Business Management Essentials
Exam Answer Key
Course Introduction
Business Management Essentials introduces students to the foundational concepts, principles, and practices of effective management within organizations. Covering core topics such as planning, organizing, leading, and controlling, this course provides insight into decision-making processes, strategic thinking, and the dynamic roles of managers in todays competitive business environment. Students will explore key areas including organizational structure, leadership styles, human resource management, and performance measurement, all while examining real-world case studies to develop practical managerial skills and a comprehensive understanding of business operations.
Recommended Textbook
Modern Management Concepts and Skills 12th Edition by Samuel C. Certo
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Page 2
Chapter 1: Introducing Modern Management: Concepts and Skills
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Sample Questions
Q1) Sarah has been working full-time at Eves Golf Inc. for three years. While at college, she worked as a part-time employee at Burger King and as an office assistant for a manufacturing organization. She was recently promoted to manager, and manages a small team that is responsible for procuring raw materials for their line of golf bags, hats, and other accessories. Considering that careers evolve through a series of stages, in this scenario Sarah's career is at the ________ stage.
A) exploration
B) establishment
C) maintenance
D) plateauing
E) decline
Answer: B
Q2) Planning is concerned only with organizational success in the short term, while organizing is concerned with the more distant future (long term).
A)True
B)False
Answer: False
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Chapter 2: Managing: History and Current Thinking
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Q1) The behavioral science approach suggests that managers can best improve their organizations by using the scientific method and mathematical techniques to solve operational problems.
A)True
B)False
Answer: False
Q2) Which of the following is a characteristic of situations in which management science techniques are applied?
A) Managers need help analyzing a large number of variables.
B) The use of behavioral models to investigate the decision situation is indicated.
C) Managers want to determine the psychological and behavioral attitudes of employees.
D) Managers want to determine quality of the customer experience.
E) Social implications are used as guidelines for making a particular decision.
Answer: A
Q3) The primary investigative tool in F.W. Taylor's research was motion study.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Corporate Social Responsibility, Ethics, and Sustainability
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Sample Questions
Q1) The primary function of the Office of Federal Contract Compliance Programs is to ensure that employers holding federal contracts ________.
A) abide by the safety and health regulations of the Occupational Safety and Health Administration
B) improve safety conditions for workers by enforcing all safety and equipment standards
C) grant equal employment opportunity to people regardless of their race or sex
D) strive to reduce consumer misunderstanding of its products
E) abide by the environmental standards enforced by the Environment Protection Agency
Answer: C
Q2) Define the term social audit. List the basic steps in conducting a social audit.
Answer: A social audit is the process of measuring the present social responsibility activities of an organization to assess its performance in this area. The basic steps in conducting a social audit are monitoring, measuring, and appraising all aspects of an organization's social responsibility performance.
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Chapter 4: Management and Diversity
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Q1) Which of the following is true regarding the assimilation approach?
A) It advocates incorporating changes into organization culture based on the cultures of new employees.
B) It gathers the best from differing cultures and accepts a variety of viewpoints.
C) It promotes creativity in the organization by encouraging employees to share their individual cultures and worldviews.
D) It creates a homogeneous culture that suppresses the creativity and diversity of views that could benefit the organization.
E) It addresses past injustices experienced by a particular group by developing policies to create a more equitable set of conditions.
Q2) A stereotype is a positive or negative assessment of members of a group or their perceived attributes.
A)True
B)False
Q3) What is diversity and what are the advantages of a diverse workforce?
Q4) Explain Donaldson and Scannell's four-stage model for managers' progression in managing a diverse workforce.
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6
Chapter 5: Managing in the Global Arena
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Q1) Managers with a ________ attitude believe that the overall quality of management recommendations, rather than the location of managers, should determine the acceptability of management practices used to guide multinational corporations.
A) ethnocentric
B) polycentric
C) geocentric
D) xenocentric
E) gynocentric
Q2) Organization members who are citizens of one country and work in another country for an organization headquartered in still another country are known as ________.
A) expatriates
B) host-country nationals
C) third-country nationals
D) repatriates
E) naturalized citizens
Q3) Explain the three basic managerial attitudes toward the operation of multinational corporations. What are their advantages and disadvantages?
Q4) What can managers in multinational corporations do to influence employees?
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Chapter 6: Management and Entrepreneurship
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Q1) Mike wants to start his own laundry service. However, he intends to first study the market and consider factors like who his competitors are, how they function, their market shares, how he can attract prospective customers, etc., before he decides whether his plan is viable. Mike is engaging in ________.
A) benchmarking
B) entrepreneurial risk management
C) feasibility analysis
D) exploitation
E) angel investing
Q2) All entrepreneurs completely fund operations with their own money or credit cards.
A)True
B)False
Q3) ________ is the third step of the entrepreneurial process.
A) Opportunity identification
B) Opportunity evaluation
C) Opportunity exploitation
D) Opportunity selection
E) Opportunity improvement
Q4) Explain feasibility analysis.
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Chapter 7: Principles of Planning
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Q1) Which of the following, if true, would most support the IT department's plan to upgrade the firm's technology?
A) Efficiency gains from the new technology would offset the payments in 10 years.
B) ABC Corp. has always been ahead of the technology-curve.
C) The proposed technology is going to be the industry standard in the next year.
D) The firm has not made any significant investments in the recent past.
E) Investment in technology is always a gamble-it may or may not pay off.
Q2) The first step in the planning process is to ________.
A) list alternative ways of reaching objectives
B) state organizational objectives
C) develop the premises upon which each alternative is based
D) develop plans to pursue the chosen alternative
E) put plans into action
Q3) Premises are the assumptions upon which alternatives to reaching organizational objectives are based.
A)True
B)False
Q4) How can managers increase the quality of their objectives?
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Page 9
Chapter 8: Making Decisions
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Sample Questions
Q1) ________ refers to situations where the probability that a particular outcome will occur is not known in advance.
A) Uncertainty
B) Risk
C) Unrealistic optimism
D) Heuristics
E) Hazard
Q2) Decision-makers who feel they are commodities and are only as valuable as the decisions they make would most likely be classified as ________.
A) having a hoarding orientation
B) being receptive
C) being exploitative
D) having an ideal orientation
E) being marketing-oriented
Q3) All decisions are either programmed or non-programmed decisions.
A)True
B)False
Q4) What are the orientations of weak decision makers?
Q5) What is bounded rationality?
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Chapter 9: Strategic Planning: Strategies, Tactics, and Competitive Dynamics
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Q1) ________ is a strategy adopted by management to maintain or slightly improve the amount of business that an SBU is generating.
A) Focus
B) Stability
C) Retrenchment
D) Growth
E) Divestiture
Q2) An organization is following a ________ strategy when it focuses on making an organization more competitive by developing a product or products that customers perceive as being different from products offered by competitors.
A) cost leadership
B) differentiation
C) focus
D) stability
E) divestiture
Q3) What skills are required for the successful implementation of strategy?
Q4) What are the main strategy formulation tools of strategic management?
Q5) Briefly discuss the strategic management process.
Q6) Compare and contrast strategic and tactical planning.
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Chapter 10: Plans and Planning Tools
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Q1) Which of the following statements is true regarding the critical path of a PERT network?
A) It refers to the sequence of events and activities requiring the shortest period of time to complete.
B) A delay in completing the sequences in the critical path causes no delay in completing the project.
C) It plays a negligible role in controlling the completion time of the project.
D) It provides an insight into how the unrealistic features of a schedule can be modified.
E) It is essentially a bar graph mainly used for scheduling resources.
Q2) Which of the following sales forecasting methods provides the forecaster with a trend-line that best explains the historical relationship between sales and time?
A) the regression method
B) the product stages method
C) the jury of executive opinion
D) the Delphi method
E) the moving average method
Q3) Compile a list of a few situations where plans can fail.
Q4) Explain the qualitative methods of sales forecasting.
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Page 12
Chapter 11: Fundamentals of Organizing
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Sample Questions
Q1) The organization structure at Sinclair Funds, a financial services company, is divided horizontally into Insurance, Mutual Funds, and Wealth Management departments. Identify the departmentalization mode being used here.
A) matrix
B) customer
C) product or service
D) geographic
E) functional
Q2) Which of the following is one of Follett's guidelines on coordination?
A) Personal communication should be minimized in coordination.
B) Managers can assume that if their system shows coordination now, it will show coordination in the future.
C) The human element should be minimized in coordination.
D) Managers should plan for coordination.
E) Coordination can be achieved with least difficulty through vertical relationships.
Q3) The matrix structure is contradictory to the principle of unity of command.
A)True
B)False
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Chapter 12: Responsibility, Authority, and Delegation
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Q1) HR Village, a staffing company has invited applications for the position of director of recruitment and compensation. This position is accountable for planning, organizing, and managing recruitment and compensation services for the company. This list of specific activities is an example of a ________.
A) job evaluation
B) work sample
C) job description
D) work plan
E) job specification
Q2) Explain the concepts of line, staff, and functional authority.
Q3) When a minimal number of job activities and minimal amount of authority are delegated to subordinates, the organization is ________.
A) decentralized
B) formalized
C) flat
D) centralized
E) functionally organized
Q4) What is delegation? Explain the steps in the delegation process.
Q5) Describe the functional similarity method of dividing job activities.
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Chapter 13: Human Resource Management
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Sample Questions
Q1) A candidate is eliminated from the selection process for lacking the necessary innate ability, ambition, and other qualities required of the job. Which stage of the selection process was the candidate most likely at when he or she was eliminated?
A) preliminary interview
B) personality test
C) performance references
D) diagnostic interview
E) intelligence test
Q2) What is performance appraisal? What are the different methods used to conduct performance appraisals?
Q3) Write a short note on the process of recruitment and its importance.
Q4) ________ are on-the-job training vehicles for assigning a particular task to an individual to furnish him or her with experience in a designated area.
A) Virtual teams
B) Cross-functional teams
C) Special project committees
D) Geographically-dispersed teams
E) New product committees
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Chapter 14: Organizational Change: Stress, Conflict, and Virtuality
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Q1) ________ is a technique for managing conflict in which managers use their authority to resolve conflicts.
A) Resolving
B) Compromising
C) Negotiating
D) Avoiding
E) Forcing
Q2) Which of the following techniques of managing conflict involves working out the differences between managers and employees?
A) resolving
B) averting C) compromising D) avoiding E) forcing
Q3) Compromise technique is inappropriate when the planned change is relatively minor and the time to make an organizational change is limited.
A)True B)False
Q4) Briefly describe the four strategies used to manage conflicts.
Page 16
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Chapter 15: Influencing and Communication
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Q1) The increasing need for information in today's society is an example of a microbarrier to communication.
A)True
B)False
Q2) Organizational communication that does not follow the lines of the organizational chart is specifically called ________.
A) lateral communication
B) upward communication
C) vertical communication
D) informal communication
E) downward communication
Q3) ________ is the process of converting messages back into information.
A) Decoding
B) Encoding
C) Derivation
D) Paraphrasing
E) Rewording
Q4) Good communicators consult with others when planning communications.
A)True
B)False
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Chapter 16: Leadership
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Q1) Explain the concept of superleadership. What are the benefits of adopting superleadership?
Q2) The central theme of leadership is ________.
A) rational assessment and handling of business situations
B) ensuring that the organization produces high quality products
C) the rational selection of goals and purposes
D) getting things accomplished through people
E) reducing the overall cost of the organization
Q3) Which of the following is a correct statement concerning transformational leadership, coaching leadership, entrepreneurial leadership, and superleadership?
A) These styles can be combined to generate a unique style of leadership.
B) These styles are considered mutually exclusive.
C) Transformational leadership is the best form of leadership .
D) Entrepreneurial leadership is considered a better style than the other three styles.
E) Superleadership is a form of entrepreneurial leadership.
Q4) Compare and contrast the Hersey-Blanchard Model of leadership with Fiedler's model.
Q5) Briefly explain and discuss the four emerging leadership styles of today.
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Chapter 17: Motivation
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Q1) Eddie Burns is the accounts manager of Avatar Inc., and a very optimistic person. He knows what he wants from his subordinates and believes that they will always do their best to get the work done. Even when work gets delayed, he assumes that they did their best. Eddie's behavior is consistent with ________.
A) Theory Y
B) Theory Z
C) Theory X
D) Type A personality
E) Type B personality
Q2) Which of the following theories was developed to counter the criticisms of and expand on Maslow's hierarchy of needs?
A) Argyris's maturity-immaturity continuum
B) Porter-Lawler theory of motivation
C) the Vroom expectancy theory
D) Alderfer's ERG theory
E) McClelland's acquired needs theory
Q3) Briefly describe the basic needs of human beings, in accordance with Maslow's hierarchy of needs.
Q4) Discuss Herzberg's hygiene and motivating factors.
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Chapter 18: Groups and Teams
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Q1) Which of the following is one of the major reasons to establish a committee?
A) to obtain status and social satisfaction that people might not enjoy without group membership
B) to perpetuate social and cultural values that group members consider important
C) to encourage groupthink
D) to handle routine organizational activities
E) to develop new ideas for solving existing organizational problems
Q2) A sociometric diagram that summarizes the personal feelings of organization members about the people in the organization with whom they would like to spend free time is a ________.
A) social audit
B) sociogram
C) social network diagram
D) formal group development diagram
E) friendship chart
Q3) The most fundamental ingredient of effective teams is member satisfaction.
A)True
B)False
Q4) Distinguish between a group and a team.
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Chapter 19: Managing Organization Culture
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Q1) ________ is defined as the dedication of organization members to uphold the values of the organization and to make worthwhile contributions to fulfilling organizational purpose.
A) Job satisfaction
B) Organizational effectiveness
C) Employee proactivity
D) Business resilience
E) Organizational commitment
Q2) The ________ dimension of organization culture is an element of organization culture that focuses on making sure that a product, in the opinion of the customer, does what it is supposed to do.
A) ethics
B) technological
C) quality
D) diversity
E) innovation
Q3) What are the functions of organization culture?
Q4) How are organization cultures classified? What are the different types of organization culture that exist?
Q5) Provide a brief description of organization culture.
Page 21
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Chapter 20: Encouraging Creativity and Innovation
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Q1) Which of the following is one of the principles of reengineering, as outlined by Michael Hammer?
A) Work should be organized around tasks, rather than outcomes.
B) Information-processing work should be carried out separately from the real work that produces the information.
C) Geographically dispersed resources must be treated as though they are decentralized and autonomous.
D) Parallel activities should be linked instead of integrating their results.
E) Control should be built into processes by keeping the decision point apart from where the work is performed.
Q2) ________ ideas are ideas that focus on inventions for improving a manufacturing practice or procedure.
A) Product
B) Technology
C) Process
D) Service
E) Management
Q3) Provide a brief note on the time-pressure/creativity matrix.
Q4) What are the three components of creativity in an individual?
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Chapter 21: Controlling, Information, and Technology
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Q1) The International Information Security Foundation produced a document known as the ________, which included a set of best practices for IS managers.
A) ISSCP
B) Gannt
C) GASSP
D) MSDS
E) Pert
Q2) Ensuring that an event occurs as it was planned to occur constitutes ________.
A) control
B) planning
C) influencing
D) organizing
E) designing
Q3) Outline the steps involved in the controlling process.
Q4) Measuring performance is the first step in the controlling process.
A)True
B)False
Q5) Define the terms technology, information technology, and information systems.
Q6) What are the steps in evaluating information?
Q7) Describe the six steps necessary to operate an IS properly.
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Chapter 22: Production and Control
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Q1) ________ is an operations control activity that determines the flow of materials from vendors through an operations system to customers.
A) Materials handling
B) Zero-based control
C) Work scheduling
D) Production planning
E) Materials control
Q2) Which of the following can be considered annual fixed costs for a publishing company?
A) author royalties
B) salaried labor
C) sales commission
D) cost of binding
E) printing costs
Q3) Value analysis is a cost control technique rather than a cost reduction technique.
A)True
B)False
Q4) Explain the concept of a layout strategy and discuss the various types of layouts.
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Page 24