Principles of Management Midterm
Exam
Course Introduction
Principles of Management introduces students to the fundamental concepts and practices involved in modern management. The course covers essential topics such as planning, organizing, leading, and controlling within organizations, emphasizing the roles and responsibilities of managers at different levels. Key themes include decision-making, motivation, teamwork, strategic management, and effective communication. By applying theoretical frameworks to real-world scenarios, students will develop an understanding of how managers drive organizational success and adapt to dynamic business environments.
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Business in Action 7th Edition by Courtland L. Bovee
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Chapter 1: Developing a Business Mindset
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Q1) Forces resulting from the practical application of science to a company's products and processes would best describe its social environment.
A)True
B)False
Answer: False
Q2) An HR specialist is most likely to be responsible for which of the following activities?
A) motivate and train diverse workforces
B) production engineering
C) design, implement, and maintain information systems
D) lodge the annual tax returns for the company
E) verify the financial reports of public companies
Answer: A
Q3) The service sector now dominates the U.S.economy.
A)True
B)False
Answer: True
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Chapter 2: Understanding Basic Economics
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Q1) In a regulated monopoly,________.
A) prices are set by government mandate
B) no single firm can grow large enough to influence prices across the market
C) firms that excel in one or more aspects can gain some control over pricing
D) individual firms can have considerable control over pricing
E) suppliers can charge as much as they want, at least until people stop buying
Answer: A
Q2) The economic system of the U.S.is such that individuals own and operate the majority of businesses with limited economic intervention by the government.This is characteristic of a ________ economy.
A) mixed
B) planned
C) capitalist
D) free-market
E) communist
Answer: A
Q3) Movement along the supply curve typically slopes upward.
A)True
B)False
Answer: True
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Chapter 3: The Global Marketplace
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Sample Questions
Q1) Compare and contrast a multidomestic strategy with a global strategy.
Answer: In the multidomestic strategy,a company creates highly independent operating units in each new country,giving local managers a great deal of freedom to run their operations almost as though they are independent companies.While this strategy can help a company respond more quickly and effectively to local market needs,it doesn't deliver the economy of scale advantages that other strategies can bring.In addition,the lack of centralized control can lead to situations in which local managers act in ways contrary to corporate strategy or guidelines. In the global strategy,a company embraces the notion of economic globalization by viewing the world as a single integrated market.This is essentially the opposite of the multidomestic strategy.Managerial control with the global strategy is highly centralized,with headquarters in the home country making all major decisions.
Q2) All U.S.companies are bound by the Foreign Corrupt Practices Act.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Business Ethics and Corporate Social Responsibility
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Q1) Conflicts of interest involve business decisions that might be influenced by the potential for personal gain.
A)True
B)False
Q2) A company that takes positive steps to address a particular issue,but only because it has been embarrassed into action by negative publicity,has a ________ CSR.
A) minimalist
B) defensive
C) strategic
D) proactive
E) cynical
Q3) When someone uses the justice approach as a way to resolve an ethical dilemma,he or she seeks the greatest good for the most people.
A)True
B)False
Q4) What is defensive CSR? How is it different from proactive CSR?
Q5) Compare and contrast ethical lapse and ethical dilemma?
Q6) What are cap and trade programs?
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Chapter 5: Forms of Ownership
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Q1) In the United States,a corporation is called a domestic corporation if it ________.
A) does business only in the state where it is chartered
B) files income taxes with the U.S. government
C) does business only within the United States
D) has more than 5 subsidiaries in the United States
E) has incorporated its business in any of the U.S. states
Q2) A company that is incorporated in one state (frequently the state of Delaware,where incorporation laws are more lenient)but that does business in several other states where it is registered is called a(n)________.
A) foreign corporation
B) domestic corporation
C) global corporation
D) alien corporation
E) international corporation
Q3) You work for a European company that is planning to launch business in the United States.The firm is planning to incorporate the new business as a partnership with a domestic firm in the U.S.Present the arguments for changing the company's decision and incorporating the business as a corporation.
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Chapter 6: Entrepreneurship and Small Business Ownership
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Q1) At the federal level,small businesses can apply for loans backed by the ________.
A) Center for Emerging Technologies
B) U.S. Chamber of Commerce
C) Service Corps of Retired Executives
D) Venture Capitalists Association (VCA)
E) Small Business Administration
Q2) Facilities that house small businesses and provide support services during the company's early growth phases are called angel investors.
A)True
B)False
Q3) A ________ gives a franchisee the right to produce and distribute the manufacturer's products,using supplies purchased from the franchisor.
A) product franchise
B) business-format franchise
C) manufacturing franchise
D) licensed franchise
E) utilitarian franchise
Q4) What is a business plan? How is it different from an executive summary?
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Chapter 7: Management Roles, Functions, and Skills
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Q1) A top executive reads summaries of vital performance variables in the organization using the executive dashboard.The executive is performing the ________ role in this case.
A) interpersonal
B) instructional
C) directional
D) decisional
E) informational
Q2) Conceptual skills refer to the ability and knowledge to perform the mechanics of a particular job.
A)True
B)False
Q3) ________ is the most important and pervasive interpersonal skill that managers use.
A) Communication
B) Evaluation
C) Analytic ability
D) Negotiation skill
E) Technical skill
Q4) Briefly explain the four basic categories of management skills.
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Chapter 8: Organization and Teamwork
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Q1) According to Bruce Tuckman's model,in the ________ stage,conflicts are resolved,and team harmony develops.
A) forming
B) storming
C) norming
D) performing
E) adjourning
Q2) Conflict is a destructive force in an organization and should be avoided at all costs.
A)True
B)False
Q3) Define span of management.How does the span of management in flat organizations differ from that in tall organizations.
Q4) Define the five major types of organization structure.
Q5) When a manager has many employees reporting directly to her,she has a narrow span of control.
A)True
B)False
Q6) Identify and define the stages of team development according to Bruce Tuckman.
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Chapter 9: Production Systems
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Q1) ________ refers to the arrangement of production work centers and other elements needed to process goods and services.
A) Supply chain
B) Facility layout
C) Capacity plan
D) Critical path
E) Production forecast
Q2) Customer involvement tends to be more for goods than services.
A)True
B)False
Q3) Value webs are multidimensional networks of suppliers and outsourcing partners.
A)True
B)False
Q4) Which of the following is a major difference between a line view and a circular view?
A) Multiple activities are considered in a series view, unlike a circular view.
B) A line view has multiple activities, unlike a circular view.
C) A circular view includes feedback, unlike a line view.
D) A circular view shows multiple activities, unlike a line view.
E) Multiple activities are considered in a circular view, unlike a serial view.
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Chapter 10: Employee Motivation
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Q1) ________ theory suggests that managers can motivate employees by shaping their actions through behavior modification.
A) Expectancy
B) Two-factor
C) Equity
D) Reinforcement
E) Maslow's
Q2) Discuss McClelland's three-needs theory.How does the three-needs theory differ from other classical theories?
Q3) Compare and contrast the three critical psychological states described in the job characteristics model.
Q4) Compare and contrast Theory X with Theory Y.
Q5) At the top of Maslow's hierarchy is self-actualization need.
A)True
B)False
Q6) Theory X-oriented managers believe that most employees are motivated by intrinsic rewards.
A)True
B)False
Page 12
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Chapter 11: Human Resources Management
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Q1) The human resource department at Wagner Group,a financial services firm,identified a list of key executives who were critical to the functioning of the firm.The HR department then worked with these executives to identify potential middle-level managers who would go through a mentoring and leadership development program.These middle-level managers were to act as potential replacements if the firm lost any of its key executives.In this example,the Wagner Group uses which of the following strategies?
A) job specification
B) decentralization
C) 360-degree review
D) succession planning
E) vertical integration
Q2) The ________ is a metaphor for discriminatory practices that have prevented women and minorities from advancing to executive level jobs.
A) high hurtle
B) glass ceiling
C) transparent entryway
D) wall of denial
E) line of demarcation
Q3) Discuss the processes involved in training and developing employees.
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Page 13
Chapter 12: Labor Relations
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Q1) As an alternative to traditional labor unions,the ________ relies on union tactics (such as strikes and boycotts)without the legal force of unionized collective bargaining.
A) "dot.org" labor movement
B) "alt-labor" movement
C) "sans-union" movement
D) "hash-tag" labor movement
E) "progressive-labor" movement
Q2) Explain the benefits of unionization.
Q3) Craft unions offer membership to workers ________.
A) who are not directly employed
B) with a specific skill
C) of the same age
D) with the same seniority
E) with a part-time membership
Q4) Collective bargaining is a negotiation between union and management negotiators to forge the human resources policies that will apply to all employees covered by a contract.
A)True
B)False
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Chapter 13: The Art and Science of Marketing
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Q1) Grouping customers with similar characteristics,behaviors,and needs is known as ________.
A) a marketing mix
B) market development
C) social commerce
D) market segmentation
E) market penetration
Q2) Selling existing products to new markets is called ________.
A) market development
B) product development
C) market segmentation
D) market penetration
E) vertical integration
Q3) A firm's marketing mix consists of product,price,distribution,and customer communication.
A)True
B)False
Q4) Compare and contrast product development with market development.Explain using an example.
Q5) Compare and contrast consumer market with organizational market.
Page 15
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Chapter 14: Product and Pricing Strategies
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Q1) Identify a new product that you would like to launch in one of the cities in the United States.Choose a suitable pricing model for the product and design a pricing strategy.
Q2) Break-even analysis is a method of ________.
A) calculating the minimum sales needed to cover all costs
B) classifying the variable costs incurred by a firm
C) classifying the fixed costs incurred by a firm
D) balancing the costs and risks of a business
E) estimating the fixed costs required to minimize the operational costs
Q3) Dynamic pricing refers to offering temporary price reductions to stimulate sales.
A)True
B)False
Q4) Research and development is carried out usually during the ________ stage of product development.
A) maturity
B) introduction
C) growth
D) saturation
E) intensification
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Chapter 15: Distribution and Marketing Logistics
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Questions
Q1) All activities required to move products from producer to consumer comprise the logistics function.
A)True
B)False
Q2) Merchant wholesalers differ from brokers in that merchant wholesalers ________.
A) are generally paid a commission for arranging sales
B) never actually own the products they handle
C) take legal title to goods they distribute
D) sell various noncompeting products to customers in a specific region
E) offer a limited range of convenience goods, long service hours, and quick checkouts
Q3) Compare and contrast transportation through air with transportation via water.What is intermodal transportation?
Q4) Exclusive distribution differs from intensive distribution in that exclusive distribution
A) involves offering products in a limited number of outlets in each market area
B) requires wholesalers and retailers of many types
C) refer to producers who sell directly to customers
D) tries to place a product in as many outlets as possible
E) offers products in only one outlet in each market area
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Chapter 16: Customer Communication
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Q1) According to the FTC,you can support claims for your product by offering a money-back guarantee or providing letters from satisfied customers.
A)True
B)False
Q2) Immediately after a news report about people getting sick from eating at Waikiki Delights,a delicatessen store,the President of Waikiki Delights appeared on a number of TV shows to describe their stringent supply chain management and health regulations.This communication can be best classified as ________.
A) sales promotion
B) conversation advertising
C) social media
D) public relations
E) personal selling
Q3) The measurability of direct marketing is one of its greatest appeals.
A)True
B)False
Q4) What are the seven general steps in personal selling?
Q5) Discuss the three trends that are likely to shape advertising media in the coming years.
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Chapter 17: Financial Information and Accounting Concepts
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Q1) Bookkeeping is the clerical function of recording the economic activities of a business.
A)True
B)False
Q2) A firm has $30,000 cash and other current assets amount to $55,000.Total amount of current liabilities add up to $50,000.Calculate the total working capital of this firm.
A) $20,000
B) $5,000
C) $30,000
D) $85,000
E) $35,000
Q3) A fiscal year is a 12-month accounting period that begins on January 1 and ends on December 31.
A)True
B)False
Q4) Describe the major provisions of the Sarbanes-Oxley Act.
Q5) Briefly explain trend analysis.
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Q6) Compare and contrast quick ratio and current ratio.Which one do you think is more accurate?
Chapter 18: Financial Management
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Q1) Compare and contrast secured loans and unsecured loans.
Q2) The ________ outlines expenditures for real estate,new facilities,major equipment,and other such investments.
A) operating budget
B) project budget
C) master budget
D) capital budget
E) start-up budget
Q3) ________ accounts represent a firm's cash on hand as well as economic value that can be converted to cash or is expected from customers,minus what it is scheduled to pay out.
A) Capital budget
B) Trade credit
C) Project budget
D) Working capital
E) Operating budget
Q4) Highly leveraged companies will have adequate funds to spend on advertising,staffing,and product development.
A)True
B)False
Page 20
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Chapter 19: Financial Markets and Investment Strategies
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Q1) The amount of money or principle that the purchaser of a bond lends to the bond issuer is known as its coupon.
A)True
B)False
Q2) Funds that invest in foreign and U.S.securities are called international funds.
A)True
B)False
Q3) A(n)________ is the purchased right,but not the obligation,to buy or sell a specified number of shares of a stock or other security at a predetermined price during a specified period.
A) credit derivative
B) secured bond
C) option
D) financial future
E) commodity future
Q4) A stock exchange is an organization that buys and sells securities on behalf of individual and institutional investors.
A)True
B)False
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Chapter 20: The Money Supply and Banking Systems
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Q1) A borrower is foreclosing when he stops making payments on his mortgage.
A)True
B)False
Q2) Which of the following federal actions is aimed at increasing the money supply in markets?
A) The Fed imposes more selective credit controls on loans.
B) The Fed buys Treasury bonds from the market.
C) The Federal Reserve raises the discount rate.
D) The Federal Reserve controls the issue of new loans.
E) The Federal Reserve increases the reserve requirement.
Q3) ________ helped fuel the housing bubble by expanding the secondary market for subprime loans.
A) Collateralization
B) Privatization
C) Securitization
D) Mortgaging
E) Amortization
Q4) What is the Dodd-Frank Act and why was it passed? What major points does Dodd-Frank emphasize?
Q5) What are foreclosures? When do such situations occur?
Page 22
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