Principles of Management Exam Practice Tests
Course Introduction
Principles of Management introduces students to the foundational concepts and theories underlying effective management practices in organizations. The course covers key functions of management, including planning, organizing, leading, and controlling, while exploring topics such as decision-making, strategic management, organizational structure, motivation, communication, and leadership. Through case studies and real-world examples, students develop a comprehensive understanding of how managers drive organizational success, adapt to changing environments, and address contemporary challenges in both global and domestic contexts. This course provides essential insights for students aspiring to leadership and managerial roles across various industries.
Recommended Textbook
Management An Integrated Approach 2nd Edition by Ranjay Gulati
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803 Verified Questions
803 Flashcards
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Page 2
Chapter 1: Introduction to Management
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Sample Questions
Q1) The factor that distinguishes leadership from management is that
A) leadership focuses on planning and budgeting.
B) leadership is the act of working with people to accomplish a desired goal.
C) leadership involves budgeting, controlling, and staffing resources.
D) leadership is the ability to drive change through motivation.
Answer: D
Q2) Bureaucratic organization structure involves vertical separation of planning and execution so that plans are made in the upper ranks of an organization and executed in the lower.
A)True
B)False
Answer: True
Q3) The factor that distinguishes the human relations movement from scientific management is that the human relations movement
A) focuses on how jobs could be designed to improve productivity.
B) emphasizes the importance of informal social relations at work.
C) views the firm as a machine and the manager as a machine operator.
D) shifts emphasis from the social side of the firm to the output of the firm.
Answer: B
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Page 3
Chapter 2: The Global Business Environment
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Sample Questions
Q1) Briefly describe the different dimensions of the general environment. Answer: The general environment includes the technological, economic, political/legal, and sociocultural dimensions that affect a firm's external environment. The technological dimension of the general environment refers to the processes, technologies, or systems that a firm can use to produce outputs. The economic dimension of a firm's environment often includes inflation, unemployment, consumer sentiment, and interest rates of all the countries where it sells its products and services. The political dimension of the external environment refers to the political events and activities in a market that affect a firm. The legal dimension refers to the regulations and laws that a firm encounters in its markets. The sociocultural dimension of the external environment refers to demographic characteristics as well as to the values and customs of a society.
Q2) The Uruguay Round is noteworthy because it created the successor to GATT.
A)True
B)False
Answer: True
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Chapter 3: Ethics and Corporate Social Responsibility
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Sample Questions
Q1) _____ is defined as the ethical philosophy claiming that behaviors are considered moral if they produce the greatest good for the greatest number of people.
A) Consumerism
B) Totalitarianism
C) Utilitarianism
D) Kantianism
Answer: C
Q2) Virtue ethics claims that morality's primary function is to develop virtuous character, similar to the way people develop skills such as creativity and conflict management.
A)True
B)False
Answer: True
Q3) The Sarbanes-Oxley Act of 2002 was passed in order to
A) control pollution and protect the environment in the long term.
B) increase taxation levels for companies doing business abroad.
C) eliminate the practice of bribery.
D) control the manipulation of accounts by the top management in firms.
Answer: D
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Chapter 4: Introduction to Strategy
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Sample Questions
Q1) According to the Roman military strategists, strategy was considered as A) the manager's "game plan" to attain personal gain.
B) represented by the specific moves or actions their armies performed.
C) a plan of action designed to achieve a specific goal.
D) a plan not usually aimed at creating a military advantage.
Q2) In the formulation of strategy, managers must create a solid fit among the activities to
A) make a competitive strategy that is different from others.
B) offer a service that cannot be easily copied by competitors.
C) decide what the company will not be doing.
D) operate more effectively than its competitors.
Q3) According to Tzu, the process of gathering information was an integral component of developing strategy.
A)True
B)False
Q4) Outline the features of exporting.
Q5) Briefly describe the use of strategy by the Roman military leaders.
Q6) Describe the business-level strategy.
Q7) Define vision, mission, and objectives. What are the benefits provided by effective mission statements?
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Chapter 5: Business-Level Strategy
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Sample Questions
Q1) The most recognizable resources that a firm uses to manufacture its products, such as the firm's plant and equipment, are categorized as _____ resources.
A) tangible
B) human
C) intangible
D) natural
Q2) Which of the following statements best describes competitive advantage?
A) It refers to the pressure a supplier or buyer can exert on a company.
B) It is the advantage that occurs when a firm offers products to all customers at higher prices.
C) It derives from a firm's ability to create value for its customers that exceeds the cost of producing the product or service.
D) It is the capability to identify and react to changes in the external environment and to mobilize internal resources to deal with those changes.
Q3) The 5-Forces Model is one of the most important tools for evaluating the attractiveness of industries.
A)True
B)False
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Chapter 6: Corporate-Level Strategy
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Sample Questions
Q1) The management of an automobile manufacturing company signed a contract with a consultancy that provides recruitment services. Though the organization was performing this function on its own previously, the management felt that the consultancy would offer a better service. Which of the following alternatives to vertical integration has the management opted?
A) Franchising
B) Exporting
C) Outsourcing
D) Licensing
Q2) Discuss the results of diversification.
Q3) According to one key study, performance increases as firms change from related diversification to unrelated diversification.
A)True
B)False
Q4) Spot contracts involve a firm's commitment to buy a commodity product at a specific price.
A)True
B)False
Q5) Define diversification and describe its types.
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Chapter 7: Organizational Design
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Sample Questions
Q1) Of the five activities that make a firm customer-centric, cooperation involves
A) helping employees at a firm develop the right skills needed to better serve customers.
B) creating structural mechanisms at the firm that allow workers to organize their activities to focus more exclusively on creating value for customers.
C) developing relationships with parties outside the firm to increase the value of the firm's offerings.
D) shaping an organization's culture and aligning incentives to encourage employees across silos in the organization to come together in the spirit of serving customers.
Q2) Which of the following terms refers to a structure where many employees have two bosses (one divisional and one functional) with equal authority in the organization?
A) Functional structure
B) Divisional structure
C) Matrix structure
D) Network structure
Q3) Outline the five customer-centric activities of an organization.
Q4) Define organizational structure and briefly describe its types.
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9
Chapter 8: Organizational Culture
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Sample Questions
Q1) Thomas is the top manager of a firm that is going to acquire another firm in a similar industry. In terms of culture, which of the following should Thomas do after acquiring the company?
A) Thomas should preserve those elements of each culture that are essential to the company's well-being.
B) Thomas should completely adopt the culture of the acquired company.
C) Thomas should encourage employees to follow both cultures in an attempt to avoid any conflict situations.
D) Thomas should stick to his own organization's culture regardless of whether the acquired company's culture is efficient or not.
Q2) An organization's _____ defines how people think, feel, and act, and it moves at an almost subconscious level.
A) structure
B) design
C) culture
D) strategy
Q3) Evaluate the importance of culture in mergers and acquisitions.
Q4) Analyze the ways in which a strong culture can affect a firm's performance.
Q5) Discuss the role of founders in influencing a firm's culture.
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Chapter 9: Managing Human Capital
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Sample Questions
Q1) BluBuddy Company has a loose, informal management structure, basic benefits, and flexible job definitions. BluBuddy is most likely in the
A) initiation stage of growth.
B) functional growth stage.
C) controlled growth stage.
D) functional integration stage of growth.
Q2) A-Recruitz is an organization that allows its employees to work from home. Most of the interaction between the employees and the organization takes place through e-mail. Moreover, the organization is able to maintain increased employee performance and satisfaction. Identify the work option offered by A-Recruitz to its employees.
A) Variable work schedules
B) Flexible work schedules
C) Telecommuting
D) Job sharing
Q3) Which of the following statements about 360-degree feedback is true?
A) 360-degree feedback is often effectively used to determine pay raises.
B) Employees receive feedback from their superiors, peers, and subordinates.
C) It often provides employees with an unrealistic view of their skills.
D) 360-degree feedback is not effective for the leadership development process.
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Page 11
Chapter 10: Performance Management
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Sample Questions
Q1) _____ is a quantitative approach that uses a method known as DMAIC, which stands for define, measure, analyze, improve, and control.
A) Benchmarking
B) Six Sigma
C) Budgeting
D) Total Quality Management
Q2) Downing Company is studying the costs required to attract new customers compared to the lifetime profitability of certain types of customers before it decides which new customers to target. Downing is focused on which of the various customer metrics?
A) Customer retention
B) New customer acquisition
C) Customer profitability
D) Market share
Q3) Which of the following is the ultimate goal of Total Quality Management?
A) Producing sustainable revenue
B) Setting strategic priorities
C) Fulfilling customer needs
D) Improving employee performance
Q4) Describe benchmarking.
Page 12
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Chapter 11: Organizational Change
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Sample Questions
Q1) Which of the following individuals is the best example of a successful change leader?
A) A change leader who offers rewards in terms of increased pay and promotion to those employees who support the change process
B) A change leader who communicates the positive results of the change process to the employees and hides the negative ones
C) A change leader who engages and listens to employees and motivates them by showing concern and sharing credit
D) A change leader who pays all attention to the structural and procedural changes needed for the transformation
Q2) Dissatisfaction provides the energy necessary for breaking organizational inertia. A)True
B)False
Q3) Briefly describe the change process.
Q4) Define organizational change and briefly explain how change can be driven by external factors.
Q5) Outline the key aspects of organizational change.
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Chapter 12: Leadership in Organizations
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Sample Questions
Q1) Sara shows concern for others, mentors subordinates, encourages subordinates to take initiative in solving problems, and shows appreciation for subordinates' contributions. Sara is demonstrating _____ leadership.
A) relationship-oriented
B) task-oriented
C) transformational
D) transactional
Q2) John is an organization's marketing lead. He has sound knowledge about the organizational activities and can make effective job-related decisions. However, his team members are unable to achieve sales targets that he sets for them. His team members complain that John does not respond or even pay attention to their problems and interests. This shows that John lacks _____ skills of leadership.
A) cognitive
B) interpersonal C) technical
D) intellectual
Q3) Define Fiedler's contingency model and situational leadership.
Q4) Explain the traits-based leadership theory.
Q5) Briefly describe task-oriented and relations-oriented leadership styles.
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Chapter 13: Becoming a Leader: Knowing Yourself
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Sample Questions
Q1) Briefly explain Howard Gardner's multiple intelligences.
Q2) Kim has an internal locus of control and sees the environment as stable. Kim is likely to ascribe her success to A) personal ability.
B) effort.
C) task difficulty.
D) luck or chance.
Q3) Jack, a marketing lead, and Jerry, a finance lead, belong to an organization that is downsizing its staff due to some recent events. In this stressful situation, Jack remains calm and confident, while Jerry gets anxious and depressed. In the context of Robert McCrae and Paul Costa's leadership personality traits, it can be inferred that
A) Jack has low conscientiousness.
B) Jerry has high emotional stability.
C) Jerry has low conscientiousness.
D) Jack has high emotional stability.
Q4) Based on their sense of personal control, externals prefer participatory supervisors who delegate.
A)True
B)False
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Chapter 14: Power and Influence
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Sample Questions
Q1) Positional power is often more influential and effective than personal power.
A)True
B)False
Q2) Which of the following is the first step in exercising power through influence?
A) Build sources of power.
B) Use specific influence principles.
C) Assess performance.
D) Choose an influence style and influence tactics.
Q3) According to Robert Cialdini's principle of scarcity
A) people should repay in the future what another person has done for them in the present.
B) someone will be more willing to say yes to an individual whom they like.
C) someone will follow orders based on the other person's position in the formal organizational hierarchy.
D) opportunities seem more valuable when it feels like a "once-in-a-lifetime situation."
Q4) Briefly describe the reactions to power.
Q5) Referent power is based on the personal liking an individual has for another.
A)True
B)False
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Chapter 15: Decision Making
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Sample Questions
Q1) Rules of thumb or short-cuts that individuals use to save time when making complex decisions are known as
A) biases.
B) rationales.
C) intuitions.
D) heuristics.
Q2) The managers, who had bargained and built coalitions with other managers in order to arrive at a decision on how the division would be restructured, were following which model of decision making?
A) Classical model
B) Administrative model
C) Political model
D) Garbage can model
Q3) _____ is the process of identifying issues and making choices from alternative courses of action.
A) Problem solving
B) Environmental scanning
C) Decision making
D) Strategic positioning
Q4) Differentiate between programmed and nonprogrammed decisions.
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Chapter 16: Conflict and Negotiation
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Sample Questions
Q1) Dean is dealing with an issue that must be resolved quickly or yearly goals will not be met. His team is disagreeable and uncooperative regarding the matter. Dean's appropriate response is one of A) avoidance.
B) accommodating.
C) compromising.
D) forcing.
Q2) Which of the following is a symptom of groupthink?
A) Underestimation of the group's opinion
B) Open-mindedness
C) Pressures toward uniformity
D) High interpersonal conflicts
Q3) Collaborating is an appropriate response to conflict when both parties' views are too important to abandon.
A)True
B)False
Q4) Describe affective and cognitive conflict.
Q5) How are disagreements resolved?
Q6) List the steps involved in an effective negotiation process.
Q7) Discuss negotiating in egalitarian and heirarchical cultures.
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Chapter 17: Leading Teams
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Sample Questions
Q1) Which of the following statements about teams and work groups is true?
A) All teams may not be a work group, but all work groups are necessarily teams.
B) Unlike teams, work groups are not effective at achieving a group's goals.
C) Teams are better than work groups when the task is complex and sophisticated.
D) Teams tend to have a clearer structure than work groups.
Q2) Which of the following is the best example of a geographically distributed team?
A) Jane, Jack, and Maria, team members with different cultural backgrounds, are responsible for contributing information to a project based on cultural diversity.
B) Mike, a project head, developed a team of middle managers from the marketing, finance, and production departments to work on a project together.
C) Sam, Ben, and Nick are team members working from three different locations on the same project, relying mainly on telephone calls, e-mails, and videoconferencing to interact with each other.
D) Tom, a manager in the marketing department, had Jim and Jake, project members who came from another country, reporting to him on the progress of an ongoing project.
Q3) Identify and describe the behaviors of effective team leaders.
Q4) What defines a team, and under what conditions is the use of teams appropriate?
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Chapter 18: Motivation
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Sample Questions
Q1) Which of the following is an intrinsic reward?
A) Recognition
B) Interesting task
C) Employee benefits
D) Monetary bonus
Q2) The study of the incentives and needs that motivate people to perform in a certain way are called _____ theories of motivation.
A) content
B) path-goal
C) reinforcement
D) process
Q3) Which of the following is one of the three needs of McClelland's acquired needs theory?
A) Need for motivation
B) Need for challenge
C) Need for power
D) Need for safety
Q4) Describe the features of reinforcement theory.
Q5) Discuss the process theories of motivation.
Q6) Outline the content theories of motivation.
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Chapter 19: Communication
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Sample Questions
Q1) Edward, the head of human resources, needs to remind employees of an important approaching deadline. Which of the following communication media should Edward use to convey this message?
A) Videoconferencing
B) In-person meeting
C) Recorded message
D) Electronic mail
Q2) Which of the following refers to the formal and informal connections through which individuals use their relationships with others to send and receive messages?
A) Communication channels
B) Communication systems
C) Communication networks
D) Communication media
Q3) One of the most compelling ways to build a personal connection is through storytelling.
A)True
B)False
Q4) Briefly describe communication networks.
Q5) Define persuasion. List the principles for enhancing persuasion.
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Chapter 20: Networking
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Sample Questions
Q1) Which of the following networks are considered to be the best?
A) Large closed networks with weak relationships
B) Small diverse networks with strong relationships
C) Small closed networks with strong and weak relationships
D) Large diverse networks with strong and weak relationships
Q2) According to David Krackhardt, the components of strong ties are
A) interaction, affection, and time.
B) importance, capability, and personality.
C) interest, similarity, and acceptance.
D) intimacy, attitude, and knowledge.
Q3) Weak ties are usually formed among similar individuals who are exposed to the same kinds of information.
A)True
B)False
Q4) What are networking clubs? What are their purpose and how do they differ?
Q5) Trust networks often reveal the pattern of linkages between employees who talk about work-related matters on a regular basis.
A)True
B)False
Q6) Briefly describe the strength of ties.
Page 22
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