solely on performance without a focus on support tend to produce burnout contexts. a. True b. False

True

A crucial part of employee development is providing feedback. a. True b. False

True

A substitute could be a competitor's product or some other product that satisfies the same consumer need. a. True b. False

True

Behaviorists are those who support a more open organizational structure where roles and responsibilities are loosely defined. a. True b. False

True

Budgeting involves allocating financial resources and measuring expected quantitative and qualitative outcomes of a firm. a. True b. False

True

Corporate advantage occurs when a firm maximizes its resources to build a competitive advantage across its various business units. a. True b. False

True

First-mover advantage occurs when a firm is first to offer desirable products or services that secure customer loyalty. a. True b. False

True

For the balanced scorecard to be valuable, measurements from the customer perspective must link directly to financial results or strategic goals. a. True b. False

True

In formal organizations, the backbone of culture generally begins with a founder. a. True b. False

True

It is the culture of the organizational structure that drives performance. a. True b. False

True

Managers must view the firm's value chain in the context of a larger value system that includes the value chains of suppliers and distribution channels. a. True b. False

True

The embedded nature of culture often makes change very difficult even in the face of strong competitive pressures. a. True b. False

True

The idea that a firm is a collection of resources is often referred to as the resource-based view of the firm. a. True b. False

True

The main components of MBO are derived from goal setting and participation in decision making. a. True b. False

True

The number of values a firm holds is not as important as how strongly held they are and how much organizational buy-in they generate. a. True b. False

True

The success of outsourcing is driven by a firm's ability to effectively manage people in different locations. a. True b. False

True

The ultimate goal of an unrelated diversification strategy is usually to create some form of financial economies. a. True b. False

True

When employees of Hewlett-Packard had difficulty adjusting to a changing marketplace and a new CEO, they demonstrated a(n) a. strong culture. b. weak culture. c. passive culture. d. aggressive culture.

a

A _____ structure is an organizational structure where key decisions are made at all levels of the firm, not only at the top. a. decentralized b. multinational c. centralized d. bureaucratic

a

An appliance manufacturer acquires a fruit preserves cannery. This is an example of a. unrelated diversification. b. backward vertical integration. c. forward vertical integration. d. related diversification.

a

BluBuddy Company has a loose, informal management structure, basic benefits, and flexible job definitions. BluBuddy is most likely in the a. initiation stage of growth. b. functional growth stage. c. controlled growth stage. d. functional integration stage of growth.

a

Cardinal Company is using cost of goods sold as a measurement of performance, which will be placed under which perspective of the balanced scorecard? a. Financial perspective b. Customer perspective c. Business process perspective d. Learning and growth perspective

a

For which of the following companies is human resources the primary resource? a. Morgan & Morgan Law Firm b. Daisy Hill Puppy Farm c. The Gold and Diamond Supply Store d. Marathon Oil Corporation

a

In a single-product diversification strategy a. a firm attempts to develop core competencies in a specific market. b. a firm owns numerous businesses that are linked in some manner. c. a firm manages several businesses with no reasonable connection. d. a firm's main focus is on establishing customer recognition and loyalty.

a

In conducting its SWOT analysis, a baseball team notes that most of its players are among the best in the world and that its coach was a distinguished major-league player. To which part of the SWOT analysis is this information pertinent? a. Strengths b. Weaknesses c. Opportunities d. Threats

a

In vertical integration, backward integration occurs when a firm a. owns or controls the inputs it uses. b. owns the distribution channels for its main products. c. controls the primary activities involved. d. controls the customers for its products.

a

Inside Patagonia, Inc., there is a culture that encourages innovation and risk taking. Employees are encouraged to experiment with products and fabrics to produce better designs. In addition, Patagonia encourages employees to leave work early to surf or rock-climb. Patagonia is likely using a a. differentiation strategy. b. cost leadership strategy. c. low-cost focus strategy. d. stuck in the middle strategy.

a

One of the more important measurements of TQM is _____, defined as the amount of time required to develop and deliver products and services to the customer. a. total cycle time b. benchmarking c. Six Sigma d. leverage

a

Star Hydraulics is organized into self-supervising teams that are responsible for a set of tasks. In the teams, each member is cross-trained to be able to perform multiple tasks, and individual goals and values completely overlap with the organization's values. Workers collaborate on projects and must negotiate proper team behavior, using the organization's mission and values as a guide. Star Hydraulics has adopted a _____ approach to organizational control. a. clan b. bureaucratic c. mutually adaptive d. totalitarian

a

Target hires and trains employees well in advance of actual openings and has managers groom one or two direct reports for management positions. Successful HR planning like the approach used at Target requires a. job analysis. b. job previews. c. job appraisals. d. management by objectives.

a

The Tidwell Company has a production department, a marketing department, a sales department, and an accounting department. The sales department is headed by the VP of sales and manages the department in a hierarchical manner. Employees are evaluated on achieving departmental goals. The Tidwell Company has a _____ structure. a. functional b. matrix c. divisional d. network

a

The final stage in the selection process often tends to be a. reference checks. b. situational interviews. c. personality tests. d. cognitive ability tests.

a

The management of an organization is in the process of reorganizing the firm's activities with a more customer-centric focus. They are mainly focused on helping employees build the skills needed to better serve customers. Identify the customer-centric activity used by the management. a. Capability development b. Coordination c. Cooperation d. Connection

a

The most recognizable resources that a firm uses to manufacture its products, such as the firm's plant and equipment, are categorized as _____ resources. a. tangible b. human c. intangible d. natural

a

The process of mutual adaptation is most critically important in which of the following industries? a. Fashion b. Fast food c. Gas and oil d. Travel and tourism

a

The process of understanding how work gets done and how individuals should interact is called a. socialization. b. internalization. c. identification. d. adaptation.

a

The ultimate goal of an unrelated diversification strategy is usually to a. create financial economies. b. support failing businesses. c. enhance innovation. d. expand globally.

a

Thomas is the top manager of a firm that is going to acquire another firm in a similar industry. In terms of culture, which of the following should Thomas do after acquiring the company? a. Thomas should preserve those elements of each culture that are essential to the company's well-being. b. Thomas should completely adopt the culture of the acquired company. c. Thomas should encourage employees to follow both cultures in an attempt to avoid any conflict situations. d. Thomas should stick to his own organization's culture regardless of whether the acquired company's culture is efficient or not.

a

When Ms. Chase interviews prospective employees, she shows them the office layout, the work space, the game room, and the professional awards displayed in the lobby. In doing so, she is sharing the _____ of the company's culture. a. artifacts b. values c. beliefs d. assumptions

a

Which of the following best describes an organization's artifacts? a. Day-to-day behaviors that can be observed b. The underlying essence of why members of an organization act as they do c. Relational factors between an organization's culture and its performance d. Aspects deemed important by members of an organization

a

Which of the following firms is most likely to benefit from the clan approach? a. A firm with highly uncertain working conditions b. A firm with work activities that can be easily measured c. A firm that lacks diverse working styles d. A firm operating in a price-competitive industry

a

Which of the following is NOT a reason why managers pursue diversification strategies? a. The opportunity to increase customer loyalty b. The potential to manage or minimize risk c. The potential for personal gain d. The opportunity to leverage core assets or skills between different businesses

a

Which of the following is an advantage of a strong culture? a. A strong culture has been linked to better levels of performance. b. Strong cultures increase performance even in turbulent environments. c. Organizations with strong cultures only encourage ethical behavior. d. It is a simple and easy task to change the strong culture of an organization.

a

Which of the following is the best example of a barrier to entry created by a firm's incumbency advantages? a. A company with superior technology when compared to its competitors b. A company that engages in extensive advertising to gain consumer loyalty c. A company that is marked by overcrowded distribution channels d. A company that manufactures its products in high volumes

a

Which of the following is the best example of an organization with a weak culture? a. TechPark is a company characterized by low levels of agreement among employees about what is valued in the organization. b. The employees of Z-Gadgets, a manufacturing company, experience role clarity, in which they operate autonomously with little monitoring. c. The performance of ElectronicZone tends to fluctuate, wherein it's good under stable environments and very poor under turbulent environments. d. Z-Furn's organizational culture is very inflexible and cannot be easily changed in response to changing environments.

a

Which of the following levels of organizational culture refers to the visible organizational structures, processes, and languages? a. Artifacts b. Values c. Assumptions d. Beliefs

a

Which of the following questions should individuals address when making decisions about their career? a. What are my strengths and values? b. Who is my role model? c. With whom will I work effectively? d. From whom should I learn?

a

Which of the following refers to the cost savings achieved when the large volume of a product manufactured by a firm enables it to reduce per-unit cost? a. Economies of scale b. Return on equity c. Demand-side benefits scale d. Tangible resources

a

Which of the following statements about the balanced scorecard is true? a. It helps managers create a set of quantitative and qualitative measurements that are related and mutually reinforcing. b. It does not enable managers to make any qualitative measurements. c. A company with many business units needs only a single balanced scorecard. d. Company mission plays an instrumental role in the balanced scorecard.

a

XYZ Company has physical assets that are not being used to full capacity, and it has a strong brand name that it could use to leverage its assets. To grow, XYZ Company will likely pursue a. related diversification. b. single-product diversification. c. unrelated diversification. d. vertical integration.

a

_____ analysis is the process of tracking the results of one's own key actions and decisions. a. Feedback b. Strategic c. Trend d. SWOT

a

_____ is an international control mechanism that pursues high-quality products by ensuring high-quality processes. a. ISO 9000 b. Benchmarking c. Six Sigma d. Total Quality Management

a

_____ is defined as the pattern of organizational roles, relationships, and procedures that enable coordinated action among employees. a. Organizational structure b. Value chain c. Synergy d. Organizational culture

a

_____ refers to a four-stage process that provides the mechanisms and systems that monitor the transformation process, ensuring that outputs are produced to the desired quality, quantity, and specification of an organization and its customers. a. Control cycle b. Trend analysis c. Scenario building d. SWOT analysis

a

_____ refers to a long-term process designed to build greater self-awareness, enhance managerial capabilities, and enable an individual to reach his or her potential. a. Development b. Offshoring c. Participation d. On-the-job training

a

hich of the following statements is true of the levels of organizational culture? a. Assumptions are deeply embedded in an organization's culture. b. It is quite difficult to note the artifacts present in an organization. c. Assumptions are the meanings that members of an organization attach to artifacts. d. Values are visible organizational structures, processes, and languages.

a

A candy company purchases sugar plantations to guarantee its own supply of sugar. This is an example of a. unrelated diversification. b. backward vertical integration. c. forward vertical integration. d. backward horizontal integration.

b

A firm can pass the better-off test in determining the viability of diversification when a. the price of the acquired firm is low enough to yield a potential return on investment. b. the total competitive advantage is above and beyond what the two businesses could achieve independently. c. it acquires extremely high-cost industries. d. it spends more time on implementation processes.

b

Ben & Jerry's 5-to-1 policy, whereby executives could not earn more than five times the amount of the lowest-paid employee, is an example of a company's a. cultural artifacts. b. cultural beliefs and values. c. cultural assumptions. d. mission.

b

Eris Company is managing employees by outlining a series of specific milestones that they are expected to meet in a defined time period. Eris is utilizing a. off-the-job training. b. management by objectives. c. Total Quality Management. d. 360-degree feedback.

b

Fine Electronics is a corporation that controls all aspects of its business such as extracting raw materials, manufacturing the products, distributing them, and finally marketing to customers. It manages these activities through several business units, where one unit provides inputs to the other. This is an example of a. unrelated diversification. b. vertical integration. c. strategic flexibility. d. franchising.

b

Footflyer Publishing has had difficulty finding timely press availability with a four-color printer for its magazines. Footflyer should consider a. backward vertical integration. b. forward vertical integration. c. unrelated diversification. d. abandoning print publications.

b

Gary, a manager at ABC Company, is evaluating the firm's internal strengths and weaknesses as well as the opportunities and threats that are evident in the firm's external environment. Gary is using a. Porter's 5-Forces Model. b. SWOT analysis. c. SWAT analysis. d. value chain analysis.

b

Humanix, Inc.allows its employees to make their own choices from a wide array of benefit options. Humanix has a a. profit-sharing plan. b. cafeteria plan. c. flexible work option. d. gain-sharing plan.

b

In a functional structure, a firm a. groups diverse functions into separate divisions. b. divides people into units in terms of the main activities that need to be performed. c. gives equal authority to both divisional and functional managers. d. categorizes its employees based on their performance and commitment.

b

In business, only two things can be observed, measured, and monitored: a. suppliers and customers. b. behavior and outputs. c. resources and growth. d. employee satisfaction and loyalty.

b

In vertical integration, forward integration occurs when a firm a. attempts to achieve economies of scope. b. controls the customers for its main products. c. owns or controls the inputs it uses. d. generates sustainable cost savings.

b

Inside CHS Company, there is a culture of frugality, discipline, and efficiency. The firm pays its employees a competitive wage, but there are no perks. CHS Company is likely using a a. differentiation strategy. b. cost leadership strategy. c. differentiated focus strategy. d. stuck in the middle strategy.

b

John signed a two-year contract with Z-Gadget to get a subsidized price on his new iPhone. He had Z-Gadget's service for only six months when he became dissatisfied and wanted to cancel the contract. However, he did not do so because of high cancellation fees as well as new activation fees with another service. Which of the following characteristics of a powerful supplier group does Z-Gadget have with respect to its contract with John? a. The supplier industry is more concentrated than the industry to which it sells. b. Industry participants face switching costs in changing suppliers. c. Suppliers offer differentiated products. d. No substitutes exist for what the supplier group provides.

b

Majestic Company is expanding benefits, adding training and development programs, and recruiting specialists. Majestic is most likely in the a. initiation stage of growth. b. functional growth stage. c. controlled growth stage. d. functional integration stage of growth.

b

Moonbow, Inc., has a highly formalized structure with extensive rules, procedures, policies, and instructions. Positions are arranged hierarchically with top management dictating the direction and activity of the organization while lower- level managers and employees follow orders. The fundamental mechanism of monitoring involves close personal surveillance of subordinates by superiors. Moonbow, Inc., has adopted a _____ approach to organizational control. a. clan b. bureaucratic c. mutually adaptive d. totalitarian

b

Organizations that emphasize performance metrics with a focus on support and trust will tend to produce _____ contexts. a. country club b. high performance c. low performance d. burnout

b

The _____ perspective identifies the infrastructure and skills needed to carry out business processes, interact with customers, and achieve long-term financial growth. a. customer b. learning and growth c. financial d. business process

b

The distinguishing factor between unrelated and related diversification strategies is that a firm using unrelated diversification strategy a. has numerous businesses that are linked in some manner. b. manages several businesses with no reasonable connection. c. focuses on one specific product, typically in one market. d. develops core competencies using its resources and capabilities.

b

The factor that differentiates behavior and output is that a. outputs include the decisions of individual employees. b. behavior is controlled at the unit or department level. c. outputs are more flexible and diverse. d. behavior can be specified for an entire organization.

b

The factor that distinguishes job-based pay from skill-based pay is that job-based pay policies a. are often used in organizations with lower hierarchical structures. b. are often used in organizations where tasks are narrowly defined. c. require individuals to use their personal judgment to make decisions. d. tend to be best suited for organizations with more decentralized authority.

b

The managers of Z-Cosmetics, after identifying key measurements, decided to set performance targets for their business. In order to fulfill the purpose, they adopted a process that required management to collect data from Color Cosmetics, a leading manufacturer in the industry. The managers of Z-Cosmetics believed that adopting the best practices across the industry would help them achieve their goals more effectively. Identify the process used by Z- Cosmetics to set performance targets. a. Activity-based costing b. Benchmarking c. Total Quality Management d. Budgeting

b

The ultimate goal of developing a corporate-level strategy is to build a. employee commitment. b. a corporate advantage. c. customer relationships. d. a wholly owned subsidiary.

b

When Dharmesh Shah, the chief technology officer (CTO) of HubSpot.com, traded jobs with Paul English, the CTO of Kayak.com, he was a. implementing the internal business perspective of the balanced scorecard. b. using job swap as a means of benchmarking. c. using job swap as a means of budgeting. d. using job swap as a means of implementing Six Sigma.

b

When employees take risks that are not financially prudent in their quest for new innovation, they are likely following in the path of the company's a. board of directors. b. founders. c. stockholders. d. new CEO.

b

Which of the following balanced scorecard perspectives is used by managers to identify the company's most important customers and how well the company is doing in meeting customers' needs? a. Internal business process perspective b. Customer perspective c. Learning and growth perspective d. Financial perspective

b

Which of the following helps organizations to socialize employees? a. The intermediaries used to reach customers b. Role modeling, leader examples, and coaching c. Technologies used in manufacturing a firm's product d. Employee characteristics such as age and experience

b

Which of the following is a disadvantage of a strong culture? a. A strong culture seldom influences an organization's performance. b. A strong culture tends to be difficult to change. c. In a strong culture, the goals are unclear. d. A strong culture requires more coordination and monitoring.

b

Which of the following is a disadvantage of realistic job previews? a. Communicate only positive job aspects b. Result in smaller pool of applicants c. Provide poor job description d. Cause increase in turnover

b

Which of the following is a key advantage of the clan approach? a. Clearly defined roles and responsibilities b. Self-regulating characteristics of employees c. Close personal surveillance of superiors over subordinates d. Extreme job specialization

b

Which of the following provides a more precise job description and defines the characteristics of the ideal candidate for the position? a. Mission statement b. Job analysis c. Job evaluation d. Balanced scorecard

b

Which of the following questions is NOT part of the three-pronged test to identify conditions under which diversification can create shareholder value? a. What is the cost of entry? b. How will the business units of the firm be aligned? c. How attractive is the industry? d. Will the business be better off?

b

Which of the following stages of organizational growth is characterized as being highly entrepreneurial and informal? a. Functional growth b. Initiation phase c. Controlled growth d. Strategic integration

b

Which of the following statements about 360-degree feedback is true? a. 360-degree feedback is often effectively used to determine pay raises. b. Employees receive feedback from their superiors, peers, and subordinates. c. It often provides employees with an unrealistic view of their skills. d. 360-degree feedback is not effective for the leadership development process.

b

Which of the following statements about strong cultures is true? a. Strong cultures often result in greater role ambiguity. b. Strong cultures allow a company to run more smoothly and quickly. c. Strong cultures lead to decreased performance in stable environments. d. In strong cultures, there are low levels of agreement among employees.

b

Which of the following statements about the divisional structure is true? a. Coordination among functions in a divisional structure is less fluid than it is in a functional structure. b. It allows for greater accountability because each division is a separate self-contained entity. c. The general manager of a functional form has a broader purpose than the general manager in the divisional form. d. Employees tend to identify more with their function than with their division.

b

Which of the following statements is an advantage of a network structure? a. It is quite inexpensive for virtual teams to use communication technology. b. It enables a firm to move quickly to adapt to a change in the marketplace. c. Virtual teams often require less coordination. d. It promotes greater accountability than divisional structure.

b

Which of the following statements is an advantage of related diversification strategy? a. Related diversification strategy allows a firm to maintain several businesses that are not connected in any way. b. The sharing of resources is a key component of developing economies of scope and often increases a firm's competitive advantage. c. Related diversification strategies often achieve financial economies through the restructuring of business units. d. Related diversification strategy can allow a sick or dying company to use capital generated in a profitable division to prop it up for a short period of time.

b

Which of the following statements is true about the various customer metrics? a. The new customer metric is measured by the total number of positive feedbacks received from new and existing customers. b. Some companies find it valuable to monitor the amount customers spend on their products relative to all other products. c. Retaining existing customers to maintain or increase market share is not an easy task. d. Customer satisfaction is one of the metrics that is the most objective and quantitative.

b

Which of the following statements is true of division of labor? a. Horizontal specialization refers to how much an employee creates, executes, and administers activities in a certain area of the firm. b. The repetitive nature of specialized jobs lends itself to quick and efficient training of new resources. c. Extreme job specialization tend to increase the level of job satisfaction among workers. d. Vertical specialization refers to the breadth of activities that are performed in a certain job.

b

Which of the following terms refers to a functional unit that operates according to its own rules and guidelines and does not openly share information with other units? a. Artifact b. Silo c. Claim value d. Synergy

b

Z-Furn is an organization that manufactures and sells office furniture. It maintains a good name in this business and has strong capital resources. The organization decides to purchase a failing food product business in order to tap into the market of that company. Which of the following types of diversification is the firm pursuing? a. Related diversification b. Unrelated diversification c. International diversification d. Single-product diversification

b

_____ analysis separates a firm into its various activities to better understand total costs in the system and potential sources of firm differentiation. a. SWOT b. Value chain c. Stakeholder d. Trend

b

_____ costs refer to the costs a firm incurs to coordinate activities between business units. a. Franchising b. Administrative c. Outsourcing d. Transaction

b

_____ is a quantitative approach that uses a method known as DMAIC, which stands for define, measure, analyze, improve, and control. a. Benchmarking b. Six Sigma c. Budgeting d. Total Quality Management

b

_____ is defined as the process of evaluating behaviors and outputs to see whether standards have been met or objectives have been obtained. a. Benchmarking b. Measurement c. De-escalation d. Strategic control

b

A film production company purchases a television network to guarantee its shows will be aired. This is an example of a. unrelated diversification. b. backward vertical integration. c. forward vertical integration. d. backward horizontal integration.

c

A-Recruitz is an organization that allows its employees to work from home. Most of the interaction between the employees and the organization takes place through e-mail. Moreover, the organization is able to maintain increased employee performance and satisfaction. Identify the work option offered by A-Recruitz to its employees. a. Variable work schedules b. Flexible work schedules c. Telecommuting d. Job sharing

c

ABC Company wished to acquire EFG Company. An analysis of the merger passed the better-off test but failed the ownership test. The managers of ABC Company should a. maintain a single-product strategy. b. enter into a spot contract with EFG Company. c. seek an alternative arrangement with EFG, such as a strategic alliance. d. outsource work to another company.

c

After a recent downsizing, Joe's work responsibilities significantly increased. Joe felt guilty and resentful and became self-absorbed and risk adverse. Joe was suffering from a. survivor syndrome. b. MBO. c. post-downsizing disorder. d. outsourcing envy.

c

An organization's _____ defines how people think, feel, and act, and it moves at an almost subconscious level. a. structure b. design c. culture d. strategy

c

Because GE operates in many businesses, ranging from aircraft engines to healthcare imaging, GE would a. not be able to use the balanced scorecard. b. have to adopt a common strategy for all businesses to be able to use the balanced scorecard. c. need to create a unique balanced scorecard for each of its business units. d. have to choose one business unit with which it could use the balanced scorecard.

c

DePaul Company has been monitoring the performance of its processes against selected measures. What is DePaul's next step in the control cycle? a. Identify measures that track the right information to assess performance. b. Set targets for the selected measures. c. Take corrective action. d. Set up a balanced scorecard.

c

Downing Company is studying the costs required to attract new customers compared to the lifetime profitability of certain types of customers before it decides which new customers to target. Downing is focused on which of the various customer metrics? a. Customer retention b. New customer acquisition c. Customer profitability d. Market share

c

Footflyer Publishing is considering procuring editorial services from outside sources. Which of the following should NOT weigh in Footflyer's decision? a. The administrative costs of keeping this function in-house b. The transaction costs of procuring the outside services c. The economies of scope achieved through vertical integration with another publisher d. Possible damage to the firm's core competencies

c

Huge Company is in the process of reducing its employee base in an effort to be more competitive. Huge is a. offshoring. b. outsourcing. c. downsizing. d. customizing.

c

Of the five activities that make a firm customer-centric, connection involves a. helping employees at the firm develop the right skills needed to better serve customers. b. creating structural mechanisms at the firm that allow workers to organize their activities to focus more exclusively on creating value for customers. c. developing relationships with external partners to deliver greater value to customers. d. using informal methods such as culture and incentives to encourage people in the organization to come together in the spirit of serving customers.

c

Rivalry among existing competitors is higher when a. fixed costs are low and marginal costs are high. b. exit barriers are low. c. industry growth is slow. d. the product is not perishable.

c

The HR department at Green Company is involved in long-range planning, training and development, and the strategic issues of the company. Green Company is most likely in the a. controlled growth stage. b. functional integration stage of growth. c. strategic integration stage of growth. d. functional growth stage.

c

The _____ was created to help businesses translate strategy into action by identifying the most critical measures to drive business success and linking long-term strategic goals with short-term operational actions. a. ISO 9000 program b. strategic review process c. balanced scorecard d. value chain analysis

c

The accounting system used to assess the specific cost components of producing a product or service is known as a. economic value added. b. return on equity. c. activity-based costing. d. economies of scale.

c

The employees of Konakoala Company are in high agreement about company values but have little passion for them. Konakoala's culture is a. strong. b. weak. c. passive. d. aggressive.

c

The management of an automobile manufacturing company signed a contract with a consultancy that provides recruitment services. Though the organization was performing this function on its own previously, the management felt that the consultancy would offer a better service. Which of the following alternatives to vertical integration has the management opted? a. Franchising b. Exporting c. Outsourcing d. Licensing

c

The process by which firms impact the nature of their overarching environment and adapt their organization in response to evolving contextual factors is called a. business process reengineering. b. vertical specialization. c. mutual adaptation. d. horizontal specialization.

c

The scope of a corporate-level strategy focuses on a. the manner in which activities of the firm will be coordinated. b. the relationship between business units. c. the markets and businesses in which the firm will compete. d. the internal environment affecting a firm's business.

c

Trend Publishing Inc. sends its typesetting activities to a contractor in Indonesia. Trend is a. offsourcing. b. customizing. c. offshoring. d. downsizing.

c

When a hotel chain empowered all employees dealing directly with customers with the ability to make decisions regarding the best way to rectify situations with unhappy customers, it was an example of pursuing customer- centricity through a. cooperation. b. capability development. c. clout. d. connection.

c

Which of the following aspects of a leader's role in relation to culture is deemed critically important to an organization's success? a. Acquire more companies and adopt all elements of the acquired company's weak culture. b. Reward employees and managers with pay based on commitment and continue raising the bar. c. Empower employees to make independent decisions and to find ways to improve operations. d. Inspire managers and employees to work as they wish in an attempt to reduce their job-related stress.

c

Which of the following is a characteristic of an organization's culture? a. Culture is unchangeable. b. Culture is unrelated to performance. c. Culture is dynamic. d. A company's culture can be easily copied by competitors.

c

Which of the following is an example of a weakness in an organization's SWOT analysis? a. Competitors with highly skilled employees b. Money spent on machineries with updated technology c. Overdependence on a particular supplier for core materials d. The increasing number of competitors

c

Which of the following is the best example of an organization with a strong culture? a. TechPark is a company characterized by low levels of agreement among employees about what is valued in the organization. b. The employees of Z-Gadgets, a manufacturing company, experience role ambiguity and therefore they require more coordination and monitoring. c. The performance of ElectronicZone tends to fluctuate, wherein it's good under stable environments and very poor under turbulent environments. d. Z-Furn's organizational culture is very flexible and can be easily changed in response to changing environments.

c

Which of the following is the first step involved in benchmarking? a. Harvesting and analyzing data b. Finding the best companies for each process c. Identifying the processes to benchmark d. Creating plans for improvement

c

Which of the following is the ultimate goal of Total Quality Management? a. Producing sustainable revenue b. Setting strategic priorities c. Fulfilling customer needs d. Improving employee performance

c

Which of the following refers to an organization's assumptions? a. Aspects deemed important by members of an organization b. Relational factors between an organization's culture and its performance c. The underlying essence of why members of an organization act as they do d. Day-to-day behaviors that can be observed

c

Which of the following refers to the quantitative and qualitative aspects of products or services that customers value most? a. Financial economies b. Core competencies c. Value propositions d. Internal business processes

c

Which of the following statements best describes competitive advantage? a. It refers to the pressure a supplier or buyer can exert on a company. b. It is the advantage that occurs when a firm offers products to all customers at higher prices. c. It derives from a firm's ability to create value for its customers that exceeds the cost of producing the product or service. d. It is the capability to identify and react to changes in the external environment and to mobilize internal resources to deal with those changes.

c

Which of the following statements is a disadvantage of group-based pay systems? a. Group-based systems cannot be fully customized to a particular department. b. They do not allow managers to modify their targets and formulas. c. Group-based pay systems tend to result in a diffusion of responsibility. d. All group-based pay programs are generally difficult to calculate and monitor.

c

Which of the following statements is an advantage of external recruitment? a. External candidates often make a quicker impact in the new role. b. Companies know better about the skills of external candidates. c. Employers can find new talent through external recruiting. d. External candidates tend to perform better than internal candidates.

c

Which of the following statements is true about the different types of training? a. Informal training programs, in particular, are easy to measure. b. Formal training is seldom valuable to an employee's learning. c. Informal training of employees includes coaching or mentorship. d. Formal training often tend to be much more effective than informal training.

c

Which of the following statements is true of the organizational design and the life cycle of a firm? a. Once a firm reaches maturity, the emphasis on coordination generally increases. b. The nature of leadership should remain stable as the firm keeps evolving. c. As a firm matures, it tends to emphasize division of labor. d. Start-up firms are characterized by more job specialization.

c

Which of the following terms refers to a structure where many employees have two bosses (one divisional and one functional) with equal authority in the organization? a. Functional structure b. Divisional structure c. Matrix structure d. Network structure

c

XYZ Company is a low-cost provider. XYZ is most susceptible to a. the bargaining power of suppliers. b. the threat of substitutes. c. new innovations from rival competitors. d. the bargaining power of customers.

c

_____ is created when a firm generates sustainable cost savings by combining duplicate activities or deploying underutilized assets across multiple businesses. a. Value b. Strategy c. Synergy d. Market power

c

_____ occurs when one corporation owns business units that make inputs for other business units in the same corporation. a. Globalization b. Franchising c. Vertical integration d. International diversification

c

CB Company lowered its price temporarily, then tried to differentiate its product, then tried to appeal to a niche group. CB company is a. using a focus strategy. b. using a cost leadership strategy. c. using a generic strategy. d. stuck in the middle.

d

Fine Gadgets, a gadgets manufacturing company, has an organizational structure where the employees have to strictly follow rules and regulations stated by the management. Moreover, only the top management is allowed to make key decisions regarding organizational activities. Fine Gadgets is an example of a _____ organization. a. decentralized b. global c. diversified d. centralized

d

Foxx Company wished to share resources with Chixx Company. An analysis of their potential relationship passed both the better-off test and the ownership test. The managers of Foxx Company should a. enter into a partnership with Chixx Company. b. enter into a joint venture with Chixx Company. c. enter into a strategic alliance with Chixx Company. d. purchase a controlling interest in Chixx Company.

d

In a _____ structure, "knowledge workers" are organized to work as individual contributors or to be a part of a work cluster that provides a certain expertise for the organization. a. functional b. divisional c. matrix d. network

d

John, an organization's HR manager, is making plans to offer training to his employees. To effectively proceed with the training process, John should first a. determine target audience. b. design the training curriculum. c. assess the effectiveness of training. d. understand the goals of training.

d

Many people in large cities are starting to use Uber to find rides. The taxi industry in these cities is facing a. the bargaining power of suppliers. b. the bargaining power of customers. c. rivalry among existing competitors. d. the threat of substitutes.

d

New Skin, a cosmetics company, is focused on innovation and new product introduction. New Skin will place heavy emphasis on which perspective of the balanced scorecard? a. Financial perspective b. Customer perspective c. Business process perspective d. Learning and growth perspective

d

Of the five activities that make a firm customer-centric, cooperation involves a. helping employees at a firm develop the right skills needed to better serve customers. b. creating structural mechanisms at the firm that allow workers to organize their activities to focus more exclusively on creating value for customers. c. developing relationships with parties outside the firm to increase the value of the firm's offerings. d. shaping an organization's culture and aligning incentives to encourage employees across silos in the organization to come together in the spirit of serving customers.

d

Of the five activities that make a firm customer-centric, coordination involves a. using informal methods such as culture and incentives to encourage people in the organization to come together in the spirit of serving customers. b. developing relationships with parties outside a firm to increase the value of the firm's offerings. c. helping employees at a firm develop the right skills needed to better serve customers. d. creating structural mechanisms at a firm that allow employees across silos to organize their activities to focus more exclusively on creating value for customers.

d

Of the five stages of organizational growth, strategic integration involves a. technical specialization and increased formality. b. concentrating on controlled growth and developing more formal procedures and increasing focus on professional management. c. developing multiple product groups and integrating various functional aspects like accounting to provide more autonomy to divisions. d. focusing on flexibility, adaptability, and integration across business functions.

d

Primary activities of a firm's value chain refers to a. the activities completed to improve a firm's product and the processes used to manufacture it. b. the activities involved with recruiting, hiring, training, developing, and compensating all personnel. c. the activities such as general management, planning, finance, accounting, legal support, and governmental relations. d. the activities involved in the physical creation of a product and its sale and transfer to the buyer.

d

Rowling Company is monitoring the amount customers spend on its products relative to all other products. Rowling is focused on which of the various customer metrics? a. Market share b. Customer retention c. Customer profitability d. Account share

d

Sara, a manager at DEM Company, is examining all of the activities the firm performs and determining how they interact to form a source of competitive advantage. Sara is using a. Porter's 5-Forces Model. b. SWOT analysis. c. SWAT analysis. d. value chain analysis.

d

Starbucks joining forces with Pepsi to distribute its cold Frappuccino products to retail/grocery outlets is an example of pursuing customer-centricity through a. cooperation. b. capability development. c. clout. d. connection

d

The Coca-Cola Company acquired Honest Tea Company, a producer of bottled iced tea beverages. This is an example of a. unrelated diversification. b. backward vertical integration. c. forward vertical integration. d. related diversification.

d

The Nickells Advertising Agency assigns a team of individuals to work on a client's advertising campaign. When the project is completed, each of the team members will be assigned to new teams pulled together for new campaigns. The Nickells Advertising Agency has a _____ structure. a. functional b. matrix c. divisional d. network

d

The factor that distinguishes functional organizational structure from divisional is that a. a functional structure is organized around the outputs a firm produces. b. a functional structure is best suited to deal with environmental change. c. a functional structure groups diverse functions into separate divisions. d. a functional structure is organized in terms of the main activities to be performed.

d

The most important provision of the Civil Rights Act, Title VII is that it a. established minimum conditions for health, safety, and general well-being of workplaces. b. established a federal minimum wage, set maximum hours for a workweek, and officially banned child labor. c. allows employees to take unpaid leaves of absence for family and medical reasons without losing their jobs. d. prohibits employment discrimination based on race, sex, color, religion, and national origin.

d

Thomas, the head of the marketing department in an organization, has structured his department in such a way that the roles and responsibilities of his workers are loosely defined. Moreover, he does not exert too much control over his workers and encourages two-way communication. His workers tend to be highly satisfied with their jobs when compared to those in the finance department, headed by John who exerts more control. From this scenario it can be inferred that Thomas has adopted a _____ mechanism for coordinating. a. bureaucratic b. authoritative c. centralized d. behavioristic

d

Toyota's unique philosophy, processes, and organizational culture a. are tangible resources. b. are human resources. c. make up its value chain. d. are intangible resources.

d

When a Ritz-Carlton employee went above and beyond what was asked to create a memorable experience for guests, he was a. following formal, written organizational rules and guidelines. b. disregarding organizational assumptions. c. showing a lack of organizational commitment. d. following the informal rules embodied in organizational culture.

d

Which of the following belongs to the primary activities of a firm's value chain? a. Technological development b. Human resource management c. Firm infrastructure d. Marketing and sales

d

Which of the following characterizes a weak culture? a. Employees require less coordination and monitoring b. High role clarity c. Allows a company to run more smoothly and quickly d. No agreement on the firm's values

d

Which of the following firms is most likely to benefit from a bureaucratic approach? a. A firm with constantly changing, dynamic markets b. A start-up firm with less complexity c. A firm involving creativity and innovation d. A firm with high turnover and a diverse workforce

d

Which of the following is a disadvantage of a divisional structure? a. It is not suited to competitive situations where coordinated action is needed for innovation. b. This structure does not allow for much accountability. c. It is not suited to business environments marked by high degrees of uncertainty. d. Several core functions are duplicated, preventing the development of economies of scale for those functions.

d

Which of the following is a source from which a firm's culture develops? a. The employees' skill set b. The suppliers and customers c. The organization's competitors d. The founder of the organization

d

Which of the following is a weakness of the matrix structure? a. In matrix structure, the divisional managers have more authority than the functional managers, which causes an imbalance of power. b. A manager cannot use a matrix structure when resources need to be shared and optimized across divisions and within functions. c. When a firm's internal interrelationships are complex, it is not possible for managers to adopt a matrix structure. d. It often creates confusion for its managers who are simultaneously accountable to distinct units that don't always share the same objectives.

d

Which of the following is an advantage of realistic job previews? a. Large number of applicants to choose from b. All candidates tend to be highly skilled c. Communicate only positive job aspects d. Decrease turnover in many organizations

d

Which of the following is one of the generic strategies through which a manager can create a firm's competitive advantage? a. Global strategy b. Market-entry strategy c. Transnational strategy d. Differentiation strategy

d

Which of the following is the main goal of related diversification? a. Support failing businesses b. Understand social values c. Create strategic flexibility d. Achieve economies of scope

d

Which of the following questions is addressed by the organizational design of a firm's corporate-level strategy? a. In what markets and businesses will the firm compete? b. How will the business units of the firm be aligned? c. What are the businesses to be acquired? d. How will the resources of the firm be coordinated?

d

Which of the following questions regarding culture should a manager address while acquiring a company? a. Which culture is the best? b. How socialized are the employees? c. Is culture linked to performance? d. Where are the similarities and differences between the merging cultures?

d

Which of the following questions should the managers address as they design control systems? a. What it is? b. Who should design? c. How to design? d. Is it relevant?

d

Which of the following statements about outsourcing and offshoring is true? a. Offshoring guarantees higher profits for a business. b. Managers always account for the risks in offshoring a process. c. Outsourcing is not a complicated issue. d. Offshoring is used to lower costs in a firm's value chain.

d

Which of the following statements is a drawback of Porter's 5-Forces Model? a. It cannot be used to evaluate the structural components of an industry. b. This tool is particularly not useful in helping managers decide where to focus. c. Evaluating the attractiveness of industries and developing business-level strategy is seldom possible. d. The 5-Forces Model typically looks at an industry at one point in time.

d

Which of the following statements is true of the role of founders in influencing culture? a. The founders take the least risk and therefore do not feel as much anxiety as their employees. b. In allowing values to trump economics, founders tend to have a weak influence on the company's culture. c. A founder cannot make any risky decisions as he/she is required to account to everyone in the organization. d. Founders are uniquely situated to be innovative and to exemplify innovation to their employees.

d

_____ directly impact culture in the manner in which they encounter big problems, solve those problems, and see the effects of their solutions. a. Suppliers b. Competitors c. Customers d. Teams

d