1. An organization’s return on investment is calculated by dividing:
its profit before interest and taxes by its total interest charges.
its operating profit by sales revenue.
its current assets by its current liabilities.
its net income before taxes by its total assets.
2. Which of the following statements is true of a corporate-level strategy?
It provides the framework within which functional managers operate.
It outlines a division’s long-term goals.
It is used to identify an organization’s strengths and weaknesses.
It is the primary responsibility of top managers.
3. A low-cost strategy requires organizations to:
focus its attention on customers from a particular geographic area.
develop products that can be manufactured inexpensively compared to existing rival products.
direct its efforts to cater to a particular kind of customer.
increase the spending on research and development to differentiate its products from those of its competitors.
4. Which of the following did Frederick W. Taylor believe to be an outcome of recording the method of performing a particular task in an organization?
Workers’ informal knowledge about their tasks became irrelevant.
Tasks became complicated and time-consuming.
Job procedures became standardized and more routine.
Workers did not have to be trained for specific roles anymore.
5. The __________ of an organization is responsible for building an efficient top management team.
chief executive officer
6. Adopting a __________ involves distributing monetary resources among divisions to increase financial returns or to spread risks among different businesses.
7. Identify a true statement about an effective control system?
It provides managers with accurate information about organizational performance.
It is limited in its capacity to provide managers with information in a timely manner.
It allows managers to take only programmed decisions.
It is an informal system that helps managers make decisions.
8. Which of the following is an advantage of group decision making?
It allows managers to process more information and rectify one another’s errors.
It is easy to execute because getting two or more managers to agree on a solution is relatively simple.
It is unaffected by any kind of cognitive bias as it benefits from multiple perspectives.
It allows managers to take decisions within relatively short periods of time compared to individual decision makers.
9. _____ is a measure of how productively resources are utilized to meet a goal
10. ______ is the process by which managers establish the structure of working relationships among employees to allow them to achieve a company’s goals efficiently and effectively.
11. __________ signify what an organization and its members are trying to accomplish.
12. According to Henry Fayol, the planning process in an organization is effective when:
it produces plans that are static, thus avoiding confusion.
it allows plans to be designed and modified at all levels.
it sets disparate, specific goals for each functional level.
it proposes multiple plans to achieve an organizational goal.
13. According to Lewin’s force-field theory of change, which of the following factors results in a change in an organization?
A decrease in forces for change
A stable task environment
A decrease in resistance to change
A stable general environment
14. Which of the following is a feature of a high-performing organization?
The managers choose inappropriate goals but use resources effectively to achieve them.
The organization produces a low-quality but affordable product.
The managers choose the right goals to pursue and use resources appropriately to meet them.
The organization produces a product that customers will want to buy but will not be able to afford.
15. First-line managers in an organization are responsible for:
assessing the appropriateness of organizational goals.
ensuring the smooth functioning of all departments.
helping middle managers set organizational goals.
supervising nonmanagerial employees on a day-to-day basis.
16. Unlike leaders, managers are those who:
seek innovation rather than stability in their approach to fulfill organizational aspirations.
implement procedures and processes to ensure the smooth functioning of an organization.
encourage and motivate employees to work together to achieve a common vision.
develop relationships with employees based on trust and mutual respect.
17. Which of the following statements is true of transformational leaders?
They use reward power and coercive power to command respect from their subordinates.
They prefer to maintain the status quo in their organizations.
They engage with subordinates and motivate them to work toward organizational goals.
They hesitate to share information with their coworkers.
18. Which of the following is an advantage of implementing a functional structure in an organization?
It helps managers specialize and develop expertise in only one product area.
It allows functional managers to develop generic skills that help manage all aspects of production.
It lets organizations choose the set of products that serves the needs of regional customers.
It enables employees who perform similar kinds of jobs to observe and learn from each other.
19. A __________ specifies the national markets and industries an organization plans to compete in and why it intends to do so.
20. One way of pursuing a differentiation strategy is by:
introducing products that are replicas of a competitor’s products.
looking for new ways to reduce production costs.
offering specialized products at low-costs.
investing more on research and development.
21. A differentiation strategy is ideal for organizations that:
aim to produce new, innovative products.
want to ensure flawless coordination among multiple divisions.
intend to exercise strict control over various departments.
try to ensure flexibility in organizational culture.
22. A person’s upbringing is an important source of __________.
23. Which of the following statements is true of an evolutionary change in an organization?
It helps the organization adapt to gradual changes in the environment.
It is effected through reengineering and innovation.
It involves quickly finding new ways to be effective.
It is likely to result in a radically new structure for the organization.
24. Is the formal system of task and job reporting relationships that determines how employees utilize resources to achieve a company’s goals.
25. Which of the following models of leadership focused on identifying the characteristics of a person capable of being an effective leader?
Fiedler’s contingency model
The trait model
The behavioral model
House’s path-goal model
26. __________ is the process by which managers regulate and monitor how efficiently and effectively an organization as a whole works to achieve organizational goals.
27. Which of the following principles identified by Henri Fayol focuses on the chain of command with an organization?
Authority should be concentrated at the top of the chain of command in an organization.
A manager is not entitled to ask for his or her employees’ obedience.
An employee should receive orders from only one supervisor.
A manager should not encourage or allow his or her employees to be innovative and creative.
28. How does an increase in job specialization lead to higher organizational performance?
Workers performing specific tasks become much more skilled and produce a product faster while working in groups.
Workers join different groups and each group performs the same task at increasing costs over a period of time.
Each worker becomes responsible for all the different tasks involved in producing a product thereby increasing productivity.
Each worker specializes in a different set of tasks over a period of time.
29. A differentiation strategy can be employed by organizations to:
reduce costs in all their functions.
enhance the value consumers perceive in their products.
ensure strict control over various departments by a system of checks and balances.
achieve flexibility in organizational culture.
30. Which of the following scenarios illustrates the attraction-selection-attrition framework?
Serena wins the annual award for best employee of the year. She was selected from all likely candidates for her dedication to her work.
The management of ThinkFree Inc. requires all prospective employees to attend a basic induction program.
Miriam likes experimenting with new possibilities and taking risks. She hires like-minded people for her start-up.
All the newly hired employees of Style Prints Inc. are encouraged to participate in team outings.
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