Principles of Management Chapters 1-5 Quiz Questions

Which of the following is an example of a business in the service industry? a. A car rental agency b. An automobile dealership c. A department store d. A florist

a. A car rental agency

Which of the following is a determinant of a strong organizational culture? a. Corporate success b. A rapidly changing management team c. No shared experiences d. A large management team

a. Corporate success

______skills enable managers to visualize the most appropriate response to a situation. a. Diagnostic b. Conceptual c. Decision-making d. Communication

a. Diagnostic

Which of the following is true of the quantitative management perspective? a. It focuses on mathematical models and the use of computers. b. It draws from psychology, sociology, anthropology, economics, and medicine. c. It places emphasis on individual attitudes and group processes. d. It is a pessimistic and negative view of workers.

a. It focuses on mathematical models and the use of computers.

Which of the following is likely to be true of an organization like Kmart where the management team changes rapidly? a. It is likely to have a weak culture. b. It is likely to have a number of shared experiences. c. It is likely to be focused on customer satisfaction. d. It is likely to be more effective than most companies.

a. It is likely to have a weak culture.

Which of the following is a disadvantage of team decision making? a. It is more time consuming than individual decision making. b. Team members are less likely to accept the final decision. c. It has less information available in a team setting. d. It generates fewer alternatives than individual decision making.

a. It is more time consuming than individual decision making.

Which of the following is a disadvantage of a strategic alliance? a. It limits profits and control over a business. b. It involves the least degree of risk. c. It involves a small cash outlay. d. It does not allow for a quick market entry.

a. It limits profits and control over a business.

A clothing manufacturer is opening a new facility in a different city. Which of the following single-use plans will it employ? a. Program b. Project c. Standard operating procedure d. Policy

a. Program

___________refers to the choices an organization makes as to where and how much to invest. a. Resource deployment b. Scope c. Distinctive competence d. Corporate-level strategy

a. Resource deployment

Which of the following areas of the strategy specifies the range of markets in which an organization will compete? a. Scope b. Distinctive competence c. Organizational strengths d. Resource deployment

a. Scope

Which of the following statements on small businesses is true? a. Small businesses sell consumers most of the products made by big manufacturers. b. More major innovations come from big businesses than small businesses. c. All new start-ups are in the field of high-tech communication. d. Big companies are the first to lay off workers during economic downswings.

a. Small businesses sell consumers most of the products made by big manufacturers.

Which of the following is true of a state of uncertainty? a. The decision maker does not know all the alternatives. b. There is a low degree of ambiguity and chances of making a bad decision. c. The availability of each alternative is associated with probability estimates. d. The decision maker knows about all the risks involved.

a. The decision maker does not know all the alternatives.

Which of the following is true of strategic plans? a. They address questions of competitive advantage and synergy. b. They have specific and concrete focus. c. They are developed by middle- and lower-level managers d. They have a short time horizon.

a. They address questions of competitive advantage and synergy.

Which of the following is true of entrepreneurs? a. They take a personal stake in the success or failure of the business. b. They hire professional managers to run their businesses. c. They run someone else's business. d. They assume the risk of the venture but are not actively involved in operating it.

a. They take a personal stake in the success or failure of the business.

A niche market is: a. a segment of a market that is not currently being exploited. b. a market in which several large firms compete. c. a market in which customer needs are generic in nature. d. an area of organizational threat.

a. a segment of a market that is not currently being exploited

Universal perspectives: a. attempt to identify the one best way to do something. b. suggest that general theories cannot be applied to organizations. c. state that managerial behavior in a situation depends on unique elements. d. state that each organization is unique.

a. attempt to identify the one best way to do something.

Roger is described as a manager with low risk propensity. He is most likely to: a. be cautious when making decisions. b. rely heavily on intuition. c. make decisions that frequently lead to big losses. d. make aggressive decisions.

a. be cautious when making decisions.

According to the BCG matrix, _____ are businesses that have a very small share of a market that is not expected to grow. a. dogs b. stars c. cash cows d. question marks

a. dogs

An organization that does not monitor feedback from its environment and make appropriate adjustments will fail due to _____. a. entropy b. soldiering c. diversity d. synergy

a. entropy

An automobile company that is the first of its kind to manufacture a car that runs solely on solar energy is said to: a. have a distinctive competence. b. be a star. c. be norming. d. be soldiering.

a. have a distinctive competence.

An organizational culture: a. helps members understand what the company stands for. b. is always the same throughout an entire organization. c. invariably emerges from a company's customers. d. is universal across all organizations.

a. helps members understand what the company stands for.

Culture problems can arise from: a. mergers. b. corporate success. c. shared experiences. d. a sense of direction.

a. mergers.

A line manager at a brewery sets a target for the minimum number of beer cartons that have to be shipped out by the end of each day. This is an example of a(n) _____ goal. a. operational b. program c. strategic d. tactical

a. operational

A(n) _____ is a control on international trade that puts limits on the number or value of goods that can be traded. a. quota b. economic community c. joint venture d. tariff

a. quota

Interest groups act as _____ in organizations. a. regulators b. strategic partners c. owners d. suppliers

a. regulators

The Securities and Exchange Commission was created by the government to protect investors and to maintain orderly and efficient markets. It is an example of a(n) _____. a. regulatory agency b. strategic partner c. competitor d. interest group

a. regulatory agency

The set of processes involved in creating or determining the organization's strategies is called ___. a. strategy formulation b. strategy c. strategy implementation d. business-level strategy

a. strategy formulation

Which of the following best describes satisficing? a. Decision makers use complete and perfect information to arrive at decisions. b. Decision makers search only until they find an alternative that meets some minimum standard of sufficiency. c. Decision makers weigh and evaluate a large number of alternatives until they arrive at the best alternative. d. Decision makers go through the six steps of decision making before they finalize on the best option.

b. Decision makers search only until they find an alternative that meets some minimum standard of sufficiency.

Which of the following is required to help alert entrepreneurs to potential trouble? a. Sufficient capital b. Effective control systems c. Dedication d. A positive outlook on life

b. Effective control systems

Which of the following statements is true of new businesses? a. Control systems are unimportant when starting a new business. b. Insufficient capital can contribute to new business failure. c. Luck plays no role in the success of businesses. d. A good outlook on life is irrelevant when starting a new business.

b. Insufficient capital can contribute to new business failure.

Which of the following is true of a differentiation strategy? a. It is a strategy through which a firm reduces its costs below the costs of competing firms. b. It is a strategy in which a firm distinguishes itself from competitors through the quality of its products. c. It is a strategy that concentrates on a specific regional market, product line, or group of buyers. d. It is also known as a corporate-level strategy.

b. It is a strategy in which a firm distinguishes itself from competitors through the quality of its products.

Which of the following statements on job creation is true? a. Small firms are the last to hire in times of economic recovery. b. Large companies are the last to lay off workers during economic downswings. c. Business size, more than entrepreneurial business success, accounts for most new job creation. d. Larger firms hire at a faster rate than smaller firms.

b. Large companies are the last to lay off workers during economic downswings.

Which of the following is a Theory X assumption? a. Work is a natural part of the lives of people. b. People want to have security. c. People will seek responsibility under favorable conditions. d. The potential of people is underutilized in organizations.

b. People want to have security.

Which of the following is true of innovation? a. All successful software firms started out as large organizations. b. Small businesses supply over half of all innovations in the U.S. marketplace each year. c. Innovations are less likely to come from small businesses than from big businesses. d. All successful new start-ups are innovative dot-com companies.

b. Small businesses supply over half of all innovations in the U.S. marketplace each year.

Which of the following is true of small businesses? a. Small businesses have no impact on the world's mature economies. b. Small firms specializing in international business create many new jobs. c. Small businesses have a weak presence in the economy. d. Jobs are created solely by small entrepreneurial companies.

b. Small firms specializing in international business create many new jobs.

_____ goals are set by and for an organization's top management. a. Tactical b. Strategic c. Operational d. Diversification

b. Strategic

_____ are organizations that provide resources for other organizations. a. Interest groups b. Suppliers c. Competitors d. Regulatory agencies

b. Suppliers

Which of the following is true of most successful entrepreneurs? a. They succeed alone. b. They carefully analyze market conditions. c. They succeed straight out of college. d. They launch their ventures in their spare time.

b. They carefully analyze market conditions.

Organizational strengths are: a. areas that may generate higher performance. b. capabilities that enable an organization to implement its strategies. c. areas that increase the difficulty of an organization performing at a high level. d. skills that do not enable an organization to choose strategies that support its mission.

b. capabilities that enable an organization to implement its strategies.

Griston Systems is a networking firm headquartered in the United States. It purchases an operating facility in Thailand that subsequently becomes a wholly owned subsidiary of Griston. This is an example of _____. a. a joint venture b. direct investment c. a strategic alliance d. licensing

b. direct investment

A firm that specializes in alternative energy releases a new and highly efficient solar battery. During the _____ stage of the product cycle, other firms will begin to produce the product and sales will continue to increase. a. introduction b. growth c. decline d. maturity

b. growth

Product differentiation is an important management issue during the _____ stage of the product life cycle. a. introduction b. growth c. maturity d. decline

b. growth

Due to the strong economies of scale, small businesses generally do not do as well as large businesses in the _____ segment. a. construction b. manufacturing c. retailing d. transportation

b. manufacturing

In the SWOT analysis, evaluating organizational _____ requires analyzing an organization's environment. a. weaknesses b. opportunities c. strengths d. hazards

b. opportunities

A wedding planner in Boston decides to open a specialty boutique for bridal gowns. This is an example of _____. a. unrelated diversification b. related diversification c. overall cost leadership strategy d. single-product strategy

b. related diversification

Under a state of _____, the availability of each alternative and its potential payoffs and costs are all associated with probability estimates. a. certainty b. risk c. uncertainty d. decision making

b. risk

The process in which employees deliberately work at a pace slower than their capabilities is known as _____. a. storming b. soldiering c. efficiency d. norming

b. soldiering

According to the BCG matrix, _____ are businesses that have the largest share of a rapidly growing market. a. question marks b. stars c. cash cows d. dogs

b. stars

In order to further an organization's goal of increasing sales by a large margin, upper-level managers coordinate the acquisition of a number of retail outlets in smaller cities. These acquisitions represent the implementation of a(n) _____ plan. a. strategic b. tactical c. operational d. mission

b. tactical

Small-business investment companies (SBICs): a. have immediate participation loan programs. b. take a more balanced approach in their choices than venture capital companies. c. demand a representative on the board of directors of the business. d. have strict eligibility guidelines.

b. take a more balanced approach in their choices than venture capital companies.

An argument against social responsibility in organizations is that: a. business often has the resources necessary to solve problems. b. there is potential for conflicts of interest. c. corporations are citizens in a society. d. business creates problems and should therefore solve them.

b. there is potential for conflicts of interest.

Which of the following is false about control systems? a. Weak control systems can lead to serious problems. b. A business may not survive without a good control system c. Control systems are not needed to keep a business on track. d. Effective control systems alert entrepreneurs to serious problems.

c. Control systems are not needed to keep a business on track.

GraviTea Inc. is examining potential for a new tea product. It has engaged a panel of experts to individually and anonymously state their opinions. It is now in the process of averaging them and may ask the experts for another prediction or justification. The average prediction will be taken to represent the decision of the group of experts. GraviTea is using a(n) _____ for decision making. a. nominal group b. coalition c. Delphi group d. evidenced-based management group

c. Delphi group

Which of the following is true of SBA financial programs? a. Managers need approval from the SBA before making major decisions. b. They supply capital in return for stock. c. Eligible firms must be unable to get private financing at reasonable terms. d. They require a representative on the board of directors of a company.

c. Eligible firms must be unable to get private financing at reasonable terms.

In the rational decision-making process, which of the following should one do after identifying the alternatives? a. Implement the chosen alternative. b. Select the best alternative. c. Evaluate the alternatives. d. Assess the results.

c. Evaluate the alternatives.

Which of the following is the final step in the rational decision-making process? a. Selecting the best alternative b. Identifying alternatives c. Evaluating the results d. Implementing the chosen alternative

c. Evaluating the results

Gerard is a mid-level manager who believes that people do not like work and try to avoid it. He therefore controls, directs, and coerces employees to get them to work toward organizational goals. Which of the following is true of Gerard? a. His actions are based on the principles of the human relations movement. b. He follows the principles of the quantitative management perspective. c. He is a Theory X manager. d. He is a Theory Y manager.

c. He is a Theory X manager

Which of the following is NOT part of the proper execution of tactical plans? a. Minimizing conflict b. Integration of activities c. Inconsistent activities d. Horizontal and vertical communication

c. Inconsistent activities

Which of the following statements is true of a coalition? a. It is an alliance of individuals alone and not groups. b. It is a formal alliance of two parties. c. It is formed to achieve a common goal. d. Its purpose is to search for the first best alternative that meets some minimum standard.

c. It is formed to achieve a common goal.

_____ is the awarding of funds or gifts to charities or other worthy causes. a. Legal compliance b. Ethical compliance c. Philanthropic giving d. Soldiering

c. Philanthropic giving

Pauline, a manager of a popular chain of supermarkets, is making a decision using the rational decision-making process. She has completed evaluating all alternatives. What should she do next? a. She should evaluate the results. b. She should define the decision situation. c. She should select the best alternative. d. She should implement the chosen alternative.

c. She should select the best alternative.

Which of the following is a type of corporate-level strategy? a. Focus strategy b. Differentiation strategy c. Single-product strategy d. Overall cost leadership strategy

c. Single-product strategy

Which of the following decisions of an experienced chef of a restaurant is a nonprogrammed decision? a. To preorder wine for the next month b. To pick a "dish of the day" from the menu c. To hire a new sous chef d. To buy 10 kilograms of potatoes for the day's menu

c. To hire a new sous chef

Which of the following is a part of an organization's economic dimension of its general environment? a. Competitors b. Physical work environment c. Unemployment d. Interest groups

c. Unemployment

A manager is hired by a start-up for her demonstrated ability to think strategically and make broad-based decisions that serve the entire organization. In other words, the manager has been hired for her strong _____ skills. a. technical b. diagnostic c. conceptual d. communication

c. conceptual

Miriam pools all her savings to open a bakery that specializes in wedding cakes. She bakes the cakes, runs the store, and creates a website that allows customers to place orders online. Miriam is a(n) _____. a. small-business investor b. venture capitalist c. entrepreneur d. wholesaler

c. entrepreneur

A small business: a. is publicly owned. b. meaningfully influences its environment. c. is owned by one individual or a small group. d. has only one retail outlet.

c. is owned by one individual or a small group.

The managerial function of leading: a. involves monitoring the organization's progress toward its goals. b. is a part of the planning process. c. is the set of processes used to get members of an organization to work together. d. involves setting an organization's goals and deciding how best to achieve them.

c. is the set of processes used to get members of an organization to work together.

A national news event leads to a surge of interest in education policy. For an education think tank, this represents an organizational _____. a. threat b. strength c. opportunity d. weakness

c. opportunity

A retail business: a. offers products to wholesalers for sale. b. sells directly to producers. c. sells products manufactured by other firms. d. requires fewer employees than wholesalers.

c. sells products manufactured by other firms.

A two-person software development company with annual sales of $100,000 would be considered a: a. franchise. b. joint venture. c. small business. d. large business.

c. small business.

Mark is a logical and rational manager. When making decisions, he first acquires complete and perfect information and then eliminates uncertainty to arrive at a decision that best serves the interests of his company. Mark follows _____. a. the nominal group decision model b. the administrative model c. the classical decision model d. the Delphi technique

c. the classical decision model

Azim works for a talented young fashion designer. Azim is promised an internship at a competing large fashion house in exchange for some of the young designer's drawings. Which of the following ethical issues is represented in this scenario? a. Bait-and-switch b. Ethical leadership c. Redlining d. Conflict of interest

d. Conflict of interest

_____ occurs when a group or team's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision. a. Satisficing b. A coalition c. Escalation of commitment d. Groupthink

d. Groupthink

Check My Work _____ is a major factor in nonprogrammed decisions. a. Identifying alternatives b. Structure c. Frequency d. Intuition

d. Intuition

Which of the following is an advantage of a franchise? a. Its start-up costs are either very small or negligent. b. It allows each franchise outlet to be vastly different from other outlets. c. It allows a franchise to build a business from a scratch using its own business model. d. It lets franchisers grow by using the investment money provided by franchisees.

d. It lets franchisers grow by using the investment money provided by franchisees.

Which of the following is true of a standard operating procedure? a. It specifies an organization's general response to a designated problem. b. It is a single-use plan. c. It is developed to carry out a course of action that is not likely to be repeated. d. It outlines the steps to be followed in particular circumstances.

d. It outlines the steps to be followed in particular circumstances.

Lana, owner of a high-end boutique, claims she selects items for her boutique purely on a hunch. Based on Lana's claim, which of the following is true of Lana's decision making? a. Lana uses bounded rationality. b. Lana uses the Delphi technique. c. Lana satisfices. d. Lana uses intuition.

d. Lana uses intuition.

Which of the following is an area of focus for tactical plans? a. Mission b. Environment c. Distinctive competence d. People

d. People

Which of the following is true of firms that successfully implement a differentiation strategy? a. They focus on quantity over quality. b. They reduce their costs below costs of competing firms. c. They benefit when consumers avoid higher-priced products. d. They are able to charge more than competitors.

d. They are able to charge more than competitors.

Which of the following is true of technical skills? a. They allow a manager to make good decisions. b. They depend on a manager's ability to think in the abstract. c. They involve the ability to motivate both individuals and groups. d. They are especially important for first-line managers.

d. They are especially important for first-line managers.

Which of the following is true of operational goals? a. They are set by middle managers. b. They focus on broad, general issues. c. They are set by an organization's top managers. d. They concern themselves with short-term issues.

d. They concern themselves with short-term issues.

A _____ is a formal, written statement of the values and principles that guide a firm's action. a. conflict of interests b. privacy policy c. maquiladora d. code of ethics

d. code of ethics

An independent record label hires a manager who has previously worked with organizations specializing in food processing, internet technology, and e-retailing. The manager is known for tailoring his managerial style in any given situation to the unique elements in that situation. His behavior is closely in sync with the principles of the _____ perspective. a. quantitative b. behavioral c. classical d. contingency

d. contingency

One significant contemporary management challenge is: a. management science. b. entropy. c. synergy. d. globalization.

d. globalization.

When the president of Smithson Corp. proposed a new product for launch, his board of directors readily accepted his proposition without considering the risks. This is an example of _____. a. the Delphi procedure b. satisficing c. a coalition d. groupthink

d. groupthink

An export restraint agreement is a type of _____. a. direct investment b. tariff c. strategic alliance d. quota

d. quota

Steven is a polymer scientist with the motivation and expertise needed to start his own business. If he chooses to finance his business in the same way that most new businesspeople finance theirs, he will: a. form a strategic alliance. b. borrow money from a lender. c. approach a venture capital company. d. rely on personal resources.

d. rely on personal resources.

A ______ describes how specific activities are to be carried out. a. standard operating procedure b. policy c. contingency play d. rule or regulation

d. rule or regulation

Tactical plans must be consistent with a(n) _____ plan. a. operational b. standing c. short-term d. strategic

d. strategic

A policy is: a. developed for nonrecurring situations. b. more specific and detailed than a standard operating procedure. c. a type of a single-use plan. d. the most general form of a standing plan.

d. the most general form of a standing plan.

In practice, organizations have a hard time focusing on _____. a. opportunities b. strengths c. threats d. weaknesses

d. weaknesses