Principles of Management CLEP Exam
Preparation of which of the following is the most logical first step in developing an annual operating plan? (A) A sales forecast by product (B) A production schedule by product (C) A flow-of-funds statement by product (D) A plant and equipment requirement forecast (E) A pro forma income statement and balance sheet
(A) A sales forecast by product
Which of the following is the primary purpose of the management-by-objectives (MBO) approach? (A) Aligning goal setting and planning (B) Creating a dynamic and complex work environment (C) Reducing employee resistance to change (D) Implementing standard operating procedures (E) Implementing a decision rule to respond to a designated problem
(A) Aligning goal setting and planning
What forecasting technique involves soliciting best-guesses and opinions from a broad variety of experts and then summing or averaging their responses? (A) Delphi technique (B) Group summation analysis (C) Oswald-Baker scenario assessment (D) Strategic averaging (E) Team thinking
(A) Delphi technique
Which of the following organizational designs groups employees by what they do? (A) Functional (B) Product (C) Geographic (D) Market (E) Authority-centered
(A) Functional
In accordance with Herzberg's 2-factor theory, which factor can demotivate but are not likely to motivate employees? (A) Hygiene factors (B) Motivational promoters (C) Motivators (D) Pressure factors (E) Barrier factors
(A) Hygiene factors
When in group meetings, Mikhail routinely shows skills in reducing tension among members, supporting others' ideas, and showing sensitivity to the decreased performance of fellow members caused by fatigue. He is exhibiting which of the following types of group roles? (A) Maintainance (B) Task (C) Gatekeeper (D) Decisional (E) Follower
(A) Maintainance
Which of the following types of questions would be the best to use during a job interview? (A) Open-ended (B) Rotational (C) Technology-ended (D) Prodding (E) Hypocritical
(A) Open-ended
Which of the following oversees the transformation process that converts inputs such as labor and raw materials into outputs such as goods and services? (A) Operation management (B) Control management (C) Strategic management (D) Human resource management (E) Project management
(A) Operation management
Which of the following is most commonly used to measure the total productivity of a company? (A) The ratio between total outputs and total inputs (B) The ratio between fixed costs and variable costs (C) The ratio between contribution margin and total revenue (D) The ratio between the break-even point and total output (E) The ratio between total inputs and total capital
(A) The ratio between total outputs and total inputs
Which of the following terms best describes leaders who guide or motivate their followers in the direction of established goals by stressing rewards and the consequences of not conforming to expectations? (A) Transactional (B) Transformational (C) Charismatic (D) People-oriented (E) Informal
(A) Transactional
The use of transactional leadership is based on the concept of which of the following? (A) Using rewards and coercive power (B) Stressing intrinsic motivators (C) Creating team-based goal setting (D) Using peer-based performance evaluations (E) Implementing employee involvement plans
(A) Using rewards and coercive power
Large organizations are likely to structure their work operations and personnel in any of the following ways EXCEPT (A) accounting (B) divisional (C) geographic (D) market (E) product
(A) accounting
Praise received from an employee's peers is best described as an example of (A) an extrinsic reward (B) an intrinsic reward (C) low valence (D) high instrumentality (E) high directive leadership
(A) an extrinsic reward
The process of discovering relationships and patterns in large amounts of data is called data (A) mining (B) clustering (C) encryption (D) networking (E) warehousing
(A) mining
The number of subordinates who directly report to a superior refers to the manager's (A) span of control (B) organizational role (C) organizational structure (D) chain of command (E) general staff
(A) span of control
The span of control most appropriate in a given organization is primarily influenced by which of the following? (A) Types of services or products being produced (B) Amount of supervision needed by subordinates (C) Amount of authority given to a supervisor (D) Number of hierarchical levels within the organization (E) Presence of work teams
(B) Amount of supervision needed by subordinates
According to equity theory, after an employee receives a reward for performance, what is the next step the employee takes in the motivation process? (A) Negotiating new valued rewards for the next performance period (B) Comparing the reward with a self-selected comparison group or person (C) Reducing productivity briefly while enjoying the earned reward (D) Expecting an increase in future rewards (E) Working harder than he or she did previously
(B) Comparing the reward with a self-selected comparison group or person
A home builder dominates a market by offering attractive options, higher quality, and value-added services. Which of the following competitive strategies has the homebuilder adopted? (A) Cost leadership (B) Differentiation (C) Price leadership (D) Generic (E) Organizing
(B) Differentiation
The manager most famous for developing the earliest model of management functions, which led to the modern POLC model we use today is: (A) Robert Decker (B) Henri Fayol (C) Abraham Maslow (D) Henry Ford (E) Peter Drucker
(B) Henri Fayol
Job enrichment can be an effective tool to achieve which of the following? (A) Better communication (B) Increased job responsibility (C) Improved work relations (D) Teamwork (E) Shared decision making
(B) Increased job responsibility
Which of the following practices enhances job content by building into the job more motivating factors such as responsibility, achievement, recognition, and personal growth, as advocated by Frederick Herzberg? (A) Job enlargement (B) Job enrichment (C) Job rotation (D) Job reengineering (E) Job intensification
(B) Job enrichment
The management process that involves motivating people to work hard to reach organizational goals is: (A) Planning (B) Leading (C) Controlling (D) Developing (E) Organizing
(B) Leading
Which of the following best describes the situation in which an employee arrives for work on time in order to avoid being placed on probation for a second time? (A) Positive reinforcement (B) Negative reinforcement (C) Extinction (D) Intermittent reinforcement (E) Cognitive learning
(B) Negative reinforcement
Under what circumstances is transactional leadership least likely to be effective? (A) Periods of stability (B) Periods of great change and uncertainty (C) Within a closely-knit group (D) When employees are poorly motivated (E) In an assembly-line production operation
(B) Periods of great change and uncertainty
A multinational company expands its operation to Brazil and hires Brazilians to manage the operation of the new branch. The company is using which type of approach to expand its operations? (A) Ethnocentric (B) Polycentric (C) Monocentric (D) Geocentric (E) Egocentric
(B) Polycentric
Intrinsic rewards can be classified as rewards that do which of the following? (A) Allow the employee to establish flexible working hours. (B) Provide a sense of achievement and accomplishment. (C) Create work coordination among all employees. (D) Improve communication effectiveness. (E) Allow greater span of control.
(B) Provide a sense of achievement and accomplishment.
What piece of US law requires a corporation to publish a corporate code of ethics? (A) Knowles-Taylor Ethics Act of 1986 (B) Sarbanes-Oxley Act (C) Public Law 2782 on Corporate Ethics (D) Executive Order 27-82, "The Ethics Order" (E) The Foreign Corrupt Practices Act
(B) Sarbanes-Oxley Act
Which of the following describes the critical path in a Program Evaluation and Review Technique (PERT) process? (A) Parts that require the most costly materials (B) The most time-consuming sequence of events and activities (C) The shortest route to the project completion (D) The central guideline for quality control (E) The property insurance
(B) The most time-consuming sequence of events and activities
If the verbal and nonverbal parts of a manager's message are in conflict, research suggests that an employee usually should believe which of the following? (A) The verbal message only. (B) The nonverbal message only. (C) Either depending on the circumstance. (D) Neither the verbal nor the nonverbal parts of the message. (E) It is impossible to judge which part of the message should be believed.
(B) The nonverbal message only.
The practice in large companies of establishing autonomous divisions whose heads are entirely responsible for what happens in the division is referred to as (A) management by exception (B) decentralization of authority (C) delegation of authority (D) integration (E) informal organization
(B) decentralization of authority
Expectancy theory tells us that employees will only be motivated by a promised reward (A) if they cannot get a better promise elsewhere (B) if they expect to be able to achieve the goal and earn the reward (C) if they personally trust the manager who has promise the reward (D) if they have earned the reward in the past (E) if the reward depends only on their own hard work
(B) if they expect to be able to achieve the goal and earn the reward
Coercive power involves the power to (A) promote (B) punish (C) reward (D) allow participation (E) delegate
(B) punish
The hierarchy of needs theory argues that deficiency needs must be met before the push to satisfy growth needs drives personal growth. The individual most commonly associated with this theory is (A) Peter Drucker (B) Henri Fayol (C) Abraham Maslow (D) Elton Mayo (E) F. W. Taylor
(C) Abraham Maslow
Which of the following styles of leadership is most likely to be effective with workers who have experience and are professionally oriented? (A) Supportive (B) Task-oriented (C) Achievement-oriented (D) Mentoring (E) Authoritarian
(C) Achievement-oriented
Which of the following management activities is most typically described as a controlling function? (A) Goal setting (B) Purchasing (C) Budgetary review (D) Staffing (E) Recruiting
(C) Budgetary review
Which of the following best describes a team that brings together organizational members from various areas such as marketing, engineering, human resources, and production to work on a task? (A) Command (B) Self-managed (C) Cross-functional (D) Restrictive (E) Informal
(C) Cross-functional
Which of the following people is associated with the development of the Theory X and Theory Y model? (A) Abraham Maslow (B) Elton Mayo (C) Douglas McGregor (D) Frederick Taylor (E) Lillian Gilbreth
(C) Douglas McGregor
In the Generic Competitive Model, which of these would describe a competitor who concentrates on a small market niche and attempts to offer products to that niche at the lowest price? (A) Generic Cost Leader (B) Generic Differentiated Competitor (C) Focused Cost Leader (D) Focused Differentiated Competitor (E) Niche Price Competitor
(C) Focused Cost Leader
Which generic competitive strategy targets a very specific niche market and offers customers a unique set of product benefits? (A) Cost leadership (B) Focused cost leadership (C) Focused differentiation (D) Focused market strategy (E) Product development
(C) Focused differentiation
Which of the following personality traits best describes individuals who can adapt and adjust their behavior to external factors? (A) Low self-esteem (B) External locus of control (C) High self-monitoring (D) Low authoritarianism (E) High authoritarianism
(C) High self-monitoring
Group or team cohesiveness is usually influenced by which of the following? (A) Employee incentive systems (B) Goal-setting processes (C) Identification with the group by its members (D) Size of the organization (E) Type of organizational structure
(C) Identification with the group by its members
Transformational leaders who offer their followers an inspiring vision of the future are using which tool? (A) Halo thinking (B) Visionary selling (C) Inspirational motivation (D) Intellectual stimulation (E) Individualized consideration
(C) Inspirational motivation
Which of the following best describes managerial ethics? (A) It is the social obligation that the individual manager has to fulfill. (B) It is a statement of the social responsibility of the organization. (C) It is the standard of conduct that guides a person's decisions and behavior. (D) It is the mission statement of the organization. (E) It is a behavior that conforms to legal principles of justice.
(C) It is the standard of conduct that guides a person's decisions and behavior.
The statement that describes an organization's reason for being is best described as: (A) Vision statement (B) Statement of purpose (C) Mission Statement (D) Operating goal (E) Strategic plan
(C) Mission Statement
Which of the following words is NOT a step in the management process? (A) Planning (B) Leading (C) Producing (D) Controlling (E) Organizing
(C) Producing
What curve shows the progress of sales of a new product from initial launch to final decline? (A) BCG Matrix (B) Product Adoption Curve (C) Product Life Cycle Curve (D) Product sales forecast (E) The Leaman Curve
(C) Product Life Cycle Curve
Which of these is a strategic planning tool that allows the assessment of an organization's strengths and weaknesses in responding to possible external events? (A) Strength assessment (B) Event Analysis Technique (EAT) (C) SWOT Analysis (D) Capacity Review (E) Strategic Assessment
(C) SWOT Analysis
Ying belongs to a group of workers who are given administrative oversight of the group's planning, scheduling, monitoring, and staffing. Which ofthe following best describes the type of team to which Ying belongs? (A) Semiautonomous (B) Cross-functional (C) Self-managed (D) Virtual (E) Traditional
(C) Self-managed
Which of the following models classifies products as stars, question marks, cash cows, or dogs? (A) Porter's five forces model (B) Theory X (C) The Boston Consulting Group Matrix (D) Theory Y (E) Kanban
(C) The Boston Consulting Group Matrix
An international cultural matrix that identifies key characteristics of national cultures, including individuality and Power-Distance is called (A) The cross-cultural assessment matrix (B) The Rolfson Assessment Matrix (C) The Hofstede Matrix (D) The Global Differentiation Matrix (E) The Global Cultural Comparison Matrix
(C) The Hofstede Matrix
Lean manufacturing and Lean control techniques are designed to help organizations be more productive by eliminating (A) Interpersonal conflicts (B) Market competition (C) Waste (D) Paperwork (E) Distractions during production
(C) Waste
Very tightly-coupled control requires close constant feedback and frequent management corrections. What perception can this produce among employees? (A) confidence in management (B) a sense of belonging and trust (C) a sense of distrust and micromanagement (D) that management is keeping secrets from employees (E) that management is unaware of what is going on in the organization
(C) a sense of distrust and micromanagement
If a manager announces a casual-dress policy on Fridays and then comes to work dressed casually on the following Friday, this is an example of (A) planning (B) organizing (C) leading (D) controlling (E) negative reinforcement
(C) leading
McGregor's Theory Y states that workers (A) naturally dislike work and avoid it when possible (B) have lower capacity for intrinsic motivation than do managers (C) naturally enjoy work and see it as a source of fulfillment and satisfaction (D) should be monitored closely while performing critical tasks (E) naturally distrust managers and seek independence
(C) naturally enjoy work and see it as a source of fulfillment and satisfaction
The ratio of output to input gives a measure of (A) proficiency (B) effectiveness (C) productivity (D) operations management (E) quality control
(C) productivity
The breakeven point is defined as the level of production at which (A) fixed costs are covered by revenue (B) variable costs are covered by revenue (C) total revenue is sufficient to cover total costs (D) marginal revenue equals marginal cost (E) the law of diminishing returns is activated
(C) total revenue is sufficient to cover total costs
A performance-appraisal method that utilizes evaluation information from supervisors, employees, and coworkers is known as (A) paired-comparison feedback (B) programmed-feedback decision (C) behaviorally anchored rating scale (D) 360-degree feedback (E) graphic rating scale
(D) 360-degree feedback
Which of the following is a conflict-resolution practice that seeks to satisfy both parties in a conflict? (A) Avoidance (B) Stipulation (C) Competition (D) Collaboration (E) Appeal to
(D) Collaboration
Which of the following is the primary concern of employees responsible for strategic planning in a company? (A) Monitoring daily cash flow (B) Determining the contribution each subunit should make to the overall corporation (C) Determining how to accomplish specific tasks with available resources (D) Determining how to pursue long-term goals with available resources (E) Preparing the annual statement
(D) Determining how to pursue long-term goals with available resources
Which competitive strategy from Porter's generic model uses unique product aspects to convince customers to pay a higher price? (A) Cost leadership (B) Focused cost leadership (C) Focused marketing (D) Differentiated competition (E) Advertising model
(D) Differentiated competition
What economic principle describes the reduction of unit costs that come when the number of units produced is increased? (A) Economic return (B) Econometric analysis (C) Economic development (D) Economies of scale (E) Competitive advantage
(D) Economies of scale
According to Maslow, the need to feel genuinely respected by peers, both in and out of the work environment, is included in which of the following need classifications? (A) Physiological (B) Safety (C) Stability (D) Esteem (E) Self-actualization
(D) Esteem
Who among the following was important in the scientific management field for promoting motion studies? (A) Max Weber (B) Henri Fayol (C) Abraham Maslow (D) Frank and Lillian Gilbreth (E) Henry Ford
(D) Frank and Lillian Gilbreth
Which of the following is the series of international standards designed to manage and minimize the harmful effects of businesses on the environment? (A) ISO 9000 (B) ISO 10000 (C) ISO 12000 (D) ISO 14000 (E) ISO 16000
(D) ISO 14000
Which of the following is the most accurate description of a grapevine in an organization? (A) It is a constant source of disruptive information. (B) It follows the chain of command. (C) It can be suppressed once it is recognized. (D) It plays an important role in organizations. (E) Most managers believe that it is a positive source of information.
(D) It plays an important role in organizations.
What aspect of job design involves adding tasks to a job to make it more variable and more interesting? (A) Job enhancement (B) Job expansion (C) Job inflation (D) Job enlargement (E) Job enrichment
(D) Job enlargement
Which type of decision typically involves extensive data collection and detailed analysis? (A) Programmed decision (B) Critical decision (C) Time-sensitive decision (D) Non-programmed decision (E) group decision
(D) Non-programmed decision
In one stage of group development, group members come to accept and understand one another; differences are resolved and members develop a sense of team cohesion. This stage of group development is known as (A) Adjourning (B) Performing (C) Storming (D) Norming (E) Forming
(D) Norming
Which of the following pairs of functions of management are most closely interdependent? (A) Staffing and organizing (B) Staffing and controlling (C) Planning and leading (D) Planning and controlling (E) Disciplining and recruiting
(D) Planning and controlling
Which of the following can be best determined by consulting an organization chart? (A) The size of the company (B) The distribution of company resources (C) The nature of work performed (D) The connections of positions (E) The quality of management of the firm
(D) The connections of positions
A manager decides to lay off 10 percent of the workforce and justifies the action by noting that 90 percent still have jobs and the company will remain solvent. This manager has utilized which of the following views of ethics? (A) Rights view of ethics (B) Theory of justice view of ethics (C) Integrative social contracts view of ethics (D) Utilitarian view of ethics (E) Golden rule view of ethics
(D) Utilitarian view of ethics
A type of control device for assessing the progress of planned activities and the expenditure of resources allocated to their accomplishments is referred to as (A) a strategic plan (B) an organizational chart (C) a tactical plan (D) a budget (E) a proposal
(D) a budget
A large span of control throughout an organization invariably results in (A) low morale (B) high morale (C) an excess workload for each manager (D) a flat (horizontal) organizational structure (E) a tall (vertical) organizational structure
(D) a flat (horizontal) organizational structure
The distortion or withholding of information to manage someone's reaction is called (A) smoke screening (B) Interference (C) selective perception (D) filtering (E) conditional communication
(D) filtering
The process of a disinterested party intervening in a dispute, with only the power to guide the disputants through a resolution process, is called (A) collective bargaining (B) win-win negotiations (C) compromising (D) mediation (E) arbitration
(D) mediation
Which organizational approach is most to provide standardization and efficiency/lower cost? (A) Decentralized (B) Informal (C) Geographic (D) Virtual (E) Centralized
(E) Centralized
Which of the following should be the first step in a decision-making process? (A) Implementing a decision (B) Assigning the problem to qualified personnel (C) Considering all alternatives (D) Knowing when to decide (E) Defining the problem
(E) Defining the problem
If an investor buys a stock based on the recommendation of a broker because the broker's previous recommendations have been profitable, the broker possesses which type of power? (A) Referent (B) Legitimate (C) Informal authority (D) Charismatic (E) Expert
(E) Expert
Which of the following best illustrates informal organization? (A) Line authority, such as that of the field marshal and battalion commander in the military (B) Staff authority, such as that of personnel or cost control in manufacturing (C) Functional authority, such as corporate supervision of the legal aspect of pension plans in branch plants (D) Groupings based on position titles (E) Groupings based on such factors as technical ability, seniority, and personal influence
(E) Groupings based on such factors as technical ability, seniority, and personal influence
Which of the following is NOT an external environment force on an organization? (A) Sociocultural trends (B) Technology (C) Economy (D) Political trends (E) Human resources
(E) Human resources
Decentralization tends to be encouraged by which of the following business trends? I. Product diversification II. Telecommuting III. Geographical expansion of operations (A) I only (B) II only (C) III only (D) I and III only (E) I, II, and III
(E) I, II, and III
Which of the following is NOT an input, according to equity theory? (A) Effort (B) Experience (C) Education (D) Seniority (E) Pay Incentives
(E) Pay Incentives
In Michael Porter's five forces model of globalenvironmental scanning, which of the followingis one of the five forces? (A) Sociocultural factors (B) Inflation (C) Technology transfer (D) Material artifacts of culture (E) Power of suppliers
(E) Power of suppliers
Which of the following control techniques is most likely to emphasize the importance of time? (A) Break-even charts (B) Physical standards (C) Quality circles (D) Variable budgeting (E) Program Evaluation and Review Technique (PERT)
(E) Program Evaluation and Review Technique (PERT)
Which of the following is a quantitative technique that can be used to predict employee performance based on such factors as education, seniority, job-related skills, and job satisfaction? (A) Time-series analysis (B) Econometric modeling (C) Sales force composition (D) Econometric indicators (E) Regression modeling
(E) Regression modeling
The preparations that a small town might make for a visit by the President of the United States would be considered what type of plan? (A) Strategic (B) Directional (C) Standing (D) Long-term (E) Single-use
(E) Single-use
Which of the following basic leadership styles most closely matches the "high structure, low consideration" of the Ohio State leadership studies? (A) Country club (B) Team (C) Selling (D) Relationship motivated (E) Telling
(E) Telling
Which type of leadership depends on the possession of a "magnetic" personality and the ability to attract followers based on your personal characteristics? (A) Transactional (B) Participative (C) Laissez-faire (D) Group-dominant (E) Transformational
(E) Transformational
The process of a disinterested party intervening in a dispute, with the power to bind the disputants to an agreement is called (A) collective bargaining (B) win-win negotiations (C) compromising (D) mediation (E) arbitration
(E) arbitration
Which of the following theories of motivation states that people are demotivated by rewards that are perceived as unfair? (A) Expectancy theory (B) Hierarchy of needs theory (C) Justice theory (D) Theory X (E) equity theory
(E) equity theory
The version of variable pay that involves compensation to employees based on the overall profitability of their organization is called (A) team compensation (B) cross-functional compensation (C) performance bonus (D) bottom-line sharing (E) gainsharing
(E) gainsharing
Frederick Taylor is considered a pioneer in the school of management referred to as the (A) management process school (B) empirical school (C) scientific management school (D) behaviorist school (E) social system school
C) scientific management school
