Foundations of Management Solved Exam Questions
Course Introduction
Foundations of Management provides an introduction to the principles, concepts, and functions of management within organizations. This course explores the roles and responsibilities of managers, the evolution of management thought, and key managerial processes such as planning, organizing, leading, and controlling. Students will examine decision-making strategies, organizational structure, and the impact of cultural and ethical considerations on management. Through case studies and real-world examples, learners gain a foundational understanding of how effective management contributes to organizational success and adapt to the dynamic global business environment.
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Foundations of Business 6th Edition by William M. Pride
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Page 2
Chapter 1: Exploring the World of Business and Economics
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Sample Questions
Q1) Explain how the basic economic questions are answered in capitalistic and command economies.
Answer: The four basic economic questions are (1)what goods and services will be produced;(2)how will they be produced;(3)for whom will they be produced;and (4)who controls the factors of production.In a capitalistic economy,supply and demand is primarily driven by the market and what price a product or service will bring.In a capitalistic economy,businesses and individuals answer the four basic economic questions.In a command economy,the government decides what goods and services will be produced,how they will be produced,and at what price they will be offered.
Q2) How does a monopoly have complete control over the price of its product?
Answer: A monopoly has some control over the price of its product because it is the only firm in the industry.No firm,however,can set its price at some astronomical figure simply due to lack of competition.The firm would find that no customers would be willing to pay an exorbitant price.Therefore,the firm in a monopoly position must consider the demand for its product and set the price at the most profitable level.
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Chapter 2: Ethics and Social Responsibility in Business
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Sample Questions
Q1) The statement "Warning: The Surgeon General Has Determined That Cigarette Smoking Is Dangerous to Your Health" supports the consumers' rights to
A) safety and to be informed.
B) life and to be informed.
C) choose and to safety.
D) work and to be informed.
E) safety and to be heard.
Answer: A
Q2) Awareness of businesses' social responsibilities has increased along with government involvement.
A)True
B)False
Answer: True
Q3) An affirmative action program is designed to ensure that minority employees are represented in about the same proportion as their representation within the community.
A)True
B)False
Answer: True
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Chapter 3: Global Business
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Sample Questions
Q1) By definition,every country has a comparative advantage in some product.
A)True
B)False
Answer: True
Q2) One of the consequences of trade restrictions is misallocation of international resources.
A)True
B)False
Answer: True
Q3) XYZ Company wants to be prepared for the ASEAN free trade area.The company plans to develop its own production and marketing facilities in one or more ASEAN countries.The best choice for XYZ Company is
A) a joint venture.
B) a licensing agreement.
C) totally owned facilities.
D) exporting.
E) sales offices.
Answer: C
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Chapter 4: Choosing a Form of Business Ownership
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Sample Questions
Q1) In your own words,explain the differences among a horizontal merger,a vertical merger,and a conglomerate merger.
Q2) Because of unlimited liability,it is easy for sole proprietors to borrow large sums of money.
A)True
B)False
Q3) The partner who can lose only what he or she has invested in a business is the
A) general partner.
B) sole proprietor.
C) manager.
D) employee.
E) limited partner.
Q4) Refer to B&G,Inc.B&G,Inc.was going through a ____ merger.
A) vertical
B) horizontal
C) conglomerate
D) hostile
E) leveraged
Q5) What types of information should a partnership agreement contain?
Q6) Explain the differences among a domestic,a foreign,and an alien corporation.
Page 6
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Chapter 5: Small Business,Entrepreneurship,and Franchises
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Sample Questions
Q1) The main reason there are fewer production industries than distribution or service industries is that
A) there are few things production industries manufacture.
B) production industries have no market.
C) production industries need a large initial investment.
D) there is little chance for profit in production industries.
E) few people want to work in production industries.
Q2) A new business is built around the entrepreneur.
A)True
B)False
Q3) The average life for an SBA-guaranteed business loan is ____ years.
A) twenty-five
B) eighteen
C) fifteen
D) twelve
E) eight
Q4) Entrepreneurial spirit is the desire to create a new business.
A)True
B)False
Q5) Why are small businesses prone to failure?
Page 7
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Chapter 6: Understanding the Management Process
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Sample Questions
Q1) Implementing a decision requires time,planning,and A) optimization.
B) a combination of alternatives.
C) maximization.
D) brainstorming.
E) preparation of personnel.
Q2) As a manager at Johnson Electric,an armature motor manufacturer,Oliver is responsible for quality.As he carries out his controlling function,Oliver sets the standard for the number of defective parts per million,and then he gathers the data measuring the actual performance.What third step of the control function should Oliver take next?
A) Change the standards to match the actual performance.
B) Determine the cause of the discrepancy.
C) Begin planning again.
D) Take corrective action.
E) Motivate his employees.
Q3) Which level of management has the closest contact with workers paid by the hour? How do these managers spend most of their time?
Q4) How does the organization's mission differ from its strategic planning?
Q5) In what ways does leading differ from motivating?
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Chapter 7: Creating a Flexible Organization
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Sample Questions
Q1) Brianna is giving a speech on job specialization for her business class.She will most likely tell the class that one of the reasons for job specialization is
A) the organization is too large for one person to do everything. B) special skills are not needed to complete specialized tasks.
C) a worker repeating the same job becomes bored and slows down the operation. D) not everyone wants to do the same thing.
Q2) Citibank has one group of loan officers who handle consumer loans and another group who work in the commercial loan area.Grouping work units this way is known as departmentalization by A) function.
B) customer.
C) product.
D) specialty.
E) location.
Q3) Discuss several advantages and disadvantages of committees over individuals.Offer examples that you have been a part of or are aware of to emphasize your point.
Q4) What are some of the primary differences between a line structure and a line-and-staff structure?
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Chapter 8: Producing Quality Goods and Services
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Sample Questions
Q1) Starbucks strives to make its cups from recyclable materials,to give back to the communities where it has stores,to aid the communities where the coffee beans are harvested,and to reduce its environmental impact.Starbucks promotes A) sustainability.
B) productivity.
C) displacement.
D) flexibility.
Q2) When Company Tech decides to produce a new product line and determines the desired capacity and use of technology,the next step is to
A) decide how big to build the new factory.
B) hire new workers for the facility.
C) decide whether to build a new plant or refurbish an existing plant.
D) determine which of the company's existing plants is best suited to produce the new product.
E) determine what the magnitude of the conversion process will be.
Q3) An analytical process breaks raw materials into different component parts.
A)True
B)False
Q4) What is the purpose of quality control? Why is it important to a firm?
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Chapter 9: Attracting and Retaining the Best Employees
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Sample Questions
Q1) Britney and David work for the same retail clothing company.Britney started working with the company as a manager of the children's department.She has a business degree,five years of experience in retail sales,and has excellent customer relationship skills.She is paid $60,000 per year plus benefits.David also has a college degree but his degree is in communications.He has six years of experience as a retail sales manager in the men's department of a clothing company and spent a year on the staff of a famous clothing designer where he gained unique insights into how clothing is made,how fabrics are selected and the different properties of different fabrics.He is paid $80,000 per year plus benefits.Britney and David were discussing their compensation during lunch one day and Britney was quite upset that David was paid so much more than she.What is the issue that has caused Britney to be upset?
A) She is upset because she feels David is paid more based on gender.
B) She is upset because she did not have the opportunity to work for a designer.
C) She upset because she has had to learn about children's clothing and all David had to learn about was men's clothing which is what he wears.
D) She is upset because she feels their education,training,and skills show that they have comparable worth and should be equally compensated.
Q2) What are the advantages and disadvantages of internal recruiting?
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Chapter 10: Motivating and Satisfying Employees
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Sample Questions
Q1) The equity theory of motivation is based on the premise that people are motivated first by rewards and then by achievement.
A)True
B)False
Q2) Explain the different facets of job enrichment and behavior modification.
Q3) According to Theory X by McGregor,managers assume that employees
A) do not naturally dislike work.
B) will work toward goals they are committed to.
C) dislike work and need to be controlled.
D) have the potential to accomplish organizational goals.
E) seek out and accept responsibility.
Q4) The systematic use of reinforcement to encourage desirable organizational behavior is called
A) behavior modification.
B) replacement theory.
C) equity theory.
D) expectancy theory.
E) reinforcement theory.
Q5) What does the word equity in equity theory refer to?
Q6) What are the advantages and disadvantages of a flextime work schedule?
Page 12
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Chapter 11: Building Customer Relationships Through Effective Marketing
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Sample Questions
Q1) There are four kinds of utility: time,form,place,and price.
A)True
B)False
Q2) In ___,a committee or group of people often make the buying decision and consider the organization's objectives,purchasing policies,resources,and personnel.
A) business buying
B) consumer buying
C) institutional buying
D) governmental buying
Q3) Products that can be marketed successfully with the undifferentiated approach include sugar and A) cars.
B) clothing.
C) writing pens.
D) flour.
E) furniture.
Q4) Customer relationship management is a technology solution for increasing sales. A)True
B)False
Page 13
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Chapter 12: Creating and Pricing Products That Satisfy Customers
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Sample Questions
Q1) Identify and discuss the three major ways that a product mix can be improved.
Q2) A major big box store allegedly adds 5 percent to the total cost of production or cost of purchasing items it sells in its store,then adds to this number the additional costs and profits in order to arrive at the product's selling price.The 5 percent represents the ___ amount.
A) markup
B) income
C) equity
D) market share
Q3) Fiona collects antique Fabergé eggs.For most of these eggs,only one or a few were created of each design.These eggs would best be classified as ____ products.
A) specialty
B) convenience
C) business
D) shopping
E) luxury
Q4) Describe non-price competition.When might it be used?
Q5) When might a firm use a price-skimming strategy? When might it use penetration pricing? Describe each strategy.
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Chapter 13: Distributing and Promoting Products
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Sample Questions
Q1) Compare and contrast intensive,selective,and exclusive distribution.Give an example of a product that normally would be distributed in the way for each type of market coverage.
Q2) In creating the advertising platform for one of its products,Gems,Inc.,will include important selling points such as:
A) features that competing products lack.
B) objectives pertaining to brand awareness.
C) an analysis of the advertising target.
D) objectives to improve consumer attitudes.
E) the appropriate media selections.
Q3) Radio advertising is the most expensive advertising medium.
A)True
B)False
Q4) Refer to P&T Inc.P&T management could use sales promotions for any of the following objectives except:
A) to attract new customers.
B) to boost sales to current customers.
C) to reinforce advertising.
D) to steady increasing sales patterns.
E) to improve shelf space and displays.
15
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Chapter 14: Exploring Social Media and E-Business
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Sample Questions
Q1) One type of B2B model focuses on
A) facilitating sales transactions between businesses.
B) increasing costs to consumers.
C) gaining the loyalty of individual buyers.
D) eliminating higher costs of finished products.
E) all of these answer choices.
Q2) Shifting revenues earned from customers inside a real Sears department store to revenues earned from those same customers online increases a firm's total sales revenues.
A)True
B)False
Q3) Social media offers extensive,nearly full control over what is said about a company and/or their products or services.
A)True
B)False
Q4) A podcast can be considered a social community.
A)True
B)False
Q5) Describe the two primary models of e-business.Provide examples.
Q6) Are social media measurements always quantitative? Support your answer.
Page 16
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Chapter 15: Using Management and Accounting Information
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Sample Questions
Q1) What are the three activities according to which a statement of cash flows is organized?
A) Operating,selling,and investing
B) Financing,buying,selling
C) Investing,financing,and expensing
D) Processing,operating,receiving
E) Operating,investing,financing
Q2) Amy Jones started a small manufacturing firm two years ago.Now,after two years,she decides it is time to hire an accountant to work in the office and process all her financial data.This accountant will be a
A) certified auditor.
B) certified bookkeeper.
C) managerial bookkeeping clerk.
D) private accountant.
E) public accountant.
Q3) The return on sales ratio indicates how effectively a firm is transforming its sales into profits.
A)True
B)False
Q4) Explain why a firm's financial statements should be audited.
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Chapter 16: Mastering Financial Management
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Sample Questions
Q1) Bonds that are secured by various assets of the issuing corporation are called debenture bonds.
A)True
B)False
Q2) What is the typical denomination for most corporate bonds?
A) $100
B) $10,000
C) $500
D) $1,000
E) Ten times the par value of its stock
Q3) The primary sources of funds available to a business include all of the following except
A) debt capital.
B) sales of assets.
C) government grants.
D) sales revenue.
E) equity capital.
Q4) Your small business has been very successful and has amassed a large amount of accounts receivable from reputable firms,but you find yourself short of ready cash to replace inventory.How could a factor help you?
Page 18
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Chapter 17: Understanding Personal Finances and Investments
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Sample Questions
Q1) In order to reach goals of high dollar returns on your investments,what must you generally give up?
A) Risk
B) Safety
C) Stocks
D) Money
E) Return
Q2) Which of the following best explains the purpose of asset allocation?
A) Reduce commission charges
B) Increase investment risk
C) Reduce government fees associated with investing
D) Reduce taxes paid to the IRS
E) Reduce investment risk
Q3) Which of the following is not a suggested tip for making investment decisions?
A) Do your homework about potential investments.
B) Keep copies of materials used to make investment decisions.
C) Monitor the value of your investments.
D) Keep accurate records.
E) Choose the least expensive online broker for stock purchases.
Page 19
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Chapter 18: Enhancing Union-Management Relations
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Q1) All of the following have been given as possible reasons for a gradual decline in union membership except that _______
A) firms moving to the Sunbelt tend to hire nonunion workers.
B) federal laws make union membership difficult.
C) heavily unionized industries have not been growing as rapidly as nonunion industries.
D) the largest growth seems to be in nonunion service industries.
E) workers do not share the need to unionize because management satisfies their needs better today.
Q2) What was the major accomplishment of the Industrial Workers of the World union?
A) Play a major role in politics
B) Make the AFL seem less threatening
C) Keep labor unions from growing
D) Prevent the use of strikes
E) Demand a reduced workday
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Chapter 19: Risk Management and Insurance
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Sample Questions
Q1) Which of the following is not a type of insurance that is available through either federal or state governments?
A) Disability
B) Retirement
C) Liability
D) Medicare
Q2) Who is responsible for paying the premiums for unemployment insurance coverage that covers eligible unemployed workers?
A) The federal government
B) State governments
C) Employees
D) Employers
E) Both employees and employers
Q3) Which of the following is not one of the four risk management techniques?
A) Assuming
B) Avoiding
C) Ignoring
D) Shifting
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Chapter 20: Business Law regulation and Taxation
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Sample Questions
Q1) Which of the following is a tax an individual would not pay but a business might pay?
A) Federal income taxes
B) State income taxes
C) Personal property taxes
D) Unemployment tax
Q2) Which of the following is not a crime as well as a tort?
A) Shoplifting
B) Tax evasion
C) Robbery
D) Murder
Q3) Which of the following is not true about bankruptcy?
A) It is more difficult to file a Chapter 7 bankruptcy now than it was many years ago.
B) To file for involuntary bankruptcy,creditors must prove that the individual has unsecured debt in excess of just over $15,000 and cannot pay its debts as they come due.
C) Bankruptcy can only be voluntary.
D) Today most bankruptcies are voluntary.
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