BUS 110 Exams Review All Correct Answers

BUS 110 Exam Review After 8 years of working for a company that installed underground sprinkling systems for golf courses, Jake was ready to venture into his own business. As he prepared his SWOT analysis, he evaluated where he stood at this time. He was fortunate to have $100,000 financing to get the business under way. He knew of three skilled installers who were willing and interested to work for him, and he was aware that new construction was at an all-time low, with several residential properties being foreclosed. In reviewing his list, you would categorize these events as __________ two strengths and one threat Technical skills that apply to the business at hand are most often necessary at __________ lower levels of management Most businesses follow a logical process when performing the planning function. It is important to understand ______________________, before embarking upon creating future long-term goals, objectives, and strategies the current situation The controlling function closes the loop for managers. It answers the question: "Did we succeed in doing what we set out to do?" Which of the following business departments has a very important role in the controlling function? Accounting department Contemporary managers ___________ emphasize teamwork and cooperation, and act as coaches, rather than "bosses" Ben oversaw the work of six pharmaceutical sales managers in the southeast region of the U.S. Each sales manager managed a team of 8-10 pharmaceutical sales representatives that developed relationships with doctors, clinics, hospital pharmacies, and local drug stores. Ben met regularly with four others in his company whose jobs were similar to his position. How would you describe the level of management Ben has achieved? Middle managementAs managers perform all functions, we recognize that ______________ is required. For example, when making plans, the manager must typically choose between two or three alternatives, sometimes equally good ideas or sometimes ideas that each has its pros and cons. decision making A mobile veterinary business, Preferred Pet Care, Inc., created a mission statement long before it opened its doors for business. The mission statement referred to the unique characteristics of the business: a traveling pet unit whose veterinarians went to the home of the pet owner, rather than the pet owner bringing the pet to the clinic. What other criteria should be considered for the mission statement? A description of the customers it serves and a statement about its social responsibility to the area where it operates. A traditional tool that serves as a way or organizing the company's current situation is called the SWOT Analysis. This is an acronym for ___________ Strengths, Weaknesses, Opportunities, Threats Jenna started a small business a little less than 10 years ago. The business employed several social workers and nurses that visited and cared for persons who had left hospital care, but were not quite ready to be on their own at home. As the CEO of the firm, Jenna decided it was time to hire a business operations manager and a marketing manager to handle the details of the business. Which of the following functions of management was Jenna performing? Organizing Dave facilitated a hiring committee for his advertising company. Six employees (including two managers) met together to discuss applicants and select the finalists for a creative writer position in the public relations department. Although the head of public relations would have the final nod on the candidate that would ultimately be hired, the evaluative work of the committee was very important because this group would send forward those persons they believed would be good work colleagues. In setting up this type of hiring process, the head of public relations was utilizing a(n) __________ style of leadership. democraticSergey Brin and Larry Page were the founders of Google™. Most would agree that they had a superb product, but in order to grow, the company needed more structure. Together, they agreed to hire Eric Schmidt to join the executive team as the executive chairman. Schmidt quickly began performing the __________ function, where he created well-structured departments and hired skilled people to perform the various functions of the business. organizing Which of the following leadership styles focuses on making decisions without consulting others? Autocratic Select the statement that best substantiates why we say, "The role of management is changing." Contemporary managers will focus on global issues and green issues, and continue to emphasize the team approach to work. All managers do planning. Allison is a general manager for a large toy store. Each day she plans the number of employees she will have in each department, including the number of cashiers. She plans the break schedules and the freight delivery schedules. In the business world, we refer to this type of planning as ___________. operational planning ____________ is concerned with finding the right information and making that information accessible and understood by everyone in an organization. Knowledge management __________ planning determines the major goals of an organization and lays the foundation for obtaining and using resources to achieve those goals. Strategic Supervisory managers spend most of their time on: technical and human relations skills As a manager, two of Sylvia's strengths are her ability to communicate goals clearly, and her ability to guide, coach, and motivate workers. Based on these strengths, __________ is a management function that Sylvia is likely to be good at performing.Leading A benefit of CAD (computer aided design) and CAM (computer assisted manufacturing) is It permits customization without a significant increase in price One strategy U.S. manufacturers have meployed in order to ecome more competitive is relying on advanced technology and the internet to unite companies Production management is the traditional term used to describe all the activities managers do to help their firms create goods MRP is the acronym for Materials requirement planning Transformation, INC. Builds machinery and robots that can assembl a variety of autos and trucks - including light pick-up trucks, two-seater sports cars, luxury sedans, full size vans and SUVs. Transformation sells products to companies that require Flexible manufacturing Firms that have a goal of_____ tend to locate tehir facilities near major highways, ports, rail lines and airports Reducing time to market Megatronics, inc. obtains computer components from a variety of suppliers and puts them together according to customer specifications to creat custom-made computers. This process is an example of An assembly process In recent years, the service sector of the U.S. economy has grown much more rapidly than the manufacturing sector At stevens manufacturing workers are organized in teams that ocmbine their efforts to produce complex unites of a final product. Stevens is using a facility layout known as a modular layout _____is the creation of goods and services using land, labor, capital, entrepreneurship, and knowledge Productionoperations management is the____phase of management implementation In a PERT network, the sequence of tasks that takes the longest to complete is called the critical path A firm that is certified as meeting both ISO 9000 and ISO 14000 standards has demonstrated world-class management of both quality and environmental standards The basic reason the term production management has been replaced by the term operations management is that the united states is now a service economy Contemporary operations management planning is an interfirm process. This means It is a process where several firms work closesly together to produce goods and servgices, and anticipate a changing environment Today manufacturers are relying more heavily on One or two suppliers because firms share so much information The operations planning practice of inputting sales forecasts into computer software that accurately predicts the amount and timing of materials needed to complete products and projects is______ Materials Requirement Planning Most new manufacturing facilities use Intermittent processes Both PERT diagrams and Gantt charts are useful to managers concerned with making sure that projects are completed on time Which of the following statements best reflects the approach state and governments take to influence the location decisions of businesses? State and local governments:Often engage in fierce competition to attract businesses, including the offer of tax breaks, zoning changes, and financial aid operations management is a specialized area in management that converts resources into both goods and services modular facilities layouts consist of teams of workers who work together on a complex assembly Most new manufactruing facilities use Intermittent processes Which of the following statemetns best describes the distinction between production management and operations management? Production management involves Activities managers perform to help create goods while operations management is a broader term that involves the activities involved in producing services as well as goods. Which of the following statements is most accurate Facility layout is important for manufacturing plants because facilities layout decisions can have a huge impact on the firm's costs Alex is a production manager who believes his firm uses more of all types of resources that is necessary to produce its products. He would like to find a way to cut back on labor, and reduce the firm's investment in tools and space as well. It seems that edwin would like to adopt Lean manufacturing The goal of lean manufacturing is to produce goods and services with less of everything that goes into the process The resurgence of U.S. manufacturing firms in recent years can be credited to a number of significant changes in both the production techniques and management styles used by U.S. firms. One of sparky's goals is to expand globally. He is most interested in doing business with the nations of the EuropeanUnion. In order to do business with the European union, sparky's company should gain ISO 9000 certification The arrangements minimotors has worked out with its suppliers to reduce the amount of inventry the company holds at any one time shows that it is commited to a(n) Just-in-time inventory control system The equipment and software sparky wants to acquire will allow the computers used to design motors to be linked directly to the computer-aided equipment on the factory floor. Sparky is proposing to set up a(n) computer-integrated manufacturing system In order to schedule deliveries, minimotors's suppliers need detailed information about when parts are needed. Minimotors will purchase a sophisticated computer application that will link its operation to sales forcasts to maker sure needed parts and supplies are available at the right time to meet customer demands. This planning system is known as Materials requirement planning (MRP) Sparky sees quality control in terms of detecting potential problems to prevent their occurrence and thus saves minimotors mone. The quality controll process that is most closely linked to Sparky's goal is known as Six Sixma Sparky knows that installing the new equipment and training workers to use it efficiently will be a long and complex process consisting of many different tasks. which of the following methods would help him determine how long this project is likely to take PERT (program evaulation and review technique) While minimotors has focused on improving porduction efficiencies, global customers are inquiring about its environment policies. In light of its strategy to serve European customers, sprky has requested two of its lead engineers to investigate what it would take to meet the environmental standards of its socially responsible customers. The engineers should investigate______as best practices for managing a firm's impact on its environment. ISO 14000As businesses strive for market expansion, companies add to their sales force, but opt to eliminate sales offices across the nation and internationally. How are these firms able to remotely operate a sales force that contributes toward increasing the bottom line? the operation is managed with teleconferencing information technology, and telecommuting The national bicycle company of japan makes 18 byicycle models in more than 2 million cobinations, with each combination designed to fit the needs of a specific customer. The customer chooses the model, size, color, and design mass customization The purpose of determining the critical path on a pert network is to identify the sequence of tasks that takes the longest to complete which of the following statements about the impact of CAD/CAM on manufacturing is most accurate? CAD/CAM Has made it possible to produce custom-designed products with little increase in costs. A company becomes lean by____its capacity to produce highquality goods, while_____its need for resources increasing; decreasing Organizing a buisness beings with: Determining the work to be done Dividing tasks into smaller jobs: Job Specialization Job Specialization often enables employees to: Imporve thier job performance The term mass production refers to: efficiently producing large quantities of goods Henri Fayol and Max Weber are best know for their contributions to Organized theoryMax Weber used the term ________ to describe middle managers whose job was to implement the orders of top management: Bureaucrats The line of authority that moves from the top of a hierarchy to the lowest level is called the: Chain of command In a bureaucratic organization: employees follow strict rules and regulations The management at Patriot Mills works hard to ensure that no one in its organization has more than one boss and all workers are treated with fairness and respect. Additionally, the firm divides the work inot areas of specialization so that everyone knows to whom they should report. The management o Patriot Mills reflects the ideas and principles of: Henri Fayol Which of the following correctly identifies the rationale behind the unity of command principle of management? Workers can become frustrated and confused if they have more than one boss Which of the following determines the degree of decentralization a firm might use? The degree to which lower level management is empowered to make decisions. Compared to the centralized management structure, which of the following is a disadvantage of the decentralized management structure. Weakened corporate image The optimum number of subordinates a manager can supervise is refferred to as the: Span of control _________ refers to the process of dividing organizational functions into seperate units DepartmentalizationA __________ organization is characterized by direct twoway lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor. Line Employees with the formal authority to issue orders, make policy decisions and enforce discipline are classified as: Line Managers Matrix organizational structures were first developed in: The aerospace industry All of the following are advantages of a matrix organization structure EXECPT: The project teams are temporary Which of the following describes a group of employees from different departments working together on a semi-permanent basis? Cross-functional teams Which of the following positions would be classified as a staff position? A lawyer employed in the legal department of a manufacturing position Today U.S. companies in the manufacturing sector: have altered their production and managerial styles in order to regain thier competitive edge in many industries Production maagement has been the traditional term used to refer to the activities managers perform to help their firms created: Goods In recent years, the service sector of the U.S. economy has: grown much more rapidly than the manufacturing sector The U.S. economy is now dominated by the: service sector The basic reason the term production management has been replaced by the term operations management is that:the United States now is a service economy The resurgence of U.S. mnufacturing firms in recent years can be credited to: a number of significant changes in both the production techniques and management styles used by U.S. firms _________ is the process of selecting a geographic location for a company's operations: Facility location Firms that have a goal of __________ tend to locate facilities near major highways, ports, rail lines and airports. reducing time to market ________ is the arrangement of resources to produce goods and services effectively and efficiently. Facility layout For services, the facility layout is usually desinged to: help customers find and buy things Unlike an assembly line where workers perform only a few tasks, in a _________ layout teams of workers combine to perform a variety of tasks needed to produce more complex units of a final product. Modular In today's quality control programs, emphasis is placed on: achieving customer satisfaction The idea behind the Deming Cycle is to: find potential errors before they occur The ___________ National Quality Award is given to firms that achieve an outstanding level of overall quality based on performance in seven key areas. Malcom Baldrige ___________ standards are concerned with the best practices for managing an organization's environmental impacts. ISO 14000Which of the following statements best describes the impact of recent advances in information technology on business location decisions? Advances in information technology will give firms more flexibility in their location decisions by reducting the need to locate close to sources of labor Which of the following statements about facility location is most accurate? Manufactures often seek to reduce time-to-market by locating facilities in areas which access to key modes of transportation Which of the following statements about facility layout is most accurate? Facility layout is imporant for manufacturing plants because facilities layout decisions can have a huge impact on the firm's costs. Which of the following statments would best describe the quality standard for most service businesses? Our customers are our best guides as to what our quality standards should be. For most service businesses the quality standard has become: delighting customers by anticipating their needs The good feeling people get when they have done a job well is a(n): intrinsic ___________ was the father of scientific management. Frederick Taylor Frank and Lillian Gilbreth developed the principle of _____________, which said that every job could be broken down into a series of elementary motions. motion economy A basic idea of __________ was to conduct time-motion studies to find the best way to perform each task, then teach people to use these methods. scientific managementFrank and Lillian Gilbreth thought that every job could be broken down into a series of elementary motions that they called: therbligs According to the principles of scientific management, the best way to improve productivity is to: Use time-motion studies to find the best method of doing each job, then teach those methods to workers. The Hawthorne studies were conducted by _________ and his colleagues from Harvard University Elton Mayo The original goal of the Hawthorne studies was to determine: the level of illumination that was associated with optimum productivity The findings of the Hawthorne studies led researchers to look more closely at how ___________ could lead to better productivity the human side of motivation Which of the following statements would Elton Mayo be most likely to make soon after concluding his Hawthorne studies? Employees who enjoy their work environment and believe they are respected are likely to be more productive workers. Which of the following statements about worker motivation is most conssistent with the findings of the Hawthorne studies? Workers are more motivated if they feelk they are part of a special group or project Maslow was mainly concerned with explaining how: human motivation was related to a hierarchy of needs Maslow called the needs people have for security at work and home: safety needs Maslow placed__________needs at the highest level of his hierarchy. self-actualizationAbraham Maslow thought that once needs at one level of his hierarchy were met: another, higher order need would emerge to motivate that person. Herzberg found that the factors that provided the highest level of motivation were mostly associated with: job content Herzberg's research found that the factor that ranked highest as a motivator was: a sense of achievement Herzberg's research found that safe working conditions and good pay: helped maintain worker satisfaction, but did little to increase motivation The practice of moving workers from one job to anoher to make work more interesting is known as: job rotation Douglas McGregor described two very different sets of managerial attitudes about workers, which he called: Theory X and Theory Y ________________ is the process of evaluating human resource needs, finding the people to fill those needs, and getting the best work out of each employee by providing the best incentives and job environment, all with the goal of meeting the organization's objectives. Human resource management The ultimate resource of a firm is its: employees Today, human resource management has become so important that in many firms it has become: a function of managers in all areas of an organization __________ workers have a higher skill level than thier current job requires UnderemployedWhich of the following statements best describes the current view of the role of human resource management within a firm? Huaman resource management functions have become so important that in many firms all managers now perform them The first step in the huamn resources planning process is to: prepare a human resource inventory A(n)_____________is prepared as a part of the huamn resource planning process, and indicates the characteristics and qualifications of the organization's labor force, thus helping the firm determine whether its employees are technically up-to-date and adequately trained. human resource inventory A __________ is a study of what is done by employees who fill various job titles: job analysis A________is a statement that identifies the minimum qualifications required of a worker in order to perform a specific job. Job specification A job________is a statement that identifies the objectives of a job, the type of work to be done, the responsibilities nd duties that are associated with the job, the working conditions, and the relationship of the job to other functions. description The_________, which is developed from the previous four steps of the human resource planning process, addresses how the firm will accomplish a wide array of human resource functions such as recruiting, training, compensating, scheduling, and compensating its employees. strategic plan All of the following are essential elements of a job description EXCEPT: the minimum qualifications workers must have to fill the position. Which of the following statements identifies a key difference between a job description and a job specification?A job description is a statement about the job, which a job specificatin is a statement about the person who does the job _______ is the set of activities used to legally obtain a sufficient number of the right people at the right time and to select those who best meet the needs of the organization. Recruitmet Help wanted ads, public and private employment agencies, and college placement bureaus are all _____sources that human resource managers can use in the recruiting efforts. external Which of the following would be used by a manager who wanted to fill a position using an internal source? promotion of a current employee Which of the following statements about recruiting is most accurate? It is important for a firm to recruit nd hire peope who are not only skilled but who also fit in with the firm's culture and leadership style The first step in the selection process is usually: obtaining complete application forms One of the main complaints made by critics of employment tests in that these tests: Have been used to discriminate against certain groups ________introduces new employees to the organization, their fellow workers, their supervisors, and to the policies, and objectives of the firm. Employee orientation A(n)________is an employee organization that represents workers in employee-management bargaining over job-related issues. labor union The union movement in the United States was an outgrowth of the economic transition caused by the: Industrial RevolutionThe first national labor organization in the United States was the: Knights of Labor In a(n)________, all of the members are skilled specialists in a particular trade. Craft Union Critics of labor unions argue that unions are no longer needed to protect workers from abusive and unfair treatment because: laws and modern management attitudes minimize the possibility of unsafe working conditions and unfair treatment of workers found in earlier eras. The______Act established the National Labor Relations Board. Wagner ___________is the process by which representatives of a union meet with representatives of management to negotiate a labor contract for workers. Collective bargaining The_________was established by the Wagner Act to oversee labor-management relations. National Labor Relations Board The first federal minimum wage was established by the: Fair Labor Sandards Act The __________outlawed the use of yellow-dog contracts and prohibited courts from issuing injunctions agains nonviolent union activists. Norris-LaGuardia Act The_______guranteed the rights of individual union members when dealing with their union. Landrum-Griffin Act The Taft-Hartley Act: allowed individual states to pass right-to-work laws prohibiting compulsory union membership One goal of the Landrum-Griffin Act was to:clean up the corrupt practices of unions The Wagner Act is best described as a(n): pro-union law The Labor-management Relations Act ( or Taft-Hartley Act) can be best described as a law which: placed limitations on union activities and gave more power to management in dealing with unions The primary purpose of collective bargaining is to: negotiate a labor-management agreement that both the union and management are willing to accept. Over the past several decades unions have: frequently changed objectives as the result of shifts in social and economic conditions Under__________workers are not required to join the union, but those who do not join still must pay a fee or regular dues to the union. agency shop agreements Under a(n)___________shop agreement, workers must belong to the union before they are hired closed If a union is present in a firm that has a(n)________shop arrangement, workers may join the union if they wish, but they are not required to join or pay a union fee in order to keep their jobs. Open __________ is the study of how a society employs its limited resources to produce goods and services and how it distributes them among competing groups and individuals. Definition Economics Term ___________ studies the operation of a nation's economy as a whole. Definition Macroeconomics Term Definition____________ looks at the behavior of individual people and organizations in specific markets. Microeconomics Term The study of how to increase the amount of available resources and create conditions that will make better use of these resources. Definition Resource development Term Economist Thomas Malthus believed that ______________ would limit economic progress. Definition overpopulation Term Neo-Malthusians (followers of Thomas Malthus) believe that the solution to poverty is: Definition Birth control Term A key to economic growth and development is to: Definition Provide people with better education Term _________ is considered by some to be the father of modern economics. Definition Adam Smith Term Which of the following is an important premise of Smith's conclusions about economic prosperity? A. Individual freedom is necessary if a society is to prosper. B. Understanding the concept of survival of the fittest will lead to prosperity. C. Determining what motivates people will lead to prosperity. Definition AD. Command economies and structured markets must be in place before we can work toward prosperity. Term A(n) _____________ curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period. Definition supply Term Which of the following would be a topic emphasized in a microeconomics class? Definition How market conditions determine the price of a specific product. Term Economics was known as the "Dismal Science" because Definition Too many people would result in food shortages and shortages of other resources Term How is it that people working in their own self-interest produce goods, services, and wealth for others? Definition In order to earn money and produce goods that improve lives, self-directed gain would provide jobs, and subsequently wages for others. Term Adam Smith believed that countries would prosper if businesspeople were free to start and run their own businesses. Businesspeople would make a profit by providing the goods, services and ideas that others in the economy wanted, and they would hire others to help increase those profits, leading to social and economics benefits for many. This idea was called the __________. Definition invisible hand. Term Sue is a gifted cook. She plans to open a Definitionrestaurant in which she will be the head chef. Sue is willing to work long hours because she believes that her culinary talents and hard work will allow her business to succeed and earn her sizeable profits. Sue's efforts are most consistent with the economic theory developed by: Adam Smith. Term Jake considers himself to be a follower of Thomas Malthus. Which of the following statements would Jake be most likely to make? A. The key to economic growth is to keep taxes and government regulations to a minimum. B. Command economies are more likely to encourage economic growth than free market economies. C. Allowing people to follow their selfinterest is the best way to generate economic growth and prosperity. D. A society will not experience sustainable economic progress unless it accepts the need to limit population growth. Definition D Term Which of the following statements would a follower of Adam Smith be most likely to make? A. The federal government should use its ability to spend and tax to guide the decisions of businesses and consumers. B. Market economies are flawed because they put too much emphasis on economic growth and not enough on environmental problems. C. Overpopulation is the main danger confronting modern economies. D. If people are given the freedom to follow their own interests, theoretically their efforts will lead to economic Definition Dgrowth that benefits society as a whole. Term Fourteen years ago, Sergio noticed that a lot of people who bought personal computers did not know much about how to use them and frequently suffered system crashes and other aggravations. He decided he could earn a nice profit by starting a consulting business to help other people overcome their computer woes. Although the business struggled at first, it has experienced a good deal of success for the past five years. Sergio has many satisfied customers, and the business has grown to the point where he now employs several workers. Sergio's experience is an example of: Definition The invisible hand. Term For many years, Congressman Ricardo Perez has called for more government regulation of business. "After all," the Congressman said recently, "businesspeople are out to make a profit, not to create jobs or serve their customers. The government must pass more laws to require businesses to take the interests of consumers and workers into account." From these comments, it is clear that Congressman Perez: Definition Does not accept the "invisible hand" idea brought forth by Adam Smith. Term In the boxed material "Making Ethical Decisions," the textbook describes corruption practices in nations such as Mexico and theUnited States. These practices include payoffs to government officials in order to get an edge on competing better in one's industry. Which of the following statements best Definition Ethics plays an important role in a capitalistic system and the freedom to compete.describes the ethical message of this boxed material? Term According to the invisible hand concept, the best way for a society to encourage the creation of jobs and the production of the products most wanted by consumers would be to: Definition Allow entrepreneurs personal freedom to follow their own self-interest. Term _________ is the name of a free-market economic system in which most of the factors of production and distribution - such as land, factories, railroads, and stores - are owned by individuals. Definition Capitalism Term Under capitalism: A. Most of the means of production and distribution are privately owned and operated for profit. B. The primary function of the government is to distribute wealth more evenly. C. Utilities, health care, education, and other important services are operated by the government. D. Markets operate to carry out the decisions made by central planners. Definition A Term The foundation of the U.S. economic system is based on: Definition Capitalism. Term Under a capitalistic system, decisions such as what goods and services to produce, what to charge, and how Definition Individuals.much to import or export are made by: Term Which of the following is a basic right under capitalism? Definition The right to compete. Term The freedom of people to decide where they want to work and live, and what they want to buy or sell are basic capitalist rights under: Definition Freedom of choice Term The freedom of people to buy, sell, and use land, buildings, machinery, and inventions are basic capitalist rights under: Definition The right to own private property. Term A free market is one in which decisions about what to produce and in what quantities are made by: Definition the market Term In a free market economic system, the mechanism of __________ is the key determinant used to signal to producers what to produce and how much to produce. Definition price Term The quantity of a good or service that producers are willing to sell at different prices during a specific time period is known as the: Definition supply for that product or service. Term A simple supply curve shows that an increase in the price of a good will Definition Increase.cause the quantity supplied to: Term A simple supply curve shows a relationship between the: Definition Price of a good and the quantity of that good sellers are willing to offer for sale at a specific point in time. Term A typical demand curve shows that: Definition People tend to buy more of a good when its price decreases Term When the supply curve and demand curve for a particular good are shown together on a single graph, the point at which the two curves intersect identifies the Definition Equilibrium price of the good. Term When prices are free to adjust over time, in the long run, the market price of a good tends to: Definition Equal the equilibrium price Term If a shortage exists for a good in a freemarket economy, the: Definition Price of the good will rise. Term __________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product. Definition Perfect competition Term ___________ exists when a large number of firms produce goods that are similar but are perceived by buyers as being different. Definition Monopolistic competitionTerm __________ exists when the entire supply of a good is controlled by a single seller. Definition A monopoly Term An oligopoly is a market that is characterized by: Definition A few large sellers who dominate the market. Term Which of the following statements about capitalism is the most accurate? A. In capitalist economies, most resources are owned by the government. B. A strength of capitalism is its ability to deal with environmental problems. C. Capitalism is characterized by unequal distribution of wealth and income. D. A drawback of capitalism is that people have little freedom to pursue their own goals. Definition C Term Due to the rights and freedoms afforded under capitalism: A. people feel safe and don't feel the need to take added risks by starting businesses. B. people are motivated to take calculated risks. C. people don't have to choose where they will work. D. the prices of necessities are always very low. Definition B Term When the market price of a good is below the equilibrium price, and all Definition the quantity demanded will exceed the quantity supplied.other determinants are unchanged: Term When the market price of a good is below the equilibrium price, and all other determinants are unchanged: A. the quantity demanded will exceed the quantity supplied. B. the supply curve will be to the right of the demand curve. C. a surplus will exist in the market. D. the government will regulate the price of the good to ensure equilibrium is attained. Definition A Term The markets for laundry detergents, soft drinks, and automobiles are dominated by just a few sellers. Economists would classify these markets as examples of: Definition Oligopolies. Term In most large cities there are a large number of bakeries. These bakeries produce similar, but not identical, products. Some bakeries claim to have the best cheesecakes in town, while others brag about their cookies or specialty breads. The bakery market in a large city is an example of: Definition . Monopolistic competition. Term The presence of competition in free markets: A. Is undesirable because it results in unnecessary duplication of efforts. B. Usually results in better quality and lower prices. C. Is rare, since most markets eventually evolve into monopolies. Definition BD. Is undesirable, because one big firm can usually produce goods more efficiently than a large number of small firms. Term One of the benefits of a free market is that: A. Businesses provide customers with quality products at fair prices. B. Businesses all make the same amount of profit. C. Businesses do better with more government regulation. D. The government dictates the number of competitors there are in each industry. Definition A Term One of the greatest concerns associated with capitalism is that: A. It is not very successful at creating wealth. B. Some businesspeople may let greed guide their behavior. C. The amount of economic freedom enjoyed by consumers is very limited. D. Producers are unlikely to supply the goods and services that consumers value the most. Definition B Term Patrick lives in a nation whose government embraces capitalism. He owns his own home and car, as well as his own business and building. Patrick maintains ownership due to: Definition The right to own private property. Term The "Spotlight on Small Business" box in Chapter 2 is titled, "The Key to Definition DCapitalism is Capital." Which of the following statements best describes the message of this story? A. This box explains that the only important factor of production for most businesses is capital. B. This story explains that loans for large capital investments come with sizeable interest rates, but usually produce better results. C. Corruption has prevented good will institutions from making large capital investments in developing countries. D. Micro-lending has proven to lift impoverished entrepreneurs to a better standard of living. Term The market price of apples is currently rising. In a free-market economy, the most likely explanation of this price change is that: Definition There is a shortage in the market for apples. Term The price of iPhones™ is falling. In a free-market economic system where everything else is equal, the most likely explanation is: Definition The product has competition at the equilibrium price. Term Reality Entertainment, Inc is a major producer of reality TV programming. The company faces fierce competition from three other major producers of similar shows. Together, Reality Entertainment and its three rivals control almost the entire reality TV programming. Their market environment is called: Definition An oligopoly Term DefinitionOn its website, Papa 's Pizza compares itself to the competition with the following message: "better ingredients, better pizza". The company wants to achieve: Product differentiation Term Which of the following statements most accurately identifies a limitation of the free-market economic system? Definition Free-market economies tend to result in unequal distribution of wealth. Term Going green, as described in the boxed material titled, Thinking Green, describes the green revolution. The auto industry is participating in this revolution. Farmers are participating in this revolution. By promoting the fact that they sell "green" products, or that they utilize "green" techniques to produce the products and services that they sell, firms who fall under a _______________ type market may have opportunity to differentiate themselves from the competition. Definition monopolistic competition Term A major premise of a socialist system is: Definition To reduce the inequality in the distribution of wealth. Term A major benefit of socialism is the: Definition Emphasis on social equality Term Under the __________ system there is very little incentive to work hard or to produce quality goods or services. Definition socialist Term Under the __________ system the Definitionnumber of choices in the market is directly related to government involvement in markets. communist Term There are some restrictions on freedom of assembly and freedom of speech under a ____________ system. Definition communist Term Brain drain has occurred in many socialistic nations because: Definition Tax rates on well-respected professionals such as doctors tend to be very high. Term Communism is an economic system in which: A. The government and private citizens own equal shares of the economic resources. B. Almost all of the productive resources are owned by private businesses. C. The government makes almost all of the major economic decisions. D. Individual consumers make all economic decisions. Definition C Term In recent years, countries with communist economic and political systems have: Definition Experienced severe economic depression. Term The economic and political system in which the government owns almost all the major factors of production is called: Definition Communism.Term Communist values are disappearing because: Definition Shortages abound due to the fact that the government cannot rely on good information. Term Which of the following statements provides the most accurate comparison of socialism and communism? A. Under socialism, the government owns most businesses, while under communism the church owns most businesses. B. Both socialism and communism want to achieve a more equal distribution of income and wealth, but under communism, the government takes more control over people's lives. C. Socialism strives for an equal distribution of income but communism wants income to go primarily to those who own and operate private businesses. D. Communism believes that the government should always strive to balance its budget, while socialism accepts deficit spending as the price of achieving true equality. Definition B Term Which of the following people would tend to favor a socialist economy? A. John wants to live in a country with low marginal tax rates. B. Robin wants to live in a country that encourages rapid economic growth. C. Liz wants to live in a country with limited government regulation. D. Fred prefers to live in a country that promotes social equality. Definition D Term DefinitionWhich of the following people would tend to favor a communist economy? A. John wants to live in a country with low marginal tax rates. B. Robin wants to live in a country that encourages rapid economic growth. C. Liz wants to live in a country where the government makes almost all of the economic decisions. D. Fred prefers to live in a country with limited government regulation. C Term One of the most significant problems faced by communist nations is: Definition Persistent shortages of basic goods such as food and clothing. Term Abby left her native land in Eastern Europe to become a nanny for a family in a western suburb of Chicago, Illinois. One of the benefits of her arrangement was that she could attend the community college near her family's residence. When she arrived at her new job, she experienced some immediate differences. Abby noted that public transportation in northern Illinois was limited and expensive, making it difficult to get to school. For a negligible fee, the government in her native country provided public transportation to everyone. The economic system in Abby's native country was more characteristic of ___________. Definition socialism Term Jorge Martinez is a well-educated entrepreneur who operated a small business in his home country of Florentina. At the encouragement of his American relatives, Jorge recently Definition Brain drainimmigrated to the United States and applied forU.S. citizenship. "In Florentina, tax rates were very high," Jorge complained. "The government used the taxes I paid to finance all sorts of social programs to help the less fortunate. While this is a noble goal, it has really undermined the profit incentive of individuals such as me. I really feel that these high taxes have stifled economic growth." Jorge's comments illustrate the reason many socialist countries are experiencing a(n): Term Recently, Hugo Chavez, the Prime Minister of Venezuela, announced that he is standing behind the concept of state owned utilities, public schools, and the communications industry of his nation. Although not all industry is owned and managed by the government, his ideas would lead one to believe that he has a preference for: Definition A communistic state Term Mike spends a lot of time blogging. Yesterday, he left the following comment on a site where participants were discussing the pros and cons of healthcare: "If you think healthcare is expensive now, wait until it is free. The problem with free rides is, eventually everyone piles on the bus and no one is left to push it. Then the system collapses." He was responded to by Martha, who added,"Universal healthcare is not a dirty word. It's the salvation for many people. If I have to pay a little more in taxes and know that my neighbor's kids have good pre-school and can see the doctor when needed, it's worth it to me." Mike and Martha are Definition Healthcare under socialismdiscussing the benefits and drawbacks of: Term Today, the economic systems of most nations could most accurately be classified as: Definition Mixed economies Term Both socialism and communism are variations of: Definition Command economies Term A major trend in the world today is that: A. Free-market economies are moving more toward socialism and socialist economies are moving more toward capitalism. B. Productivity in the service sector is increasing much more rapidly than productivity in agriculture and manufacturing. C. Governments in socialist economies are increasing their use of social programs and relying on higher tax rates to finance these programs. D. Governments in countries with capitalist economies are paying less attention to environmental concerns and issues involving social equality. Definition A Term A command economic system is characterized by: A. Reliance on the forces of supply and demand to determine what is produced. B. Reliance on the government to determine what is produced and who gets the output. C. An extremely rapid rate of economic Definition Bgrowth. D. Freedom of choice and freedom of competition. Term The social and economic goals of __________ include private ownership of land and business. Definition capitalism Term The "Reaching Beyond Our Borders" box in Chapter 2, explains the changing business climate in other nations. What kinds of experiences areU.S. based companies facing abroad? A. Companies are only benefitting when they set-up business in a nation with a similar economic and/or political system as the home-based business. B. Companies such as U.S. based General Motors is competing well in Japan, but having a difficult time in Mexico. C. For some food franchisors such as Yum Brands, the economic and political systems are not preventing them from growing the business abroad. D. Differentiating oneself abroad is detrimental because socialist nations seek equality, even in food products and advertising. Definition C Term During the recession of 2008-2009, the administrations of Presidents George W. Bush and Barack Obama flooded several banking, financial services, and insurance firms with government funds in exchange (at least temporarily) for government ownership rights. The unprecedented move signaled the Definition Cgovernment's concern that the global banking system might collapse if these firms ended up in bankruptcy. The decision for active government involvement in the operations of these firms demonstrates: A. The unforgiving nature of capitalism. B. The desire for more individuals in the U.S. to live under a socialist system. C. The trend toward mostly capitalist nations to move toward socialism. D. The freedoms the U.S. government has under capitalism. Term As the term "global" become "local", and as we see more opportunities to compete in the global market, A. the long-term trend is for most nations to operate as mixed economies. B. disagreements about the best economic system to embrace will cause many nations to close their doors to outside commerce. C. the only industries that governments will want to own are the ones that are profitable. D. the forecast is for socialist nations to trend toward communism (Cuba is the example) and for capitalist nations to trend toward socialism. Definition A Term Over the years, the government of Montivia has focused on implementing programs that promote equality. On the short-term, though, Montivia legislators are concerned about the very slow rate of growth that has plagued its national economy. In order to address this problem, the government is likely to: A. Take control of more major Definition Bindustries. B. Reduce taxes and cut back on some social programs. C. Make sure to balance its budget. D. Avoid the use of fiscal policies and reduce the supply of money in circulation. Term In an effort to promote rapid growth, the government of Goldinia has kept taxes low, done little to regulate business activities, and implemented only modest social programs. The government is now facing political pressure to do more to clean up the environment and to reduce the inequalities of income and wealth. Which of the following statements is most accurate? Goldinia's government is currently taking: A. A purely capitalist approach to achieve its economic goals, and is likely to continue doing so in the future. B. A purely socialist approach to achieve its economics goals, and is likely to continue doing so in the future. C. A predominately socialist approach to achieving economic goals, but the current pressures it faces suggest it is likely to adopt a more capitalist approach in the future. D. A predominately capitalist approach toward achieving economic goals, but the current pressures it faces suggest it is likely to adopt a more socialist approach in the future. Definition D Term The prime minister of the nation of Urbania has called for Urbania's legislature to enact new legislation designed to shift his country away from socialism toward a more capitalistic Definition Dsystem. The Prime Minister acknowledges that such a radical change will entail some hardships, and that some citizens will be unhappy with the changes. The most likely source of dissatisfaction with a move toward capitalism is: A. Decrease in wealth. B. People will have less economic freedom. C. Tax rates will have to increase. D. A trend toward unequal distribution of wealth. Term The National Coalition on Healthcare Reform reports that nearly 18% of the U.S. population under the age of 65 is without healthcare. If this advocacy group succeeds in convincing the current administration and Congress to vote for basic healthcare for everyone, which of the following is likely to occur? A. More rapid economic growth. B. Higher taxes than in past years. C. Increasing reliance on markets to determine economic outcomes. D. An increase in the number of insurance companies. Definition B Term Several years ago, the nation of Florentina had a government-owned telecommunication system that lagged far behind other nations. In several of its rural areas, there was only one phone for an entire village of people. Government taxes collected for the purpose of maintaining the telephone system were very meager, so the notion of expanding service was almost impossible. The government of Florentina decided to sell the phone Definition Dcompany to a private firm. The private firm expanded rapidly. It reported that even poor consumers were willing to pay for a private phone line. This government decision and subsequent sale was: A. A move toward nationalism. B. A move toward communism. C. A move toward socialism. D. A move toward capitalism. Term The U.S. economic system relies on A. The private sector to measure its economic well being. B. Industries that produce capital equipment to determine how well things are going. C. Frictional unemployment statistics as the sole measure of economic health. D. Key economic indicators such as GDP, to measure economic progress. Definition D Term The total value of final goods and services produced within a nation's borders in a given year is known as that nation's: Definition gross domestic product Term Three important economic indicators of theUnited States are the unemployment rate, the price indices, and the: Definition gross domestic product (GDP). Term The four basic types of unemployment are frictional, structural, seasonal, and: Definition cyclical Term Definition__________ unemployment refers to persons who purposefully quit their jobs and have not yet found a new job. Frictional Term __________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs. Definition Structural Term __________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy. Definition Cyclical Term __________ unemployment results when the demand for labor varies during the year. Definition Seasonal Term The _________ is a statistic used to compute the pace of inflation or deflation. Definition consumer price index Term The measure used to report price changes at the wholesale level is the: Definition producer price index (PPI). Term _____________ refers to a general rise in the price level of goods and services over time. Definition Inflation Term __________ is a condition in which inflation is increasing, at a decreasing Definition Disinflationrate. Term __________ is a condition in which the average level of prices is actually falling. Definition Deflation Term A __________ is a very severe recession that is usually accompanied by a decline in the average level of prices. Definition depression Term In recent years, U.S. manufacturing has experienced ___________ productivity. Definition rising Term The next wave of marketable innovations may involve new ways to produce and conserve energy. If we can turn new technology into marketable products and services that produce energy to run our businesses and homes, the U.S.could see a surge in output of goods and services. The Department of Economic Development would document this surge by measuring the ______. Definition Gross Domestic Product Term One reason the CPI is monitored very closely by government, businesses, and workers is that: Definition Some wages, interest rates, tax rates, and government benefits are tied to changes in the value of the CPI. Term ____________ in the service sector has not shown the significant improvement that it has in the manufacturing sector. There are significant advances in the Definition Productivityquality of service, but workers in this sector are unable to increase the number of persons served in a given time period. Term . If consumers see a measurable increase in the price of coffee, they are likely to change their consumption to less expensive tea. These substitutions would show-up in the ____________. Definition Chained Consumer Price Index Term Which of the following indicators provides the clearest indication that an economy is experiencing deflation? A. A decrease in the unemployment rate. B. A decrease in GDP. C. An increase in the PPI. D. A decrease in the CPI. Definition D Term A collapse in Buldovia's banking system eventually led to companies unable to borrow money to run their businesses. Firms terminated employees. These circumstances cut into consumer's purchasing power, causing a severe decline in the prices of goods and services, better known as _______. Definition Deflation. Term The nation of Florentina is in the midst of a serious economic downturn. The nation's GDPhas declined steadily for over five years and is now at its lowest level in over fifty years. Florentina's unemployment rate is at an all time high and the nation's CPI is falling. Florentina's economic condition is Definition Depression.referred to as a: Term John complained to his buddy, Frank, that prices have increased a lot over the past year. Frank disagreed, saying that the prices of some goods have gone up a bit, but other prices have declined, noting that you can get some good buys on houses right now. Frank feels that the average price of consumer goods hasn't changed. Frank and John can refer to the __________ to learn how government economists currently view the price situation. Definition GDP Term Emily recently quit her job at a major corporation because she saw little chance for advancement. Although she is still searching for a new position, Emily believes the economy is healthy and she hears that several firms are hiring people with her qualifications. Which of the following statements about Emily's current situation is most accurate? Emily is: A. Not considered unemployed because she voluntarily quit her job. B. An example of cyclical unemployment. C. An example of frictional unemployment. D. Likely to find employment quickly if she seeks training in a different field. Definition C Term Kathleen's company produces computer monitors and other peripheral devices for computers. About six months ago, Kathleen began to keep track of number of hours Definition Aworked, and the resulting output at her particular work site. Comparing the results, she found that the number of workers (and the hours they worked) remained relatively steady over the past six months, however, the work site's output increased significantly. This indicates that: A. Productivity at the work site has increased. B. The work site sold-off some of its excess inventory. C. The company's prices have increased faster than the wages paid to workers. D. The company should hire more workers. Term Which of the following statements about business cycles in the U.S. is most accurate? A. Business cycles occur precisely every 5 years. B. Long term business cycles have only two phases—boom and bust. C. Seasonal business cycles occur within a year. D. Business cycles are based on theories. Definition C Term Which of the following statements about productivity in the service sector of the U.S.economy is most accurate? A. Productivity in the service sector has increased much more rapidly than productivity in the manufacturing sector. B. Improving productivity in the service sector is much less important than improving productivity in the manufacturing sector, because the service sector does not really produce anything. Definition DC. Productivity in the service sector is easier to measure than productivity in agriculture. D. Measures of productivity in the service sector do a poor job of taking quality improvements into account. Term Chase is a recent college graduate with a new job as an engineering trainee for a large defense company. Now that he is making good wages, he hopes to start saving for his first house and also contribute toward the company retirement plan. As he looks over his monthly bills, Chase is concerned about ever getting ahead of the game. His food bill, car payment, and mounting gasoline payments keep him in the "just making ends meet" category. As his mind wonders back to the good ol' college days, he reflects on a time when gas and food seemed a lot more reasonable. Chase is experiencing the effects of: Definition Inflation Term Gabby and Gus Malloy recently got pre-approved on a loan for their first house purchase. They are speculating on how much they should bid on their number one choice - a small, threebedroom bungalow near a major college town. Which of the following indicators may be an important factor in whether they are able to successfully put in a low bid? A. The federal tax rate in that area B. The unemployment rate in that area C. The producer's price index in that area D. The CMI - consumer's marginal index Definition CTerm Patrick just landed a job working for a major online gaming company in Silicon Valley. In a lot of ways, this is his dream job come true - the chance to work for a company that makes gaming software and live in California at the same time. As his plane lands at San Jose International, he pictures a snazzy apartment with a palm tree right outside the front door. A few hours later, as he meets a property manager of a large apartment complex, his heart sinks. The price of apartments is out of sight! Back at the hotel, he logs on to the Bureau of Labor Statistics to try to get a better picture of why the cost of housing is so high in this region of the U.S. Which factors may be causing the rise in the price of housing? A. Low Unemployment rate and increasing GDP B. High consumer's marginal index and low PPI C. Low CPI and high state tax rate D. Decreasing Disruptive Technologies Index and high unemployment Definition A Term . At the onset of the 2008 economic slowdown, prices at the grocery stores continued to rise. In some cases, products such as milk and bread almost doubled in price. In March 2008, a Bostonnewspaper reported, "The price of eggs was up 40% and milk was up 26%." Consumers were already being hit with high energy costs, and now their confidence in the economy was further shaken with job cuts and a loss of discretionary income due to increases in food prices. The economy was slowing, but prices were rising, signifying the potential for Definition stagflation___________. Term John is creating a presentation on the consumer price index, for his business class. He wants students to understand that food and energy prices have risen more rapidly than other market items that the government traditionally measures for inclusion in the CPI calculation. He will show students that the core inflation figure will be _______ than the CPI. He will then inform the class that if consumers begin substituting, for example: If the prices at full service hair styling salons get too exorbitant, consumers may substitute by going to cheaper hair cutting salons. This will make the ___________ calculation lower. A. higher; C-CPI B. lower; C-CPI C. lower, PPI D. higher, PPI Definition B Term Recently the U.S. national debt was a little more than: A. $10 trillion. B. $25 trillion. C. $560 billion. D. $380 billion. Definition A Term ____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending. Definition Fiscal policy Term DefinitionFiscal policy involves increases or decreases in: Government spending and taxes. Term When the federal government's collection of tax revenues is less than what it spends in a given year, it results in a: Definition National deficit Term When the government runs a continual budget deficit, it increases the: Definition National debt Term In the U.S., the __________ has the role of managing the money supply and interest rates. Definition Federal Reserve Bank Term On average, what percentage of the GDP does theU.S. government collect through taxes? A. 50% B. 10.5% C. 28.2% D. 33.33% Definition C Term One way to lessen the U.S. government budget deficit is to: A. cut spending. B. increase spending. C. call-in government savings bonds. D. increase government social programs such as welfare, food-stamps, and Medicare. Definition A Term Efforts by the Federal Reserve Bank Definition(the Fed) to control the money supply and interest rates are known as: monetary policy Term The Federal Reserve Bank operates: A. as a semi-private organization not under the direct control of the government. B. under the direct control of the executive branch of the government. C. under the direction of the Banking Oversight Committee of Congress. D. as a special agency of the U.S. Treasury. Definition A Term Which of the following statements about government deficit spending is most accurate? A. The federal government violates the law by running deficits because the U.S. Constitution requires the government to balance its budget each year. B. Although the government used to run big deficits, it has consistently run surpluses since the late 1980s. C. The government has used deficit spending to lower the national debt. D. One reason the government has a hard time reducing deficits is that there is a great deal of pressure on the government to expand its spending each year. Definition D Term While scanning the movies section in your local online newspaper, you click on the business section by mistake. While you're there, you quickly scan a report that says government spending will again exceed tax revenues in the current year. This means that the: Definition AA. Total national debt is likely to increase. B. National deficit is likely to decrease. C. Rate of inflation is likely to fall. D. Monetary policies pursued by the Fed need tightening. Term Which of the following statements about the Federal Reserve Bank (the Fed) is most accurate? A. The Fed is an agency of the U.S. Treasury Department that has the responsibility of collecting tax receipts for the IRS. B. The Fed manages the U.S. money supply and interest rates. C. The Fed is the primary government agency involved in carrying out our nation's fiscal policies. D. The Fed is the agency of the government that ensures the U.S. maintains enough gold reserves to pay any foreign debts that result from international trade. Definition B Term During the economic crisis of 2008- 2009, Presidents George W. Bush and Barack Obama increased government spending by $2 trillion, in order to revive the ailing economy. Their strategy followed the economic theory known as: Definition Keynesian Term Keynesian economic theory suggests: A. Reducing government involvement in the free-market economy. B. Proposing long-term solutions in order to create wider swings in the business cycle. Definition DC. A more permanent government involvement in the banking system, even creating a national banking system that owns and operates most of the global and regional banks. D. Short-term increases in government spending to stimulate the economy. Term Senator Gong Lee is alarmed at the state of the economy. Unemployment is high and GDP is low. Senator Lee has called for Congress to take action to increase government spending and cut taxes in order to stimulate the economy. The actions called for by Senator Lee are examples of: Definition Fiscal policy Term Your professor showed you an Internet video of the chair of the Federal Reserve Bank speaking to the American public. The message he is conveying indicates that Fed economists are worried about inflation and believe the best course of action would be to slow the economy. Which of the following policies is the Fed most likely to pursue? A. Increase taxes. B. Decrease interest rates. C. Restrict the money supply and increase interest rates. D. Devalue the dollar on international currency exchanges. Definition C Term Ben recently lost his job at a major U.S. auto plant in one of the rust belt states. After looking unsuccessfully for work in a similar industry for several months, he plans to start Definition Dinterviewing with road and bridge repair companies. He speculates that if the government begins to contract with companies that repair highways and bridges, he may find steady work, at least in the short-term. Which of the following statements best describes the strategy behind his thoughts? A. The best way for the government to reign-in on too much money floating around the system is to hire people and pay them wages. B. Ben doesn't understand the causes of unemployment. We obviously don't need any more autos on the roads if the plant has closed. Repairs will slow down rather than increase. C. If the current administration asks the FED to raise interest rates, it will do more than if the current administration begins contracting with road repair companies. D. By increasing government spending through road and bridge repair and construction, the government will intervene in the free-market economic system to help jump-start a weak economy. Term Lance owns Lance Lawns Irrigation Systems, LLC, a company that installs and maintains underground lawn irrigation systems. Business is down due to new housing starts being negatively impacted by a deep recession. To make things worse, his bank called yesterday to inform him that his credit limit (interest fee of 12.5%) will be cut from $30,000 per year to $15,000 per year, unless he is willing to pay a higher interest rate of 20%. As Lance drives to the first job this morning, he knows that his last task of the day will be to reduce the Definition Chours for his two employees. He can't afford to work employees eight hours per day, with only a $15,000 line of credit. Which of the following strategies will help Lance's situation? A. Increase government spending on public parks. B. Decrease government spending so that banks can keep more reserves. C. Fed decreases interest rates D. Fed increases the federal funds rates to jump-start the economy. Term If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment - less than 2%), the Fed may decide to: A. Lower interest rates. B. Raise taxes. C. Lower taxes. D. Increase interest rates. Definition D Term Gig started Giganeers to earn a profit, but by working hard and increasing his market share, he was able to create jobs for others. This is an example of the ______________ concept. Definition invisible hand Term Gig's native country of Frinezia was much different from the United States. In addition to its higher tax rates, the government offered more extensive social programs that were designed to redistribute income and reduce inequality. Although small businesses were privately owned and operated in Frinezia, many basic industries were owned and operated by the Definition Socialism.government. From this information, you would classify Frinezia's economic system as ___________. Term The broadcast that reported a decline in total output for the United States probably got some of its information from the government's measurement of ___________. Definition GDP Term The broadcast cited forecasts that national output might continue to fall in the future. If total output shows decline for two consecutive quarters, economists would classify this as a _____________. Definition recession. Term Gig recently heard a radio report that the Fed will try to help get the U.S. economy back on track. If the Fed takes action, Gig would likely see: A. Lower interest rates. B. An increase in the size of the government's budget deficit. C. Lower government spending. D. An increase in the minimum wage. Definition A Term Besides the slowdown in the general economy, Giganeers faces threats of competition from several other companies that provide engineering consulting services. In order to gain more business, Gig tries to convince potential clients that his company offers better service than the competition. He has advertised heavily in professional magazines, often quoting some of his Definition monopolistic competitionhighly satisfied clients. The market Giganeers operates in is an example of: Manufacturing in US US is still world's leading manufacturer What percent of goods produced each year come from US? Almost 25% of all goods produced each year come from US True or False: US is dominated by service sector True Leading US Manufactured Goods Chemicals; Transportation equipment; Processed Foods, beverages, tobacco; Computers and electronics "Green Movement" Consumers like products that say "all natural", "locally grown", "energy efficient" What percent of US jobs are in the service sector? 85%; US economy is no longer manufacturing based Production Creation of goods using land, labor, capital, entrepreneurship, and knowledge (the factors of production) Production Management All the activities managers do to help firms create goods; how you create the products Operations Management A specialized area in management that converts or transforms resources into goods and services; deals with how businesses provides services; manufacturing tangible goods and operating services Includes: Inventory management, quality control, production scheduling, follow-up services The Production Process Input -> Production control -> Output Form UtilityThe values producers add to materials in the creation of finished goods and services; PRODUCTION OPERATIONS CREATE FORM UTILITY; Production Manufacturing The part of production that physically or chemically changes materials Assembly Process The part of the production process that puts together components (ex. putting car parts together) 2 Types of Key Production Processes Continuous and Intermittent Continuous Production Process Long production runs turn out finished good over time and you don't change anything; producing the same thing over again Intermittent Production Process Production runs are short and the producer adjusts machines frequently to make different products Developments that make US companies more competitive Computer-aided design and manufacturing; flexible manufacturing; lean manufacturing; mass customization Computer-Aided Design CAD; the use of computers in the design of products Computer-Aided Manufacturing CAM; the use of computers in the manufacturing of products; makes workplace safer Flexible Manufacturing Designing machines to do multiple tasks so they can produce a variety of products Lean Manufacturing Using less of everything than in mass production; trying to be safe for environment; compared to other companies, they use half the human effort, carry 90% less inventory; use half floor space, etc.Mass Customization Tailoring products to meet the needs of larger numbers of individual customers; exists in service sector too Operations Management Helps solve problems like facility location, facility layout, materials required planning, purchasing, inventory control, quality control Facility location The process of selecting a geographic location for a company's operations; Rising numbers of Internet businesses means brickand-mortar retailers must find great locations Telecommuting Working from home via computer and modem Facility Layout The physical arrangement of resources, including people, to most efficiently produce goods and provide services; for service: to help customers find products; for manufacturing: improve efficiency Facility Layout Options Assembly Line Layout; Modular Layout; Fixed-position layout; Process layout Assembly Line Layout Workers do only a few tasks at a time Modular Layout Teams of workers produce more complex units of the final product Fixed-position layout Allows workers to congregate around the product Process Layout Similar equipment and functions are grouped together Materials Requirement PlanningMRP; a computer-based operations management system that uses sales forecasts to make sure parts and materials are available when needed Enterprise Resource Planning ERP; a newer version of MRP, combines computerized functions into a single integrated software program using a single database Purchasing The function that searches for high-quality material resources, finds the best suppliers and negotiates the best prices for goods and services Just-In-Time Inventory Control (JIT); the production process in which a minimum of inventory is kept and parts, supplies, and other needs are delivered just in time to go on the assembly line; to work efficiently, the process requires excellent coordination with suppliers; best strategy is to keep inventory low, but enough to meet demands Quality Consistently producing what the customer wants while reducing errors before and after delivery Six Sigma Quality A quality measure that allows only 3.4 defects per million opportunities Statistical Quality Control A process used to continually monitor all phases of the production process Statistical Process Control A process of testing statistical samples of product components at each stage of production International Organization of Standardization ISO; worldwide federation of national standard bodies ISO 9000 The common name given to quality management and assurance standards ISO 14000A collection of the best practices for managing an organization's impact on the environment Program Evaluation and Review Technique PERT; a method for analyzing the tasks involved in completing a given project and estimating the time needed Steps involved in PERT 1. Analyzing and sequencing tasks 2. Estimating the time needed to complete each task 3. Drawing a PERT network illustrating the first 2 steps 4. Identifying the critical path Critical Path The sequence of tasks that takes the longest time to complete Gantt Chart A bar graph that shows what projects are being worked on and how much has been completed From 2001 to 2009, _________ in the U.S. rose 4% each year manufacturing output The U.S. is still the world's leading ______ manufacturer Almost ______of all goods produced each year come from the U.S 25% The U.S. economy is no longer manufacturing based. 85% of jobs are in the _______ service sector The top-paying service jobs in the U.S. are in: Legal services Medical services Entertainment Accounting Finance Management consulting ______ is still the leader in nanotechnology and biotechnology. U.SHow can U.S. businesses maintain a competitive edge? Focusing on customers Practicing continuous improvement Focusing on quality Relying on the Internet to unite companies Adopting new production techniques Production the creation of finished goods and services using the factors of production: land, labor, capital, entrepreneurship, and knowledge what has HISTORICALLY meant manufacturing? production Operations Management a specialized area in management that converts or transforms resources (including human resources) into goods and services (Inventory Management, Quality Control, Productive Scheduling and Following Services) in an automobile plant, ________ transforms raw materials and human resources into cars thru assembly process operations management production management the term used to describe all the activities managers do to help their firms create goods The Production Process: Converting _______ (a) to _______ (b) inputs (a) to outputs (b) Production Control (list of 5 things) Planning Routing Scheduling Dispatching Follow-up Goods, Services, and Ideas are all what? outputsritz hotel has fresh fruit and flowers in each room, this exemplifies what? operation management in the SERVICE industry what is the implementation phase of management operation management Production Process Inputs-->Production Control-->outputs it consists of taking the factors of productions and using those inputs to produce goods, services and ideas to accomplish the objective (output) Quality is based on customer perceptions illustrates a good or a service? service How Manufacturers Have Become More Effective Focus on customers Maintain close relationships Continuous improvement Focus on quality Save costs Rely on the Internet New production techniques is this china or india? Driving Force: Manufacturing Largest Communist Country Population: 1.3 Billion Economic Growth Rate: 9% Financial/Commercial Capital: Shanghai China is this china or india? Driving Force: Services Largest Democracy Population: 1.1 Billion Economic Growth Rate: 7% Financial/Commercial Capital: Mumbai India Form UtilityThe value added by the creation of finished goods and services, such as the value added by taking silicon and making computer chips or putting services together to create a vacation package what are 3 basic requirements of production? 1. build and deliver products in response to the demands of the customer at a scheduled delivery time 2. provide acceptable quality level 3. provide everything at lowest possible cost Process Manufacturing That part of the production process that physically or chemically changes materials what does this illustrate? boiling an egg physically changes it process manufacturing Assembly process That part of the production process that puts together components to make a product what does this illustrate? a car is made by putting together the frame and the engine assembly process Continuous Process A production process in which long production runs turn out finished goods over time what does this illustrate? conveyer belt that continuously lowers eggs into boiling water for 3 minutes to cook it and then it lifts them out of the water continuous process production process can be what 2? continuous or intermittent Intermittent Process A production process in which the production run is short and the machines are changed frequently to make different products what type of process makes sense to use when responding to specific customer orders? intermittent processwhat is the ultimate goal of operations management? to provide high-quality goods and services instantaneously in response to customer demand The leading factor influencing the gains in productivity is _______ followed by capital improvement innovation Computer-Aided Design - CAD The use of computers in the design of products -allows designers to work in 3 dimensions -has doubled productivity in firms Major Developments that have made U.S companies more Competitive: (4) 1. computer-aided Design and Manufacturing 2. Flexible Manufacturing 3. Lean Manufacturing 4. Mass Customization Computer-Aided Manufacturing - CAM The use of computers in the manufacturing of products what software program unites CAD and CAM? Computer-integrated Manufacturing (CIM) Computer-integrated Manufacturing- CIM The uniting of computer-aided design with computer-aided manufacturing -it cuts 80% of time needed to program machines to make parts What are 3 Production techniques? flexible manufacturing lean manufacturing mass customization Flexible Manufacturing Designing machines to do multiple tasks so that they can produce a variety of products Lean Manufacturing The production of goods using less of everything compared to mass production: less human effort, less manufacturing space,less investment in tools, and less engineering time to develop a new product what are some characteristics of a Lean Company? -they take 1/2 the human effort -they have 1/2 the defects in the finished product or service -they require 1/3 less engineering effort -use 1/2 the floor space for the same output -carry 90% less inventory Mass Customization Tailoring products to meet the needs of individual customers what is this an example of? japanese company makes 18 bike models in 2 million combos (each designed to fit the needs of specific customers) mass customization Operations Management Planning includes what 7 things? Facility Location Facility Layout Materials Requirement Planning Enterprise Resource Planning Purchasing J-I-T Inventory Control Quality Control Facility Location the process of selecting a geographic location for a company's operations -find a site that makes it easy for consumers to use the company's services and to communicate about their needs telecommuting working from home via computer and modem-->major trend in business Facility Layout The physical arrangement of resources (including people) in the production process to most efficiently produce goods and provide services for customers What does this illustrate? the internet is designed to help consumers find and buy thingsfacility layout companies moving from ______ (a) where workers do few tasks at a time to a ______ (b) where teams of workers combine to produce more complex units of the final product a)assembly line layout (a.k.a product layout; used to produce large quantities of a few types of products) b)modular layout (a.k.a cellular layout; can accomodate changes in design or customer demand) fixed position layout allows workers to what? congregate around the product to be completed -a major feature of planning is scheduling work operations ex=building a bridge a process layout is one in which similar equipment and functions are grouped together -process depends on design of the item -used in operations that serve diff. customers' diff. needs Materials Requirement Planning (MRP) A computer based production management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place Enterprise Resource Planning (ERP) A computer application that enables multiple firms to manage all of their operations (finance, requirements planning, human resources, and order fulfillment) on the basis of a single, integrated set of corporate data what is a newer version of MRP that combines functions of all the divisions and subsidiaries of the firm? ERP Purchasing The function in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for goods and services Just-In-Time J-I-T Inventory ControlA production process in which a minimum of inventory is kept on the premises and parts, supplies, and other needs are delivered just in time to go on the assembly line what production process requires an accurate production schedule (ERP) and coordination with carefully selected suppliers? this system makes sure right materials are at right place at right time at cheapest cost to meet customer and production needs Just-In-Time J-I-T Inventory Control Quality Control Consistently producing what the customer wants while reducing errors before and after delivery to the customer What are the 3 Location factors? Transportation Physical Factors Human Factors what are categories under the Transportation factor of location proximity to markets proximity to raw materials availability of transportation alternative what are categories under the Physical factors of location? Water supply energy hazardous wastes what are categories under human factors of location labor supply local zoning regulations community living conditions Product Layout (also called assembly line.) Used to produce large quantities of a few types of products Cellular or Modular Layout Can accommodate changes in design or customer demand Six Sigma Qualitya quality measure that allows only 3.4 defects per million opportunities -detects potential problems to prevent their occurrence Statistical Quality Control (SQC) the process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning Statistical Process Control (SPC) the process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards managers can see and correct any deviation from quality standards in what process? SPC-Statistical Process Control ISO 9000 the common name given to quality management and assurance standards -the standards require that a company determine what customer needs are and make arrangements to handle issues ISO 14000 a collection of the best practices for managing an organization's impact on the environment the following all fall under what category? Six Sigma Quality Statistical Quality Control (SQC) Statistical Process Control (SPC) ISO 9000 ISO 14000 The Baldrige Award quality control The Baldrige Award Introduced in the US in 1987 and set standards for overall company quality in: Manufacturing Services Small BusinessesEducation Health Care To qualify for The Baldrige Award organizations must show quality in seven key areas: Leadership Strategic Planning Customer and Market Focus Information and analysis Human Resources Focus Business Results what is this for?Major criteria for earning the awards include whether customer wants and needs are being met and whether customer satisfaction ratings are better than those of competitors The Baldrige Award ISO founded in 1947 At the end of 2004, the worldwide total of certificates: ISO 9000 - 670,000 in 154 countries ISO 14000 - 90,000 in 127 countries what is ISO- International Organization for Standardization a worldwide federation of national standards bodies from more than 140 countries that set global measures for the quality of individual products what are the 2 control procedures? Program Evaluation & Review Techniques (PERT) and Gantt Chart Program Evaluation & Review Techniques (PERT) a method for analyzing the tasks involved in completing a given project, estimating the time needed to complete each task, and identifying the minimum time needed to complete the total project Gannt Chart bar graph showing production managers what projects are being worked on and what stage they are in at any given time Named for its developer, Henry GanttA bar graph that clearly shows what projects are being worked on and how much has been completed at any given time what are the 4 steps in PERT? 1. Analyzing and sequencing tasks that need to be done 2. Estimating the time needed to complete each task 3. Drawing a PERT network illustrating the information from steps 1 and 2 4. Identifying the critical path critical path the sequence of tasks that takes the longest time to complete -a delay anywhere along this path will cause the project or production run to be late a manager can trace the production process minute by minute to determine which tasks are on time and which are behind so that adjustments can be made to allow the company to stay on schedule with what? gantt chart Which of the following factors would NOT be part of a process to improve a business’ competitive positioning in a global marketplace? Reducing product quality to keep costs low. Which of the following statements concerning the U.S. service sector today is most accurate? This sector has grown much more rapidly than the manufacturing sector. ***** Chapter 1 ***** When referring to risk, which of the following statements is reasonable? Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good opportunities. The strategy is to make the most profit with the least amount of risk. Entrepreneurs and small business start-ups are advised to take calculated risk. Those that take the most risk may make the most profit. Profits equal _______. the funds available for business growth, after expenses and salaries are paid Profits are what the firm earns above and beyond what it pays out for expenses and salaries.Which of the following circumstances is most likely to reduce one's standard of living? An increase in the cost of some goods such as escalating gasoline prices. By definition, the standard of living is the amount of goods and services that people buy, with the funds they have available. As such, if you increase the price of a good in high demand such as gasoline, the added expense will cut into the funds available to buy other things or the funds one can put in savings. When developing and maintaining good stakeholder relationships, companies find that_______. most often, they must balance the needs of the stakeholders with the need to make profits Stakeholders are people and organizations who stand to gain or lose by the actions of the business. Examples of stakeholders include customers, employees, government organizations, suppliers, and even community citizens. Firms must balance the need to make profits with the needs of stakeholders. As a __________________, Judy started a non-profit business called Music and Memories™. She recognized that music, socialization, and memory-challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time. social entrepreneur Social entrepreneurs are persons who develop business ideas that respond to the social needs of society. Darnell lives in an area where labor is plentiful and locations for start-ups are relatively cheap. He is also confident that he can find start-up funds for a graphic arts business. As he evaluates the opportunity for his proposed venture, which of the following factors of production should he focus on? Entrepreneurship and knowledge The late Peter Drucker, renowned professor of management, emphasized that the most important factor of production in contemporary society is knowledge. In terms of factors of production, businesses have succeeded in finding capital, land, and labor. Governments have promoted entrepreneurship. In this situation, Darnell has learned that labor is available; start-up land is plentiful and economically feasible; and he is able tosecure start-up capital. This leaves entrepreneurship (innovation/other intangible characteristics) and knowledge about his proposed craft that requires focus. To encourage entrepreneurial growth, governments might _______. pass laws that enable businesspeople to write contracts that are enforceable in court The government can lessen the risks of entrepreneurship by passing laws that enable businesspeople to write contracts that are enforceable in court. In countries that don't yet have such laws, the risks of starting a business are that much greater. Eduardo has many business ideas that could satisfy the unfulfilled needs of people who live in his community. However, there are laws that govern the type of businesses that private citizens can own and business taxes are high because the government subsidizes many social programs in his nation. Challenges in the _________________ environment increase the risk of Eduardo starting a business. economic and legal The legal and economic environment can either increase the risk (too many laws may restrict trade; increasing taxes may act as a disincentive for starting a business), or decrease the risk (the ability to successfully find capital; laws that permit competition, and laws that keep taxes at a minimal level) of starting a business. Efficiency means _______. producing items using the least amount of resources Efficiency means producing goods and services using the least amount of resources. At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______. using technology to stay responsive to customer needs Businesses must explore the technological environment that surrounds their respective industries. When scanning thetechnological environment, it is important to ask the following questions: Are there technologies the business could employ that would enhance the product or service offering? Are there technologies emerging that could threaten the demand for the products or services offered? Blake wanted to offer high quality basics in his restaurant. His motto was "the best darn meat and potatoes for miles around." The locals agreed that the food was good. They also agreed that if you decided to eat there, be prepared to wait. Food preparation and service were slow. Although Blake's motto stated the business's competitive advantage, your accurate advice to Blake would be _______. the winning competitive advantage is one that addresses quality and service In today's competitive environment, customers are looking for a combination of good quality and good service. Lance and Laurie live on three acres of land in North Carolina, with two llamas, five goats, six chickens, and two dogs. The goats provide milk, cheese, yogurt, and even fiber that is woven into yarn; the chickens provide free-range eggs; and the llamas serve as protection for the other animals. Although Lance and Laurie have other professional jobs, their home lifestyle represents _______. a growing trend in the social environment to have more control of the food they eat and where it comes from An important social trend that continues to grow in strength is a concern for what we eat and where it comes from. Business managers must continually scan the social environment for changes in attitudes, beliefs, and lifestyle trends. In the technological business environment the opportunity would be the internet, the challenge would be_______, whereas in the global business environment the opportunity would be ______ and the challenge would be war and terrorism. Identity theft and green living With more and more advances in using the Internet to gather information and enact business, there has been a significant increase in identity theft. Saving energy and producing products that cause less harm to the environment is a trend called greening.Since the mid-1980s, the __________ sector has generated the most amount of increases in employment in the United States. service Together, services make up more than half of the American economy. Since the mid-1980s, the service industry has generated almost all of the U.S. economy's increases in employment. Although service-sector growth has slowed, it remains the largest area of growth. Today, high-paying service-sector jobs in the U.S. can be found in ___________________. entertainment Today, high-paying jobs in the service sector include healthcare, accounting, entertainment, and telecommunications. The service sector is also where most hiring is occurring. The service sector makes up 70% of the value of the U.S. economy. ***** Chapter 2 ***** The way in which a country's resources are utilized to produce goods and services; and, the way those goods and services are distributed among those who desire to have them depends upon ______________. The economic system under which the country operates Economics is about the management of scarce resources. The economic system under which a system operates determines what gets produced; how much gets produced; and, who gets it. The famous actor, Robert Redford created The Sundance Film Festival, where talented, young directors and producers can submit their films for review and possible showing. The festival attracts thousands of tourists each year, employs many others at various capacities, and provides important exposure to up and coming artists who may otherwise not be able to get their works noticed. Ultimately, the festival provides social and economic benefit for many. Adam Smith believed that one's self-directed gain would eventually create prosperity for many, and called the process, the ___________. invisible hand The Invisible Hand concept refers to how one's self-directed gaincan eventually lead into social and economic benefit of others. This concept was first described by political economist, Adam Smith. At a young age, Lita's coaches were confident she had the potential to be a world class swimmer. They encouraged her parents to do as much as they could to further develop her skills, because a future in Olympic swimming could set her for life, including promotional endorsements and coaching positions when her competitive days were over. After four years on an athletic scholarship and Olympic experience under her belt, she chose a different path. With her savings and personal connections, she rented a corner building in a bustling San Francisco neighborhood and pursued her dream: a surf shop business. After several successful years, Lita was certain that Adam Smith would smile because: he laid the foundation for her success: She had freedom of choice. Adam Smith believed that a capitalistic system would be beneficial, as long as society embraced four basic rights. One of those rights was the freedom of choice, meaning the freedom to choose the type of business or profession to pursue. Which of the following best describes a capitalistic nation? Most or all of the factors of production and distribution are privately owned and operated for a profit. In a political and economic system known as Capitalism, most or all of the factors of production and distribution are privately owned and operated for a profit. This means that businesses are privately owned by one or more persons or stockholders . In a free-market economic system, if consumers perceive the price for a state of the art cell phone is too high for the value received, they are likely to avoid buying it. In the same light: if the consumer's desired price is too low, producers may limit the amount produced. In a free market economic system, the mechanism of "price" determines how much of a product consumers demand, and how much producers are able to produce. If consumers demand less of a product because they do not see value for the price the producer/seller is asking, in the long-run, producers will limit the amount they are willing and able to produce. As noted by thesupply curve, producers are willing to produce more of the product, if they are able to charge more for the product. Ray's mom specifically asked for a CIP cast iron pan for her birthday. As Ray scanned the cast iron pans in two department stores, he found ten different brands, none of which were CIP. When he found CIP in a kitchen specialty shop, he was challenged to tell the difference between his mom's choice and the others. In his business class, he learned about ______________, where many sellers may be offering very similar products. Through other means, each seller differentiates his product from the competition. monopolistic competition Monopolistic competition is defined by many sellers who sell very similar products, but are able to differentiate from the competition through advertising and branding. You studied for two hours each day, for an entire week before your first marketing exam. On exam day, when you turned-in the test, you felt confident that your effort paid-off. At the next class meeting, your instructor said she was considering curving the grades because the class average was lower than she had anticipated. All of a sudden, your 98% score did not have the same impact that it did when you first saw it! Now the guy next to you that got an 84% was likely to have an "A" grade too. As you analyze this situation, you realize that it parallels an economic system such as ________________, where even if you work harder than another person, you are likely to realize the same benefit. Socialism The premise of socialism is that wealth should be more evenly distributed among people. Socialistic nations provide more government funded services for society. In order for the value of goods and services to be counted as part of a nation's gross domestic product: the goods and services must be produced within the physical boundaries of a particular nation. Gross Domestic Product = the value of all goods and services produced within the physical boundaries of a particular nation in one year's time.According to the BEA [Bureau of Economic Analysis], during the period between 2007 and 2010, real GDP decreased at an average annual rate of 0.3%. This news would lead you to conclude: productivity in the U.S. also decreased. GDP [Gross Domestic Product] the measurable value of all goods and services produced within the physical boundaries of a nation, in one year. GDP is a standard measure of productivity and positively correlated with GDP. The following chart reflects the U.S.'s GDP [Gross Domestic Product] for the past five years. Which of the following statements best reflects the health of the U.S. economy during this time period? 2005 $12.62 trillion 2006 $12.96 trillion 2007 $13.21 trillion 2008 $13.16 trillion 2009 $12.70 trillion 2010 $13.09 trillion The U.S. economy fell into recession in 2008 and 2009. Two consecutive quarterly declines in GDP constitute a recession. The annual decline of GDP realized in 2008 and 2009 indicated that the economy was in recession. The U.S. unemployment rate is an important, key economic indicator because most of us need jobs to maintain our standard of living. A criteria used to calculate the unemployment rate is: unemployed persons age 16 and over, who have been looking for work during the past four weeks. The unemployment rate is defined as the number of persons age 16 and over who do not have jobs, and who have been looking for work during the past four weeks. The CPI [consumer price index] measures ________________ and ________________.inflation and deflation; includes energy and food as part of the market basket of goods and services that it measures. The Consumer Price Index is a measurement of inflation and deflation. The market basket of goods that is regularly measured includes housing, energy, food, apparel, medical care, and an "other" category. At Six City Wellness Center, Greg operates a new state-of-theart MRI scanner that serves approximately 10 patients during his 8-hr. shift. Patients are scheduled for various lengths of time, depending on which part(s) of their body requires scanning. The image quality is significantly superior to what it was on previous scanners, but the number of patients served per day remains the same. This situation attests to the fact that: the service sector has seen improvement in quality of service, but productivity remains about the same. Although technology has improved the quality of tools that we use to provide service in the service sector, the number of customers that we can serve in a fixed time period has not significantly improved. A few years ago, the American Society of Civil Engineers published a report card for America's interstates. It was reported that road repairs cost the American taxpayers $67 billion per year. Through the enactment of ___________ the U.S. government collects tax dollars and then spends some of these funds to maintain the infrastructure of the nation. Increasing taxes has the effect of drawing money away from the private sector. fiscal policy Fiscal policy refers to the federal government's efforts to keep the economy stable by increasing or decreasing taxes. Increasing taxes draws money away from the private sector and puts it in the hands of government. Imagine the following: New sources of energy have become marketable and the industries involved have hired thousands to operate the emergence of new businesses. Construction companies cannot build homes fast enough for workers in the energy industry. Due to increasing salaries in several other industries that partner with energy companies, the demand for everything from food to entertainment to travel has increased.High demand has brought about shortages in some product categories. To help manage the situation in the short-term: the Fed will likely increase interest rates. The Federal Reserve Board, open market committee makes decisions to raise or lower the interest rate known as the federal funds rate. This is the rate that the Federal Reserve charges member banks to borrow funds. Member banks pass along the higher or lower interest rate charges to their clients. If the Fed believes that the economy is growing too quickly and demand for several product categories is forcing prices too increase too rapidly, it may decided to tighten the money supply by increasing interest rates. ***** Chapter 3 ***** The Republic of South Africa exports edible fruits and nuts into the common market known as the European Union, and imports from the European Union other products which South Africa could produce but at a higher cost than what it costs the Europeans to produce. This practice follows the premise of _________________. The Theory of Comparative Advantage The theory of comparative advantage states that a nation will produce those goods and services that it produces efficiently and effectively. It will buy goods and services from other nations that it cannot produce as efficiently and effectively as the other nation. The nation of Andolvia exports $50 million worth of products and services and imports $44 million worth of products and services. Andolvia has a(n) _____________. trade surplus Trade surplus means that the value of a nation's exports exceeds the value of its imports. A trade deficit occurs when the value of a nation's exports is less than the value of its imports. In this example: Exports less Imports = trade surplus. $50 million - $44 million = $6 million trade surplus. As a strategy for reaching global markets, licensing provides the licensor with several advantages. One advantage is _____________. the cost of producing and marketing the product in a foreign market is significantly reducedLicensing refers to the strategy of giving permission to a foreign company to produce and sell your product or service. In exchange, the foreign company pays your company royalties, which usually consist of a percentage of revenues or profits. An important advantage is the reduction in costs of production and selling, because the licensee most often covers these expenses. _______________ is a cost effective way that many companies outsource the production of goods, such as clothing, shoes, and cell phones. A domestic firm contracts with a foreign company to produce and private-label the goods, at a much cheaper price than the domestic firm could produce the same goods in its home market. The major cost differential is usually cheap labor. Contract manufacturing Contract manufacturing refers to the outsourcing of the production of a good or service to a foreign producer. Contract manufacturers will private-label the goods for other companies. Most often due to cheap labor and the proximity of resources, the foreign manufacturer can produce the product or service with minimal expense compared to what it would cost the company to produce it in its domestic market. Even though the nation faces political instability, the island of Frollik with its wide, expansive beaches is a destination hub for cruise lines. Recently, a large theme park business showed strong interest in buying land in Frollik, including beach front property, with the intent of building an entertainment park targeted toward families. The theme park company wants to make a commitment to Frollik, including the hiring of several hundred local employees. The global marketing strategy referred to in this scenario is ____________. foreign direct investment Foreign direct investment refers to buying property and/or businesses in a foreign country, and making a commitment to produce and provide its product or service in that market. Foreign subsidiaries are one of the more common forms of foreign direct investment. The strategic alliance between Coca Cola and Nestle has spanned a period of over 20 years due to the fact that both companies benefit from this arrangement. As a globalmarketing strategy, an important characteristic of a strategic alliance is _____________. participant companies do not share costs or profits A strategic alliance is a long-term arrangement between two or more companies with the intent that each company will achieve a competitive market advantage. The companies do not share costs or profits. Sovereign wealth funds (SWFs) are a fast growing form of foreign direct investment. The size of these funds and the fact that they are investments from the government coffers of other nations might be a cause for concern. More specifically, some fear __________. the governments who offer these funds may obtain sensitive technologies or gain control of strategic resources Sovereign Wealth Funds are the government funds of cash wealthy nations, who wish to invest these funds in foreign corporations, where they believe they can get a good return on investment. The large size as well as the fact that these are government funds makes some fear that foreign governments may obtain sensitive, technological information or that the management of these firms could be undermined by the decision makers in the countries where these funds originate. According to Geert Hofstede, who has spent a lifetime studying differences in cultures, the Chinese have a long-term orientation, meaning they are patient savers and are willing to forgo things today, for a better future. Americans typically have a short-term orientation. They prefer more instant gratification and are not as willing to save for the future. This difference in values between the Chinese and Americans is a _____________ attribute that may represent a challenge in future global trade. sociocultural Sociocultural challenges include differences in religion, attitude, personal communication, manners, and customs. Barkley wants to sell his bicycle horns to the Beijing and Shanghai markets, due to the high volume of bicycles as a common form of transportation in these two heavily populated cities. The exchange rate as of yesterday was $1 U.S. dollar = 6.42 Chinese yuan. Economically speaking, how are his prospects?Not good. If the horn sold for $3.00, it would take 19.26 yuan to by it. Currency exchange rates continue to challenge global trade. In this scenario, it takes 6.42 yuan to = $1.00. Chinese customers would have to exchange 6.42 yuan for $1. They may prefer to buy a domestically made horn for less. During the past five years, the nation of Andolvia began a massive undertaking: teaching farmers how to successfully grow and harvest peanuts. The government subsidized the building of peanut processing plants, where private businesses are now producing peanut butter and other products of nutritional value. Although the Andolvia government has not completely banned the importation of peanuts, it has placed ________________ on the number of peanut products that the nation can import each year, in order to protect Andolvia's young peanut industry. import quotas Import quotas are protectionist policies structured to limit the number of products in certain categories that a government will permit to be imported into its nation. Belonging to the EU (European Union) has its advantages for member nations. One advantage is ___________. European Union members have a common external tariff, but no internal tariff The European Union is one of several common markets designed to provide trade benefits for its member nations. These nations have a common external tariff and no internal tariff; however, most are highly structured organizations with laws that facilitate the exchange among members. Recently, two nations experienced a trade dispute over copyright issues. Country "A" accused Country "B" of violating international copyright laws. Since both were members of ______________, they appealed to this organization to mediate the dispute. the WTO (World Trade Organization) The World Trade Organization (WTO) is a 153-member international organization whose purpose is to facilitate trade among member nations. The WTO listens to and mediates cross-border trade issues among its members. The WTO was established after the Uruguay Round agreements. ______________ has dethroned Germany as the world's largest exporter. China Not only has China dethroned Germany as the world's largest exporter, it has surpassed Japan as the second largest economy in the world. Besides the shift of jobs to foreign countries, outsourcing has other drawbacks such as __________. questionable safety and quality issues with finished products There is concern that many products produced abroad do not meet the safety standards required for selling in the U.S. The quality and precision of products are also questioned. We refer to the BRIC nations as four economics powers that will likely dominate world trade by 2030. It is predicted that the two that will supply the world with most of the raw materials are ___________. Brazil and Russia The BRIC nations are Brazil, Russia, India, and China. It is predicted that these nations will be the wealthier economies by 2030. The prediction is that Brazil and Russia will produce and sell most of the world's raw materials, while India and China will be the leading global suppliers of manufactured goods. ***** Chapter 4 ***** Ethics are the standards of right and wrong set for us by society, whereas the law is __________. the minimum protection a society enacts toward behavior that is harmful to many Laws are minimum standards set by a society to prevent harmful behavior. If your supervisor directed you to enter false information into a sales order book and told you if you refused that you would lose your opportunity for promotion, you would probably consider this situation to be a(n) ________________.ethical dilemma An ethical dilemma occurs when you are asked to take action that you believe might be harmful or unfair to others. Jake served on a committee of employees who were charged with selecting three co-workers to honor at the holiday banquet. One employee whose name was at the top of everybody's list was instrumental in helping another employee who failed to wear his protective gear avoid a serious head injury. Although this was a noble act, Jake knew that the hero was frequently negligent about wearing his own head gear. Jake knew that several other employees followed strict company policy every day and always wore their head gear; yet, they were not being acknowledged for their compliance. These employees also knew Jake was representing them on this committee. According to Normal Vincent Peale, which of the following questions should Jake refer to as he proceeds to make an ethical decision? How does the action I am proposing to take make me feel about myself? Normal Vincent Peale suggests that decisions that solve ethical dilemmas should be evaluated against three questions: 1) Does the decision follow laws and company policy? 2) Is it balanced— is there a sense of fairness in the decision? 3) How does the decision made make me feel about myself? Encouraged by the new Sarbanes-Oxley law, individuals who report unethical or illegal behavior within an organization are referred to as ____________. whistleblowers Whistleblowers are insiders who report illegal or unethical behavior. The first day on the job waiting tables at a popular restaurant, Ashley noticed that when one member of the wait staff was serving a very large party, the other waiters would help with carrying food to the table(s) and even checking to make sure water glasses were filled and condiments were on the table. Although these actions were not part of the mandatory wait staff training, Ashley perceived that those who were not as attentive to helping out were not viewed as team players by the majority of employees. Ashley was observing an example of the ___________ followed at this organization.integrity-based ethics Integrity-based ethics are informal company behavior that evolves from individuals' desire to make things better for all. These define the company's guiding values, and most often it involves shared accountability. A legal provision known as the _______________ now provides for an award for whistleblowers whose actions result in a legal conviction. The monetary award may total as high as 30% of the amount collected for violations, above the first $1 million. Dodd-Frank Wall Street Reform and Consumer Protection Act The Dodd-Frank Wall Street Reform and Consumer Protection Act provides whistleblowers an award if their actions lead to an enforceable action or conviction. This is called a "bounty" provision because as stated, they may receive a monetary award for their actions. Proponents of corporate social responsibility strongly believe in benevolence; however, they still want their businesses to be profitable. In the long run, they believe ______________. CSR can lead to even more profits Corporate social responsibility (CSR) is the concern businesses have for the welfare of society. Businesses can show their CSR in many ways. Its premise is based on integrity, fairness, and respect for others. Companies that participate in CSR typically have more loyal employees and customers. In the long run, CSR enhances profits. When an F5 tornado hit a town in southern Missouri, the people that lived there needed the basics: food, water, and shelter. The owners of Boccardi's Ristorante in St. Louis initiated an endeavor of driving several miles with a van of employees, equipment, and food to donate what they could to the storm victims. The business term we use to describe this philanthropic action is ___________________, where a company donates what it does best to help make a situation better. corporate social initiative Corporate social initiative refers to a company taking the initiative to utilize its expertise to make a situation better.The last recession changed the way many companies give. Monetary donations _______________. Many firms chose to ______________. decreased; encourage their employees to volunteer their time During the last recession monetary contributions decreased and companies found ways to continue their philanthropic participation by asking employees to donate time to corporate social initiatives and other projects. Progressive companies use __________ to communicate their CSR efforts with the public. Toyota ran a contest where it donated 100 cars to nonprofit organizations, voted on by Facebook™ and Twitter™ participants. social media Social media is a popular method that businesses now use to communicate their benevolent actions to their customers and others. Interactive media allows interested consumers to comment on a firm's actions. A few months ago, Pedro's Pizza House, a large nationwide chain of restaurants, purchased one of its competitors, Italian Stallion Pizza Stations, for $800 million. Italian Stallion stockholders got a very fair deal for their stock: $6.50/share above market value. The event was not without its problems. An ethical issue arose when it was speculated that somehow a member of Pedro's management team mentioned the deal to a person he sat next to on a flight from LA to Seattle. That person called five of his relatives. Three of them quickly bought shares of Italian Stallion and "got on record" before the acquisition. The ethical dilemma that occurred is called _________. insider trading Insider trading refers to the discussion or leak of private, proprietary information about a firm that is not yet made public. Typically it is the kind of information where parties in the know can benefit. Due to the fact that it is not yet public, those who act upon the information have an unfair advantage and stand to gain financially. It is an act that is against the law and against Securities and Exchange Commission policy. The Pak-It-Your-Way Company makes custom packaging of all kinds. The firm has evolved into a big business due to quality and innovative work. Recently, top management asked company departments to list and evaluate the kinds of sociallyresponsible efforts conducted internally and externally in the business and also to list negative occurrences that supervisors observed. Top management is essentially conducting a(n)_____________ . A measurable category would reasonably include _______________. social audit; amount of pollutants due to the manufacturing of Styrofoam containers A social audit is a systematic evaluation of a company's progress toward becoming a socially responsive organization. Both positive and negative activities are measured. The amount of pollutants a firm unleashes into the environment would serve as an example of a negative activity that would be included in the social audit measurements. Besides environmental groups, unions, and investors, a new type of watchdog organization that reports on corporate social responsibility efforts is _____________. socially conscious research organizations Socially conscious research organizations collect information on the social responsibility efforts of companies. U.S. companies that operate abroad, particularly those who contract with foreign companies, are now _______________________ human rights and environmental standards followed by U.S. law. separating themselves from suppliers who violate There is significant pressure on U.S. companies to separate themselves from suppliers who violate human rights and environmentally progressive guidelines. Which of the following statements reflects upon the difficulty companies face when requiring international suppliers to follow environmental and human rights standards set by U.S. firms? Both economics and culture enter into the discussion of fairness concerning international suppliers who do business with U.S. firms. Demanding developing countries to adhere to U.S. law is not clear-cut. Economic conditions in some developing countries make child labor a necessity for survival for families. In other situations, traditions and customs make gifts and other briberytype activities the norm in some nations.***** Chapter 5 ***** When Greg started his window-washing business, he wanted to keep things simple. As recommended, he filed a record of the business with the state where he resided. He carefully watched his expenses including state filing expenses and licensure requirements. Greg knew his financial resources were limited, but after all, it was only "him." There were no other family members to support. Greg could easily form a ___________________. sole proprietorship A sole proprietorship is an easy form of business ownership to form with limited start-up expenses, unlimited liability, and no special taxes; meaning the profits from the business are taxed at the individual owner's personal income tax rate. Unlimited liability means ___________. the business is responsible for the debt it incurs. If the business cannot pay its bills, the debt burden transfers to the owner(s), and he/she/they are liable for all debt When the business accepts unlimited liability, any debt the business incurs is the burden of the owner(s). The owner assumes all liability for paying these bills. Partnerships refer to more than one owner. The difference between a general partnership and a limited partnership is a ______________. limited partnership consists of general partners and limited partners, at least one of each General partnerships are businesses with more than one owner, all actively involved in the business. The profits are usually divided in the manner agreed upon by the partnership agreement. A limited partnership consists of at least one general partner actively involved in the business, and one limited partner who has invested in the business and seeks to realize a portion of the profits, but is not actively involved in the operational decision making. When Ben joined his Uncle's oil exploration company in southern Oklahoma, he was given several hundred shares of stock in the firm, and was officially made a partner. The firm's accountant explained that the company paid taxes the sameway as regular partnerships, by passing the profits through to each partner. Ben could purchase more shares of the company on a public stock exchange, as long as someone was willing to sell his/her shares. This firm was likely a special form of ownership called ___________________. master limited partnership A master limited partnership pays taxes like other partnerships, by passing the profits through to the individual owners, and thus accounting for those profits on each owner's federal tax return. Similar to a corporation, the master limited partnership's shares actually trade on a stock exchange. A brother and sister team, Jack and Julie took over the family's Italian restaurant business as general partners when their father died. The transition was difficult in the beginning and they mortgaged their homes in order to get the cash they needed to keep the business going. Julie operates one of the three locations and keeps the firm's books and orders supplies and equipment for all three locations. Jack operates the other two restaurants. While Julie's restaurant is doing well, Jack's locations are in trouble. In fact, they are losing so much money that the partners are in danger of going bankrupt and losing their homes. Julie believes that she should not be responsible for the debt since her location is thriving. If the business fails Julie thinks Jack should be the only one responsible for the debt. Jack believes that they are both responsible for the partnership's debts. Who is right? Jack, because partners both share unlimited liability. If one or the other fails to meet his/her financial commitment, the other partner is liable for the debts as well. Which of the following lists characteristics typical of a CCorporation? Taxed separate from its owners who also enjoy limited liability. C-Corporations are taxed separate from their owners; and owners enjoy limited liability. When Dave, Dan, and Darwin lost their jobs during the last recession, they pooled their resources, borrowed a little more, and bought a couple of houses to renovate. Darwin was a single guy with two other residential properties that he rented out. Dan and Dave had families with college-age children; they owned their homes, and Dan had a wife that worked at a professional job. All three were concerned about the riskinvolved in owning their own business, particularly the risk of losing personal assets. As their advisor, which of the following forms of business ownership would you recommend? Limited Liability Company The advantage of the LLC, Limited Liability Company, is limited liability (members are only liable for the funds each invested) and a choice of how the organization will be taxed. In this case, the partners were concerned with liability. The other three forms of ownership have unlimited liability. Twenty years ago, your parents invested in Sears. As the years have gone by, the investment has grown. However, if Sears should go out of business, what would happen? Your parents will only lose the value of their shares. According to the text, the corporation's stockholders are its owners. It further points out: "What this means for the owners is that they are not liable for the debts or any other problems of the corporation beyond the money they invest." For your parents, this means they would only lose the value of their shares. You inherited 500 shares of GE stock from your Great Aunt Martha. As you contemplate selling the shares, your accountant informs you that the company pays a generous dividend, and advises you to start watching the firm's profits. When you are awarded the first dividend, you learn that it is considered a source of income and you will be taxed on that amount. You find this bothersome because the firm paid the dividend from after-tax profits (these dollars were already taxed). This phenomenon is called __________. double taxation If corporations issue dividends to stockholders, these amounts are considered income and as such are taxed as the personal income of the stockholders. After-tax profits, though, have already been taxed. The corporation paid taxes against those dollars prior to issuing them as dividends. In the following example, the $11,700,000 earnings was part of the original $18,000,000 that the firm earned, and as such, it was already taxed once. If the $11,700,000 is issued to stockholders as dividends, it will be taxed again. Earnings before taxes $18,000,000 Tax Expense (@35%) - 6,300,000 Earnings after taxes $11,700,000 [dividends are paid from this remaining amount]A firm's management purchases all the issued and outstanding stock of the firm and takes the company off the stock market. The management of this company has engaged in ____________. taking the firm private Taking a firm private involves the efforts of a group of stockholders or management to obtain all of the firm's stock for themselves. If the employees of San Simeon Company successfully borrowed a large sum of money and purchased the firm from its current owners, we would call this event a ___________. leveraged buyout Leveraged buyout (LBO) is an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing. The funds borrowed are used to buy out the stockholders in the company. The employees, managers, or investors now become the owners of the firm. When managers buy all of the stock of a firm and take it off the open market, it is referred to as taking the firm private. Maverick Motors was a small manufacturing company that made motors for compressors used in air conditioning systems. Maverick purchased Calvert Compressor Company which essentially became Maverick Motors' largest customer. This strategic decision is termed a: vertical merger A vertical merger is the joining of two firms at different stages of related businesses. A few years ago, in order to gain market share, Blackboard™, a well-known learning management system software company used by many colleges and universities, joined forces with WEB CT™, another learning management system software company. Both companies were in the same industry and originally competed against one another. In business, we would call this event a(n) _______________. horizontal merger A horizontal merger is the joining of two firms in the same industry, often producing very similar products or services. This strategic move is usually for the purpose of the purchasing firm increasing its market share and competitive advantage.In his search for a franchised business that would satisfy his passion for the outdoors and also earn him a decent living, Asher noted that the shared profit criterion required of franchisors had significant variance. Some required franchisees to pay 8% of their monthly revenues to the franchisor. Others required 3% of the profits. In business we refer to this obligation as a ______________. royalty fee Royalties are shared profit obligations that the franchisee agrees to pay the franchisor. This payment can be in the form of a percentage of the revenues or a percentage of the profits. Shared profits are usually considered a disadvantage of owning a franchised business. Advantages of _________________ include reduced startup fees and no territory restrictions. online franchising Starting an online franchise has its advantages in reduced franchise fees, lower start-up costs, and no territory restrictions. ***** Chapter 6 ***** Entrepreneurs emphasize the importance of believing in your own ideas because in the process of developing those ideas you are likely to hear from skeptics. Characteristically, they also know that success or failure is "on them." These attributes are described as _____________. self-directed and self-nurturing Self-directed entrepreneurs know they must be self-disciplined. Success or failure is in their hands. Self-nurturing entrepreneurs believe in their own ideas. Reed Hastings started Netflix. His inspiration came from the fact that he had to pay a sizeable late fee for returning a DVD beyond the due date at a rental store. It took a few tries to develop the winning business model. Which statement accurately describes his success? His idea solved a problem. Hastings turned his problem into an opportunity. He knew if he was interested in a better way of renting movies others likely would also have the same need.An opportunity has evolved that has leveled the playing field for home-based businesses. ___________ has made starting a home-based business much more affordable. Broadband Internet connections and other technologies Computer technology, including broadband Internet connection and smart phones, has leveled the playing field between big business and small business. Pam logged onto her Facebook™ account and noted that Sallie "liked" two different websites. Since Sallie is a good friend of Pam's and a reliable source of information, Pam linked into these websites and decided to purchase from one of them. A common strategy for web-based business is _______________. affiliate marketing Affiliate marketing is a popular strategy for web-based businesses. As described in the scenario, friends direct friends to websites that they believe provide value. The friend becomes the referent. Andre works for a company that promotes an entrepreneurial culture. Employees are encouraged to discuss new ideas. Development time is provided for those ideas that float to the top. Employees who use their creative talents to generate ideas within large companies are _________. intrapreneurs Intrapreneurs are employees who are encouraged to perform entrepreneurial activities within a large business. When Parker started his business, he knew he had to keep costs to a minimal and he worried about taxes. He planned to build and distribute safety goggles for construction workers and military personnel. Most of his business would not be walk-in customers. He chose to locate in a government subsidized area called a(n) ________________, where he would receive tax breaks. enterprise zone Enterprise zones are government subsidized regions. Usually they are locations that the state or local government would like to see improved and revived.Why do incubator facilities continue to remain very popular with start-up businesses? They have a very strong success rate. Their graduates almost always succeed. It is reported that 87% of all businesses that start in incubators succeed. Why do experts agree that small business management and large business management are similar in practice? Similar to large businesses, small business have concerns about capital and good marketing and management. Large and small businesses alike are concerned with raising capital, maintaining a good flow of information, marketing, and good management. While on a trip to South Africa, Erin was impressed with colorful woven outdoor placemats, floor mats, chair cushions, and umbrellas that local artisans were weaving. Upon her return to the U.S., she was confident that others would also be intrigued by these accessories. Erin decided to explore the possibility of starting an importing business to bring these products to the U.S. consumer. Which of the following statements stands out as good advice for Erin? Learn from others who import goods from abroad, and particular from Africa. Good advice is to try to find others in the same or similar business and learn from them. Also, there might be opportunities to apprentice with others in the import business. Although the Business Plan has a great amount of detail and requires thoroughness, a well-explained idea will come to life almost immediately in which part of this document? The executive summary. The well-conceived and well-explained executive summary will attract the attention of more readers than any other part of the Business Plan. It is a summary of the highlights of the document and strongly advocates the product's or service's competitive advantage.Organizations known as _______________ have a significant role in the economic recovery. Some start-up businesses have successfully found sources of capital by going through one of these organizations. CDFIs (Community Development Financial Institutions) CDFIs are organizations that have played an important role in the recent economic recovery because they have been able to accumulate sources of funds for lending to small businesses. These funds have originated from large institutional investment companies and the U.S. government. SCORE is ____________. an organization affiliated with the Small Business Administration where retired experts volunteer to provide free advice small businesses that are just getting started An important source of information for small businesses is the Service Corps of Retired Executives (SCORE). Volunteers from industry, trade associations, and education counsel small businesses at no cost (except for expenses). A small business advantage is ____________. the ability to quickly adapt to customer needs Understanding the market is very important for small business success. Due to their size and flexibility, small businesses can often adapt quicker to changes in the market, including changes in preferred product offerings and delivery methods. Going global is wide open for small business because ____________. although this is predicted to change, currently, only about one percent of small businesses are exporting Only about one percent of all small businesses participate in export trading. This is a great opportunity, and it is predicted that this will change by 2015. While cultural differences and bureaucratic paperwork for foreign governments make the prospect of global trade difficult for small businesses, there is one bright spot on the horizon that has brought global trade closer to home. Small businesses can now ___________. use technology such as PayPal™ to fulfill orders, which gives them some assurance of paymentTechnological advances have made it much more feasible for small businesses to trade abroad. PayPal™, for one, allows for prompt international payments. ***** Chapter 7 ***** use technology such as PayPal™ to fulfill orders, which gives them some assurance of payment Contemporary managers will focus on global issues and green issues, and continue to emphasize the team approach to work. Managerial roles will continue to emphasize the team approach in working and solving problems. Contemporary managers will have an eye on "green" business—using green products in their operations and producing green products and services for others. They will also continue to have a global business focus, and be skilled in areas that serve a global business such as knowledge of foreign languages. Contemporary managers ___________. emphasize teamwork and cooperation, and act as coaches, rather than "bosses" Managers are educated to guide, train, support, motivate, and coach employees rather than to tell them what to do. There is more emphasis on working in teams and team building. Most modern managers emphasize teamwork and cooperation rather than discipline and order giving. Jenna started a small business a little less than 10 years ago. The business employed several social workers and nurses that visited and cared for persons who had left hospital care, but were not quite ready to be on their own at home. As the CEO of the firm, Jenna decided it was time to hire a business operations manager and a marketing manager to handle the details of the business. Which of the following functions of management was Jenna performing? Organizing Jenna was performing the organizing function of management. By hiring additional employees, she was designing the structure of the organization. A mobile veterinary business, Preferred Pet Care, Inc., created a mission statement long before it opened its doors forbusiness. The mission statement referred to the unique characteristics of the business: a traveling pet unit whose veterinarians went to the home of the pet owner, rather than the pet owner bringing the pet to the clinic. What other criteria should be considered for the mission statement? A description of the customers it serves and a statement about its social responsibility to the area where it operates. The mission statement should describe the main product or service that the firm offers. It should describe the customer market it serves. It can also include the company philosophy (value statement) and social responsibility statement. Most businesses follow a logical process when performing the planning function. It is important to understand ______________________, before embarking upon creating future long-term goals, objectives, and strategies. the current situation Before proceeding to write long-term goals, objectives, strategies, and tactics, managers must understand the current situation—in other words, things like the strengths and skill of employees, the firm's financial position, the current economic situation, the competitive situation, and any new technology that may serve the firm as it plans for growth. A traditional tool that serves as a way or organizing the company's current situation is called the SWOT Analysis. This is an acronym for ___________. Strengths, Weaknesses, Opportunities, Threats SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. This is a type of analysis performed during the preliminary steps of the planning process. After 8 years of working for a company that installed underground sprinkling systems for golf courses, Jake was ready to venture into his own business. As he prepared his SWOT analysis, he evaluated where he stood at this time. He was fortunate to have $100,000 financing to get the business under way. He knew of three skilled installers who were willing and interested to work for him, and he was aware that new construction was at an all-time low, with several residential properties being foreclosed. In reviewing his list, you would categorize these events as __________.two strengths and one threat Jake had two strengths (these are internal to the operation): (1) $100,000 financing, (2) three skilled installers. He had one threat (external to the operation): (1) poor economy evidence by very little new construction and property foreclosures. All managers do planning. Allison is a general manager for a large toy store. Each day she plans the number of employees she will have in each department, including the number of cashiers. She plans the break schedules and the freight delivery schedules. In the business world, we refer to this type of planning as ___________. operational planning Allison is performing operational planning, where work schedules and assignments are planned. Operational planning focuses on the planning performed by supervisors and the kinds of activities that employees would perform. As managers perform all functions, we recognize that ______________ is required. For example, when making plans, the manager must typically choose between two or three alternatives, sometimes equally good ideas or sometimes ideas that each has its pros and cons. decision making Decision making is happening throughout the process of performing all managerial functions. Managers usually have to choose between or among two or more alternative ways to proceed. Sergey Brin and Larry Page were the founders of Google™. Most would agree that they had a superb product, but in order to grow, the company needed more structure. Together, they agreed to hire Eric Schmidt to join the executive team as the executive chairman. Schmidt quickly began performing the __________ function, where he created well-structured departments and hired skilled people to perform the various functions of the business. organizing When performing the organizing function, management will hire and train other managers to perform the managerial functions at various levels of the organization. Top management, middle managers, and supervisory managers are typically needed inmost businesses. The structure is visible in the firm's organization chart. Ben oversaw the work of six pharmaceutical sales managers in the southeast region of the U.S. Each sales manager managed a team of 8-10 pharmaceutical sales representatives that developed relationships with doctors, clinics, hospital pharmacies, and local drug stores. Ben met regularly with four others in his company whose jobs were similar to his position. How would you describe the level of management Ben has achieved? Middle management Middle management positions include division managers, regional managers, plant managers, and branch managers. Technical skills that apply to the business at hand are most often necessary at __________. lower levels of management Lower level and supervisory level management require more technical skills. Technical skills are the ability to perform very specific tasks for a business. These are technical skills such as a programming supervisor, a scheduling manager, or a first-line supervisor. Which of the following leadership styles focuses on making decisions without consulting others? Autocratic Autocratic leadership involves making managerial decisions without consulting others. Such a style is effective in emergencies and when absolute followership is needed—for example, when fighting fires. Dave facilitated a hiring committee for his advertising company. Six employees (including two managers) met together to discuss applicants and select the finalists for a creative writer position in the public relations department. Although the head of public relations would have the final nod on the candidate that would ultimately be hired, the evaluative work of the committee was very important because this group would send forward those persons they believed would be good work colleagues. In setting up this type of hiring process, the head of public relations was utilizing a(n) __________ style of leadership.democratic The manager utilized a participative (democratic) style of leadership by soliciting the opinions of several employees who might directly or indirectly work with the person ultimately selected for this position. All committee members had the opportunity to bring forth their perceptions of each candidate and to articulate their selection preference, even though the department head made the final decision. The department head was interested in their input. The controlling function closes the loop for managers. It answers the question: "Did we succeed in doing what we set out to do?" Which of the following business departments has a very important role in the controlling function? Accounting department The controlling function measures performance. The accounting department provides the numbers (profit and loss statements and other financial statements), which assists management in measuring how well the firm has performed. Management relies on accounting and finance in order to evaluate progress. ***** Chapter 8 * ** Rachel planned to open a pastry shop in a resort town on the east coast. As she pondered her organizational set-up, she decided she would need four employees to specialize in the creation and production of delicate pastries, and three employees to greet, serve, and sell to customers.One or two of her workers were designated as supervisors. Another preliminary organizational decision that Rachel will most likely tackle is _______________. the allocation of resources within her operation Structuring the organization requires the manager to make decisions on how the work will be performed—the division of labor, setting up teams and/or departments, allocating resources, and establishing procedures for meeting the business' objectives. Division of labor means ___________. tasks are divided among a group of employees Division of labor means that functions are divided into areas of specialization such as production, marketing, and finance.Although many work environments require a division of labor for efficiency, cross-functional teamwork is being given more emphasis. In the past, organizational design was set up to facilitate the needs of management, rather than ___________________. pleasing customers In the past, management was more concerned with making management's job easier at work. Firms were organized to facilitate management's needs, rather than out of a concern for pleasing the customer. Julie recently started working at a major urban university. One of the first things her supervisor provided her with was a large white notebook that contained rules and regulations on just about every aspect of the university's business. As a recent business graduate, Julie realized that the university operated in a(n) ___________ environment. bureaucratic Bureaucratic organizations are rule oriented. There are clearly established, written rules and procedures. A manager's need to exert tight controls on subordinates is most accurately captured by which of the following? Control will decrease as the manager gets to higher levels in the organization and work becomes less standardized. Span of control is the optimum number of subordinates a manager supervises or should supervise. The text further explains that the number of workers supervised by one person gradually narrows at higher levels of the organization because work is less standardized and there's more need for face-to-face communication. Accountants at Leisure Time Gaming, Inc. have a big job! Although they work with state-of-the-art systems that create financial statements every day, the interpretation and analysis of those statements can take several hours. The accounting department consists of financial, managerial, and tax accountants. One advantage of departmentalizing the accountants is ______________. for efficiency, the employees can coordinate work within the functionDepartmentalization has several advantages. One particular advantage is that employees with similar expertise can coordinate the work between and among each other. During the past recession, Cali-Bration Company created a __________ organization, when it restructured and eliminated several middle management positions. As it emerged from the recession, Cali-Bration realized that Internet technology permitted the remaining employees to be just as responsive to customer needs as the firm was prior to restructuring. flat A flat organization structure is one that has fewer layers of management and a broad span of control (that is, there are many people reporting to each manager). Such structures can be highly responsive to customer demands because authority and responsibility for making decisions might be given to lower-level employees. ABC Company desires a successful product launch. Looking outside of its industry, it solicits the advice of companies JKL and MNO who were known for successful product introductions in past years. The business term that we use to describe the practice of looking toward others for a model approach is called _____________. benchmarking Benchmarking is comparing an organization's practices, processes, and products against the firm or firms known to do it the best. ABC Company was awarded a bid to build an energy-efficient motor for a large government heating and cooling project. The requirements of the project included a timeline of one year to build and deliver the system. In order to provide a quality product and stay within the time requirements, ABC Company set up a _____________ organization, whereby employees from various functions of the business would join a team to see this project through, from start to finish. Upon completion, the team would disband and members would return to their respective functional units. matrix In a matrix organization design, specialists from different functional units of the organization are brought together to workon specific projects but still remain part of a line-and-staff structure. A project manager can temporarily assign people from different departments to help design and market new product ideas. Members return to their functional units when the project is complete. In order to build the next generation of gaming software, Leisure Time Gaming, Inc., put together a______________ organization structure. The structure included suppliers, distributors, and customers, who joined company experts to pursue the company's objectives. cross-functional Cross-functional teams consist of employees who are permanent team members, each with expertise from one or more business subject areas. The teams may also consist of suppliers, distributors, and customers. Transparency refers to ____________. the seamless operation of organizational partners, so that each is perceived as an integral part of the operation, and appears to be part of the same company Transparency is a concept that describes a company being so open to other companies working with it that the once-solid barriers between them become see-through and electronic information is shared as if the companies were one. A large commercial equine operation (commercial horse farm) provides jobs for over 100 employees, who care for over 300 horses of various breeds. The operation consists of traditional functional units which include management, marketing, and finance, and 45 veterinarians that specialize in the various breeds of horses owned by the company. Although the firm operates with a CEO, COO, and CFO, and a director of marketing, it relies on the veterinarians to make decisions on the appropriate care and environment for the horses. Sometimes the veterinary decisions override marketing and financial concerns. The commercial farm operates as a(n) _________ organization. inverted In an inverted organization, decision makers are not necessarily the chief officers of the company. Specialists are empowered to make the best decisions for the firm. These employees are supported by top management.A Far-East auto company recognized the quality of airconditioning systems that a U.S. company in the state of Indiana successfully manufactured for the U.S. auto industry. Rather than build its own, it ______________ the airconditioning component of its models to the U.S. company, which provided several jobs for skilled trades persons in that state. insourced When a foreign company hires U.S. firms to produce products, it has the opposite effect of outsourcing. We call this insourcing. Due to his reputation of putting together powerful presentations, Brock was contractually hired by Robotic Life, Inc. to help this firm introduce the value of its new robotic arms and legs to high net worth investors. Robotic Life hired Brock strictly for this special project. At this stage of its life, the firm operates as a(n) ______________, where it solicits the services of other companies on an "as needed" basis, and then releases them when the job is done. virtual corporation Virtual corporations are companies who partner with other business firms. AJ was a newly hired attorney for Leisure Time Gaming, Inc. Even though he reported directly to the president of the company, AJ noticed that the president always had time to converse with the director of sales, calling on him to get a pulse on legal/regulatory issues that, as the company attorney, AJ could have probably handled. AJ also noted that the HR manager's administrative assistant was the "go to" person for a number of things that would make life easier at work. AJ was recognizing the _________________ culture at Leisure Time Gaming. informal organization The informal organizations are the friendships, cliques, and lines of authorities at work that form spontaneously outside the formal organization. ***** Chapter 9 ***** Which of the following factors would NOT be part of a processto improve a business' competitive positioning in a global marketplace? Reducing product quality to keep costs low. The items U.S.manufacturers are emphasizing to regain a competitive edge are:focusing on customers, practicing continuous improvement, relying on the Internet to unite companies, maintaining close relationships with suppliers and other companies to satisfy customer needs, focusing on quality, saving on costs through site selection, and adopting new production techniques. The list does not include reducing product quality to keep costs low. Which of the following statements concerning the U.S. service sector today is most accurate? This sector has grown much more rapidly than the manufacturing sector. The U.S. service sector of the economy has grown more rapidly than the manufacturing sector in recent times. __________ is about converting resources into goods and services. It includes inventory management, quality control, production scheduling, follow-up services, and more. Operations management Operations management is a specialized area in management that converts or transforms resources (including human resources) into goods and services. An operations manager at a wood processing plant in Oregon notices that there is significant scrap and inefficiencies in the plant's operations. Which of the following techniques would he be most interested in implementing? lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production. Designing and making custom-made guitars is an example of which of the following processes? Intermittent process Intermittent process is a production process in which the production run is short and the machines are changed frequently to make different products. The text uses manufacturers ofcustom-designed furniture as an example of an intermittent process. A company that makes fireplace mantles uses computer modeling in order to ensure that the process used makes the most efficient use of resources. The company is equipped with _____________ technology. CAD/CAM CAD (computer-aided design) uses computer programs to design products. CAM (computer-aided manufacturing) uses computer programs in the manufacturing of products. CAD/CAM makes it possible to custom-design products to meet the needs of small markets with very little increase in cost. In order for a U.S. or non-European companies to export manufactured goods to European countries, which of the following would most likely apply? Companies that want to do business with the EU must be certified by ISO standards. ISO 9000 is the common name given to quality management and assurance standards. The text points out that "what makes ISO 9000 so important is that the European Union (EU) demands that companies that want to do business with the EU be certified by ISO standards." As Leisure-Time Gaming, Inc.'s business and product lines continue to grow, it wants to limit the need to build additional space to house programmers and other personnel who work on new products. The company has strategically decided to adopt ________. Skilled employees can work from remote locations. telecommuting Telecommuting is the process of working remotely from the firm's main location. Many skilled employees are now working from home. Telecommuting is becoming a major trend in business. Bellandro Brewery recently became certified as an ISO 14000 company. Which of the following criteria would decisionmakers evaluate for this award? Environmental improvement plans.ISO 14000 is a collection of best practices for an organization's impact on the environment. __________ is the process managers use to continually monitor all phases of the production process to ensure that quality is being built into the product from the beginning and that quality is not being "inspected" into the product at the end of the process. Statistical quality control (SQC) Statistical quality control (SQC) is the process managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning. Anna worked for over an hour trying to set-up her new smart phone by following the brochure directions and even going online to access services. She finally gave-up and used the online locator to find the service provider's nearest location to her home. Businesses know their products can be complicated and many customers prefer on-site service visits. Brick-andmortar locations need to ________ in order to compete for the business of busy customers. offer outstanding customer service In order to provide value, brick-and-mortar stores must provide outstanding service and select locations that are very convenient for their customers. The Toyota™ assembly plant in Tennessee purchases several thousand unassembled parts for automobiles and then performs final assembly of the vehicles before delivering them to dealers all over the nation. Purchasing parts several days or weeks before they are assembled would increase the total cash outlay the plant has tied-up in inventory at any given time. In order to reduce the expense of large inventories, most assembly plants have successfully adopted ____________ inventory systems. just-in-time Just-in-time inventory systems control the amount of inventory on hand during every hour of the working day. Partner/suppliers deliver only the amount of unassembled parts that the assembly plant will need to assemble the number of vehicles that will be assembled on any particular day.The project manager building a new underwater dolphin exhibit at a large urban zoo is reviewing the chronological sequence of activities that must be completed on the project and the estimated time of completion of each activity. He is studying the _________. PERT technique The PERT technique is a chronological sequence of tasks that must be completed in order to bring a project to completion. The following PERT network lists all the different tasks that must occur in order for West Coast Aquatics Swim Club to successfully host a regional swim meet at the Frank Fiscallini Swim Center. The darkened boxes are the critical path because __________. this represents the path of tasks that will take the longest to complete The critical path is the path of tasks that will take the longest to complete. If the director experiences any delays in the completion of these tasks, the entire activity will be delayed. The O'Donnell Company field engineers perform installation and repair on large pieces of equipment that are used in the process of making gasoline at petro-chemical plants. Each day, the on-site engineer reviews the ___________ to determine which parts of the project are in-progress and which have been completed. This bar graph also shows the engineer which equipment must be installed before other parts are started. Gantt chart A Gantt chart is a bar graph that clearly shows what projects are being worked on and how much has been completed at any given time. ***** Chapter 10 ***** With respect to the development of scientific management, Frederick Taylor's objective was to ______________. increase productivity at work Frederick Taylor, the father of scientific management, wanted to increase productivity at work. He studied (observed) the way that workers performed each job and timed their progress. From this observation he developed the most efficient method to do each task.At the ice cream shop where Kayla works, all shoppers are greeted with the same script: "Welcome to Chill-A-While. My name is _____. How may I help you?" All shoppers must be greeted in less than three minutes after they have entered the shop. Which management theorist would have approved of this method of operation? Taylor Elton Mayo's famous experiment at the Hawthorne Plant concluded ____________. people who perceive that management permits them to contribute to work decisions might be more productive The Hawthorne Studies concluded that workers who knew they were being studied, workers who were given an opportunity to be part of the work decision making, and workers who felt part of a group at work could be more productive. Recently Tommy switched jobs from a large firm, to a mediumsized firm. As one of four project managers at the new firm, Tommy recognizes that employees have much more respect for his expertise than he perceived at the larger firm where there were a minimum of 25 project managers. According to Maslow, which hierarchy of need is important to Tommy? Esteem Maslow defines esteem needs as the need for recognition and acknowledgment from others, as well as self-respect and a sense of status or importance. In accordance with Maslow's way of thinking, if Elizabeth secured a good paying job that paid her enough to live in a decent apartment and buy an economical car, and if she felt that her work location and her home location were relatively safe places, she would ______________. turn her focus to the next level of needs: social needs Maslow emphasizes that people will satisfy lower order needs first. Once a level of need is satisfied, we turn our attention to the next level of needs. In this situation, the next level is social needs. According to Herzberg, which of the following would be considered "motivators?"Sense of achievement and opportunity for growth. Herzberg listed several work related factors. The first five included "sense of achievement" and "opportunity for growth." Both are considered motivators. Herzberg's research purposefully directed managerial thinking to ___________. develop interesting jobs which might require problem solving and decision making Herzberg's research was directed toward helping managers create jobs where employees would feel more fulfilled. He separated motivating factors from what he called hygiene factors. Motivating factors such as "more interesting work" were the type of characteristic that employees desired. Employees may recognize the absence of hygiene factors, but did not consider such characteristics as motivational. Motivating employees by expanding the number of jobs or tasks that they are involved with is referred to as job ___________. enlargement One type of job enrichment is job enlargement, which combines a series of tasks into one challenging and interesting assignment. McGregor recognized that ____________. their attitude toward workers affected how managers proceeded to motivate According to McGregor, the way the managers "manage" depends upon their attitudes and beliefs toward workers. Betty is the assistant store manager at a trendy clothing store. The store hires lots of seasonal employees. Betty has little regard for the skill or ability of those she hires, and she is certain that few would come to work on time each day if it weren't for the fact that the store is known to fire any employee who fails to be on time. As a student of motivational theory, you would describe the management style of Betty as ___________. Theory X Theory X managers typically believe that employees dislike work. Most workers' primary motivators are fear and money. Due tothese employee attributes, workers must be directed, controlled, and closely monitored. Which of the following approaches suggests that a manager believes that employees should be involved in both defining problems and in designing the solutions? McGregor's Theory Y Rather than emphasize authority, direction, and close supervision, Theory Y emphasizes a relaxed managerial atmosphere in which workers are free to set objectives, be creative, be flexible, and go beyond the objectives set by management. A key technique in meeting these objectives is empowerment. Empowerment gives employees the authority to make decisions and the tools to implement the decisions they make. For empowerment to be a real motivator, management should follow these three steps: (1) find out what people think the problems in the organization are, (2) let them design the solutions, and (3) get out of the way and let them put those solutions into action. William Ouchi's theory Z recognized ___________. the merits of a hybrid form of Japanese style management and American style of management Theory Z is a hybrid style of management that incorporates what Ouchi considered to be the best of Japanese style management and American style of management. This hybrid approach considers such progressive ideas as employee involvement, informal employee control (empowerment), shared responsibility, and a slower approach to evaluation and promotion. A Michigan State University student spends his summer months in his hometown, where he works for a local microbrewery during the evening hours. In the late morning, he attends the local community college, where he takes a summer course that he knows will transfer back to MSU. Although he finds the courses just as challenging as his regular university, he does not worry about his summer grades affecting his 3.2 (out of 4.0) grade point average, because MSU only accepts the transfer credits. As long as he receives C grade or better, he maintains his current grade point average. Which of the following theories suggests that the student will only work as hard as necessary to earn a "C" grade?Expectancy Theory Expectancy theory suggests that when faced with a work situation, we ask ourselves: (1) Can I accomplish what I need to accomplish? (2) If I accomplish what I need to accomplish, what will be the reward? (3) Is the reward that I am likely to receive worth the effort (do I want this reward)? If the student puts forth maximum effort, there is a good opportunity to make an "A" grade. However, if he/she completes the class with a "C" grade or better, the best he/she can hope for is credit hours toward graduation from MSU. It is not possible to transfer an "A" or "B" grade, and their accompanying grade points. Therefore, the student is not motivated to achieve a high performance. Becca works for a large management consulting firm, as a junior level consultant. She recently learned that another consultant who was hired at the same time has already received a step-up promotion. Becca knows that she has contributed to well-received projects and projects that have received accolades from clients. According to equity theory, Becca may choose to _____________. increase her inputs Equity theory says that employees want to be treated fairly. If employees perceive inequitable treatment at work, they will try to reestablish fairness by doing one of several things: (1) decrease inputs (the amount of work they do), (2) rationalize the difference, (3) increase inputs, in the hopes that managers will notice the effort, (4) rationalize that he/she is worth more, and find another job. In order to get a comprehensive evaluation of the computer programmers he managed, Justin organized a(n) __________________, where he asked immediate coworkers and others that worked closely with the programmers to participate in the evaluation process 360-Degree Review Today, most managers perform some functions associated with ______________ human resource management When AJ was hired by Idle Time Gaming, Inc., he accepted an opportunity to be part of the management training program. Besides on-the-job coaching, a common aspect of management development programs is ____________. job rotationWorkers originally formed unions ___________. to protect themselves from intolerable work conditions and unfair treatment A few years ago, a mid-level manager who was still completing her probationary period at a new job was called in by her direct supervisor for a first month evaluation. The conversation became rather unpleasant when the supervisor alluded to his disappointment that the new manager was not spending more time with him away from work, where they could get to know each other in a more intimate manner. In fact, he commented that such an effort might just solidify her continuing employment. The type of sexual harassment that the new manager was subjected to is called ___________. quid pro quo When negotiations appeared to be going in the wrong direction, a HVAC systems company and its union representatives agreed to bring in a(n) _______________. This expert would serve as a facilitator to get negotiations back on track; whereas, if a(n) ________ were solicited by both union and management, that person's decision would be binding. mediator; arbitrator When was it common for employees to have 60-hour work weeks? Early 1900's McGregor recognized that ____________. their attitude toward workers affected how managers proceeded to motivate Betty is the assistant store manager at a trendy clothing store. The store hires lots of seasonal employees. Betty has little regard for the skill or ability of those she hires, and she is certain that few would come to work on time each day if it weren't for the fact that the store is known to fire any employee who fails to be on time. As a student of motivational theory, you would describe the management style of Betty as ___________. Theory XWhich of the following approaches suggests that a manager believes that employees should be involved in both defining problems and in designing the solutions? McGregor's Theory Y William Ouchi's theory Z recognized ___________. the merits of a hybrid form of Japanese style management and American style of management A Michigan State University student spends his summer months in his hometown, where he works for a local microbrewery during the evening hours. In the late morning, he attends the local community college, where he takes a summer course that he knows will transfer back to MSU. Although he finds the courses just as challenging as his regular university, he does not worry about his summer grades affecting his 3.2 (out of 4.0) grade point average, because MSU only accepts the transfer credits. As long as he receives C grade or better, he maintains his current grade point average. Which of the following theories suggests that the student will only work as hard as necessary to earn a "C" grade? Expectancy Theory Becca works for a large management consulting firm, as a junior level consultant. She recently learned that another consultant who was hired at the same time has already received a step-up promotion. Becca knows that she has contributed to well-received projects and projects that have received accolades from clients. According to equity theory, Becca may choose to _____________. experiment with Ouchi Theory Z ideas An HR director was reviewing the job description for a new position in the Information Technology department of his company. He quickly jotted down a few comments that he would later share with the department manager. Among other things, his comments included suggestions for incorporating more skill variety into the job and a little more autonomy as to how the job might be accomplished from start to finish. As a student of business, you recognize that the HR director believes that a person holding this position would be motivated by _______________. job enrichmentAs the director of Human Resource Management for Idle Time Gaming, Inc., Addie's responsibilities included __________________. recruiting talented employees, developing and training employees, and selecting tools for performance evaluations Adam was recruiting project managers for his small business. As he finalized the job description for the position, he worried about attracting top talent. He knew the job would be challenging, but his concern was ____________. When it comes to recruiting skilled employees, this is where small businesses are challenged. compensation Which agency is charged with enforcing affirmative action programs? EEOC Businesses want productive employees. __________ focuses on short-term skills, whereas _________focuses on increasing employees' long-term abilities. Training; development When performing a job analysis, the human resource manager will write a job description, as well as a job specification. The job specification consists of _________. the minimum academic and experience qualifications One of the reasons that companies experience challenges obtaining employees when positions become open is ____________. it is often difficult to find a qualified candidate that doesn't need training after hire Once the job analysis is performed, there are several wellstructured steps to the hiring process. This process includes _____________. performing background checks on selected candidates, and establishing probationary periods At a local university, over 50% of the faculty are part-time employees, who have similar credentials as full-time employees but do not have permanent positions. These employees are seldom offered benefits and are not represented by theeducator's union. HR experts would designate these professionals as __________________. contingent employees Jake's family owned a plumbing company with a steadfast reputation of excellent work. Yet, when Jake joined the business, his father required that he spend several years working alongside two licensed plumbers. In business, we call Jake's starting position a(n) ______________. apprentice Companies that make a concerted effort to attract and hire women and other minority groups ____________. know that their efforts correlate with increasing women and minority customers Progressive companies who want to attract and keep good employees are now offering their employees ________ benefits, such as onsite dry cleaning services, shoe repair, onsite medical care, and even free breakfasts soft When Maggie joined Techno-Nerds, Inc., she automatically joined an employee team. Team members each had base salaries, but they were also compensated through a __________ system, where they would receive bonuses for team improvements over the last time the team's performance was evaluated. gain-sharing Which of the following would be considered an outgrowth of the Industrial Revolution, according to most historians? Union movement _________________ was legislation that established the minimum wage in the United States. Fair Labor Standards Act Under a(n) ______________ companies hire nonunion workers who are not required to join the union, but who must pay a special union fee agency shop agreementLansing Distributors, Inc., a company that distributes a range of household products from manufacturers to retailers, was negotiating a new contract with its union employees who worked in the company's warehouses and drove its trucks. Union reps and management were willing to negotiate on 20 points, but the union wanted to discuss 2 other points that Lansing management did not want to make part of the employee contract. In this situation, the bargaining______________ constituted 20 options. zone Negotiations between union representatives and management came to a standstill at the Habit-You-Can-Live-With Seatbelt and Airbag Company. On the day employees went on strike, they were also asked to refrain from buying cars, vans, or trucks from any assembly plant that purchased Habit's seatbelts or airbags. The union was asking Habit's employees to participate in a(n) ___________. primary boycott A court-ordered ______________ was imposed on Fairlawn city employees that worked on streets and bridges. Although these employees agreed to strike for higher wages and benefits, the city asked the courts to order them back to work, to keep the streets free of ice and snow during the winter months. injunction How would you characterize the popularity and power of today's unions? Across the board, union membership is significantly reduced, which decreases their future bargaining power. CEO compensation that is awarded via stock options has become problematic because _____________. recent decreasing swings in stock prices lead to CEO buying opportunities which ultimately leads to a much higher percentage increase in compensation compared to other employees Companies are focusing attention on the social issue known as eldercare because it is ____________. decreasing productivity at work The issue of subsidizing child care through one's employer is hotly debated. Those who oppose it ___________.complain that they will have to contribute to a benefit that they do not use Marketing is as much about helping sellers sell products and services, as it is about __________. helping buyers buy The idea behind marketing (known as the marketing concept) is ___________. a mutually beneficial exchange between buyers and sellers, where buyers receive quality products and good service, and sellers realize a profit Focusing on long-term customer loyalty is called ____________. customer relationship management Mac and Zac want to start their own youth sports academy, to teach baseball skills to young boys. Which of the following steps in the marketing process is a good place to begin? Find out what young baseball players want to achieve As Mac and Zac explore the possibility of starting a youth sports academy, they collect demographic and lifestyle information about the families who would potentially buy their service. This exercise will help to better identify their ________. target market Once Mac and Zac have a better understanding of the kinds of baseball skills that local youth want to acquire, they can begin to prepare the ________________.pricing structure marketing mix Marketers constantly require good information if they are to meet or exceed their customers' expectations. When performing marketing research, Mac and Zac's first step is to ______________. determine the type of information (the question) they are seeking Two baseball leagues in the city, where Mac and Zac plan to open a youth sports academy, agreed to allow Mac and Zac to distribute an email survey to their league players. In order to capture this opportunity, Mac quickly put together a set of 15 questions that inquire about the type of skills (batting, pitching, fielding, running) that league players want to develop.The survey and subsequent information this research would glean is called ________________ data. primary After one year of operating a youth sports academy in their hometown, Mac and Zac learned that several enthusiastic baseball players were driving to a larger town to receive similar services. In order to learn about the potential customers who were going elsewhere for service, Mac and Zac proceeded to scan the Internet to determine how competitors' services differed from theirs. They learned that competitors were open longer hours on weekends, and even had celebrity endorsements. The new information Mac and Zac collected, and its interpretation was the _______________ part of the marketing research process. analysis Through environmental scanning, marketers can learn new ways to reach prospective customers. As they scan the _____________ environment, Mac and Zac hope to buy the most state-of-the-art mechanical arms for their youth sports academy. Recently, they learned about a robotic baseball player that stands at the plate. He can be programmed to change sizes. The big question for Mac and Zac is can they afford it; and if not, will their competitors decide to buy it? technological Recently, Mac and Zac's Youth Sports Academy has had several inquiries about girls' softball. While scanning the ____________ environment in their service area, Mac and Zac become aware of the growing importance of girls' sports, and particularly girls' softball. Girls' softball received a boost in the local market when the high school team won the state championship. Mac and Zac are seriously considering expanding their operation to include skill lessons for young girls sociocultural Up until now, Mac and Zac's Youth Sports Academy has served the ____________ market. Just recently, the local high school contacted Mac and Zac's inquiring about practice space for boys' baseball and girls' softball during bad weather. If Mac and Zac negotiate a contract with the high school, they will also be serving the ___________ market. consumer; B2BMarket segmentation is about dividing the total market for a product or service into groups with similar characteristics and needs. Marketers often divide the total market for their products and services demographically, either by age, education, or income level. If they wanted to know if all 18- year-old in their market had similar TV show interests, their inquiry would also focus on _____________ segmentation. psychographic Lauren is heading home from work and realizes she forgot to buy cat food during her lunch hour. As she navigates the traffic, she tries to decide where it will be most convenient to stop. She could go to the large discount store, which would give her the best price, but the lines are usually long after work. There are a couple of convenience stores on her route, but she isn't certain they will have her cat's brand. The grocery store is no better than the discount store after work. She settles on one of the drug store chains that also has just about everything. It is larger than the convenience stores, but never as crowded as the grocery store or discount store. In terms of consumer behavior, _____________ influences have guided Lauren's decision situational Business to business (B2B) customers _________________. tend to be more rational in their decision making than individual consumers One of the ways that restaurants adapt their product offerings to address changes in competition is ____________. develop new menu offerings Which of the following would be considered a convenience good? Candy bar Products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers are known as ____________ goods and services. shopping Fountain of Youth Tea Company changed their glass bottles to streamlined thermos- like, blue sports bottles that fit nicely onbicycles and in car holders. A packaging innovation such as this is often perceived by the buyer as a _____________. new product New packaging technology that allows companies to track products through radio frequency identification is referred to as ____________ RFID Priceline™ and Expedia™ are two online travel companies. Both are known to utilize ___________ of services such as "airline flights and hotel stays" to entice customers to purchase both at the same time, for a more reasonable price than what they would pay separately for each of these services bundling A legally protected brand is a _______________ trademark A survey company used a dollar value to measure the ___________ of Ben and Jerry's Ice Cream, as compared to some of its worthy competitors. Essentially, the survey firm evaluated Ben and Jerry's by measuring net value of several components that would comprise the brand's perception and image to ice cream customers. brand equity GAP jeans are sold exclusively at GAP stores. This is an example of a(n) _________ brand. private Differentiating your product so that it will appeal to additional market segments occurs most often at which stage of the product life cycle? Maturity Upscale retailers, such as Nordstrom's, feature customer service as their significant point of difference and use that difference to compete with less expensive stores. This is known as ___________ competition. nonpriceProducts that the consumer purchases which include insurance, burial services or emergency car-towing are known as ___________ goods and services. unsought Idea generation represents the first stage of _______________. new-product development Volvo is a well-known quality manufacturer of cars, trucks, and SUVs. Volvo dealers also provide financing to their customers. These products and services are part of Volvo's product _____________. mix The purpose of the product life cycle is it serves as a(n) __________ tool that tells the marketing manager if the product market is changing The channel of distribution consists of ___________, who provide transportation and storage of goods as they are distributed from producers to ultimate consumers marketing intermediaries About 80% of all wholesales are _______________. They typically are independent companies that take title to goods that they resell to retailers merchant wholesalers The movement of information and the movement of goods is a function of which of the following? Logistics Which utility is usually provided by producers rather than intermediaries? Form As long as they do not __________, manufacturer's agents can represent several manufacturers in a specific territory represent competing products When Fountain of Youth Tea Company strategized on how to distribute its product to customers, it elected to first startoffering it through high-end grocery stores. The company essentially added ______________ utility to the distribution process place A store that sells a huge variety of one type of product such as books, in order to dominate that category is called a category _________ store killer You can find Coca-Cola products in discount stores, grocery stores, convenience stores, and even vending machines. CocaCola practices _______________ distribution with its product lines. selective intensive When Beck's Bicycles, Inc., started its specialty bicycle business, it became the luxury brand of world famous bikers, who competed in world class races and were known to only pursue their sport using state-of-the-art equipment. The best distribution strategy for a brand with this image would be _________ distribution. exclusive Beck's Bicycles, Inc., purchases its wheels from a Southeast Asian company. The supplier sends the goods via ship, with the Port of Los Angeles as its destination. From there the wheels are shipped via rail to Chicago, Illinois, where they are loaded onto a truck for their final destination to Beck's assembly plant on the east coast. Beck's uses _________ shipping to transport its goods. intermodal A convenience store is open seven days a week and remains open on holidays. The store provides its customers with _________ utility time Now that so many goods are produced abroad, companies are finding that services such as ___________ provide important utility to the process of successfully processing products through customs and other legal requirements web-based trade compliance systemsService utility is rapidly becoming the most important utility for many ________ as they face competition from direct marketing, such as the Internet or catalogs. retailers It is important for companies to build cooperative and transparent channel systems for moving goods, supplies, and services. Well-known fast food franchises usually set up _____________ systems, where individual franchise owners participate in channel cooperation through legal agreements. contractual One of the fastest growing aspects of retailing is _________. Examples of firms that compete in this type of retailing are Lands End™ and L. L. Bean™, who both sell casual men's, women's, and children's clothing and accessories direct marketing Promotion is one of the four Ps of marketing. The promotion mix is __________. the promotional tools marketers use to carry out promotion When using various forms of promotion to carry the promotion message, it is important that the recipients of the message interpret it in the same way. Creating a unified promotional message, where potential customers perceive the same message, whether it is in a TV commercial, or on a billboard, or in an online blog is called ____________. integrated marketing communication If the sender in a non-personal, paid promotion is identified, we define it as advertising. If the sender is not readily identified, we label it ____________. propaganda How do consumers benefit from advertising? They receive valuable information, and advertising can even pay for the media that delivers the message While doing an online search for a music venue, Darcy ran across a performance of well-known entertainer Lady Gaga that featured her hair neatly wrapped in Coca-Cola™ cans. The venue did not visibly identify the sponsor in any other way. Marketers would categorize this form of advertising as _________________product placement Some products and services lend themselves to ______________ better than others. For example, youth in Southeast Asia, youth in Bosnia, youth in Alaska, and youth in Brazil may desire the same products, in the same form. global advertising A fast growing form of media for the delivery of advertising messages is __________. Some firms boast that they have several million followers on Twitter™ and Facebook™ accounts. social media A benefit of utilizing social media to deliver advertising messages is the advertiser can more easily track who has selectively viewed the message and who has passed it along to others Personal selling, as a form promotion, differs when the effort is a B2B (business to business) sales effort rather than a B2C (business to consumer) sales effort. B2B personal selling requires ______________. more prospecting and qualifying Which of the following statements about personal selling is true today? Salespeople are starting to use the Internet and other technology to do everything it takes to complete the order. _____________is an unpaid form of promotion. It can have positive and negative effects on the recipient. When you log onto Yahoo™ and read that four auto assembly line plants are closing, it is not good news for our economy. However, on the same site, if you read about a motor company's water recycling effort targeted toward good stream management, you are usually impressed. Publicity When Beck's Bicycles, Inc. volunteered to send its expert riders up mountainous terrain to rescue a lost dog that was unable to free himself from a cliff, it received accolades not only from other bicyclists, but from the public in general. Beck's marketing director insisted that the company show a video of the search and rescue on its social media site and on-lineadvertising. The effort quickly turned into an important _____________ campaign for the firm. public relations When Marmalade's Cupcake Closet is not jammed with happy customers, one or two of its sales associates stand out front and provide tastes of Marmalade's sumptuous goodies, in the form of miniature-sized treats. The company owners know that ________ is a very powerful form of promotion. sampling When Fountain of Youth Tea Company (FYT) wanted to secure shelf space in high-end grocery stores, it found that it had a lot of competition. In order to get the attention of retailers, FYT directed its promotion toward the consumer who desired a refreshing tea drink, as opposed to carbonated beverages. Due to a successful campaign, it compelled the grocers to feature it in the stores. FYT used _______ strategy pull As an attorney who advocates for disabled children, Patty created a(n) ________ to provide expert opinion and other resources to a targeted group who needed her services. This promotional tool was similar to an online diary on the Web, and spread messages quickly and efficiently, sort of like wordof-mouth testimonials. blog In a private company's accounting system, inputs are _______________ and outputs are _____________. transactions such as sales and payroll expenses; financial statements A Certified Public Accountant (CPA) is ___________. an accountant who has met educational requirements and has passed exams established by the American Institute of Certified Public Accountants In order for information to be meaningful, a firm's accounting processes and procedures should be certified as accurate by nationally acceptable accounting standards. Companies hire _________________ to provide unbiased opinions about the accuracy of a firm's financial statements. Independent AuditorsAccumulated earnings from a firm's profitable operations that are kept in the business and not paid out to stockholders are called _____________. Retained Earnings Buying and selling goods, acquiring insurance and using supplies represent __________ transactions. Financial Ledgers can yield information to compile which of the following? Trial Balances The fundamental accounting equation is ____________. assets= liabilities + owner's equity _________ accounting is used to provide information and analysis to managers within the firm to assist in decision making. managerial If Beck's Bicycles, Incorporated's income statement shows gross profit of $350 million, with operating expenses of $120 million, and if Beck's tax rate is 30%, what is the firm's net income after taxes? $161 Million Which of the following is most helpful in analyzing the financial performance of a company? Financial Ratios Small businesses that are just getting off the ground often have cash _________ problems. This is simply the difference between cash coming into the business less any cash going out of the business. If the company allows for too lenient credit sales terms, customers do not pay on time, which magnifies this situation. Flow Darby's company reported net income after taxes of $2,000,000, on sales of $225 million. Her boss asked her to calculate the earnings per share for stockholders. Darby noted that the company's balance sheet showed 44 million sharesoutstanding. To explain to him that her calculation is correct, Darby's correct response is __________. $0.045 per share. Earnings per share is calculated by taking net income after taxes and dividing by the total number of common shares issued and outstanding Darby's boss asked her to determine if the company is operating with too many borrowed funds. Which ratio will Darby utilize to help her with her decision? leverage The following information is listed on Beck's Bicycles, Incorporated's Balance Sheet as of 12/30/2012 _____________. If you were one of Beck's accountants and you were asked to evaluate if the firm has enough funds to pay its bills that are coming due in the next few months, how would you respond? Beck's will have enough funds to pay bills coming due in the next few months, as long as it continues to collect money that others owe Beck's and it turns over (sells) at least $7 million in inventory. Financial managers examine the financial data prepared by ___________ and make recommendations to top executives about strategies for improving the financial strength of a firm. Accountants Taxes represent ____________. cash outflow Short-term forecasts are based on ______________. expected sales revenues and expenses If your job is to compare actual expenses incurred by your company, with financial projections previously created, you are performing the task of __________. Financial Control Accepting bank credit cards represents one way to decrease_____________. the expense of collecting accounts recievable What is the major problem with selling on credit?A sizeable portion of a firm's assets could be tied up in accounts receivable. The Credit Card Responsibility Accountability and Disclosure Act of 2009 did very little to protect ___________ from increases in credit card interest rates and fees. small businesses Marco's Italian Gardens, an authentic restaurant in suburban Chicago, worked with a local bank for a _____________. This unsecured source of funds was available for Marco to tap into if he needed immediate funds for the business. He liked the fact that he had a cushion and only used it if he fell short of funds. line of credit Backstreet Books, Inc., an eclectic book and music store near a large college campus, is a reseller. The operation buys books almost every day. Deliveries are constantly part of the day-today operation of the firm. The transportation company that delivers to Backstreet Books provides this service on trade credit terms of 3/5, net 30. This means the firm ___________. is offered a 3% discount if it pays during the first 5 days. The entire bill is due in 30 days Which of the following is a long-term debt obligation of a corporation or government? bond The financial manager for Bellandro Bay Brewery is working with the firm's marketing department to bring out a new line of pumpkin ale. The new product development and subsequent production will require a long-term investment of funds by the company. Which of the following sources of financing would be representative of such a funding requirement? issuance of bonds One advantage in using retained earnings as a long-term source of funds is __________. firms avoid having to make dividend payments to stockholders, or interest payments to bondholders ldle Time Gaming, Inc. knows that its stockholders expect a return on their investment. The expected return thatstockholders anticipate translates into the company's __________. Essentially, this is the amount that the investment funds are costing the firm. cost of capital One of the consequences of the financial crisis of the late 2000s was __________. more government scrutiny and regulations Issuing stock as a source of funding is referred to as ____________. equity financing One of the major functions of the securities markets is to ____________. assist businesses in finding long-term funding to finance business expansion ______________ and their members provide value because they buy and sell securities on behalf of the companies and individuals they represent. stock exchanges Like most stock exchanges, the NYSE EURONEXT, the world's largest stock exchange has seen its business model evolve. Which of the following represents that evolution? The exchange now sells large amounts of market information to other companies. The __________ is the federal regulating body for the securities markets. SEC (Securities and Exchange Commission) The most basic form of ownership in a firm consists of ___________. common stock Mark was trying to decide between purchasing the common stock shares of AMEREN-UE stock (a utility company), or preferred shares of the same company. As a student of business, you provide the following accurate information that ___________.preferred shareholders typically do not have voting rights. Companies are obligated to pay preferred shareholders their dividends, before paying dividends to common stockholders A company that issues _______ has a legal obligation to make regular interest payments and to repay the principal amount at a prescribed time. a bond An older person nearing retirement might typically find it better to invest in ___________. bonds Andrew is contemplating selling the bonds he holds prior to their date of maturity. Which of the following may result in Andrew's bonds being worth less than their face value, if he decides to sell prior to the maturity date? If interest rates for similar bonds are higher than the interest rate Andrew's bond is paying. ABC Investment Company sells shares of _______________ to the general public. ABC's investment managers buy an assortment of stocks and bonds and then repackage them into a new product. The company then sells shares of the new product. mutual funds If the paper reports the corporate bond price as 79 ½, the price an investor would have to pay is ____________. $795 As quoted on an intraday report, a stock's Beta is __________. a measurement of its risk value An average of the cost of 30 industrial stocks, the purpose of the DOW Jones Industrial Average is to ___________. indicate the movement [up or down] of the stock market, in general Unlike the market for shirts at the local department store, the market for securities can experience significant upswings and downswings in values, in the same day. Program trading allows for thousands of trades to occur simultaneously. To preventlarge, sudden drops in value of securities markets, electronic systems rely on ______________ to temporarily close program trading. circuit breakers Entrepreneurship is: A. managing businesses for others. B. a controlling interest in the ownership of a corporation. C. managing businesses that operate in multiple countries. D. accepting the risk of starting and running a business. Definition D. accepting the risk of starting and running a business. Term (p. 146) Which of the following U.S. issues does entrepreneurship most directly affect? A. The political process B. The ability to create jobs for others C. Contributions of money to organizations that help people in need D. The ability to influence national macroeconomics polices Definition B. The ability to create jobs for others Term (p. 148) Which of the following explains why individuals accept the risks of business ownership? A. The potential for learning how to be self-disciplined B. The sense of self-satisfaction and independence C. The challenge of seeking power D. The desire to work fewer hours Definition B. The sense of self-satisfaction and independence Term Definition(p. 148) Which of the following is a characteristic of successful entrepreneurs? A. Power-seeking B. Relies heavily on others who believe in the business C. Willingness and desire to follow others D. Action-oriented D. Action-oriented Term (p. 148) Which of the following best describes entrepreneurial personality traits? A. Tolerant of uncertainty and highly energetic. B. Risk averse and self-nurturing. C. Appreciate direction from others and risk averse. D. Prefer to work less hours and prefer to give directions and let others do the foot work Definition A. Tolerant of uncertainty and highly energetic. Term (p. 150) A(n) ________________ is a group of experienced professionals from different areas of business who join together to develop, make, and market a new product. A. entrepreneurial team B. joint venture C. self-directed functional team D. managerial task force Definition A. entrepreneurial team Term (p. 150) An entrepreneurial team consists of: A. managers with similar skills, abilities, and interests. B. experienced professionals from different areas of business. C. a group of wealthy investors who Definition B. experienced professionals from different areas of business.share a vision for a product. D. representatives from management, labor, and the government who work together to solve a company's problems in a creative way. Term (p. 150) Business owners who prefer to maintain their businesses at a manageable size are called: A. macropreneurs B. intrapreneurs C. micropreneurs D. home workers Definition C. micropreneurs Term (p. 151) One of the challenges of running a home-based business is: A. an increase in business risk. B. managing the extra time on your hands. C. keeping work and family tasks separate. D. burdensome tax laws. Definition C. keeping work and family tasks separate. Term (p. 155) A successful web-based strategy that helps a business spread the word about its web site and products is called ______________. A. wildfire marketing B. "its all about the buzz" C. social marketing D. affiliate marketing Definition D. affiliate marketing Term (p. 155) Shopping widgets allow Internet users to become ____________ for eretailers. A. peer to peer affiliates B. buyers Definition A. peer to peer affiliatesC. sellers D. personal shoppers Term (p. 155) A creative person working within a corporation to launch new products and generate new profits is known as a(n): A. arbitrator. B. micropreneur. C. macropreneur. D. intrapreneur. Definition D. intrapreneur. Term (p. 155) The goal of an intrapreneur is: A. to improve quality control in a corporation's production process. B. to develop new products and generate new profits for the corporation. C. to implement cost control policies for existing products. D. to create smaller companies within larger companies. Definition B. to develop new products and generate new profits for the corporation. Term (p. 156) The U.S. government's Immigration Act of 1990: A. encouraged entrepreneurs to come to the U.S.through "investor visas". B. established a government program to teach American workers displaced by immigration how to start their own businesses. C. established guidelines to help entrepreneurs recruit legal aliens as a source of low cost labor. D. proposed an exchange program for American and European entrepreneurs to temporarily live internationally in order to open up foreign branches for their businesses. Definition A. encouraged entrepreneurs to come to the U.S.through "investor visas".Term (p. 156) Enterprise zones are specific geographic areas that: A. the government has set aside for major corporations that promise to spend at least $10 million to create new jobs. B. attract business investment by offering lower taxes and government support for development. C. the government has recognized as having the fastest growth rates in the country. D. are characterized by government ownership of small businesses. Definition B. attract business investment by offering lower taxes and government support for development. Term (p. 156) Business incubators are usually government-funded facilities intended to: A. provide health care benefits for small business owners and their families. B. offer startup firms low-cost office space and basic business services. C. help rebuild the nation's infrastructure. D. assist foreign investors in identifying business opportunities in the U.S. Definition B. offer startup firms low-cost office space and basic business services. Term (p. 148) Historically entrepreneurs in the U.S. A. created wealth for themselves, but have had a minor impact on the economy as a whole. B. started many small firms that later became major corporations employing thousands of workers. C. experienced success only when they worked in partnership with the federal government. D. played an important role, but are Definition B. started many small firms that later became major corporations employing thousands of workers.less important now in creating jobs and wealth. Term (p. 148) Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge? A. It's all about profits, and the chance to make a lot of money B. It's about independence and the opportunity to share in the American dream C. It's about power and fame D. It is about a lot of things, but it does not include personal achievement Definition B. It's about independence and the opportunity to share in the American dream Term (p. 148) Successful entrepreneurs are selfnurturing. This means they: A. look to others for strength and encouragement. B. self-finance their business with no assistance from others. C. perform all business operations by themselves. D. believe in themselves and their ideas. Definition D. believe in themselves and their ideas. Term (p. 149) Which of the following statements is characteristic of entrepreneurs? A. They like certainty B. They have the ability to visualize a clear path C. They look at problems and see opportunities D. They prefer to be inventive rather than worry about whether the invention solves a customer need Definition C. They look at problems and see opportunities Term Definition(p. 149) Although successful entrepreneurs are more tolerant of uncertainty, A. they seldom start another business after a failure. B. they develop mental games to see themselves through the risk game, especially. C. they always protect themselves from failure by taking-out lots of insurance. D. they strive to take calculated risks. D. they strive to take calculated risks. Term (p. 150) Effective entrepreneurial teams combine: A. creativity with marketing and production experience. B. venture financing, tax benefits, and production economies. C. scientific abilities, capital investment, and marketing skills. D. risk tolerance, debt financing, and international experience. Definition A. creativity with marketing and production experience. Term (p. 150) Successful entrepreneurial teams: A. quickly organize themselves like large corporations. B. assign only one person to new product innovation. C. bring a variety of talent to the business venture. D. outsource most of the details of innovation. Definition C. bring a variety of talent to the business venture. Term (p. 152) One reason we have seen continued growth in home-based businesses is: A. the location offers a more secure operational environment. Definition B. affordable computer and information technology makes it easier to compete.B. affordable computer and information technology makes it easier to compete. C. people need something to do while they wait to return to work for a large corporation. D. it is less risky to start a home-based business than other types of entrepreneurial ventures Term (p. 152-153) Which of the following statements is not a challenge for homebased businesses? A. Affordable technology such as the Internet B. Staying focused on the business and leaving home chores for after-business hours C. Using your time wisely D. Promoting your services Definition A. Affordable technology such as the Internet Term (p. 155) Affiliate marketing is a web-based business strategy that: A. relies on customers that enter the sites of large companies such as GAP™ and Nike™. B. asks you to offer the names and emails of ten of your friends who may be interested in the products or services the web-site is selling. C. currently illegal, but difficult to stop. D. rewards individuals who are willing to link a company's website to their blog or social network. Definition D. rewards individuals who are willing to link a company's website to their blog or social network. Term (p. 146; 155) Which of the following best describes the difference between an intrapreneur and an entrepreneur? A. Intrapreneurs start nonprofit Definition C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own businessorganizations while entrepreneurs start profit-seeking businesses B. Intraprenuers are practical while entrepreneurs are creative C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business D. Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in the management of all areas of a business Term (p. 155) Intrapreneurs make use of __________ to develop and launch new products and generate new profits. A. their employer's existing human, financial, and physical resources B. their own personal financial resources C. government-supplied physical and financial resources D. old ideas abandoned by entrepreneurs Definition A. their employer's existing human, financial, and physical resources Term (p. 156) Enterprise zones are: A. government owned properties that are available for entrepreneurial ventures at a reduced cost B. similar to incubator facilities but strictly run by city and state governments C. blighted areas that contained toxic materials making them unsuitable for business operations D. specific locations across the U.S. where entrepreneurs can set-up shop and receive tax breaks for operating in these areas Definition D. specific locations across the U.S. where entrepreneurs can set-up shop and receive tax breaks for operating in these areas Term Definition(p. 156) Enterprise zones and investor visas are examples of: A. government policies that favor large corporations rather than small businesses. B. government programs that encourage economic growth through entrepreneurship. C. government policies designed to encourage intrapreneurs. D. examples of private initiatives to reduce the government's role in the economy. B. government programs that encourage economic growth through entrepreneurship. Term (p. 156) For the past twenty-five years, state and city governments have promoted facilities where new businesses can open-up shop and share common services such as secretarial, accounting, and legal services. Due to their remarkable success rate, _______________ continue to grow in popularity. A. enterprise zones B. incubators C. intrapreneurial development centers D. venture farms Definition B. incubators Term (p. 147) The Spotlight on Small Business box "You're Never Too Young to be an Entrepreneur", features young people who A. directed inheritance money they received into profitable business ventures. B. turned a social passion into a business opportunity. C. realized the American dream at a very young age, and now run multimillion dollar companies. D. convinced banks to fund their Definition B. turned a social passion into a business opportunity.business ideas. Term (p. 149) In the Thinking Green box, "Socially Responsible Entrepreneurship",: A. Gary Hirshberg explains how he turned Kraft Foods into an eco-friendly company. B. Gary Hirshberg explains the difficulties that companies experience in their attempts to be socially responsible, and talks about what he learned from his business failures. C. Gary Hirshberg explains that environmentalism and business still don't mix due to the high investment costs in re-tolling manufacturing sites to be more eco-friendly. D. Gary Hirshberg proves that environmentalism and business can cohabitate and even turn a profit. Definition D. Gary Hirshberg proves that environmentalism and business can cohabitate and even turn a profit. Term (p. 153) According to the Reaching Beyond our Borders box, how do small business owners use technology to keep their labor costs down? A. They have purchased accounting and bookkeeping software like, Quickbooks™ B. Most have gone in debt to retrofit their manufacturing facilities to include robots on the production lines C. They only do business with sweat shops D. They solicit the services of Elance.com and other online services to contractually hire graphic designers and other virtual assistants from around the globe Definition D. They solicit the services of Elance.com and other online services to contractually hire graphic designers and other virtual assistants from around the globe Term Definition(p. 146) Kenya recently quit a job with a large corporation to start her own business. While she realizes that her decision comes with risk, she is excited for the chance to be independent and by the challenges of running her own firm. Kenya is an example of a(n): A. intrapreneur. B. entrepreneur. C. venture capitalist. D. raconteur. B. entrepreneur. Term (p. 148) Erin developed a new type of exercise equipment she calls the Tush N' Tone. After unsuccessfully searching for potential investors, she arranged a personal loan and borrowed additional money from her parents. Her willingness to continue believing in her idea and remain enthusiastic shows that Erin is: A. characteristically self-nurturing. B. better suited to managing a nonprofit organization. C. unaware of the risks she was taking. D. not a true entrepreneur. Definition A. characteristically self-nurturing. Term (p. 150) Apple Computer's "smart team" is an example of a firm that succeeded by: A. encouraging each manager to focus on a well defined area of the business and build his own specialized department. B. bringing together a group of talented and experienced managers to conceive, develop, and market products. C. emphasizing a low price and low cost strategy right from the beginning. D. assembling a group of employees whose inexperience was a plus, because they did not come with the baggage and Definition B. bringing together a group of talented and experienced managers to conceive, develop, and market products.institutional ideas of larger companies. Term (p. 152) Anna recently left a large insurance firm and opened a homebased business preparing medical transcriptions for doctors. Based on recent statistics, she can expect: A. a negative reaction from friends and family who wonder when she will get a "real" job. B. the emergence of affordable technology will make it less challenging for her to compete with larger firms offering the same service. C. the government will discourage her attempts to create a home-based business in the hopes that she will opt for locating in an enterprise zone. D. to find security, routine and a paycheck from her new enterprise. Definition B. the emergence of affordable technology will make it less challenging for her to compete with larger firms offering the same service. Term (p. 155) Jake is an innovative engineering graduate who works for a large company that makes adhesive products for commercial and consumer use. One of his primary responsibilities is to initiate and develop new products to complement the firm's current product line. Jake's company is ___________. A. intrapreneurial B. entrepreneurial C. an outside consultant for other firms D. at a disadvantage because it is trying to operate like a small business Definition A. intrapreneurial Term (p. 156) SouthwestCollege received a government grant to establish a business incubator. This facility will offer: Definition D. new businesses low-cost office space with basic business services.A. local government agencies assistance in obtaining funds for urban renewal. B. area businesses advice on employee benefits and ways to reduce taxes. C. venture capitalists an opportunity to identify new entrepreneurs. D. new businesses low-cost office space with basic business services. Term (p. 155) Ketan is an intrapreneur for a multinational electronics company. As an intrapreneur Ketan: A. is expected to recruit new managerial talent for his firm. B. will use the firm's existing resources to develop new products. C. is concerned mainly with improving the firm's public image. D. will concentrate on creating new ventures that can be spun off to become independent firms. Definition B. will use the firm's existing resources to develop new products. Term (p. 150-152) Pete inherited a thriving dry cleaning business from his father and mother. He continued the tradition of offering quality service to the customers he served. As the surrounding towns expanded, several people suggested that Pete expand the business to offer service in new locations. He chose to maintain only one operation, so as not to lose control and to keep his work life and home life balanced. Pete is a good example of a(n) ______________. A. small business affiliate B. intrapreneur C. micropreneur D. enterprise zone participant Definition C. micropreneur Term Definition(p. 156) Located on Monsanto's world headquarters campus, the NidusCenter is a unique ___________ facility. The tenants are biotechnology companies who are at various stages of product development. The agricultural giant, Monsanto, the Danforth Foundation,Washington University St. Louis, St. LouisUniversity, and several venture capital firms contribute seed money for these small start-up ventures that receive approval to further develop their ideas at the NidusCenter. A. incubator B. intrapreneurial C. enterprise zone D. micropreneurial A. incubator Term (p. 157) Small businesses: A. deal with similar management issues that large companies face. B. deal with very different management issues due to the very different management challenges experienced by small businesses. C. do not seek government funding due to the fact that the federal government has made it very clear that it must support large operations before small operations. D. concern themselves with state-of-theart information and accounting technology but not employee relations due to their challenge to financially support employee benefits programs. Definition A. deal with similar management issues that large companies face. Term (p. 157) The Small Business Administration defines a small business as a firm that: A. has fewer than 100 partners. B. is independently owned but not Definition B. is independently owned but not dominant in its industry.dominant in its industry. C. is dominant in its industry, but small in the number of workers it employs. D. has annual receipts of more than a specified amount depending upon the industry. Term (p. 158) Small businesses create about __________ percent of the new jobs in the United States. A. 5-10 B. 25-35 C. 60-80 D. 100 Definition C. 60-80 Term (p. 157) A business's size is measured: A. in relation to the number of competitors in its industry. B. in relation to other firms in its industry. C. in relation to the number of dominant competitors in its sector. D. as small, if it participates in the services sector. Definition B. in relation to other firms in its industry. Term (p. 158) According to economist Bruce Kirchhoff, small business failures are: A. lower than traditionally reported. B. understated to keep small business creation enthusiasm. C. accurate and alarming. D. inconclusive. Definition A. lower than traditionally reported. Term (p. 158) When comparing small businesses to their larger competitors, it is clear that: A. bigger is always better. Definition C. small firms often can offer more personalized customer services than big firms.B. small firms can always outperform big firms on a level playing field. C. small firms often can offer more personalized customer services than big firms. D. small firms are slower to respond to opportunities than are large firms. Term (p. 159) Which of the following is not a reason stated for small business failure? A. Managerial incompetence B. Inadequate financial planning C. Buying too little on credit and not being lenient enough with your credit paying customers D. Borrowing money without a plan of how and when you will repay the debt Definition C. Buying too little on credit and not being lenient enough with your credit paying customers Term (p. 159) Which of the following will not help your small business succeed? A. Services you perform are easily replicated by larger companies, such as online banking B. You provide a unique service that requires a significant amount of personal attention such as a service that provides in-home care for seniors C. Investing in a franchise D. Your product is not easily mass produced, like professional photography Definition A. Services you perform are easily replicated by larger companies, such as online banking Term (p. 158) Small businesses are important to the U.S. economy because: A. they fill-in the gaps when large businesses want to let workers go on vacation; or when large businesses want Definition D. they create over 60% of new jobs each year and generate over 50% of the U.S. GDPto temporarily cease production B. banks and other financial services companies would not have borrowing customers, because small businesses borrow more than large businesses C. they pay most of the tax revenue collected by the U.S. government D. they create over 60% of new jobs each year and generate over 50% of the U.S. GDP Term (p. 158) Using the analogy of boulders vs. sand for filling a hole, the textbook points out that: A. small businesses are employing a record number of employees because they have to work twice as hard at producing the same amount of output as a large competitor. B. small businesses can serve niche markets that larger firms do not serve well. C. the sand represents the small businesses that start and fail each year, while the boulders represent the large companies whose resources permit them to stay the course. D. large companies serve market niches so much better than small companies. Definition B. small businesses can serve niche markets that larger firms do not serve well. Term (p. 158) Which of the following employment statistics about small businesses is true? A. Small businesses create about 15% of all new jobs in the U.S. B. The number of women owning small businesses has remained constant C. A great majority of American workers find their first jobs with a small business D. Growth of minority-owned Definition C. A great majority of American workers find their first jobs with a small businessbusinesses in theU.S. is declining Term (p. 157) According to SBA guidelines, a manufacturing firm with 1,000 employees: A. would be classified as a large firm in the industrial sector. B. may be classified as a small business depending upon the size of other firms in the industry. C. is too small to achieve the efficiencies of large scale production. D. is classified as an S corporation. Definition B. may be classified as a small business depending upon the size of other firms in the industry. Term (p. 159) Entrepreneurs looking for a business that gives them the best opportunity to get rich should consider starting a business in: A. the manufacturing sector. B. the food service industry. C. a low risk industry. D. the agriculture sector. Definition A. the manufacturing sector. Term (p. 159) A review of small business successes and failures indicates that the: A. businesses that are easiest to start offer the greatest potential for long term growth and profits. B. restaurant industry offers the least risk for entrepreneurs. C. businesses with potential of high profit levels tend to be difficult to start and hard to keep going. D. reason the service sector is rapidly growing is that these firms are easy to start and keep going, and offer high levels of security and growth potential. Definition C. businesses with potential of high profit levels tend to be difficult to start and hard to keep going.Term (p. 157-158) After graduation, Manny focused his attention on finding full time employment. He has decided to narrow his job search to jobs with a major corporation. His job search strategy: A. makes sense because managerial skills are best developed by working for big firms. B. is smart because major corporations represent the most important source of employment growth in the United States. C. indicates that Manny's passion is to fulfill his dream of owning his own business. D. will likely limit his job prospects since most new jobs are with small businesses. Definition D. will likely limit his job prospects since most new jobs are with small businesses. Term (p. 157) After several years of working as a regional manager for a nationally known nonprofit, Janelle landed a management position with an innovative small business. If she accepts the job offer, she is likely to find that: A. due to the significant differences in large and small firms, her previous experience will be of little value in her new position. B. the principles of management are much the same at large and small firms. C. nonprofit organizations are motivated by their desire to help people and so financial management is of little concern. D. planning is more important to a nonprofit organization and less important to a small business so she will need to adjust the time she spends on the planning function. Definition B. the principles of management are much the same at large and small firms.Term (p. 159) As a result of corporate downsizing, Alex lost his job as an information systems manager for a large telecommunications company. A bonafide computer geek in his own right, Alex knew that several of his past company contacts often outsourced their computer problems. He decided it was a good time to test the waters and see if he could secure enough computer clients to be in business for himself. His success demonstrated that: A. starting your own business can quickly provide security and profits. B. people always tend to hire people they know from past associations. C. the service sector is not an area of significant growth. D. successful big businesses often create profitable opportunities for small businesses. Definition D. successful big businesses often create profitable opportunities for small businesses. Term (p. 158) After selling his software business for a sizeable profit, software engineer Gus Greene decided to try something different. He would become a general contractor on a large condo development in an upcoming area of Atlanta,Georgia. He invested several million and then borrowed another $30 million (or 75% of the project cost) from a lending institution. He based his borrowing risk on the assumption that the housing market would continue to appreciate for several years to come. As the housing market began a free-fall in early 2008 and continued into 2009, Gus saw his business crashing around him. Sales were very meager and the bank wanted its money back. Which of the following statements might best describe the reason Gus' business failed? Definition D. Gus went into the business with very little knowledge about the industry or the market.A. Although Gus took some risk, it wasn't enough. In business, it is "more risk, more expected reward!" B. The bank let Gus down. It should not have lent him that much money. C. He should have designated himself as a passive investor. Therefore, his investment would not be in jeopardy D. Gus went into the business with very little knowledge about the industry or the market. Term (p. 159) Jennifer, a talented photography major started a corporate photography business. She planned to solicit jobs from large corporations who needed pictures for their annual reports and websites. Although filling a unique niche, Jennifer needed the security that the business would thrive and that she would earn enough to support herself and her child. She also hoped that she would spend less time each day calling on potential clients and more time doing the actual shoots. As her small business consultant, which of the following suggestions would you have for Jennifer? A. Jennifer should either take the risk necessary to develop a small business, or go to work for someone else. B. In the beginning, it's doubtful that Jennifer will realize ease of entry, security, and good profits. She needs to make plans in the event that one or more of these does not materialize quickly. C. Photographers can take pictures of a multitude of things. It's probably not good strategy to limit her business to only photographing the needs of large corporations. D. Jennifer should definitely make time for herself each day so that she does not Definition B. In the beginning, it's doubtful that Jennifer will realize ease of entry, security, and good profits. She needs to make plans in the event that one or more of these does not materialize quickly.experience burn-out. If she plans well, leaping into her own business will provide with her several hours of unstructured time each day where she can perfect her craft even more. Term (p. 158) Dr. Smiley White just graduated from dental school. He is hoping to acquire the necessary funding to start his own dental practice. One advantage of this type of business is: A. above average opportunity to borrow funds at a high interest rate B. nearly unlimited growth potential C. the service is individualized and not easily mass-produced D. very low startup costs Definition C. the service is individualized and not easily mass-produced Term (p. 159) When Krystal Ginger graduates from culinary school she dreams of opening her own Asian fusion restaurant. Her other passion is skiing in Colorado, where she schedules four or five trips each year. As her small business advisor, you believe it necessary to provide her with information that will help her make good business decisions. Which of the following would be helpful for Krystal to know? A. Restaurants are relatively easy businesses to start, but are labor intensive and also have the greatest failure rate. B. Restaurants are not the easiest type of business to start, but once you get it going, you will have plenty of time for skiing. C. Most restaurant owners get rich if they open their own, independent restaurant as opposed to starting a franchised operation. Definition A. Restaurants are relatively easy businesses to start, but are labor intensive and also have the greatest failure rate.D. Franchised operations will take less time on the part of the owner than a regular independently owned operation. If she opens a franchise, she will have more time for creativity in the business, and more time for skiing too. Term (p. 160) A small business management course at a community college may offer entrepreneurs an opportunity to: A. meet with experienced entrepreneurs and learn from their advice. B. try out ideas on a computer simulation before risking real time and money. C. listen to a qualified instructor solve all of the problems of small business owners. D. be part of a group that will include angel investors. Definition A. meet with experienced entrepreneurs and learn from their advice. Term (p. 161) One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on: A. the prospects for business competition. B. the current owner's retirement plan. C. the amount of government contracts the company has. D. the value of what the business owns, what it earns, and what makes it unique. Definition D. the value of what the business owns, what it earns, and what makes it unique. Term (p. 160) Conversations with people who start their own business often reveal that: A. many small business owners got their entrepreneurial idea from a Definition A. many small business owners got their entrepreneurial idea from a previous job.previous job. B. it is unusual for experienced corporate managers to start their own businesses. C. the most successful entrepreneurs often start their business ventures right after high school. D. most small business owners begin with significant personal wealth. Term (p. 160) For prospective entrepreneurs, enrolling in an introduction to business or small business management course offered through their community college: A. is likely to be wasted time since college courses tend to be too theoretical. B. can be helpful by offering them an opportunity to meet experienced small business owners. C. serves as supplementary information, only after starting their business venture. D. seldom provides you with information to help make small business decisions. Definition B. can be helpful by offering them an opportunity to meet experienced small business owners. Term (p. 160) Which of the following suggestions would an experienced business owner offer to help someone who is thinking about starting a business venture? A. Avoid the temptation of buying an existing firm. Build your own reputation and make your own mistakes. B. Gain experience by working for a successful businessperson. C. Postpone consulting with an accountant or lawyer until you can afford their services. Definition B. Gain experience by working for a successful businessperson.D. Jump in quickly, before the market conditions change and opportunities are lost. Term (p. 160) Successful small business owners are: A. not good sources for information on starting your own business because they generally do not understand failure. B. valuable sources for information since you can learn from their experiences. C. good but risky since their keen sense of sniffing-out something with potential will tempt them to steal your ideas. D. valuable sources of information, but you should proceed with caution because talking with someone who could eventually be your competitor may cross the line due to federal trade commission laws. Definition B. valuable sources for information since you can learn from their experiences. Term (p. 160) When starting a small business, it's important to remember: A. an affinity for taking large amounts of risk is the critical factor in achieving small business success. B. doing things differently from previous entrepreneurs is the real key to success. C. learning from others and gaining relevant business experience improves the odds for success. D. to avoid burnout, limit the number of hours you work each week as you adapt to the rigors of self-employment. Definition C. learning from others and gaining relevant business experience improves the odds for success. Term (p. 161) The Making Ethical Decisions box, "Going Down with the Definition C. ethical decisions that need to be considered when employees leave aShip" addresses a dilemma worthy of consideration. It describes: A. an unethical situation where the business owner's need for capital causes him/her to delay all payments to suppliers for 120 days, forcing several of his close business relationships, outof-business. B. the slow death of a business and how important it is to delay payments, selloff assets and do everything possible to save a failing business except dismissing employees who need their jobs for survival. C. ethical decisions that need to be considered when employees leave a faltering business to start their own, eventually competing against theirprevious employer. D. the unethical and disloyal decision to leave your family business and start your own, taking with you all the family business's trade secrets. faltering business to start their own, eventually competing against their previous employer. Term (p. 161) Motivated by his desire to operate his own business, Nick considers purchasing an existing business. As he carefully weighs this option, he is likely to find that: A. very few owners of small businesses have any interest in selling. B. his potential for success would greatly improve if he started his own new firm. C. the value of an existing business is determined by what the business owns, what it earns, and what makes it unique. D. any entrepreneur willing to sell his/her business is experiencing serious financial problems. Definition C. the value of an existing business is determined by what the business owns, what it earns, and what makes it unique. Term Definition(p. 160) Carrie, a student atMetropolitanCommunity College, dreams of starting her own business. In an effort to learn as much as she can about small business management, she talked to four friends who each offered their advice. Which of these suggestions is likely to help Carrie the most? A. The best way to learn about running a business is by getting hands-on experience. You should quit school and put your dream into action. B. Take courses related to small business management and look for a job with a successful businessperson, preferably in your field of interest. C. Since every business is unique, don't worry about advice from others. Go to a bank, get a business loan, and live your dream. D. Starting and managing a small business requires little more than common sense. If your idea is unique, hard work will guarantee your success. B. Take courses related to small business management and look for a job with a successful businessperson, preferably in your field of interest. Term (p. 161) Greg benefited from his experience working for an established private company that provided innovative lighting for large music venues. Although confident that he could start his own lighting business, he had limited capital to buy the necessary equipment needed to successfully compete with established companies. Which of the following strategies would best help Greg achieve his goal of business ownership? A. Begin by offering to take over management of his employer's business, allowing the owner to enjoy some leisure time B. Consider working for a major corporation, live modestly, and save until he has sufficient funds to start his Definition A. Begin by offering to take over management of his employer's business, allowing the owner to enjoy some leisure timebusiness C. Enroll in the closest university and apply for student loans D. Open his business and trust that his work experience will bring him success even with insufficient capital Term (p. 161) As a young boy, Drew remembers his grandfather telling him, "Son, if you can find something you like to do, and somebody is willing to pay you to do it, well, that's the secret to a great life." The way Drew saw it, this was his big break. For the past five years, he split his time between school and working for a local tree farm/nursery business. The owner recently announced he was ready to retire. As Drew began creating a business plan, he contemplated what the business might be worth and how much will he need to buy this business. For starters, Drew A. needs to find a government data base that outlines what nursery businesses are worth, on average, across the country. B. should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage. C. will want to determine the assessed value of the acreage that the business owns, and then bid competitively. D. needs to understand that it's difficult to buy an existing business, rather than start your own. The key will be to meet with the company's accountant, and explain your interest. The accountant will have all the answers. Definition B. should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage Term (p. 162) Two key management functions that need particular attention when Definition B. planning and financingstarting a business are: A. human relations and accounting B. planning and financing C. marketing and public relations D. staffing and controlling Term (p. 162) A __________ is a written document that details the business idea, the target market and the business's competitive advantage, financial resources available for the business, and the qualification of the management. A. feasibility product B. marketing plan C. business plan D. statement of intent Definition C. business plan Term (p. 162) The business plan will include ______________. A. an analysis of the competition B. names of banks the owner plans to visit C. import/export information D. names of employees Definition A. an analysis of the competition Term (p. 162) A detailed written statement that describes the nature of the business, the target market, the firm's competitive advantages, as well as the owner's resources and qualifications is a: A. business plan. B. entrepreneurial mission statement. C. profit and loss statement. D. professional action plan. Definition A. business plan. Term (p. 162) Entrepreneurs seeking financial Definition C. create a detailed business plan tosupport from bankers and potential investors should: A. be vague regarding their creative business plan to avoid having their idea stolen. B. seek the bankers' and investors' assistance in developing their business plan. C. create a detailed business plan to help the bankers and investors understand why this business will succeed. D. ask for a relatively small amount of capital initially, postponing a full funding request until the investors better understand the business concept. help the bankers and investors understand why this business will succeed. Term (p. 162) Bankers and potential investors are likely to read ___________ first. A. the executive summary B. the marketing plan C. the qualifications of the management team D. the analysis of the competition Definition A. the executive summary Term (p. 164) After personal savings, the next largest source of capital for entrepreneurs is from: A. large multinational banks. B. the Small Business Administration. C. state and local governments. D. friends and family. Definition D. friends and family. Term (p. 164) ________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies. A. Leveraged buyout specialists Definition B. Angel investorsB. Angel investors C. Venture investors D. Corporate raider investors Term (p. 165) Due to the credit crunch during the recession of 2008, many small businesses found that _____________ were more willing to lend money to smaller operations. A. large corporations B. credit card companies C. international banks D. smaller, community banks Definition D. smaller, community banks Term (p. 165) A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a(n): A. corporate raider. B. takeover specialist. C. financial capitalist. D. venture capitalist. Definition D. venture capitalist. Term (p. 165) Which of the following government agencies is responsible for encouraging the development of small business? A. Small Business Administration B. Federal Trade Commission C. Entrepreneur Assistance Center D. Federal Microloan Authority Definition A. Small Business Administration Term (p. 165) Which of the following sources of investment is the least likely type available to entrepreneurs? A. Angel investors B. Small Business Administration loans Definition C. Venture capitalistsC. Venture capitalists D. Family and friends Term (p. 165) The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their: A. collateral. B. credit history. C. previous business success. D. integrity and sound business idea. Definition D. integrity and sound business idea. Term (p. 165) A Small Business Investment Company (SBIC) is a(n): A. agency of the federal government that loans money to high tech firms. B. private investment company that is licensed by the SBA to make loans to small businesses. C. private firm that offers loans to small businesses in return for a share of ownership in the firm. D. agency set up by state governments to provide managerial advice and support to small businesses. Definition B. private investment company that is licensed by the SBA to make loans to small businesses. Term (p. 165) One of the best places for young entrepreneurs to start shopping for a SBA loan is a(n): A. SmallBusinessDevelopmentCenter. B. financial institution specializing in business loans. C. college or university financial aid office. D. the Internet web Page: of the Venture Capitalists Association. Definition A. SmallBusinessDevelopmentCenter. Term Definition(p. 166) A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service. A. market B. consumer cooperative C. consumer collective D. buyer's cooperative A. market Term (p. 167) To be considered part of a market, an individual must: A. be a registered buyer. B. have made a purchase within the past 30 days. C. know the names and addresses of two or more sellers. D. have both a willingness to buy and the financial resources needed to buy. Definition D. have both a willingness to buy and the financial resources needed to buy. Term (p. 167) Small business owners often struggle in attracting qualified workers. Which of the following contributes to this problem? A. Bosses in small firms tend to be disrespectful to the workers B. Owners will not often listen to ideas suggested by the workers C. Employee relations are especially poor in small firms D. Many jobs in small firms have low pay and few benefits Definition D. Many jobs in small firms have low pay and few benefits Term (p. 167) Employees of small businesses often have greater job satisfaction than do employees of larger firms. One reason for this difference in job satisfaction is that employees of small businesses often: A. earn higher wages. Definition C. get more respect from their bosses.B. receive more vacation time. C. get more respect from their bosses. D. have more job security and better fringe benefits. Term (p. 167) A new business that sets up a(n) _____________ from the start is saving itself time and grief later. A. angel investment network B. good accounting system C. detailed supplier network D. vertical marketing system Definition B. good accounting system Term (p. 167-168) Small businesses must seek advice from outside experts. In order to put together official documents such as leases, contracts, and partnership agreements, it is important to seek the advice of __________. A. a friend who has already started a business B. a competitor in a similar business C. an attorney D. a marketing expert Definition C. an attorney Term (p. 168) A(n) ____________ is a valuable source of information regarding techniques to reduce a firm's exposure to risk. A. insurance agent B. accountant C. liability assessor D. union business agent Definition A. insurance agent Term (p. 168) Similar to how large businesses proceed, small businesses make marketing decisions ______________. Definition D. before a product is developed or store is openedA. after the product or service is developed B. before the business is funded C. at the same time that they hire employees, research for an accountant, and prepare the business plan D. before a product is developed or store is opened Term (p. 168) Most entrepreneurs and small business owners agree that a small business' marketing effort should include: A. a web presence B. a list of competitor products C. a pro forma income statement D. a complete product lifecycle Definition A. a web presence Term (p. 168) The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called: A. the Small Business Council of Volunteers. B. Partners in Service and Economic Progress. C. Small Business Counselors Incorporated. D. the Service Corps of Retired Executives. Definition D. the Service Corps of Retired Executives. Term (p. 162) Entrepreneurs applying for a bank loan should realize that bankers will: A. expect to receive a share of ownership in the business in exchange for their loan. Definition B. expect the entrepreneur to provide a business plan.B. expect the entrepreneur to provide a business plan. C. generally make loans only to small businesses in dot.com related industries. D. offer only short-term financing. Term (p. 162) A good business plan will: A. focus on the big picture and omit the small details of operating the business. B. describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications. C. be purposefully vague, since specifics can restrict creativity and flexibility. D. focus on the nature of the business and the target market, omitting personal information about the owner in order to avoid personality issues. Definition B. describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications. Term (p. 162) The executive summary section of the business plan contains: A. computerized information that readers can access interactively. B. information that will capture the attention of bankers and other investors who receive many business plans every day. C. qualifications, experience, and education of the entrepreneur and prospective employees. D. a financial summary prepared by the business' accountant. Definition B. information that will capture the attention of bankers and other investors who receive many business plans every day. Term (p. 165) When seeking financial backing from a venture capitalist, a small business owner should realize that the Definition C. expect an ownership stake in the company in exchange for financial backing.venture capitalist will: A. charge an interest rate that is much higher than any other lender. B. not be interested in the management of the business. C. expect an ownership stake in the company in exchange for financial backing. D. demand that the money be repaid within 90 days or less. Term (p. 166) A market consists of potential buyers of a good or service. However, for a market to exist: A. the business requires wholesalers and retailers. B. one firm must dominate in sales and product development. C. people must have unsatisfied wants and needs as well as a willingness and ability to buy. D. the product must be laboratory tested and approved by the Food and Drug Administration (FDA). Definition C. people must have unsatisfied wants and needs as well as a willingness and ability to buy. Term (p. 167) Small business employees: A. usually dislike their jobs and look forward to finding employment with major corporations. B. find their jobs less challenging than a similar job in a large corporation. C. usually get paid higher wages than workers in large corporations. D. often find more job satisfaction than their counterparts in big business. Definition D. often find more job satisfaction than their counterparts in big business. Term (p. 167-168) Entrepreneurs learn that there are many legal and financial issues involved in starting their business. The Definition D. seek and pay for expert guidance and assistance.best way for the small business owner to resolve these issues and protect the firm's resources is: A. for the owner(s) to trust his/her common sense. B. to hire a full-time lawyer and accountant who work exclusively for the small business. C. defer making decisions regarding these issues until the company is bigger. D. seek and pay for expert guidance and assistance. Term (p. 168) Which of the following is not a recommended source of small business advice for persons contemplating a new business? A. Successful small business owners B. University internship programs C. Other prospective small business owners D. SCORE [Service Corps of Retired Executives] Definition C. Other prospective small business owners Term (p. 162) In order to finance The Shortbread Shack, a mobile bakery business that services several large Silicon Valley companies, Marcy demonstrated her steadfast desire to get her bakery off the ground by visiting several bankers with _____________. A. her insurance agent B. her business plan C. her venture capitalist D. her idea Definition B. her business plan Term (p. 162) In order to improve his chances of small business success, Demitri prepared a business plan. Most often, a Definition C. the plan enables Demitri to think carefully about all aspects of his business idea.positive outcome of this exercise is: A. the plan will meet federal reporting requirements of the Internal Revenue Service. B. the plan ensures financing will be available from the Small Business Administration. C. the plan enables Demitri to think carefully about all aspects of his business idea. D. the plan will protect Demitri from failure. Term (p. 168) Justin's favorite part of Introduction to Business class was marketing. As he brainstorms about starting a car detailing business, he recalls that it is important to: A. open for business and start collecting information about what customers want. B. find the most affordable location for the business. C. only agree to serve a high-end market. D. analyze the market before making the service available. Definition D. analyze the market before making the service available. Term (p. 164) As a high net worth individual, Allison searches for growth firms in need of additional funding to achieve their goals. In return for this ____________, Allison expects to assume ownership in the business. A. analysis B. venture capital C. corporate loan D. securities investment Definition B. venture capital Term Definition(p. 164) Chris is an angel investor. This means that he: A. invests his money in new businesses with potential for growth, hoping for a good return on his investment if they go public. B. creates business incubators for startup Web-based firms. C. invests in non-profits that plan to change their status when they double in size. D. he comes to the rescue of firms who default on their bank loans. A. invests his money in new businesses with potential for growth, hoping for a good return on his investment if they go public. Term (p. 165) Samantha recently applied for a microloan from the SBA. Although several criteria are important, the Small Business Administration's decision to grant or deny the loan will largely depend upon A. her credit history and the collateral she can offer. B. her age, since microloans are only available to senior citizens. C. her previous record of business success. D. the soundness of her business plan, and her integrity. Definition D. the soundness of her business plan, and her integrity. Term (p. 168) Bing came to the U.S. on a swimming scholarship. After a few months of frustration with trying to find swim goggles like he used in his native country, he started a web site that offered specialty goggles for swimming, skiing, and snowboarding. Before launching the web site and filling orders, Bing spent a few months going to swim meets and gathering preferences about goggles from other swimmers. Bing's actions: A. showed that he had a ready market Definition D. demonstrated his need to better understand the market.for this product. B. demonstrated that he had little experience with this product. C. showed that he was promoting the web site before it launched. D. demonstrated his need to better understand the market. Term (p. 166) Ben got a phone call from one of his regular customers asking if he had time to repair a couple of broken sprinkler heads on the customer's underground sprinkling system. Although it was already 6:00 p.m. and Ben had put in a full day of work, he turned his car around and headed for the customer's house. As a small business owner, Ben demonstrates: A. his need for additional cash flow. B. his ability to easily adapt and respond to his customer's needs. C. the fact that it is difficult to find employees willing to go the extra mile for a small business because benefits are non-existent. D. that considering the fact that sprinkler heads are constantly breaking and need repair, his service is overpriced. Definition B. his ability to easily adapt and respond to his customer's needs. Term (p. 167) Ming's three employees have been with her since she started Employment Recruiters, Inc., nearly 10 years ago. As she contemplates the staffing for her new branch office, she senses that none of these three are ready to manage the office. Faced with this difficult situation, she should: A. appoint one of the three anyway to show that she appreciates their loyalty and commitment. B. run the new branch herself and Definition C. hire a new employee to manage the office since this could be detrimental to the business.appoint one of the three to take over the original office. C. hire a new employee to manage the office since this could be detrimental to the business. D. appoint all three to the new branch and let them run it using a "team" approach. Term (p. 167) After Kate graduated from college, her grandfather created a bookkeeping position for her in his furniture retail business. Her older brother is in charge of purchasing inventory for the stores, yet often the store runs out of popular furniture or become overstocked with pieces that must be marked down to be sold. Kate is confident that her brother is more suited for handling accounting and finance, and she has a pulse on what sells and how much sells. Although she has spoken with her grandfather about it a couple of times, he seems reluctant to change. As the founder of the business, he may: A. find it difficult to remove family members from positions, even if it is not good for the business. B. find it difficult to retrain Kate for the job, and even though his business is losing opportunities, he will stay the course. C. he knows that profit margins have declined, and he doesn't care. D. have a bigger picture of things, and not feel the need to respond to a family member's request. Definition A. find it difficult to remove family members from positions, even if it is not good for the business. Term (p. 167) As a small business owner, Tanika can't afford to provide her employees with the high wages and benefits Definition C. empower her employees to develop their own ideas.offered by big corporations. One way to retain her employees and create a high level of motivation would be to: A. constantly communicate with them that "at least they have a job." B. adopt a policy of promoting workers who have been employed the longest. C. empower her employees to develop their own ideas. D. hire only family members, since they are more loyal. Term (p. 168) After retiring as a telecommunications executive, Chad joined SCORE. As a SCORE counselor Chad will: A. provide venture capital funds for aspiring small businesspeople. B. visit high schools to advise students who are thinking about starting their own business. C. help in the research and development of new products for entrepreneurs to market. D. provide consulting services to small businesses for free. Definition D. provide consulting services to small businesses for free. Term (p. 169) The size of the world market is: A. 500 million B. 6.7 billion C. 5 million D. 10 trillion Definition B. 6.7 billion Term (p. 169) According to the U.S. Department of Commerce, a ________ of small businesses export their goods. A. small percentage B. large percentage C. decreasing number Definition A. small percentageD. decreasing percentage Term (p. 169) Increased participation in small business exporting owes credit to _________. A. political constituents who have made in-roads abroad B. large events such as the Olympics that have brought attention to the potential in world markets C. technological advances such as the Internet and PayPal for safely fulfilling orders D. partnerships that small businesses have formed with large businesses Definition C. technological advances such as the Internet and PayPal for safely fulfilling orders Term (p. 169) One of the hurdles small businesses face when deciding to export is: A. financing is often difficult to find. B. overseas buyers prefer dealing with large corporations. C. smaller companies must wait in line after large companies to qualify for tariffs. D. American products are perceived as inferior. Definition A. financing is often difficult to find. Term (p. 169) One reason why many U.S. small businesses are not involved in exporting is: A. there is a limited market for their products. B. the government's new homeland security programs limit opportunities for small businesses. C. many of these firms do not know how to get started. D. U.S. products are perceived as Definition C. many of these firms do not know how to get started.inferior. Term (p. 170) The SBA's ________ program provides export financing opportunities for small businesses. A. global trade funding B. Homeland security funding C. Export Express loan D. International Monetary Funding Definition C. Export Express loan Term (p. 170) Small business owners interested in finding out more about exporting will find that: A. there is very little information on exporting relevant to small businesses. B. the single best resource is the International Monetary Fund. C. the most valuable information costs more than it is worth. D. there is an abundance of inexpensive information from a variety of sources. Definition D. there is an abundance of inexpensive information from a variety of sources. Term (p. 169) Which of the following best describes the outlook for small businesses in international markets? A. the world is a larger, and potentially a more lucrative market than the U.S. domestic market B. the threat of terrorist activities prevents small businesses from competing internationally C. most foreign buyers prefer to deal with large, well-known corporations rather than small businesses D. higher business costs eliminate the profit opportunities in global markets Definition A. the world is a larger, and potentially a more lucrative market than the U.S. domestic market Term Definition(p. 170) Small businesses often have advantages in international markets. One advantage is: A. a greater expertise in managing the paperwork required to sell goods in international markets. B. a better understanding of the cultural differences involved. C. individualized customer service as opposed to impersonal corporate bureaucracies. D. the ability to obtain financing through the International Monetary Fund. C. individualized customer service as opposed to impersonal corporate bureaucracies. Term (p. 170) Labels Plus, LLC, exports specialty printing equipment for the labeling, flexible packaging, and carton industry. Due to increased support from ________, this company's sales to Brazilian companies and other global opportunities have significantly increased. A. its newly revised web site B. Department of Commerce's Bureau of Industry and Security C. the FDA D. local politicians Definition B. Department of Commerce's Bureau of Industry and Security Term (p. 169) Jake wants to sell his workout DVDs in European, Asian, and Latin American countries. _______________ will help him reach vendors abroad, without the expense of traveling to meet them face-to-face. A. A web site and other technological advances Definition A. A web site and other technological advancesB. Partnering with a large U.S. recording studio C. The SBA (Small Business Administration) D. An incubator facility Term (p. 169) Luis is a partner in a firm that specializes in producing vitamins and health food products. While the business is considered small by U.S.standards, he is attempting to persuade his partner to expand internationally. Luis would list which of the following as an advantage of going international? A. Exporting can help sell excess inventory B. Marketing programs benefit from the cultural similarities in prospective markets C. Financing can easily be obtained to expand internationally D. Selling your products in other markets reduces their life cycle, making them more attractive Definition A. Exporting can help sell excess inventory Term (p. 170) Antoine is considering marketing his bicycles in Brazil. If he enters the Brazilian market, he is likely to learn that ____________. A. some cultures like dealing with individuals from smaller companies rather than large companies B. he will not be able to keep up with demand C. most foreign cultures prefer large company relationships to small company relationships D. there is strong resistance of Brazilian firms with respect to American products Definition A. some cultures like dealing with individuals from smaller companies rather than large companiesSuccessful entrepreneurial teams: A. quickly organize themselves like large corporations. B. assign only one person to new product innovation. C. bring a variety of talent to the business venture. D. outsource most of the details of innovation. C. bring a variety of talent to the business venture. A business's size is measured: A. in relation to the number of competitors in its industry. B. in relation to other firms in its industry. C. in relation to the number of dominant competitors in its sector. D. as small, if it participates in the services sector. B. in relation to other firms in its industry For prospective entrepreneurs, enrolling in an introduction to business or small business management course offered through their community college: A. is likely to be wasted time since college courses tend to be too theoretical. B. can be helpful by offering them an opportunity to meet experienced small business owners. C. serves as supplementary information, only after starting their business venture. D. seldom provides you with information to help make small business decisions. B. can be helpful by offering them an opportunity to meet experienced small business owners. ________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies. A. Leveraged buyout specialists B. Angel investors C. Venture investors D. Corporate raider investors B. Angel investors Enterprise zones are specific geographic areas that: A. the government has set aside for major corporations that promise to spend at least $10 million to create new jobs. B. attract business investment by offering lower taxes and government support for development. C. the government has recognized as having the fastest growth rates in the country.D. are characterized by government ownership of small businesses. B. attract business investment by offering lower taxes and government support for development. Successful small business owners are: A. not good sources for information on starting your own B. business because they generally do not understand failure. C. valuable sources for information since you can learn from their experiences. D. good but risky since their keen sense of sniffing-out something with potential will tempt them to steal your ideas. C. valuable sources for information since you can learn from their experiences. A Small Business Investment Company (SBIC) is a(n): A. agency of the federal government that loans money to high tech firms. B. private investment company that is licensed by the SBA to make loans to small businesses. C. private firm that offers loans to small businesses in return for a share of ownership in the firm. D. agency set up by state governments to provide managerial advice and support to small businesses. B. private investment company that is licensed by the SBA to make loans to small businesses. A creative person working within a corporation to launch new products and generate new profits is known as a(n): A. arbitrator. B. micropreneur. C. macropreneur. D. intrapreneur. D. intrapreneur One reason we have seen continued growth in home-based businesses is: A. the location offers a more secure operational environment. B. affordable computer and information technology makes it easier to compete. C. people need something to do while they wait to return to work for a large corporation. D. it is less risky to start a home-based business than other types of entrepreneurial ventures. B. affordable computer and information technology makes it easier to compete.A new business that sets up a(n) _____________ from the start is saving itself time and grief later. A. angel investment network B. good accounting system C. detailed supplier network D. vertical marketing system B. good accounting system When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will: A. charge an interest rate that is much higher than any other lender. B. not be interested in the management of the business. C. expect an ownership stake in the company in exchange for financial backing. D. demand that the money be repaid within 90 days or less. C. expect an ownership stake in the company in exchange for financial backing. Similar to how large businesses proceed, small businesses make marketing decisions _____________. A. after the product or service is developed B. before the business is funded C. at the same time that they hire employees, research for an accountant, and prepare the business plan D. before a product is developed or store is opened D. before a product is developed or store is opened Entrepreneurship is: A. managing businesses for others. B. a controlling interest in the ownership of a corporation. C. managing businesses that operate in multiple countries. D. accepting the risk of starting and running a business. D. accepting the risk of starting and running a business. When starting a small business, it's important to remember: A. an affinity for taking large amounts of risk is the critical factor in achieving small business success. B. doing things differently from previous entrepreneurs is the real key to success. C. learning from others and gaining relevant business experience improves the odds for success.D. to avoid burnout, limit the number of hours you work each week as you adapt to the rigors of self-employment. C. learning from others and gaining relevant business experience improves the odds for success. Enterprise zones are: A. government owned properties that are available for entrepreneurial ventures at a reduced cost B. similar to incubator facilities but strictly run by city and state governments C. blighted areas that contained toxic materials making them unsuitable for business operations D. specific locations across the U.S. where entrepreneurs can set-up shop and receive tax breaks for operating in these areas D. specific locations across the U.S. where entrepreneurs can setup shop and receive tax breaks for operating in these areas When comparing small businesses to their larger competitors, it is clear that: A. bigger is always better. B. small firms can always outperform big firms on a level playing field. C. small firms often can offer more personalized customer services than big firms. D. small firms are slower to respond to opportunities than are large firms. C. small firms often can offer more personalized customer services than big firms. An entrepreneurial team consists of: A. managers with similar skills, abilities, and interests. B. experienced professionals from different areas of business. C. a group of wealthy investors who share a vision for a product. D. representatives from management, labor, and the government who work together to solve a company's problems in a creative way. B. experienced professionals from different areas of business. The size of the world market is: A. 500 million B. 6.9 billion C. 5 million D. 10 trillion B. 6.9 billionAffiliate marketing is a web-based business strategy that: A. relies on customers that enter the sites of large companies such as GAP™ and Nike™. B. asks you to offer the names and emails of ten of your friends who may be interested in the products or services the web-site is selling. C. is currently illegal, but difficult to stop. D. Rewards individuals who are willing to link a company's website to their blog or social network page. D. Rewards individuals who are willing to link a company's website to their blog or social network page. A market consists of potential buyers of a good or service. However, for a market to exist: A. the business requires wholesalers and retailers. B. one firm must dominate in sales and product development. C. people must have unsatisfied wants and needs as well as a willingness and ability to buy. D. the product must be laboratory tested and approved by the Food and Drug Administration (FDA). C. people must have unsatisfied wants and needs as well as a willingness and ability to buy. Increased participation in small business exporting owes credit to ________. A. political constituents who have made in-roads abroad B. large events such as the Olympics that have brought attention to the potential in world markets C. technological advances such as the Internet and PayPal for safely fulfilling orders D. partnerships that small businesses have formed with large businesses C. technological advances such as the Internet and PayPal for safely fulfilling orders A(n) ________________ is a group of experienced professionals from different areas of business who join together to develop, make, and market a new product. A. entrepreneurial team B. joint venture C. self-directed functional team D. managerial task force A. entrepreneurial teamA firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a: A. corporate raider. B. takeover specialist. C. financial capitalist. D. venture capitalist. D. venture capitalist. The U.S. government's Immigration Act of 1990: A. encouraged entrepreneurs to come to the U.S. through "investor visas". B. established a government program to teach American workers displaced by immigration how to start their own businesses. C. established guidelines to help entrepreneurs recruit legal aliens as a source of low cost labor. D. proposed an exchange program for American and European entrepreneurs to temporarily live internationally in order to open up foreign branches for their businesses. A. encouraged entrepreneurs to come to the U.S. through "investor visas". Which of the following best describes the difference between an intrapreneur and an entrepreneur? A. Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses B. Intraprenuers are practical while entrepreneurs are creative C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business D. Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in the management of all areas of a business C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business Business owners who prefer to maintain their businesses at a manageable size are called: A. macropreneurs B. intrapreneurs C. micropreneurs D. home workers C. micropreneurs A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.A. market B. consumer cooperative C. consumer collective D. buyer's cooperative A. market Chris is an angel investor. This means that he: A. invests his money in new businesses with potential for growth, hoping for a good return on his investment if they go public. B. creates business incubators for startup Web-based firms. C. invests in non-profits that plan to change their status when they double in size. D. he comes to the rescue of firms who default on their bank loans. A. invests his money in new businesses with potential for growth, hoping for a good return on his investment if they go public. Intrapreneurs make use of __________ to develop and launch new products and generate new profits. A. their employer's existing human, financial, and physical resources B. their own personal financial resources C. government-supplied physical and financial resources D. old ideas abandoned by entrepreneurs A. their employer's existing human, financial, and physical resources A(n) ____________ is a valuable source of information regarding techniques to reduce a firm's exposure to risk. A. insurance agent B. Accountant C. liability assessor D. union business agent A. insurance agent Entrepreneurship Accepting the risk of starting and running a business. entrepreneurial team A group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop,make, and market a new product. micropreneursEntrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle. affiliate marketing An internet-based marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its Web site. intrapreneurs Creative people who work as entrepreneurs within corporations. enterprise zones Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support. incubators Centers that offer new businesses low-cost offices with basic business services. small business A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts. business plan A written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s). venture capitalists Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses. Small Business Administration (SBA) A U.S government agency that advises and assists small businesses by providing management training and financial advice and loans. Small Business Investment Company (SBIC) ProgramA program through which private investment companies licensed by the Small Business Administration lend money to small businesses. market People with unsatisfied wants and needs who have both the resources and the willingness to buy. Service Corps of Retired Executives (SCORE) An SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost (except for expenses). Enterprise zones are specific geographic areas that: attract business investment by offering lower taxes and government support for development. A business's size is measured: in relation to other firms in its industry. When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will: expect an ownership stake in the company in exchange for financial backing. A successful web-based strategy that helps a business spread the word about its web site and products is called _____________. affiliate marketing A Small Business Investment Company (SBIC) is a(n): private investment company that is licensed by the SBA to make loans to small businesses. The U.S. government's Immigration Act of 1990: encouraged entrepreneurs to come to the U.S. through "investor visas". When comparing small businesses to their larger competitors, it is clear that: small firms often can offer more personalized customer services than big firms.For prospective entrepreneurs, enrolling in an introduction to business or small business management course offered through their community college: can be helpful in knowing what are the right strategies in setting up and running a business. ________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies. Angel Investors Two key management functions that need particular attention when starting a business are: planning and financing A(n) ________________ is a group of experienced professionals from different areas of business, within a company, who join together to develop, make, and market a new product. entrepreneurial team Business incubators are usually government-funded facilities intended to: offer startup firms low-cost office space and basic business services. Affiliate marketing is a web-based business strategy that: Rewards individuals who are willing to link a company's website to their blog or social network page. Which of the following is a characteristic of successful entrepreneurs? Action-oriented One reason we have seen continued growth in home-based businesses is: affordable computer and information technology makes it easier to compete. Effective entrepreneurial teams combine: creativity with marketing and production experience. According to the U.S. Department of Commerce, a ________ of small businesses export their goods.small percentage According to SBA guidelines, a manufacturing firm with 1,000 employees: may be classified as a small business depending upon the size of other firms in the industry. Which of the following government agencies is responsible for encouraging the development of small business? Small Business Administration The SBA's ________ program provides export financing opportunities for small businesses. Export Express loan Successful entrepreneurs are self-nurturing. This means they: believe in themselves and their ideas. Chris is an angel investor. This means that he: invests his money in new businesses with potential for growth, hoping for a good return on his investment if they go public. Business owners who prefer to maintain their businesses at a manageable size are called: micropreneurs A __________ is a written document that details the business idea, the target market and the business's competitive advantage, financial resources available for the business, and the qualification of the management. business plan The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their: integrity and sound business idea. Bankers and potential investors are likely to read ___________ first. the executive summary One of the challenges of running a home-based business is: keeping work and family tasks separate.The Small Business Administration defines a small business as a firm that: is independently owned but not dominant in its industry. A creative person working within a corporation to launch new products and generate new profits is known as a(n): intrapreneur. Which of the following sources of investment is the least likely type available to entrepreneurs? Venture capitalists Blake owns a business that installs hardwood flooring. The business employs one other full-time employee and several part-time employees who are deployed to various job sites on an "as needed" basis. The earnings from his company are added to other family earnings for tax purposes, and Blake assumes unlimited liability for the business's bills and debt. Blake's form of business ownership is a __________. sole proprietorship Greg's band wants to form a partnership. General partners will include the drummer, two guitarists, one keyboardist, and one singer. Greg's great-uncle, a musician in his own right, plans to provide $30,000, but does not plan to participate in the gigs, only in the profits. The band will form a _______________ limited partnership Jim and Sherry own Lawns for Less, Inc., a commercial lawn cutting service. The couple supplements their income with the rentals from a few apartment buildings that they own. They incorporated the lawn care business in order to keep it separate from their other income. As a C-corporation, if the business should fail, the couple would _______. lose only the funds they originally invested in their company One reason limited liability companies have become so popular is that they _______. can be taxed either as a corporation or as a partnership—owners can choose the tax treatment that is most advantageous for their situation In a leveraged buyout, the managers of a firm, its employees, or other investors _______ use borrowed funds to buy out the firm's stockholdersTrans Globe Airlines recently merged with Royal Blue Airlines, a financially troubled rival. The firms' management believes the merger will create a stronger company that can offer travelers more flights to a wider variety of destinations. This proposed merger is an example of a _______. horizontal merger Mega Bank's latest acquisition is Windfall Bank Shares, a bank with a strong presence in online financial services. Companies will acquire other businesses in order to ______________. enter new markets An evaluation of franchising would conclude that this type of arrangement _______ appeals to people who want to own a business, but are not comfortable starting a company from scratch Midas Muffler sells franchises to prospective business persons who want to use the Midas name and offer Midas products. In a franchise arrangement, Midas would be the _____________, and the buyer of the franchise is the ____________. franchisor; franchisee A ___________ is an organization that is owned and controlled by the people who use it—producers, consumers and workers with similar needs who pool their resources for mutual gain. cooperative An entrepreneur _______. accepts the risk of starting and running a business One way an intrapreneur differs from an entrepreneur is that intrapreneurs _______ work within existing corporations while entrepreneurs assume the risks of starting their own business When looking at the advantages and disadvantages of starting various types of businesses, it appears that _______ businesses that offer a chance for high profits tend to be difficult to start and hard to keep goingResearch about people who start their own businesses reveals that _______ many small business owners got their entrepreneurial idea from a previous job they held Which of the following suggestions would an experienced entrepreneur most likely give to someone who is thinking about starting their own business? Even small businesses must keep accurate records Due to severe storm damage, Tim needed a new roof on his house. He called well-known roofing companies in the area because he had heard their TV promotions for years. His insurance agent recommended that he call a smaller firm that several of his clients had worked with in the past. Although all firms agreed to bid on the project, the smaller firm won the business. All were competitively priced, but the small company spent several hours with Tim to make sure that he got what he wanted; and it also agreed to do the job in two days. One of the greatest advantages small businesses have is _______ the ability to know their customers better and adapt quickly to changing needs When seeking a loan from a bank, an entrepreneur hoping to start a new business should realize that bankers will _______ expect the entrepreneur to have a well-prepared business plan When Marco decided to start his own business, Grand Slam Baseball Academy, he was inspired by a need to improve the availability of sports activities for young boys in his community. He lined up several enthusiastic professionals willing to volunteer their time for his cause. Finding funds to renovate a building and promote his services was the challenge. A friend told him about _____________, as a possible source of funds for lower-income communities. Marco learned that these organizations often assist their clients with marketing advice, as well. community development institution programs One of the first sources of help that Eric sought when he began to plan for his Scandinavian import business was ____________. He was amazed to learn that this organization boasts over 10,000 volunteers that span industries, trade associations, and education institutions. TheSmall Business Administration connected him with a member that fit well with the type of business he planned to start. SCORE—Service Corps of Retired Executives Luis is a partner in a firm that specializes in producing vitamins and health food products. While the business is considered small by U.S. standards, he is attempting to persuade his partner to expand internationally. Luis would list which of the following as an advantage of going international? Exporting can absorb excess inventory. Today's progressive managers _______. emphasize teamwork and cooperation rather than discipline and order-giving Which of the following activities is part of the organizing function of management? finding the resources workers need to provide faster and better customer service When managers identify a market trend that suggests a new opportunity and then devise a strategy to go after this new opportunity, they are ____________. planning The _________ analysis is a tool used in the planning process that helps companies assess changes in external environments as well as strengths and weaknesses within the firm. SWOT Engineers at New Generations Computer Company provided three design approaches for the new keyboard the company was planning to produce and sell. Designers got together and used a problem solving approach called ________, in which they analyzed each approach on its advantages, disadvantages and implications to finalize their selection. PMI Ed Flavorman, the chief executive of Flavor Best Ice Cream, believes that alternative plans are almost as important as preliminary plans because the market is so competitive and unpredictable. Ed endorses _______ planning. contingencyAs David progressed in his career from a territory sales manager, to a regional sales manager, to the director of sales, he found that he utilized more ________ skills and less _______ skills. conceptual; technical Which of the following statements about effective leadership is the most accurate? The most effective leadership style depends on who is being led and the situation that presents itself. At Livwell Pharmaceuticals, researchers know that the company's objective is to develop three new cancer fighting medicines each year, but researchers are able to work on their own to develop these new drugs. Managers at Livwell practice _______ leadership. free-rein Bing spent several hours reviewing sales and expense reports for her tea-importing business, in order to determine if she had reached her profit goals for the previous month. Bing's efforts are part of the ___________ function of management. controlling Managers are involved in the ____ function of management when they work on shifting procedures and processes to achieve the organization's goals. organizing When managers try to inspire and fuel worker creativity, they are involved in the management function of ... leading Managers are involved in the ___ function of management when they make sure that the organization is making sufficient progress toward achieving its goals and objectives. controlling Silvia has review the financial statements for the last five years to compare the firm's performance with its goals and has called a meeting with her employees to share the news. Her action's are part of the ___ function of management controllingCommunicating a vision for others to follow, establishing corporate values, promoting corporate ethics, and embracing change are qualities that make a good ... leader Leaders who welcome suggestions from employees and make them a part of the decision-making process are using the ____ style of leadership participative What is true regarding the comparison between management and leadership> Leaders will make changes when it's beneficial to the organization. The first step in the controlling process of the managerial function of controlling consists of.... setting clear performance standards ¨Reduce product defects by 10% over the next 6 months¨ is a good example of what? establishing good performance standards Richard just finished comparing the financial forecasts prepared last year with the company's actual performance over the most recent quarter. After he finishes this task, he will... communicate the results and deviations to management ____ planning converts the tactical objectives of the organization into daily or weekly tasks operational The managers of Region One decide to establish a road map for the organization, after identifying the direction in which the organization is going and its purpose. The road map is the ... mission statement In a SWOT analysis what is not considered an organizational threat? a lack of managerial depth and talent Developing specific employee work assignments and schedules is an example of what? operational planningManagers who need strong technical skills are responsible for assigning specific jobs to workers and evaluating their daily performance are typically at the _____ level of managment supervisory A manager who is able to picture the organization as a whole and think in terms of the ¨big picture¨ is said to possess ____ skills conceptual As executive chairman of Google, Eric Schmidt oversees the company's business strategies. At his management level, Schmidt will likely spend most of his time using ____ skills conceptual In general, as a manager progresses thru the ranks within an organization, he will require fewer ___ sills but more ___ skills technical; conceptial Communicating a vision for others to follow, establishing corporate values & ethics, and embracing change are qualities that make a good ___ leader Leaders who welcome suggestions from employees and make them a part of the decision-making process are using the __ style of leadership participative A true statement regarding the comparison between management and leadership leaders are accepting of change when it benefits the organization When implementing a knowledge management strategy, one of the first steps is to... decide what knowledge is the most important for employees to do the best jobs they can At this company, salaries are public knowledge, and workers identify strategic opportunities for both the company and themselves. This is an example of ___ leadership free-reinA managers nowadays are more likely to... emphasize teamwork Today's managers must: 6pts be a skilled communicator and team player, as well as a planner, organizer, motivator, and leader. Although Best Buy managers allow workers to complete their tasks on their own in their own way, the managers are still very much involved in... 2pts setting goals and monitoring performance A mission statement should address an organization's.. 2pts customer needs;self-concept Rank, in order, the five steps of the control process. 5pts 1. Establish clear performance standards 2. monitoring and recording actual performance or results 3. comparing results against plans and standards 4. communicating results and deviations to appropriate employees 5. taking corrective action when needed and providing positive feedback skills that involve the ability to perform tasks in a specific discipline or department are technical skills An organization chart is a useful visual aid because it shows... 2pts the division of work in an organization;who reports to whom specific, short-term statements detailing how to achieve the organization's goals are... objectives Problem solving differs from decision making bc it... 2pts is less formal and usually requires faster action What is management The process used to accomplish organizational goals thru planning, organizing, leading, and controlling organizational resourcesThe broad, long-term accomplishments an organization wishes to attain goals What are supervisory managers directly responsible for? 2pts workers' daily performance; evaluating first line workers' daily performance ___ is giving employees the authority to make a decision without consulting the manager and responsibility to respond quickly to customer requests empowerment What are the 7 steps in the decision-making process? 1. define the situation 2. describe and collect needed information 3. develop alternatives 4. develop agreement among those involved 5. decide which alternative is best 6. do what is indicated (begin implementation) 7. determine whether the decision was a good one, and follow-up Skills that involve the ability to picture the organization as a whole and the relationship among its various parts conceptual skills Human relations skills are those associated with leadership such as.. (3pts) delegating, training & development, coaching What is the focus of strategic planning? looks at the organization as a whole; long-range What is the focus of operational planning? focusses on specific supervisors, department managers, and individual employees, very short-term What is the focus of tactical planning? designed to implement the activities and objectives specified in the strategic plan; short-range The process of setting work standards and schedules necessary to implement the company's tactical objectives is...operational planning Tasks associated with the organizing function of management: 3pts recruiting, selecting, training, and developing employees; allocating resources, assigning tasks, and establishing procedures for accomplishing goals; preparing a structure showing lines of authority and responsibility What is free-rein leadership? a leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives When a leader empowers employees, that leader is giving them: as much freedom as possible to become self-directed and selfmotivated What is staffing? the part of the management function of organizing that involves hiring, motivating, and retaining the best people ___ is a management function that involves measuring performance against standards or objectives, followed by identifying, investigating, and correcting any deviations from those standards or objectives controlling Allocating resources, preparing a structure, recruiting, selecting, and placing employees where they will be most effective are tasks associated with the _____ function of management organizing ____ strive to produce stability, whereas___ embrace and manage change managers; leaders Common roles more progressive managers play today: 3pts supporting; team building; motivating ___ is the presentation of a company's facts and figures in a way that is clear and apparent to all stakeholderstransparency What would be 2 examples of the internal customers of a company such as Toyota? the payroll department; employees on the assembly line Kirby is an experienced manager who gathered his team each morning and assigned tasks. Lucy supervised a second team, she didnt tell them what to do but what needs to be done overall. her team constantly showed higher productivity. What dos this example demonstrate how the roles of managers are changing the process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals strategic planning Enabling employees so they can be empowered successfully means.. 3pts assuring that they have the correct education; training them to do the job; giving them need coaching Strategic planning is done by ___ ___ ___ top level management The management function that involves creating a vision for the organization, communicating it to others, and motivating them to achieve goals is ___ leading The process of developing detailed, short-term statements about what is to be done, who is to do it, and how tactical planning Tactical plans that are detailed and short term state.. 3pts what is to be done; who is to do it; how it will be done by which level of management is tactical planning usually done? 2pts lower level managers; teams of lower level managers the management function that includes designing the structure of the organization and creating conditions and systems inwhich everyone and everything works together to achieve the organization's goals and objectives is... organizing What is planning? 3pts a management function that includes anticipating trends and determining the best strategies and tactics to achieve organization goals and objectives; setting the organization's vision (mission statement); Continuous process but also normally follows a pattern What are planning teams? having people help monitor the environment, find business opportunities, and watch for challenges Why is planning a key function of management? the other functions depend heavily on it What is organizing? a management-function that includes designing the structure of the organization and creating conditions in which everyone and everything work together to achieve the organization's goals and objectives. What is leading? management-function creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization's goals and objectives (in a timely manner) What is directing? telling employees exactly what to do Why don't most large firms use directing anymore? because employees often how more than their bosses What is controlling? 4pts a management-function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not. Basically, it means measuring whether what actually occurs meets the organization's goalsWhat is a vision? an encompassing explanation of why the organization exists and where it's trying to head. What is a mission-statement? an outline of the fundamental purposes of an organization; The foundation for setting specific goals and objectives What should a mission-statement address? 5pts - the organization's self-concept - its philosophy - long-term survival needs - social responsibility - nature of the product or service What are goals? the broad, long-term accomplishments an organization wishes to attain; setting them is often a team process What are objectives? specific, short-term statements detailing how to achieve the organization's goals. 3 fundamental questions of planning (procedure you and your business will follow) What is the situation now; weaknesses and strengths; how can we get to our goal from here What are the four forms of planning? strategic, tactical, operational, and contingency What is strategic planning? the process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals. what are policies? broad guidelines for action what are strategies? determine the best way to use resources at the strategic planning stage.. 4ptstop managers of the company decide which customers to serve, when to serve them, what products or services to sell, and the geographic areas in which to compete. What is the goal of strategic planning? to be flexible and responsive to the market What is tactical planning? the process of developing detailed, short-term statement about what is to be done, who is to do it, and how it is to be done. who normally does tactical planning? lower level managers What is contingency planning? the process of preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objective; Back up plans in case primary plans fail What is operational planning? the process of setting work standards and schedules necessary to implement the company's tactical objectives Whom does operational planning focus on? 3pts Focuses on specific supervisors, department managers, and individual employees. Strategic planning involves the setting of ... by.. broad long-range goals; top managers Tactical planning involves the identification of ..... by .. specific, short-range objectives; lower-level managers What is the danger involved with the fact that very few firms bother to use contingency planning? If something changes the market, such companies may be slow to respond What is decision-making? choose among two or more alternatives What are the steps involved in the rational decision making model? 7pts1. Define the situation 2. Describe and collect needed information 3. Develop alternatives 4. Develop agreement among those involved 5. Decide which alternative is best 6. Do what is indicated (begin implementation) 7. Determine whether the decision was a good one, and follow up What is problem solving? the process of solving the everyday problems that occur. It is less formal than decision making and usually calls for quicker action. What is PMI? Listing all the plusses for a solution in one column, all the minuses in another, and all the implications in the third. What is the idea behind PMI? to have the plusses exceed the minuses What is an organizational chart? a visual device that shows relationships among people and divides the organization's work; it shows who reports to whom. What are the levels of management? 3pts top management; middle management; supervisory management What is top management? the highest level of management, consisting of the president and other key company executives who develop strategic plans. middle management the level of management that includes general managers, division managers, and branch and plant managers who are responsible for tactical-planning and controlling. supervisory management managers who are directly responsible for supervising workers and evaluating their daily performance. What three categories of skills must a manager have? 3pts technical skills; human relations skills; conceptual skills technical skillsskills that involve the ability to perform tasks in a specific discipline or department human relations skills skills that involve communication and motivation; they enable managers to work through and with people conceptual skills skills that involve the ability to picture the organization as a whole and the relationship among its various parts. what is staffing? a management-function that includes hiring, motivating, and retaining the best people available to accomplish the company's objectives. What is leadership? creating a vision for others to follow, establishing corporate values and ethics, and transforming the way the organization does business in order to improve its effectiveness and efficiency. What 5 things must a leader do (in order to motivate workers and create the environment for them to motivate others and carrying out the leader's vision) communicate a vision and rally others around that vision; establish corporate values; promote corporate ethics; embrace change; stress accountability and responsibility What is participative leadership? leadership style that consists of managers and employees working together to make decisions What is the key to empowerment? enabling What is enabling? giving workers the education and tools they need to make decisions knowledge management finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firmWhat is the control process? (definition) provides feedback that lets managers and workers adjust to deviations from plans and to changes in the environment that have affected performance. What is the control process 6pts? 1. establish clear standards 2. monitor and record performance 3. compare results against standards against plans and standards 4. communicate results 5. if needed take corrective action ... (feedback) are standards realistic? With ______, performance measurement is relatively easy and the proper action can be taken. why? clear standards; the control process/process is based on clear standards In order to measure results, what must be true about the standards and goals? in order to measure the results, the standards must be specific, attainable, and measurable. detailed and not broad setting clear standards is apart of which function of management? planning What are often the foundations for control systems? why? accounting and finance; they provide the numbers to evaluate progress What measures a company's success? 4pts or so financial, pleasing employees, stakeholders, and customers, both external and internal customers external customers dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use. internal customers individuals and units within the firm that receive services from other individuals or units. An example (well memorized because it can contradict another question) of internal customersthe field salespeople are the internal-customers of the marketing research people who prepare market reports for them. What does management look like today? Managers tend to be more progressive (Promoting or favoring progress toward better conditions or new policies, ideas, or methods) For example, they emphasize teams and team building; they create drop-in centers, team spaces, and open work areas. They tend to guide, train, support, motivate, and coach employees rather than tell them what to do. What reasons account for changes in management? Leaders of fortune 100 companies today tend to be younger, more female, less elite universities. They know their employyes sometimes know more What are the primary functions of management? planning, organizing, leading, controlling What is an organizational chart? a visual device that shows relationships among people and divides the organization's work; it shows who is accountable for the completion of specific work and who reports to whom Are the skills needed to be a manager equally important at all management levels? no. top managers rely heavily on human relations and conceptual skills and rarely use technical skills. while first-line supervisors need strong technical and human relations skills but use conceptual skills less often. Middle managers need a balance of all three. What's the difference between a manager and a leader? a manager plans, organizes, and controls functions within an organization. A leader has a vision and inspires others to grasp that vision, establishes corporate values, emphasizes corporate ethics, and doesn't fear change Which is the best leadership style? depends on the people being led. The challenge of the future will be to empower self-managed teams What qualities must standards possess to measure performance results?Standards must be specific, attainable, and measureable Today's progressive managers: emphasize teamwork and cooperation rather than discipline and order-giving ___ is the management function that involves determining whether an organization is progressing toward its goals, rewarding employees for doing a good job, and taking corrective action when they are not. controlling Setting contingency plans in an organization is considered very important today mainly because: conditions change rapidly in today's economic and competitive environments. a ___ is used by an organization to show who is accountable for the completion of specific work and who reports to whom. organizational chart __________ is the art of utilizing organizational resources to accomplish goals at work. A. Socialization B. Justification C. Preparation D. Management Definition D. Management Term (p. 178) Management is more progressive today. There is more emphasis on: A. individual work that can be successfully measured. B. working in teams. C. striving to eliminate the control function of management. D. placing greater reliance on the government for financing. Definition B. working in teams. Term (p. 178) One of the challenges facing today's managers is to: Definition C. work with a more educated workforce.A. deal with a workforce that is less educated and less self-directed than in the past. B. find ways to encourage conformity instead of diversity. C. work with a more educated workforce. D. cope with the sudden and unexpected slowdown in the pace of innovation and change. Term (p. 178) Today's progressive managers: A. prefer to use the autocratic style of leadership. B. emphasize teamwork and cooperation rather than discipline and order-giving. C. face fewer challenges and problems than managers in the past. D. can rely on a much higher level of worker loyalty to the organization than in the past. Definition B. emphasize teamwork and cooperation rather than discipline and order-giving. Term (p. 178) Which of the following statements comparing today's workers with those from earlier eras is most accurate? Compared to earlier workers, today's employees are: A. more loyal to the firm. B. less educated and less self-directed. C. more willing to leave the firm to seek better opportunities. D. more likely to need direct guidance and direction from their managers. Definition C. more willing to leave the firm to seek better opportunities. Term (p. 178) The revolution in management that is currently underway suggests that the most effective managers of the future will: Definition D. emphasize team work.A. be very strict in their treatment of workers. B. emphasize individual initiative rather than teamwork. C. specialize in performing one of the four management functions. D. emphasize team work. Term (p. 178) How are managers today different from managers in the past? A. Managers today are more likely to reprimand workers B. Managers in the past would use praise and gentle suggestions C. Managers in the past were less loyal to their employer D. Managers today emphasize teamwork Definition D. Managers today emphasize teamwork Term (p. 180) Which of the following statements has resulted in changes in the role of management? A. Most workers today show little initiative or creativity, so managers must spend more time directing their efforts B. The marketplace is becoming global, which increases both competition and opportunities for cooperation and integration C. Firms are recognizing that their workforces are too diverse, so managers must find ways to reduce diversity without violating federal laws against discrimination D. The desire to encourage teamwork has resulted in larger, more cumbersome organizations with too many workers Definition B. The marketplace is becoming global, which increases both competition and opportunities for cooperation and integration Term Definition(p. 179) One of the four primary functions of management is: A. controlling. B. marketing. C. financing. D. designing. A. controlling. Term (p. 179) The management function concerned with anticipating future trends and determining the best strategies to achieve an organization's goals and objectives is known as: A. directing. B. leadership. C. planning. D. forecasting. Definition C. planning. Term (p. 180) According to the "Reaching Beyond Our Borders" box in Chapter 7, Jack Welch, former CEO of General Electric, said the key problem companies face in addressing opportunities for in the global market is: A. the lack of engineer and scientists in the global market. B. the lack of support from the U.S. government for global expansion. C. the lack of professional managers at all levels to run operations. D. the lack of production capability to keep up with global demand. Definition C. the lack of professional managers at all levels to run operations. Term (p. 180) When managers work on creating conditions and systems to ensure that everything and everyone works together to achieve the organization's goals, they are involved in the Definition D. organizing__________ function of management. A. controlling B. leading C. planning D. organizing Term (p. 181) __________ is the management function that involves determining whether an organization is progressing toward its goals, rewarding employees for doing a good job, and taking corrective action when they are not. A. Organizing B. Controlling C. Leading D. Officiating Definition B. Controlling Term (p. 179) ___________ is the management function that involves setting goals, strategies, and tactics for achieving the organization's goals and objectives. A. Forecasting B. Planning C. Conceptualizing D. Controlling Definition B. Planning Term (p. 180) ___________ is the management function of creating a vision for the organization and guiding, training, coaching, and motivating employees to help achieve the goals and objectives of the organization. A. Organizing B. Controlling C. Leading D. Officiating Definition C. Leading Term Definition(p. 180) Which of the following goals best describes today's view of the organizing function? Organizing today focuses on: A. achieving unified opinions from a diversified workforce. B. designing the organization around the customer. C. simplifying the process of measuring outcomes related to performance standards. D. developing the most efficient strategic plans for the firm. B. designing the organization around the customer. Term (p. 181) When managers determine that an organization is not making sufficient progress toward achieving its goals and objectives and they develop corrective measures, they are involved in: A. controlling. B. planning. C. directing. D. accounting. Definition A. controlling. Term (p. 179) When managers identify a market trend that suggests a new opportunity and then devise a strategy to go after this new opportunity, they are involved in the function of: A. controlling. B. planning. C. leading. D. organizing. Definition B. planning. Term (p. 180) Which of the following activities would be a part of the leading function of management? A. Devising a new strategic plan to enter a new foreign market currently dominated by a competing firm Definition D. Training and coaching workers to help them understand their job and perform it effectivelyB. Recruiting qualified workers to join the organization and assigning them to their proper position C. Examining a financial report to see whether the firm's profits are improving and taking corrective action if they are not D. Training and coaching workers to help them understand their job and perform it effectively Term (p. 179) Which of the following activities is part of the planning function of management? A. Assigning a particular worker to do a specific task B. Looking at market forecasts to identify future business opportunities and challenges C. Praising a sales representative who has far exceeded her monthly sales objectives D. Conducting a job interview with a potential new employee Definition B. Looking at market forecasts to identify future business opportunities and challenges Term (p. 180) Which of the following activities is part of the organizing function of management? A. Going over a spreadsheet to analyze some financial data B. Teaching a new employee how to use a piece of office equipment C. Giving front-line workers additional resources needed to provide faster and better service to customers D. Developing a broad general strategy to help the organization meet its longterm growth objectives Definition C. Giving front-line workers additional resources needed to provide faster and better service to customers Term Definition(p. 180) As a manager, two of Sylvia's strengths are her ability to communicate goals clearly, and her ability to guide, coach, and motivate workers. Based on these strengths, __________ is a management function that Sylvia is likely to be good at performing. A. Controlling B. Planning C. Leading D. Organizing C. Leading Term (p. 181) Amanda, a regional manager for Flairol Cosmetics, has just seen a report showing that sales in her region are trending lower than anticipated for the third quarter. Her next task is to determine the reason for the disappointing results and find a way to get sales up to their desired level. Amanda's efforts are part of the ____________ function of management. A. controlling B. directing C. organizing D. planning Definition A. controlling Term (p. 181) A __________ is an overall explanation of why an organization exists and where it is trying to head. A. tactical plan B. prime directive C. corporate charter D. vision Definition D. vision Term (p. 181) A vision for a company is: A. an explanation of why the company Definition A. an explanation of why the company exists and where it wants to go.exists and where it wants to go. B. the same thing as an objective. C. a detailed plan that outlines the major organizational structure of the firm. D. very relevant for the short-term, but less useful for the long-term. Term (p. 181) A meaningful mission statement should address topics such as the organization's: A. form of ownership and methods of financing. B. self-concept and company philosophy. C. advertising strategy and distribution plan. D. tactical plans and contingency plans. Definition B. self-concept and company philosophy. Term (p. 181) Employees often work with managers to develop a(n) __________ that outlines the fundamental purposes of their organization. A. organization chart B. value statement C. mission statement D. PERT diagram Definition C. mission statement Term (p. 181) __________ involves setting the organization's vision, goals, and objectives. A. Organizing B. Planning C. Controlling D. Directing Definition B. Planning Term (p. 181) ___________ are broad, long-term Definitionaccomplishments an organization wants to achieve. A. Goals B. Objectives C. Directives D. Agendas A. Goals Term (p. 181) __________ are specific, shortterm, measurable results an organization wants to achieve in order to fulfill its long term goals. A. Directives B. Opportunity targets C. Objectives D. Mission complements Definition C. Objectives Term (p. 182) A __________ analysis is used to help companies evaluate their internal strengths and weaknesses, and develop an awareness of external threats and opportunities. A. WISH B. SWAMP C. ASSET D. SWOT Definition D. SWOT Term (p. 183) __________ planning determines the major goals of an organization and lays the foundation for obtaining and using resources to achieve those goals. A. Strategic B. Contingency C. Central D. Tactical Definition A. Strategic Term (p. 184) The type of planning that is concerned with developing detailed Definition D. tacticalshort-term actions about what is to be done, who is to do it, and how it is to be done is known as __________ planning. A. strategic B. contingency C. first-line D. tactical Term (p. 184) __________ planning prepares alternative courses of action that may be used if the primary plans are not achieving objectives. A. Strategic B. Contingency C. Tactical D. Alternative Definition B. Contingency Term (p. 184) Tactical planning is concerned with: A. determining the best way to cope with an emergency situation. B. developing detailed strategies about what is to be done, who is to do it, and how it is to be done. C. devising temporary courses of action to be used if the primary plans do not achieve the desired results. D. setting long run goals that will govern the general course of the organization for years. Definition B. developing detailed strategies about what is to be done, who is to do it, and how it is to be done. Term (p. 184) Which of the following is involved in setting work standards and schedules needed to implement the firm's tactical objectives? A. Mission statement B. Tactical planning C. Operational planning D. Contingency planning Definition C. Operational planningTerm (p. 184) A(n) __________ would be used by a department manager as a tool for making daily and weekly assignments: A. operational plan B. vision statement C. mission statement D. tactical plan Definition A. operational plan Term (p. 184) Strategic planning looks at the organization as a whole, while ________ planning focuses on daily tasks and decisions. A. tactical B. strategic C. mission D. operational Definition D. operational Term (p. 185) _________ planning is a part of contingency planning that is used to deal with sudden and unexpected changes in the business environment. A. Crisis B. Tactical C. Operational D. SWOT Definition A. Crisis Term (p. 185) __________ is choosing among two or more alternatives. A. Contingency planning B. Decision-making C. Organizational selection D. Utility analysis Definition B. Decision-making Term (p. 186) The first step in the rational decision-making model is to: Definition D. define the situation.A. recruit team members to work on the problem. B. gather data. C. develop alternative responses. D. define the situation. Term (p. 186) __________ is a problem solving technique that attempts to come up with as many solutions as possible in a short time without censoring the ideas. A. Brainstorming B. Game theory C. CAD/CAM D. PMI Definition A. Brainstorming Term (p. 186) PMI is a: A. computer program used to help managers write mission statements. B. statistical technique used in the controlling process. C. problem solving technique used to evaluate possible solutions to a problem. D. rule of thumb used to determine how many employees should be managed by any single manager. Definition C. problem solving technique used to evaluate possible solutions to a problem. Term (p. 181) In a company in which a effective vision has been provided: A. there is no need for tactical planning. B. the economic and competitive environments tend to be much more predictable. C. employees are likely to have a sense of purpose and a common set of values. D. goals and objectives are no longer needed. Definition C. employees are likely to have a sense of purpose and a common set of values. Term Definition(p. 181) A basic difference between goals and objectives is that goals are: A. precise, while objectives are vague. B. set by tactical plans, while objectives are set by strategic plans. C. set by middle management, while objectives are set by first-line managers. D. concerned with broad, long-term accomplishments, while objectives focus on specific short-term details. D. concerned with broad, long-term accomplishments, while objectives focus on specific short-term details. Term (p. 183) Which of the following would be a concern addressed in a strategic plan? A. Should the firm make a long-term commitment to expand into new markets? B. Which specific jobs should be assigned to each employee? C. How much output should be produced this week in a given production facility? D. Which computer software package should the firm's human resources office use to manage the payroll? Definition A. Should the firm make a long-term commitment to expand into new markets? Term (p. 185) According to the "Spotlight on Small Business" box in Chapter 7, the Blue Man Group knew that if they wanted to expand their product planning and organization were critical. Therefore, the three partners spent considerable time writing a: A. strategic plan B. performance plan C. crisis plan D. responsive plan Definition A. strategic plan Term (p. 184) Because economic and Definition B. develop contingency plans.competitive environments frequently change, organizations should: A. set a long-term plan and stick to it. B. develop contingency plans. C. save time and money by cutting back on planning. D. eliminate any long-term strategic plans, but devise short-term tactical plans and update them once a year. Term (p. 186) Which of the following techniques would a team of workers be most likely to use if they wanted to evaluate several possible solutions to a specific problem their company needs to solve? A. PERT B. Regression analysis C. PMI D. MBO Definition C. PMI Term (p. 181) Jenna Raiter, the president and CEO of AutoMotion Auto Service Centers, has asked several managers and employees to help establish a statement to outline the fundamental purposes of their company. The result of this effort is likely to be a document known as a(n): A. payoff matrix. B. mission statement. C. tactical plan. D. organization chart. Definition B. mission statement. Term (p. 183) Jamal is part of a management group that is examining whether his company, State Engineering, should offer some important new services that would broaden its business by appealing to a different group of Definition C. strategic planning.potential clients. Jamal's group is involved with: A. contingency planning. B. operational planning. C. strategic planning. D. tactical planning. Term (p. 181) Monica was hired by the Misty Mount Corporation to take over as the new chief executive officer. Her initial impression is that the company is in disarray, primarily because the employees do not have a sense of purpose or a common set of values. Monica's observations suggest that she needs to provide a(n) _________ for Misty Mount: A. vision B. contingency plan C. objective function D. corporate logo Definition A. vision Term (p. 181) Customers who visit any Good As New Appliance Repair Center see a framed statement prominently displayed near the front door. The plaque describes the company's fundamental purposes. In part, it states that "All Good As New Centers operate under the belief that every customer deserves good quality parts, fast and dependable service, and a fair price." The words on this plaque reflect the ____________ of Good As New. A. strategic plan B. mission statement C. corporate agenda D. corporate charter Definition B. mission statement Term Definition(p. 184) Setting contingency plans in an organization is considered very important today mainly because: A. managers have historically been poor tactical planners. B. the government can charge firms with unfair business practices if they do not have such plans. C. conditions change rapidly in today's economic and competitive environments. D. most employees and staff don't understand strategic planning, so they tend to rely more on contingency plans. C. conditions change rapidly in today's economic and competitive environments. Term (p. 182) When a firm makes use of the SWOT analysis, one of its objectives is to: A. identify the best employees to fill each position within the organization. B. set specific short-term performance standards for each department. C. evaluate the desirability of issuing stocks or bonds in the current financial climate. D. identify the things it does well as an organization and the things it needs to improve. Definition D. identify the things it does well as an organization and the things it needs to improve. Term (p. 184) Jermaine is a manager with Drevil Industries. Part of his job is to make specific short-term decisions about what his department must do to achieve Drevil's long-term success. Jermaine is involved in: A. strategic planning. B. contingency planning. C. tactical planning. D. complimentary planning. Definition C. tactical planning. Term Definition(p. 185) According to the "Spotlight on Small Business" box in Chapter 7, one of the keys to the success of the Blue Man Group has been: A. keeping the price for their show as low as possible. B. focusing on the small markets where the competition for entertainment is less intense. C. the decision to keep the organization small and not risk losing control through expansion. D. the development of a strategic plan to manage the product's growth and everyday operations. D. the development of a strategic plan to manage the product's growth and everyday operations. Term (p. 184) Kayla is a supervisor who manages a production line. She spends several hours each week developing specific employee work assignments and production schedules for the coming week so that the production department can meet its short-term production objectives. This suggests that a significant component of Kayla's job involves: A. strategic planning. B. contingency planning. C. tactical planning. D. operational planning. Definition D. operational planning. Term (p. 184) Flavio, CEO of Fabulous Frozen Custard believes that alternate plans are almost as important as the primary operational plans because external circumstances such as the weather, competitor moves, and even economic conditions make it important to have a Plan B. Flavio endorses: A. tactical planning. B. retroactive planning. C. concurrent planning. Definition D. contingency planning.D. contingency planning. Term (p. 186) Carlos had been thinking of setting up a graphic design service business for quite some time. He knew that he wanted to work at home and he now had several leads for prospective customers. He also knew how much money he needed to make to cover his expenses. He had several ways to approach his new business including working by himself or taking on a partner. Both ways needed more thought to determine what each would involve. In terms of the rational decision-making model, Carlos is in which of the following steps? A. Defining the situation B. Describing and collect needed information C. Develop alternatives D. Develop agreement among those involved Definition C. Develop alternatives Term (p. 186) __________ is the management function that involves allocating resources, assigning tasks, and establishing procedures for accomplishing the organizational objectives. A. Controlling B. Outsourcing C. Organizing D. Coordinating Definition C. Organizing Term (p. 187) A(n) __________ is used by an organization to show who is accountable for the completion of specific work and who reports to Definition D. organization chartwhom. A. balance sheet B. Venn diagram C. stakeholder outline D. organization chart Term (p. 187) A(n) ________________ is a visual device which shows relationships among people and divides the organization's work. A. organization chart B. Venn diagram C. corporate tree D. Gantt chart Definition A. organization chart Term (p. 188) The level of management that is directly responsible for assigning specific jobs to workers and evaluating their daily performance is called: A. primary management. B. middle management. C. supervisory management. D. secondary management. Definition C. supervisory management. Term Middle managers are responsible for: A. establishing the vision for the organization. B. assigning specific jobs and evaluating the daily performance of workers. C. devising the organization's strategic plan. D. developing tactical plans and controlling. Definition D. developing tactical plans and controlling. Term (p. 187) General and divisional managers, plant managers, and deans and Definition A. middle management.department heads at colleges are classified as: A. middle management. B. supervisory management. C. top management. D. nominal management. Term (p. 188) Supervisory managers spend most of their time on: A. conceptual and financial skills. B. technical and human relations skills. C. strategic planning. D. external efforts such as meeting with stockholders and other stakeholders. Definition B. technical and human relations skills. Term (p. 188) ___________ skills involve a manager's ability to picture the organization as a whole and the relationship among its various parts. A. Creative B. Technical C. Conceptual D. Autonomic Definition C. Conceptual Term (p. 188) ____________ skills include the ability to perform tasks of a specific department or job, such as selling (marketing) or bookkeeping (accounting). A. Conceptual B. Departmental C. Technical D. Tactical Definition C. Technical Term (p. 188) Leadership, coaching, and morale building are all part of a manager's _________ skills. Definition D. human relationsA. technical B. theoretical C. empirical D. human relations Term (p. 188) Although top managers most often possess these skills, they usually make less use of __________ skills than supervisory managers. A. technical B. conceptual C. human relations D. empirical Definition A. technical Term (p. 187) The downsizing that has occurred in recent years has __________ middle managers in many organizations. A. increased the number of B. eliminated the jobs of some C. strengthened the control of D. increased the importance of Definition B. eliminated the jobs of some Term (p. 187) Which of the following management positions is responsible for getting the right information to other managers to enable them to make better decisions? A. Chief executive officer (CEO) B. Chief financial officer (CFO) C. Chief planning officer (CPO) D. Chief information officer (CIO) Definition D. Chief information officer (CIO) Term (p. 188) The further up the managerial ladder a person moves, the __________ his or her original job skills become. A. more important B. less important Definition B. less importantC. stronger D. more tactical Term (p. 187) A chief operating officer (COO) would be classified as part of a firm's: A. primary management. B. middle management. C. top management. D. first-line management. Definition C. top management. Term (p. 189) ___________ involves recruiting, hiring, motivating, and retaining the best people available to accomplish the company's objectives. A. Directing B. Planning C. Leading D. Staffing Definition D. Staffing Term (p. 188) In comparing the types of skills used by managers at different levels within an organization, which of the following is true? A. Top managers use mainly technical skills and middle and first-line managers use mostly conceptual skills B. First-line managers use mainly technical and human relations skills, while top managers devote most of their time to activities involving human relations and conceptual skills C. The types of skills used by managers do not change much from one level of management to another D. The specific skills used at different levels of management do vary, but conceptual skills are the most important at all levels Definition B. First-line managers use mainly technical and human relations skills, while top managers devote most of their time to activities involving human relations and conceptual skillsTerm (p. 189) Gabriella is responsible for hiring, motivating, and retaining the best employees for her organization. Gabriella is in charge of: A. staffing. B. orienting. C. directing. D. facilitating. Definition A. staffing. Term (p. 188) After thirteen years as a laborer for Hendrix Construction, Jimmy was promoted to the position of foreman. He is directly responsible for assigning various jobs to his work crew and evaluating their performance on a daily basis. Jimmy is now a member of: A. top management. B. middle management. C. supervisory management. D. forward management. Definition C. supervisory management. Term (p. 188) By completing the courses needed to obtain a college major in accounting, marketing, or some other field, a student can go a long way toward acquiring the _________ skills managers need to rise through the ranks of their area of specialization. A. autocratic B. technical C. human relations D. secondary Definition B. technical Term (p. 187) Which of the following persons is most likely to be involved in strategic planning? A. Chief executive officer B. Electrical shop supervisor Definition A. Chief executive officerC. Budget analyst D. Advertising manager Term (p. 188) Axel is in a new position, serving as a first-line manager. Axel's position will require him to spend a lot of time: A. developing strategic plans. B. evaluating the daily performance of workers. C. creating a vision for the company. D. providing information to stakeholders. Definition B. evaluating the daily performance of workers. Term (p. 187) Anita is employed as plant manager for Mojo Industries, Incorporated. Though she spends some time performing all management functions, she is particularly concerned with tactical planning and controlling. Anita's position would be classified as part of Mojo's: A. top management. B. lateral management. C. supervisory management. D. middle management. Definition D. middle management. Term (p. 188) After working for eleven years as a production line worker, Hollis recently was made a foreman. In his new position, Hollis will rely on: A. conceptual skills more than human relations skills. B. technical skills and human relations skills more than conceptual skills. C. technical skills and conceptual skills, but he won't really need any human relations skills. D. accounting and financial skills. Definition B. technical skills and human relations skills more than conceptual skills.Term (p. 188) Ricardo works as a department head atBarnesHospital. His job requires Ricardo to spend most of his time training and coaching employees to perform their jobs more effectively and teaching other managers to be better leaders. Ricardo's job requires him to make full use of his: A. technical skills. B. conceptual skills. C. orientation skills. D. human relations skills. Definition D. human relations skills. Term (p. 188) As CEO of Google, Eric Schmidt performs strategic planning for the organization as well as putting structure in place to monitor company progress. These activities make use of Eric's: A. conceptual skills. B. technical skills. C. concurrent skills. D. human relations skills. Definition A. conceptual skills. Term (p. 188) Vinnie wants to become a manager in his company, but he has always been a bit shy and has a hard time interacting with co-workers. In order for Vinnie to succeed as a manager, he will need to work on his: A. technical skills. B. human relations skills. C. control skills. D. integration skills. Definition B. human relations skills. Term (p. 188) Rob intends to major in accounting because he is confident that an ability to read and interpret Definition A. technical skills.financial and accounting data is the way to get to the top in business. Rob seems to be concerned with developing his: A. technical skills. B. verbal skills. C. qualitative skills. D. conceptual skills. Term (p. 189) _____________ involves creating a vision for others to follow, establishing corporate values and ethics, and transforming the way an organization does business so that it is more effective and efficient. A. Organizing B. Production management C. Tactical planning D. Leadership Definition D. Leadership Term (p. 189) Leaders: A. embrace change. B. are mainly concerned with tactical issues as opposed to change issues. C. tend to do the work themselves rather than delegate it to others. D. strive to maintain order and stability. Definition A. embrace change. Term (p. 191) The __________ style of leadership is characterized by making managerial decisions without consulting others. A. autocratic B. bureaucratic C. free rein D. democratic Definition A. autocratic Term Definition. (p. 191) Managers who listen to their subordinates and allow them to participate in decision-making are using the ____________ style of leadership. A. autocratic B. free-rein C. participative D. bureaucratic C. participative Term (p. 191) A(n) __________ leader would set objectives and give employees a great deal of freedom to decide for themselves how to accomplish those objectives. A. free-rein B. autocratic C. Type A D. aristocratic Definition A. free-rein Term (p. 189) A key to effective leadership is the ability to: A. maintain order, stability, and control. B. communicate a vision and rally others around that vision. C. master the technical details of the jobs performed by subordinates. D. maintain an autocratic approach to dealing with others. Definition B. communicate a vision and rally others around that vision. Term (p. 192) __________ is the term used to describe giving workers the education and tools they need to assume additional decision-making powers. A. Energizing B. Provisioning C. Upgrading D. Enabling Definition D. EnablingTerm (p. 192) _____________ means giving employees the authority and responsibility to respond quickly to customer requests. A. Restructuring B. Delineating C. Empowerment D. Intrapreneuring Definition C. Empowerment Term (p. 192) In traditional organizations, ____________ involves giving explicit instructions to workers, telling them what to do to meet the goals and objectives of the organization. A. directing B. organizing C. budgeting D. controlling Definition A. directing Term (p. 192) ____________ is concerned with finding the right information and making that information accessible and understood by everyone in an organization. A. Mission management B. Data management C. Knowledge management D. Auditing Definition C. Knowledge management Term (p. 192) The first step in developing a knowledge management system is to: A. empower employees to make their own decisions and accept the Definition D. determine what knowledge is most important to the organization.consequences. B. obtain the necessary information system technologies. C. recognize that perfect information is readily available in all organizations. D. determine what knowledge is most important to the organization. Term (p. 189) One difference between managers and leaders is that: A. managers are found in businesses while leaders operate in nonprofit organizations. B. mangers work to achieve stability while leaders embrace change. C. managers use an autocratic approach while leaders embrace a democratic style. D. all employees can manage, but only top managers can lead. Definition B. mangers work to achieve stability while leaders embrace change. Term (p. 192) Which of the following statements about effective leadership is the most accurate? A. Effective leaders have the same personality traits B. The most effective leadership style depends on who is being led and in what situation C. The democratic style of leadership will almost always improve the effectiveness of the organization D. One trait of effective managers is that they consistently maintain the same style of leadership Definition B. The most effective leadership style depends on who is being led and in what situation Term (p. 191) Autocratic leadership is likely to be effective when: A. subordinates are highly trained Definition B. the organization faces an emergency situation.professionals. B. the organization faces an emergency situation. C. workers enjoy expressing their opinions and having a say in what is done. D. the manager is uncertain about the best strategy to pursue. Term (p. 192) Which of the following statements about leadership styles is most accurate? A. A manager should choose one style and use it consistently B. Managers have no control over the leadership style they use C. Effective managers often use a variety of leadership styles D. Managers should always start with an autocratic style, but can gradually switch to a more democratic approach if workers earn their trust Definition C. Effective managers often use a variety of leadership styles Term (p. 192) As firms make greater use of empowerment and teams, managers will find that they: A. should use the same techniques for directing employees that were used in the past. B. will need to closely supervise the teams to make sure they remain focused on the goals of the organization. C. will need to provide the teams with detailed instructions to give them a clear sense of direction. D. must become more like coaches and counselors than bosses. Definition D. must become more like coaches and counselors than bosses. Term Which of the following best summarizes Definition A. supply both a vision and a moral andthe type of leader future organizations are likely to need? In the future, organizations will need leaders who: A. supply both a vision and a moral and ethical foundation for growth. B. provide the sense of stability and orderliness the organization needs to withstand the challenges posed by a changing environment. C. have a strong track record of focusing on the accomplishment of financial objectives. D. are effective at using autocratic techniques. ethical foundation for growth. Term (p. 191) The CEO of peripheral company QuickDrive uses a leadership style that encourages employees to discuss management issues with the CEO and to work together to resolve those issues in a democratic manner. Which of the following statements would the CEO of QuickDrive most likely make? A. The key to QuickDrive staying on top in a high-tech industry is not wasting time checking out what other firms do, but to act immediately on my directives B. In a high-tech business, it is more important to invest in technology than to invest in people C. The key to keeping talented employees loyal to QuickDrive is to use a participative management style and treat them with respect, value their ideas, give them the resources they need, and expect great things from them D. Spending a lot of money to buy out competitors for their technology is likely to backfire, because QuickDrive is a leader in technology development Definition C. The key to keeping talented employees loyal to QuickDrive is to use a participative management style and treat them with respect, value their ideas, give them the resources they need, and expect great things from themTerm (p. 191) Well-known retired basketball coach, Bob Knight, was known for his emotional antics atIndianaUniversity and Texas Tech. If you talk with Bob, he believes in total dedication from his team and total compliance to his style of coaching. It's "his way or the highway." Bob typifies the _____________ style of leader. A. bureaucratic B. free-rein C. remanded D. autocratic Definition D. autocratic Term (p. 191) At Holyfield Chemicals, department heads usually make decisions after meeting with employees and seeking their ideas and suggestions. Department heads at Holyfield Chemicals make extensive use of the ___________ style of leadership. A. autocratic B. diplomatic C. democratic (participative) D. open shop Definition C. democratic (participative) Term (p. 191) At Lifeline Pharmaceuticals, highly regarded research personnel rely on top management to provide strategic direction. Beyond that, researchers work on their own to develop new drugs to satisfy customer needs and company profit objectives. Middle management at Lifeline practice _____________. A. free-rein leadership B. consultative leadership C. projectory leadership D. autocratic leadership Definition A. free-rein leadershipTerm (p. 192) Adam is a first-line manager for Idle Time Gaming, Inc., a company whose values and focus is innovation. Having recently transferred in from a traditional retail (top/down) company, which of the following changes will the new company expect Adam to embrace? A. He must continue to issue detailed instructions to give the teams a sense of direction B. He will no longer have a management position in the firm, since the purpose of teams is to eliminate the need for first-line managers C. He will need to act less like a "boss" and more like a coach, advisor, counselor, and team player D. He will isolate himself from his subordinates Definition C. He will need to act less like a "boss" and more like a coach, advisor, counselor, and team player Term (p. 193) The first step in controlling consists of: A. issuing orders and explaining routines. B. setting clear performance standards. C. establishing a clear chain of command. D. assigning workers to perform specific tasks. Definition B. setting clear performance standards. Term (p. 193) In the control process the first step is to: A. communicate results and deviations to employees. B. compare results to plans and Definition C. set clear and appropriate standards.standards. C. set clear and appropriate standards. D. monitor and record performance. Term (p. 194) In order for standards to be useful in the controlling process, they must have certain characteristics. One of these characteristics is that they must be: A. nonspecific. B. redundant. C. included the mission statement. D. attainable. Definition D. attainable. Term (p. 194) Which of the following should form the foundation of a firm's control system? A. Accounting and finance B. Marketing and production C. Human resources and finance D. Computing and production Definition A. Accounting and finance Term (p. 194) __________ are units within an organization that receive services from other units within the organization. A. End-users B. Internal customers C. Third-party distribution centers D. Profit centers Definition B. Internal customers Term (p. 194) __________ include dealers, who buy products to sell to others, and ultimate customers who buy products for their own personal use. A. End users B. External customers C. Internal customers Definition B. External customersD. Distribution centers Term (p. 193) Ho Han has just spent two hours going over quality reports to determine whether his department is meeting quality standards he set for the current month. Ho's efforts are part of the ___________ function of management. A. planning B. organizing C. directing D. controlling Definition D. controlling Term (p. 194) Pam is a sales manager for Paradise Beauty Products. She has told her sales people that she expects each of them to increase their customer contacts by at least 5 percent in the next month. Pam has set a(n): A. procedural policy. B. functional objective. C. policy guide. D. performance standard. Definition D. performance standard. Term (p. 194) Which of the following is a clear performance standard? A. Bring about a significant improvement in the morale of all workers. B. Decrease the number of products rejected due to manufacturing defects by 10% over the next 6 months. C. Completely eliminate all customer complaints. D. Make secretaries more efficient. Definition B. Decrease the number of products rejected due to manufacturing defects by 10% over the next 6 months. Term (p. 193) Two years ago, Travis started his Definition C. devise a set of clear performanceown restaurant supply company, serving the greaterChicago area. Until recently, he has never concerned himself with establishing a formal control system. Now, with a recession looming, he is experiencing cost conscious restaurant owners. He has decided that a formal control system is needed. The first step Travis should take is: A. draw up a formal organization chart. B. talk to his banker to set financial goals. C. devise a set of clear performance standards. D. design an accident report form so that he can keep accurate records of all accidents that occur. standards. Term (p. 193) As a middle manager for her firm, Tori just finished comparing the results of a promotional campaign with the outcome expectations. The next step in the control process is: A. monitor and record actual performance. B. set up contingency plans. C. communicate results and deviations with management and employees involved. D. establish discipline committees to decide on dismissals. Definition C. communicate results and deviations with management and employees involved. Term (p. 194) Harper is a sales rep for an eyeglass company. The company is always on the cutting edge of trendy designs. In her job, she frequently relies on the marketing department to provide her with information and materials. When using customer satisfaction to judge the success of their Definition B. take Harper's satisfaction into account, because customers can be internal as well as external.company, Harper's managers should: A. ignore Harper's satisfaction, since she is an employee rather than a customer. B. take Harper's satisfaction into account, because customers can be internal as well as external. C. consider Harper's satisfaction, but place less emphasis it than on the satisfaction of a stockholder, since she is an external customer. D. only consider Harper's satisfaction if she has worked in the same job for at least 2 years. Term (p. 194) When establishing criteria to measure the success of a customeroriented business, managers should: A. limit their attention to financial measures such as profit and return on investment since these are the only objective and quantifiable measures available. B. focus most of their attention on measures of employee satisfaction, since without good employees the firm will not be competitive. C. focus primarily on financial measures, but pay some attention to non-financial concerns. D. recognize that, while financial measures are important and should be considered, the purpose of the firm is to satisfy both internal and external customers. Definition D. recognize that, while financial measures are important and should be considered, the purpose of the firm is to satisfy both internal and external customers. Which statement is most accurate about the impact of business on society? ... Which statement is most accurate about the impact of business on society? Businesses can have a positive impact on both standard of living and quality of life.Eve and 3 of her friends enjoy perfumes. Eve made scented candles as gifts for her friends. Her friends encouraged Eve to create more and sell them online. Eve has been filling orders and turning a profit, Eve is proof that: When you successfully fill a market need, you can make money. Noliva is a small and poor nation, but its current president has a genuine desire to create more wealth for Noliva citizens. The president has recieved many recommendations from his advisors, which is most likely to create the most wealth for N? Establish a business environment that promotes and rewards entrepreneurship. Nick is a recent finance graduate who has two passions: music and finance. Upon graduation, he was offered an opportunity to join a struggling rock band with a lot of potential, or a job at a large well-established financial services company. By joining the band, he will forgo which of the following? Added benefits such as health insurance provided to employees of large corporations. Adam Ripley sells custom bicycles. Adam buys several bike parts including wheels and tires from the Good Treads Company. Although several government—supported regulations help Adam in his business, regulations that make it easy for Adam's business to enjoy good vendor relationships are: Laws that support enforceable contracts between firms. Marla Staples is concerned with identity theft. One of the ways that she can protect her ... information from leaking—out to the wrong hands is: Install antivirus software, firewalls, and anti-spyware software on her computer. Which of the following statements best describes how firms must treat their front-line workers in order to remain competitive? Front-line workers must be: Empowered with the authority to respond quickly to the unmet needs of customersSt. Claire Hospital is considering a program that would allow some of its workers to use ... flextime. One group of workers who would probably benefit from flextime is: Single-parent families. Laura and Tim McNash recently moved to North Carolina on a three-acre home site. They purposefully purchased their home within biking distance to the university where they are both employed, and their bikes each have room for two cloth bags for groceries if they need to purchase food on the way home, although they plan to grow much of their own. Laura and Tim are examples of a growing number of young people who: Want to change their lifestyle to be more in tune to saving energy. Jenna Leigh is an information savvy, 20-something person who is trying to select between two marketing job offers. She can either join a company that makes small hammers and screwdrivers for the do-it-yourself hardware store business, or she can join a company developing the fourth generation cell phone service. She is quite impressed that the hardware business is growing quite nicely in China, Mexico, and India where people are starting to expand their living spaces. She is also aware of: An information—based global revolution that might make her career at a telecommunications company more lucrative in the long run. Which of the following statements would a follower of Adam Smith be most likely to make? lf people are given the freedom to follow their own interests, theoretically their efforts will lead to economic growth that benefits society as a whole. For many years, Congressman Ricardo Perez has called for more government regulation of business. "After all," the Congressman said recently, "businesspeople are out to make a profit, not to create jobs or serve their customers. The government must pass more laws to require businesses to take the interests of consumers and workers into account." From these comments, it is clear that Congressman Perez:Does not accept the "invisible hand" idea brought forth by Adam Smith. Patrick lives in a nation whose government embraces capitalism. He owns his own home and car, as well as his own business and building. Patrick maintains ownership due to: The right to own private property. The market price of apples is currently rising. In a free—market economy, the most likely explanation of this price change is that: There is a shortage in the market for apples. Jorge Martinez is a well—educated entrepreneur who operated a small business in his home country of Florentina. At the encouragement of his American relatives, Jorge recently immigrated to the United States and applied for U.S. citizenship. "ln Florentina, tax rates were very high," Jorge complained. "The government used the taxes I paid to finance all sorts of social programs to help the less fortunate. While this is a noble goal, it has really undermined the profit incentive of individuals such as me. I really feel that these high taxes have stifled economic growth." Jorge's comments illustrate the reason many socialist countries are experiencing a(n): Brain drain. The prime minister of the nation of Urbania has called for Urbania's legislature to enact new ... legislation designed to shift his country away from socialism toward a more capitalistic system. The Prime Minister acknowledges that such a radical change will entail some hardships, and that some citizens will be unhappy with the changes. The most likely source of dissatisfaction with a move toward capitalism is: A trend toward unequal distribution of wealth. Several years ago, the nation of Florentina had a governmentowned telecommunication system that lagged far behind other nations. In several of its rural areas, there was only one phone for an entire village of people. Government taxes collected for the purpose of maintaining the telephone system were very meager, so the notion of expanding service was almostimpossible. The government of Florentina decided to sell the phone company to a private firm. The private firm expanded rapidly. It reported that even poor consumers were willing to pay for a private phone line. This government decision and subsequent sale was: A move toward capitalism. John complained to his buddy, Frank that prices have increased a lot over the past year. Frank disagreed, saying that the prices of some goods have gone up a bit, but other prices have declined, noting that you can get some good buys on houses right now. Frank feels that the average price of consumer goods hasn't changed. Frank and John can refer to the to learn how government economists currently view the price situation. CPI Chase is a recent college graduate with a new job as an engineering trainee for a large defense company. Now that he is making good wages, he hopes to start saving for his first house and also contribute toward the company retirement plan. As he looks over his monthly bills, Chase is concerned about ever getting ahead of the game. His food bill, car payment, and mounting payments keep him in the "just making ends meet" category. As his mind wonders back to the good ol' college days, he reflects on a time when gas and food seemed a lot more reasonable. Chase is experiencing the effects of: Inflation Lance owns Lance Lawns Irrigation Systems, LLC, a company that installs and maintains underground lawn irrigation systems. Business is down due to new housing starts being negatively impacted by a deep recession. To make things worse, his bank called yesterday to inform him that his credit limit (interest fee of 12.5%) will be cut from $30,000 per year to $15,000 per year, unless he is willing to pay a higher interest rate of 20%. As Lance drives to the first job this morning, he knows that his last task of the day will be to reduce the hours for his two employees. He can't afford to work employees eight hours per day, with only a $15,000 line of credit. Which of the following strategies will help Lance's situation? Fed decreases interest rates Many of the toy products sold in the United States are imported from Taiwan because the Taiwanese can producethese products more efficiently than U.S. companies. This is an example of: Comparative advantage. An American firm recently criticized a Chinese steel producer for charging a lower price for its steel in the United States than it charges in China. If proven to be true, the Chinese firm has engaged in: dumping The nation of Redland reported that its imports for the previous year were $4 billion greater than its exports. During the same period, Redland reported a favorable balance of payments. This information suggests: money inflows from tourism, foreign aid, foreign investment and other sources more than offset Redland's trade deficit. Pepsi Cola entered into a long—term contract with a South African beverage company. The contract calls for the South African firm to produce and market Pepsi Cola in South Africa. Pepsi will receive royalties on each case of beverage sold. This is an example of: Licensing Adam's Apple Corporation ships all of the apples from its orchards in Washington to a single buyer in Japan. The firms' entire profits are derived from this international transaction. Adam's Apple Corporation: Is not a multinational corporation. Workers in the nation of Argenia prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This difference between Argenia workers and U.S. workers represents a management challenge for firms trading in the global market. sociocultural Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of: changes in the supply of and/or demand for dollars in the global currency market. Responding to pressure from political lobbyists representing the U.S. steel industry, the U.S. government levies a tax onsteel products imported from Europe. This is an example of a(n): protective tariff. A major concern voiced by U.S. critics of the North American Free Trade Agreement ~ (NAFTA) is that it would result in: loss of jobs in the U.S. economy. Jill works as a flight attendant for an international airline. While in China, it is convenient for Jill to find look-a-likes in famous brands of watches, purses, clothing, and golf clubs. ln fact, she does her Christmas shopping there and even buys good quality items for auctioning at her son's preschool events back in the U.S. Jill's actions: Demonstrate a continual problem with product piracy in China. When WorldCom used intentional accounting irregularities to make the company look more profitable than it actually was, it: Engaged in illegal behavior. After a few years of being in business, employees who worked for a startup software company noticed that the owner overlooked certain questionable actions of high billing associates, versus other employees who worked hard but only brought in an average number of new clients each month. With respect to what you learned in this chapter about the ethical behavior of many Americans, which of the following statements applies here? As is often the case today, some leaders will look at each situation individually when making value judgments. A friend offers to share with you a term paper previously prepared for her Introduction to Business class last semester. When you tell her that it wouldn't be fair, she reminds you of your habit of reading an entire Harry Potter book at the local bookstore without paying for the book. Which ethics—based question would be most helpful in evaluating these situations? Is it balanced? 34.Which of the following would most likely involve ethical concerns? ... A. Overstating an expense report. ...35. In an effort to promote the importance of a valuable education, the faculty and staff at the local community college are trained to ask each student about their career preferences, rather than suggest courses that may not benefit the student's future goals. Although it would be tempting to suggest courses just to increase the College's enrollment, employees know that it is ... more important to serve each student well, even if it means suggesting courses and/or degrees offered at other institutions. This approach is consistent with: ... A. An integrity-based ethics code. ... 36. John was recently hired by Backstreet Books, an eclectic bookstore in a large college town. At the beginning of the first day on the job, his store manager handed him a small booklet consisting of company rules. He was asked to read it and sign and submit the last page, before starting work. Among other things, the rules explicitly discussed reprimands for grievous behavior and dismissal if the firm could prove that the employee was stealing product from the store. This booklet represented the of the store. ... B. compliance-based ethics ... 37. Before it was publicly known that IBM was going to take over Lotus Development, an IBM secretary told her husband, who told two co—workers, who told friends, relatives, business associates, and even a pizza delivery man. A total of 25 people received the information and traded on this tip to make a profit. These people were: ... B. Insider trading. ...38. Last year the Bank of Plenty, Inc. made an all out effort to go paperless. The bank's public relations arm promoted the strategy both internally and extemally. Customers were strongly encouraged to utilize the bank's online banking for all their banking needs. Customers could sign up for local workshops where employees were dedicated to showing them how to navigate the bank's new website and find the information they required. The bank's initiative demonstrates: ... C. An area where the firm can contribute to the green effort, as well as cut costs. ... 39. J. D. started working for an export trading company right out of college. His job took him to Asia on several occasions, where he interacted with manufacturers and got to practice his limited Chinese. He was amazed to see the difference in working conditions in the developing nations where he visited, compared to similar operations in the U.S. The expectations of workers were not the same. J.D.'s experience is an example of: ... B. Social responsibility differences between similar firms, but in different countries. ... 40. A few years ago, several U.S. retailers were sued in Los Angeles courts for human rights abuses associated with contract manufacturers located in the Marianas Islands, a territory of the U.S. government. The accusers wanted the retailers to stop outsourcing the manufacturing of soft goods to manufacturers on the islands that practiced inhumane labor standards. The activists who brought suit against the U.S. firms: ... A. claimed that the retailers were breaking the law. ... 41. Cali owns Dog Trotters, a dog walking business that she started to earn money after school and supplement her allowance. She planned to keep all the profits, and kept things simple, by putting a flier on the bulletin board at the localgrocery store announcing that she was available to provide this service. Cali's business is a: ... A. Sole proprietorship. ... 42. Kristen and her brothers and sisters decided to form a partnership that specializes in home design of all types. One of their goals is to maintain the loving relationship they currently enjoy so they are following the Model Business Corporation Act recommendations as they write the partnership agreement. Which of the following is an accurate recommendation of the Act? ... C. There should be discussion and well understood ways that the partners will handle disagreements. ... 43. Zach and Mac own an auto repair business which they operate as co-owners. Both take an active role in the management of the business, and each accepts unlimited liability. Zach and Mac operate as a: ... B. general partnership ... 44. Dane is a stockholder in SmallWorld, Inc., a C-corporation that manufactures amusement park rides. The company recently lost a major court decision and will probably be forced into bankruptcy. In fact, the damages awarded are so great that, even if all company assets are sold and the proceeds are used to pay its debts, SmallWorld is likely to still owe money to its creditors. lf SmallWorld go bankrupt, Dane and the other stockholders will: ... B. Lose their investment but nothing else. ... 45. A few years back, your three U.S. born friends that live in the State of Wyoming inherited a dude ranch that they plan totum into a retirement haven for race horses. Peaceful Pastures wants to open its doors by spring, 2010. After attending several small business seminars, the three friends are certain they need limited liability. The high-risk, labor-intensive business will require a sizable investment including an air-conditioned van, several fenced-in pastures and loads of animal feed. You recently heard that one form of business ownership requires owners to pay self-employment taxes on the entire amount of earnings. You are fairly certain this is one tax loophole your friends would like to avoid. You recommend: ... D. S-Corporation ... 46. Continental Foods is considering a conglomerate merger with a company that makes storage solutions. A likely reason is: ... C. Diversification. ... 47. Several years ago. Regis Corporation, a very large hair styling salon company purchased "Your Father's Mustache" salons. Although this was initially an acquisition, the merging of these two businesses was a(n) ______. Regis went on to purchase several hair care product companies. Joining forces with hair care product companies would represent a _______. ... C.horizontal merger; vertical merger ... 48. Marco is a franchisee with Daggies, a chain of sandwich shops. His business was doing well until several Daggies franchisees got in trouble and were forced to close their shops. Soon afterward, Marco's business deteriorated and he too was forced to close. This is an example of: ... B.The coattail effect. ...49. Jenna plans to invest in a cleaning service franchise called "Spare Time". At her first interview with the franchisor's selling agent, she leamed that the parent company expects royalties of 5%. These are: ... D. A share of the profits or a percentage share of revenues (net sales). ... 50. Which of the following people would be most interested in participating in a business organized as a cooperative? ... A. Joe is intrigued by the idea of combining his time and resources with many other people to operate a business providing a good or service that they all will use. ... 5l. Erin developed a new type of exercise equipment she calls the Tush N' Tone. After unsuccessfully searching for potential investors, she arranged a personal loan and borrowed additional money from her parents. Her willingness to continue believing in her idea and remain enthusiastic shows that Erin is: ... A. characteristically self—nurturing. ... 52. Anna recently left a large insurance firm and opened a home-based business preparing medical transcriptions for doctors. Based on recent statistics, she can expect: ... B. the emergence of affordable technology will make it less challenging for her to compete with larger firms offering the same service. ... 53. Pete inherited a thriving dry cleaning business from his father and mother. He continued the tradition of offering quality service to the customers he served. As the surrounding towns expanded, several people suggested that Pete expand thebusiness to offer service in new locations. He chose to maintain only one operation, so as not to lose control and to keep his work life and home life balanced. Pete is a good example of a(n): ... C. Micropreneur ... 54. As a result of corporate downsizing, Alex lost his job as an information systems manager for a large telecommunications company. A bonafide computer geek in his own right, Alex knew that several of his past company contacts often outsourced their computer problems. He decided it was a good time to test the waters and see if he could secure enough computer clients to be in business for himself. His success demonstrated that: ... D. Successful big businesses often create profitable opportunities for small businesses. ... 55. When Krystal Ginger graduates from culinary school she dreams of opening her own Asian fusion restaurant. Her other passion is skiing in Colorado, where she schedules four or five trips each year. As her small business advisor, you believe it necessary to provide her with information that will help her make good business decisions. Which of the following would be helpful for Krystal to know? ... A. Restaurants are relatively easy businesses to start, but are labor intensive and also have the greatest failure rate. ... 56. Carrie, a student at Metropolitan Community College, dreams of starting her own business. In an effort to learn as much as she can about small business management, she talked to four friends who each offered their advice. Which of these suggestions is likely to help Carrie the most? ...B. Take courses related to small business management and look for a job with a successful businessperson, preferably in your field of interest. ... 57. As a young boy, Drew remembers his grandfather telling him, "Son, if you can find something you like to do, and somebody is-willing to pay you to do it, well, that's the secret to a great life." The way Drew saw it, this was his big break. For the past five years, he split his time between school and working for a local tree farm/nursery business. The owner recently announced he was ready to retire. As Drew began creating a business plan, he contemplated what the business might be worth. How much will he need to buy this business? For starters, Drew ... B. should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage. ... 58. Justin's favorite part of Introduction to Business class was marketing. As he brainstorms about starting a car detailing business, he recalls that it is important to: ... D. analyze the market before making the service available. ... 59. Bing came to the U.S. ona swimming scholarship. After a few months of frustration with trying to find swim goggles like he used in his native country, he started a web site that offere specialty goggles for swimming, skiing, and snowboarding. Before launching the web site and filling orders, Bing spent a few months going to swim meets and gathering preferences about goggles from other swimmers. Bing's actions: ... D. demonstrated his need to better understand the market. ... 60. As a small business owner, Tanika can't afford to provide her employees with the high wages and benefits offered by bigcorporations. One way to retain her employees and create a high level of motivation would be to: ... C. empower her employees to develop their own ideas. · ... 60. Jake wants to sell his workout DVDs in European, Asian, and Latin American countries. ___________ ... will help him reach vendors abroad, without the expense of traveling to meet them face-to-face. ... A. A web site and other technological advances ... 62. Antoine is considering marketing his bicycles in Brazil. If he enters the Brazilian market, he is likely to learn that _____________. ... B. Social responsibility differences between similar firms, but in different countries. ... 63. How are managers today different from managers in the past? ... D. Managers today emphasize teamwork ... 64. Which of the following statements has resulted in changes in the role of management? ... B. The marketplace is becoming global, which increases both competition and opportunities for ... cooperation and integration.... 65. As a manager, two of Sylvia's strengths are her ability to communicate goals clearly, and her ability to guide, coach, and motivate workers. Based on these strengths, _________ is a management function that Sylvia is likely to be good at performing. ... C. Leading ... 66. Amanda, a regional manager for Flairol Cosmetics, has just seen a report showing that sales in her region are trending lower than anticipated for the third quarter. Her next task is to determine the reason for the disappointing results and find a way to get sales up to their desired level. Amanda's efforts are part of the function of management. ... A. Controlling ... Jenna Raiter, the president and CEO of AutoMotion Auto Service Centers, has asked several managers and employees to help establish a statement to outline the fundamental purposes of their company. The result of this effort is likely to be a document known as a(n): · ... B. Mission statement. ... Monica was hired by the Misty Mount Corporation to take over as the new chief executive officer. Her initial impression is that the company is in disarray, primarily because the employees do not have a sense of purpose or a common set of values. Monica's observations suggest that she needs to provide a(n) ______ for Misty Mount. ... A. Vision ...Flavio, CEO of Fabulous Frozen Custard believes that alternate plans are almost as important as the primary operational plans because extemal circumstances such as the weather, competitor moves, and even economic conditions make it important to have a Plan B. Flavio endorses: ... D. Contingency planning. ... Which of the following persons is most likely to be involved in strategic planning? ... A. Chief executive officer ... Ricardo works as a department head at Bames Hospital. His job requires Ricardo to spend most of his time training and coaching employees to perform their jobs more effectively and teaching other managers to be better leaders. Ricardo's job requires him to make full use of his: ... D. Human relations skills. ... Rob intends to major in accounting because he is confident that an ability to read and interpret financial and accounting data is the way to get to the top in business. Rob seems to be concerned with developing his: ... A. Technical skills. ... The CEO of peripheral company QuickDrive uses a leadership style that encourages employees to discuss management issues with the CEO and to work together to resolve those issues in a democratic manner. Which of the following statements would the CEO of QuickDrive most likely make? ...C. The key to keeping talented employees loyal to QuickDrive is to use a participative management style and treat them with respect, value their ideas, give them the resources they need, and expect great things from them. ... At Lifeline Pharmaceuticals, highly regarded research personnel rely on top management to provide strategic direction. Beyond that, researchers work on their own to develop new drugs to satisfy customer needs and company profit objectives. Middle management at Lifeline practice _________. ... A. Free—rein leadership ... Two years ago, Travis started his own restaurant supply company, serving the greater Chicago area. Until recently, he has never concemed himself with establishing a formal control system. Now, with a recession looming, he is experiencing cost conscious restaurant owners. He has decided that a formal control system is needed. The first step Travis should take is: ... C. Devise a set of clear performance standards. ... Harper is a sales rep for an eyeglass company. The company is always on the cutting edge of trendy designs. In her job, she frequently relies on the marketing department to provide her with information and materials. When using customer satisfaction to judge the success of their company, Harper's managers should: ... B. take Harper's satisfaction into account, because customers can be internal as well as external. ... As Bret prepares to open his new business, he has identified the tasks that need to be accomplished and has assigned employees to each task. This illustrates a: ...B. Division of labor. ... As your good friend ponders putting some structure to his/her graphic design business idea, which of the following do you ng advise him/her to do? ... A. Prepare the non-changeable marketing plan for the next three years, including marketing analysis and marketing strategy. ... While adding structure to his graphic design business, including the allocation of resources for getting the job done, Jack knew that he would need to initially allocate a considerable amount of funds for the sales team to have face to face meetings with other businesses who needed website design and promotional materials, Since overall funds were limited, he worried about his employees using these funds for the stated purpose and in a manner that he would use them. As his business advisor, you explain: ... D. creating a corporate culture that emphasizes your values goes hand in hand with structuring your organization. ... At Green Acres Fencing Company, eight employees each perform various aspects of the company's- work. One person does sales, four perform installation; one purchases materials; one does billing; one performs after-sales inspections. This type of organization reflects Fayol's principle of: ... A. Division of labor. ... John recently accepted a job in the marketing department with the Burbank Bagel Boys. After just a few days on the job, John learned that the company has many layers of management, and seems to have a rule to cover almost every situation. These conditions suggest that Burbank Bagel Boys is a(n):... D. Bureaucratic organization. ... Which of the following statements would best summarize Max Weber's views on the role of workers in an organization? ... C. Workers should simply follow well-defined procedures. ... HipHop Music Company assigns workers to departments based on similar skills. Currently, the company has a marketing department, a production department, a finance department, and a human resources department. This suggests that HipHop departmentalizes by: ... B. Function. ... During the past six years, the marketing department manager at Creative Concepts Intemational made a strong push to hire mover/shakerprofessionals that had superior performance records prior to joining this company. It didn't take long for these enthusiastic marketers to recognize the many talents within their department. They marveled at how much they were like each other and how they seemed to agree with each other's work styles and ideas. After a while, it became difficult for others in the organization to present to this group. If the idea did not originate within the marketing department, marketers did not give it much credence. Management counselors would describe this phenomenon as : ... D. Groupthink ... Which of the following would be the least likely to serve on a cross-functional team for the Discovery Corporation? ...C. A production manager for one of Discovery's main competitors ... Chang is a project manager at Paradox Industries. He is able to borrow specialists from the organization on a regular basis to assist in major projects. After the project ends, the specialists return to their functional units to await new assignments. Paradox Industries ... D. matrix organization model ... Independence Electronics prides itself as a world-class producer of components used in CD and DVD players. The outstanding performance of the production department indicates that this activity is one of the firm's: ... B. core competencies ... When Eric Schmidt became the CEO of Google, he reported that the company in the hands of founders Larry Page and Sergey Brinn was running well, it just needed a little structure. CEO Schmidt helped develop: Contemporary businesses are: A. beginning to use Fayol's principles of organization to respond quickly to changes in the marketplace. B. reorganizing to be more competitive. C. performing the organization function to look good to prospective buyers. D. adding to their workforce as part of adaptive change. Definition B. reorganizing to be more competitive. Term (p. 202) Organizing a business begins with: A. acquiring the necessary resources. B. choosing the best qualified Definition D. determining the work to be done.employees. C. developing an efficient plan of action. D. determining the work to be done. Term (p. 202) Dividing the required work among a group of employees is called: A. departmentalization. B. delegation of responsibility. C. division of labor. D. separation of control. Definition C. division of labor. Term (p. 202-203) Dividing tasks into smaller jobs is called: A. job enrichment. B. job specialization. C. departmentalization. D. division of authority. Definition B. job specialization. Term (p. 203) The process of setting up individual functional units of the business to do specialized tasks is called: A. Departmentalization. B. Division of labor. C. Job specialization. D. Delegation of authority. Definition A. Departmentalization. Term (p. 202) Job specialization is known to: A. minimize delegated authority and responsibility. B. improve job performance. C. create work teams and improve resource allocation. D. establish procedures. Definition B. improve job performance.Term (p. 202) Due to changes in technology and competition, managing __________ has become a critical management skill. A. consumer demand B. international markets C. change D. negative spiritual issues Definition C. change Term (p. 203) Which of the following is an example of a move to reorganize? A. Reducing the labor force within your business B. Revising plans by creating contingency plans C. Managing by objectives and clearing pathways for success D. Developing a way to monitor financial success Definition A. Reducing the labor force within your business Term (p. 203) As depicted in the Reaching Beyond our Borders, box, "General Electric Looks for More Profits", in order to compete globally, corporate strategy should: A. not try to match the performance of competitors. B. study competitors and try to match or exceed their performance. C. not waste time and resources going beyond the competitor's strategy, but should move within striking distance. D. centralize all services. Definition B. study competitors and try to match or exceed their performance. Term (p. 202-203) The proven success of job specializationlies in the fact that: A. it leads to groupthink. B. it avoids the pitfalls of division of labor, where workers become removed Definition D. it adds efficiency to the business's operation by identifying tasks that some do better than others.from thinking conceptually about the business. C. it is a detractor to others who are thinking about entering your industry because it successfully creates barriers to entry. D. it adds efficiency to the business's operation by identifying tasks that some do better than others. Term (p. 204) In the Making Ethical Decisions box, titled, "Safety versus Profit", which of the following statements best forms the theme of this passage? A. In the beginning, company procedures that require value judgments are often too costly. As the business grows, the owner can add ethical procedures to each job. B. The principles of organization state that the only company objective is to gain profits for the owner(s) or stockholders. If your competitors are cutting corners with safety regulations, you should consider the same. C. The only way to be profitable is to avoid risk. If new safety equipment becomes available that is applicable to your business, even if it slows productivity, you should adopt it. D. The corporate culture you create as you begin your service will last a long time. Your workers will adopt your values. Definition D. The corporate culture you create as you begin your service will last a long time. Your workers will adopt your values. Term (p. 202) As Bret prepares to open his new business, he has identified the tasks that need to be accomplished and has assigned employees to each task. This illustrates a: A. management departmentalization. Definition B. division of labor.B. division of labor. C. specialization of priorities. D. mass production economies. Term (p. 203) When Bret started his auto mechanic shop his business plan included a(n) _______________ that showed the relationship among employees in his organization and the lines of authority and responsibility. A. business view map B. department categorization C. organization chart D. operating matrix grid Definition C. organization chart Term (p. 202-203) As your good friend ponders putting some structure to his/her graphic design business idea, which of the following do you not advise him/her to do? A. Prepare the non-changeable marketing plan for the next three years, including marketing analysis and marketing strategy B. List the work that needs to be done such as 1) computer assisted design; 2) sales generation; 3) accounting and bookkeeping; 4) purchasing and supply ordering, and more C. List who will do the various jobs, including who will perform the computer work, who will keep the books, and who will go out and create sales D. Assign responsibility and authority to certain employees Definition A. Prepare the non-changeable marketing plan for the next three years, including marketing analysis and marketing strategy Term (p. 203) While adding structure to his graphic design business, including the Definition D. creating a corporate culture that emphasizes your values goes hand inallocation of resources for getting the job done, Jack knew that he would need to initially allocate a considerable amount of funds for the sales team to have face to face meetings with other businesses who needed website design and promotional materials. Since overall funds were limited, he worried about his employees using these funds for the stated purpose and in a manner that he would use them. As his business advisor, you explain: A. it always "takes money to make money", so he needs to realize that he will have to take risks B. in order to achieve a productive business, he will have to trust those that he hires but control them carefully C. it's difficult to monitor financial resources during the first year of business. This is the wild-cat year where you pull-out all stops and let the experts do the work it takes to make the sale D. creating a corporate culture that emphasizes your values goes hand in hand with structuring your organization hand with structuring your organization Term (p. 205) The concept of ____________ suggests that as a firm produces more, the average cost of goods produced goes down. A. natural growth B. survival of the fittest C. cost enhancement D. economies of scale Definition D. economies of scale Term (p. 205) Henri Fayol and Max Weber are best known for their contributions to: A. production theory. B. marketing theory. Definition C. organization theory.C. organization theory. D. finance theory. Term (p. 205) Organization theorists emerged during the era of mass production, meaning: A. the development of ways to produce a large quantity of product efficiently. B. the development of ways to purchase raw materials in bulk. C. the decline in the cost of production due to an increase in the cottage industry. D. the era when most companies adopted very similar methods of producing goods and services, which led to standardization of organizational design. Definition A. the development of ways to produce a large quantity of product efficiently. Term (p. 205) Fayol's _____________ principle states that each worker should report to one, and only one, boss. A. division of labor B. unity of command C. esprit de corps D. comparative advantage Definition B. unity of command Term (p. 205) Fayol's ____________ principle says that tasks should be divided into areas of specialization. A. departmentalization B. comparative advantage C. division of labor D. centralization Definition C. division of labor Term (p. 206) Fayol's ____________ principle says that workers' attitudes would Definition A. esprit de corpscreate an environment of pride and loyalty within an organization. A. esprit de corps B. hierarchy of loyalty C. unity of command D. equity Term (p. 206) __________ believed that managers were trustworthy and companies would do well if employees simply did what they were told. A. John Keynes B. Adam Smith C. Peter Drucker D. Max Weber Definition D. Max Weber Term (p. 206) Max Weber used the term ________ to describe middle managers whose job was to implement the orders of top management: A. management B. autocrats C. staff personnel D. bureaucrats Definition D. bureaucrats Term (p. 206) In Weber's view of a bureaucratic organization, the role of top management was to: A. empower workers and enable them to quickly respond to customer wants. B. make decisions. C. develop the rules and procedures needed to carry out the plans of bureaucrats. D. directly supervise front-line employees to better control operations. Definition B. make decisions. Term Definition(p. 206) In Weber's view of a bureaucratic organization, the organization demanded: A. a spirit of pride and loyalty among the workers. B. cross-functional teams. C. clearly established rules and guidelines that were to be precisely followed. D. self-managed teams. C. clearly established rules and guidelines that were to be precisely followed. Term (p. 207) The line of authority that moves from the top of a hierarchy to the lowest level is called the: A. chain of logic. B. chain of command. C. organizational design. D. delegation of contingent authority. Definition B. chain of command. Term (p. 207) A(n) __________ consists of one person at the top of the organization and many levels of managers who are responsible to that person. A. hierarchy B. oligarchy C. inverted organization D. informal organization Definition A. hierarchy Term (p. 207) In a bureaucratic organization: A. departments communicate with each other on a regular basis. B. employees follow strict rules and regulations. C. customer satisfaction is the number one priority. D. first-line workers are empowered to respond to the needs of customers. Definition B. employees follow strict rules and regulations. Term Definition(p. 207) One advantage of a bureaucratic organization is that: A. it is very responsive to the wants and needs of customers. B. there are very few layers of management. C. it encourages cooperation among different departments within the organization. D. employees know they are expected to follow the rules and regulations D. employees know they are expected to follow the rules and regulations. Term (p. 207) ______________ organizations are characteristic of many layers of management and function with welldefined rules and procedures. A. Matrix B. Inverted C. Ordered D. Bureaucratic Definition D. Bureaucratic Term (p. 205) Economies of scale: A. are available to small firms but not to large firms due to management inefficiencies. B. are achieved when a firm reduces its average cost of production as it produces more. C. can be avoided by purchasing supplies and raw materials in large quantities. D. help explain the success of small businesses. Definition B. are achieved when a firm reduces its average cost of production as it produces more. Term (p. 206) Max Weber favored which of the following? A. Inverted organizations B. Worker participation in decision making Definition C. Staffing and promotions based on qualificationsC. Staffing and promotions based on qualifications D. Flat organizations Term (p. 205) Fayol believed that decisionmaking authority should remain in the hands of top management: A. in small organizations, but should be delegated to middle and first-line managers in large organizations. B. in large organizations, but could be delegated to middle and first-line managers in small organizations. C. in all types and sizes of organizations. D. only in organizations subjected to significant government regulation. Definition A. in small organizations, but should be delegated to middle and first-line managers in large organizations. Term (p. 205) Which of the following correctly identifies the explanation behind the unity of command principle of management? A. All workers must share the same goal B. Every firm has one strong leader, and everyone should support that individual C. Workers can become frustrated and confused if they have more than one boss D. All authority should rest with top management, since only top managers carry the responsibility of bad decisions Definition C. Workers can become frustrated and confused if they have more than one boss Term (p. 206) If companies follow the theories of Fayol and Weber, which of the following scenarios is likely to result? A. Organization design will be benefit by the emergence of quick decisionDefinition C. Organizations that grow will develop several layers of management and the time that it takes to make a decision will increasemaking B. Organization design will eliminate systems of hierarchy and chains of command due to their hindrance of esprit de corps C. Organizations that grow will develop several layers of management and the time that it takes to make a decision will increase D. There will be a significant reduction of work force due to specialization and departmentalization Term (p. 206) Which of the following statements most closely identifies the problem with adopting Fayol's principles of organization design for contemporary businesses? A. Leaving some decision-making power to middle management had the effect of minimizing the effort and results that management would put into the other historical principles of organization B. The rule making that developed from these principles created organizations that didn't respond quickly to customer needs C. The principles of Fayol and Weber hampered a firm's ability to determine if it was profitable D. Authority and responsibility quickly became unrelated Definition B. The rule making that developed from these principles created organizations that didn't respond quickly to customer needs Term (p. 207) Campbell is a middle manager for a bureaucratic organization. According to Max Weber's views on bureaucratic organizations,Campbell's function within the organization is to: A. make key operating decisions. B. evaluate the daily performance of first-line employees. Definition D. implement the decisions of top management.C. ensure the organization achieves esprit de corps. D. implement the decisions of top management. Term (p. 205) At Green Acres Fencing Company, eight employees each perform various aspects of the company's work. One person does sales, four perform installation; one purchases materials; one does billing; one performs after-sales inspections. This type of organization reflects Fayol's principle of: A. division of labor. B. equity. C. unity of command. D. hierarchy of authority. Definition A. division of labor. Term (p. 205) Sarah is a designer for a business that installs underground sprinkler systems for residential and commercial customers. Sarah designs and presents systems to prospective customers. Brothers Tom and Bill share the ownership responsibilities. Tom is in charge of commercial accounts and Bill is in charge of residential accounts. Sometimes Tom and Bill double book Sarah's time, creating frustration and animosity. Since they share supervisory responsibility, there is no clear way to decide whose accounts are most important. This type of situation represents a violation of Fayol's ____________ principle. A. division of labor B. clarity of objective C. priority of assignment D. unity of command Definition D. unity of commandTerm (p. 206) Bill, a financial manager at Carlyle Bank and Trust always strives to treat each subordinate with respect and fairness. Bill's treatment of employees is an example of Fayol's principle of: A. unity of command. B. equity. C. empowerment. D. order. Definition B. equity. Term (p. 207) John recently accepted a job in the marketing department with the Burbank Bagel Boys. After just a few days on the job, John learned that the company has many layers of management, and seems to have a rule to cover almost every situation. These conditions suggest that Burbank Bagel Boys is a(n): A. cross-functional organization. B. decentralized organization. C. oligopolistic organization. D. bureaucratic organization. Definition D. bureaucratic organization. Term (p. 207) FairviewCommunity College is a multi-district college with four campuses. Each campus has one president, two vice presidents, five deans, 12 department chairs, over 100 faculty members, and several persons in support roles. The presidents from each campus report to four vicechancellors and the vice-chancellors report to the chancellor. It is clear that Fairview has a well-defined _____________. A. channel of academic culture B. chain of command C. responsibility environment Definition B. chain of commandD. bureaucratic reallocation Term Andrew's company is a bureaucratic organization. Andrew is likely to encounter which of the following conditions? A. Real time decisions B. Cross-functional teams C. Empowerment of first line employees to better serve customers D. Many layers of management Definition D. Many layers of management Term (p. 205) The management at Patriot Mills works hard to ensure that no one in its organization has more than one boss and all workers are treated with fairness and respect. Additionally, the firm divides the work into areas of specialization so that everyone knows to whom they should report. The management of Patriot Mills reflects the ideas and principles of: A. John M. Keynes. B. Peter Drucker. C. Karl Marx. D. Henri Fayol. Definition D. Henri Fayol. Term (p. 206) As a manager of a retail clothing store, Lance favors detailed job descriptions, formal rules and regulations, detailed records, and standardized procedures. He also believes that staffing and promotion decisions should be based strictly on the qualifications of the people under consideration. Lance's attitudes suggest that he is strongly influenced by the ideas of: A. Ralph Nader. Definition B. Max Weber.B. Max Weber. C. Karl Marx. D. Adam Smith. Term (p. 206) Which of the following statements would best summarize Max Weber's views on the role of workers in an organization? A. Workers should be empowered to do whatever it takes to satisfy the needs of customers B. Workers will be promoted within the organization depending upon "who they know", rather than "what they know" C. Workers should simply follow welldefined procedures D. Although top managers must ultimately make the decisions, workers are an important creative resource for a firm, and top management should listen to their ideas Definition C. Workers should simply follow welldefined procedures Term (p. 207) Mike prepared a paper for his class about organizational styles used in business. He found that one reason the traditional bureaucratic style is less popular than in the past is that: A. business organizations are much larger than they once were. B. restructuring has not produced the increased efficiency that was expected. C. the chain of command clearly identifies areas of responsibility. D. today's workforce is better educated and prefers a greater amount of decision-making involvement in their jobs. Definition D. today's workforce is better educated and prefers a greater amount of decision-making involvement in their jobs. Term Definition(p. 208) Which of the following determines the degree of decentralization a firm might use? A. The degree to which lower level management is empowered to make decisions. B. The chain of command used to follow the flow of authority from top of the hierarchy to the lowest levels. C. The geographical area served by the firm's operations. D. The degree of product standardization desired by the marketplace. A. The degree to which lower level management is empowered to make decisions. Term (p. 208) In a(n) _____________ organization, decision-making authority is concentrated at the top level of management. A. bottom-up B. decentralized C. inverted D. centralized Definition D. centralized Term (p. 208) _______________ means that decision-making authority is delegated to lower-level managers and employees. A. Uniformity of authority B. Decentralized authority C. Specification of authority D. Standardized authority Definition B. Decentralized authority Term (p. 209) As compared to a centralized management structure, which of the following is a disadvantage of the decentralized management structure? A. Less responsive to customers B. Less empowerment Definition C. Weakened corporate imageC. Weakened corporate image D. Lower morale away from corporate headquarters Term (p. 209) As compared to the decentralized management structure, which of the following is a disadvantage of the centralized management structure? A. Potential for inter-organizational conflict B. Less top management control C. Less efficient D. Complex distribution system Definition A. Potential for inter-organizational conflict Term (p. 208) The optimum number of subordinates a manager can supervise is referred to as the: A. manager-subordinate ratio. B. chain of command. C. employee quota. D. span of control. Definition D. span of control. Term (p. 209) The span of control for a manager: A. should never exceed 7 subordinates. B. is no longer a relevant issue in today's computerized offices. C. depends on a number of factors, and can vary from one manager to another. D. varies somewhat from manager to manager, but most managers operate best with a span of control of about 9 employees. Definition C. depends on a number of factors, and can vary from one manager to another. Term (p. 209) Due to more emphasis on empowerment and more talented and better-educated lower level Definition A. increasedmanagement, span of control in organizations has ___________. A. increased B. decreased C. become an obsolete term in organization design D. led to tall organizations Term (p. 209) An organization that consists of many layers of management is referred to as a(n) ____________ organization. A. flat B. wide C. tall D. deep Definition C. tall Term (p. 209) The ________ an organization's structure, the ________ the span of control. A. flatter; wider B. flatter; narrower C. taller; wider D. taller; flatter Definition A. flatter; wider Term (p. 209) An organization with only a few layers of management is known as a(n): A. tall organization. B. flat organization. C. leveraged organization. D. coordinated organization. Definition B. flat organization. Term (p. 209) In recent years, large organizations have tried to improve their efficiency in communication and decision making by: A. creating specific rules for everyone Definition B. eliminating several layers of management.to follow. B. eliminating several layers of management. C. restructuring into a bureaucratic organization. D. reducing the span of control for managers. Term (p. 210) ________ refers to the process of dividing organizational functions (sales, production, accounting/bookkeeping) into separate units. A. Coordination B. A chain of command C. Empowerment D. Departmentalization Definition D. Departmentalization Term (p. 210) The traditional technique used to departmentalize an organization is by: A. function. B. customer group. C. geographic area. D. production process. Definition A. function. Term (p. 211) Which of the following is considered to be a disadvantage of functional departmentalization? A. There may be a lack of communication among the different departments B. Employees must develop skills in depth C. The company must achieve economies of scale D. Top management has to direct and control department activities Definition A. There may be a lack of communication among the different departments Term Definition(p. 210) Which of the following is considered to be an advantage of functional departmentalization? A. Employees begin to identify with their department and its goals rather than with the goals of the entire organization B. People in the same department tend to think very differently C. Departments are isolated from one another D. Employee skills can be developed in depth D. Employee skills can be developed in depth Term (p. 209) Within its production department, Sooner Manufacturing has shift leaders, supervisors, assistant plant managers, plant managers, product group managers, assistant division managers, division managers, an assistant vice president for production, and a vice president in charge of production. Given its multiple layer management structure, Sooner Manufacturing is an example of a(n) ____________ organization. A. tall B. wide C. cross-functional D. decentralized Definition A. tall Term (p. 208-209) Which of the following factors help determine a manager's span of control? A. The number of global competitors B. The level of standardization of the work to be done C. Method of accounting for production D. Form of business ownership Definition B. The level of standardization of the work to be done Term Definition(p. 208) Organizations that require consistent production standards to help create a high quality public image would tend to favor: A. centralized authority. B. an inverted organization. C. a high level of employee empowerment. D. flat organizational structures. A. centralized authority. Term (p. 209) Today's preference to flat vs. tall organization structures is mainly due to a flat organization's ability to: A. encourage esprit de corps among employees in various departments. B. increase the cost of labor through economies of scale. C. respond readily to customer demands. D. increase sales through multiple customer contacts by several layers of management. Definition C. respond readily to customer demands. Term (p. 208) Greenwave Garden Centers is a national chain of discount gardening stores. The top management at Greenwave realizes that different regions of the United States have very different climates and soil conditions, so they give regional managers a great deal of freedom to decide exactly what types of plants, fertilizers, and other items to stock and how to best market these products. Greenwave is an example of a _______________ organization. A. bureaucratic B. top down C. free form D. decentralized Definition D. decentralizedTerm (p. 210) HipHop Music Company assigns workers to departments based on similar skills. Currently, the company has a marketing department, a production department, a finance department, and a human resources department. This suggests that HipHop departmentalizes by: A. process. B. function. C. user group. D. tradition. Definition B. function. Term (p. 211) Gangsta Industries produces a variety of anti-crime and safety products such as burglar alarms, smoke detectors, surveillance cameras, and specialty locks. Gangsta sells to households, businesses, and government agencies. They have found that each market requires a different marketing strategy. Gangsta would probably benefit from departmentalization by: A. function. B. process. C. customer type. D. market opportunities. Definition C. customer type. Term (p. 208) As the head of the engineering department for her company, Jody works with her team on complex and challenging projects. The level of detail in this work requires Jody to spend a significant amount of time with each team member, providing advice and support. Due to the complexity and time involvement of each project, Jody has a(n) ________ span of control. A. wide B. narrow Definition B. narrowC. unlimited D. functional Term (p. 210) Vaughn Studios organizes its operations by activity, such as production, marketing, accounting, and finance. Vaughn utilizes _____________ departmentalization in order to maximize their efficiency: A. product B. customer C. functional D. standardized Definition C. functional Term (p. 211) Springfield National Bank organizes its loan operations based on the market served, such as consumer, small business, and nonprofit organizations. Departmentalization based on ________ allows Springfield to better serve borrowers with different needs. A. function B. geography C. process D. customer group Definition D. customer group Term (p. 210) JayLo Corporation has experienced rapid growth during its five years of existence. While still relatively small, JayLo is now big enough that Jennifer, the firm's CEO, has decided to organize the firm into functional departments. Jennifer can likely expect which of the following to occur? A. Quick company response to a change in the business environment B. Excellent communications between Definition D. Opportunities for employees to develop their skills in depthdifferent departments C. Increase in scope of the performance of functions D. Opportunities for employees to develop their skills in depth Term (p. 208) International Inns and ConferenceCenters[IICC], a national chain of professional event centers utilizes a centralized authority structure. Which of the following provides the most likely explanation for why management at IICC would favor centralized authority? A. Top management at IICC intends to empower its first-line employees B. Top management at IICC wants to improve customer service response time C. Top management desires to maintain a uniform image and high quality service D. IICC wants to utilize a crossfunctional organization Definition C. Top management desires to maintain a uniform image and high quality service Term (p. 209) As a response to a rapidly changing marketplace, Idea Electronics found it necessary to reorganize, including a significant downsize of its middle management. This action will likely result in ___________. A. acquiring additional firms B. flattening the organization and empowering employees, allowing them to get closer to the customer C. increasing the size of its traditional departments to handle 24/7 operations D. centralizing its decision making to better control its total quality management program Definition B. flattening the organization and empowering employees, allowing them to get closer to the customer Term Definition(p. 211) During the past six years, the marketing department manager at Creative Concepts International made a strong push to hire mover/shaker professionals that had superior performance records prior to joining this company. It didn't take long for these enthusiastic marketers to recognize the many talents within their department. They marveled at how much they were like each other and how they seemed to agree with each other's work styles and ideas. After a while, it became difficult for others in the organization to present to this group. If the idea did not originate within the marketing department, marketers did not give it much credence. Management counselors would describe this phenomenon as ______. A. departmentalization clique B. inter-office competition C. forward thinking friction D. groupthink D. groupthink Term (p. 209) Management at Hottie Potatee, a nationwide potato bar chain, believes that its customers value a predictable and consistent level of service and quality. When customers stop at one of its potato bar chain restaurants anywhere in the United States, they should know what to expect in terms of menu, price and quality. In order to maintain this consistency, Hottie Potatee adopted a(n) ______ structure. A. centralized authority B. decentralized authority C. hybrid authority D. origination authority Definition A. centralized authority Term Definition(p. 213) A ____________ organization is characterized by direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor. A. matrix B. cross-functional C. line D. line-and-staff C. line Term (p. 213) __________ are responsible for directly achieving organizational goals. A. Organizational specialists B. Line personnel C. Chain of command managers D. Staff personnel Definition B. Line personnel Term (p. 213) Employees who perform functions that advise and assist line personnel are known as: A. middle managers. B. empowered workers. C. secondary employees. D. staff personnel. Definition D. staff personnel. Term (p. 213) Which of the organization models follows all of Fayol's traditional management rules? A. Line organizations B. Line-and-staff organizations C. Cross-functional teams D. Matrix Definition A. Line organizations Term (p. 213) Staff positions in an organization: A. support and assist the line positions. Definition A. support and assist the line positions.B. are superior to line positions. C. are less well-paid than line positions. D. are ways to employ past CEOs until they retire. Term (p. 214-215) In a _____________ organization, specialists from different parts of the organization are brought together on a temporary basis to work on specific projects. A. matrix B. line C. line-and-staff D. centralized Definition A. matrix Term (p. 214) Line-and-staff organizations work well in organizations with: A. operations in high-growth industries. B. stiff competition. C. short product life cycles. D. a relatively unchanging environment. Definition D. a relatively unchanging environment. Term (p. 215) Matrix organizational structures were first developed in: A. Japan. B. the aerospace industry. C. the dot com Internet industry. D. the chemicals industry. Definition B. the aerospace industry. Term (p. 216) Which of the following was created as a solution to the temporary nature of the matrix structure? A. Line organizations B. Cross-functional self-managed teams C. Line-and-staff organizations Definition B. Cross-functional self-managed teamsD. Network organizations Term (p. 216) Which of the following describes a group of employees from different departments working together on a long-term basis? A. Focus group B. Mixed function groups C. Cross-functional self-managed teams D. Intrapraneurial teams Definition C. Cross-functional self-managed teams Term (p. 216) Cross-functional self-managed teams work best when ________________. A. leadership is shared B. there are at least two line and staff mangers on the team C. the teams consist of members of only two functional units D. The academic levels of all members are comparable Definition A. leadership is shared Term (p. 213) Which of the following is an advantage of a line organization in a large business? A. It does not require specialists to advise people along the line B. Responsibility and authority are clearly defined C. Each worker has several supervisors D. It is very flexible Definition B. Responsibility and authority are clearly defined Term (p. 213) Which of the following positions would be classified as a staff position? A. An assembly line worker for a major auto manufacturer B. The chief executive officer of a small Definition D. An attorney in the legal department of a manufacturing corporationcorporation C. A sales manager for a chain of clothing stores D. An attorney in the legal department of a manufacturing corporation Term (p. 215) Which of the following is an advantage of a matrix organization structure? A. It is much cheaper to staff than other organization models B. It provides for efficient use of organizational resources C. The project teams are permanent D. It is a complex organization structure Definition B. It provides for efficient use of organizational resources Term (p. 216) Which of the following is true of cross-functional teams? A. Cross-functional teams are required not to share information across national boundaries B. Employees on the teams are frustrated by organizational rules and regulations C. Cross-functional teams work best when the voice of the customer is brought into the organization D. Cross-functional teams are disbanded once the current project is complete Definition C. Cross-functional teams work best when the voice of the customer is brought into the organization Term (p. 216) The main difference between a matrix-style organization model and a cross-functional team is: A. the matrix model has a limit on the number of functional units who send an expert to join the team, whereas the cross-functional team does not. Definition B. the matrix model is a temporary arrangement, whereas the crossfunctional team is a more permanent arrangement.B. the matrix model is a temporary arrangement, whereas the crossfunctional team is a more permanent arrangement. C. the matrix model shares leadership responsibilities within the group, whereas the cross-functional team does not. D. the matrix model is a more permanent arrangement, whereas the cross-functional team is a temporary arrangement. Term (p. 216) Which of the following would be the least likely to serve on a crossfunctional team for the Discovery Corporation? A. A member of the Discovery marketing department B. A production manager for a firm that is one of Discovery's major customers C. A production manager for one of Discovery's main competitors D. A representative of a firm that is one of Discovery's major suppliers Definition C. A production manager for one of Discovery's main competitors Term (p. 213) The organizational structure of the U.S. Army's 1st Infantry Division provides for direct two-way lines of responsibility, authority, and communication running from the top to the bottom. Additionally, each person in the division reports to only one superior. The 1st Infantry Division is clearly an example of a(n): A. matrix organization. B. functional organization. C. line organization. D. service organization. Definition C. line organization.Term (p. 213) Eileen works in the human resources department of a corporation with several hundred employees. Her main function is to advise and assist managers in other departments, such as marketing and production, when they make staffing decisions. Eileen's position would be classified as a(n) ___________ position. A. staff B. line C. first-line D. secondary Definition A. staff Term (p. 216) Joe, a production engineer at Freestone Tires recently joined a team of specialists from other areas, such as marketing and finance. His long-term assignment to this team has produced several new products. Joe enjoys this work environment, in part because Freestone's management has given the team the freedom and flexibility to make decisions. A recent development is the inclusion of "outsiders" from Freestone's major distributors and suppliers on the team. It appears that Joe's team is a(n): A. interfunctional matrix organization. B. multidivisional group think-tank. C. multi-modal product development team. D. cross-functional self-managed team. Definition D. cross-functional self-managed team. Term (p. 216) Barclay developed two interactive computer games. He didn't do it entirely alone. Last year he started a small company, hired two programmers, and a marketing graduate. He considers himself a Definition D. cross-functional teamcutting-edge kind of guy and wants to position his company the same. Soliciting your advice as to how he should structure his organization as he moves forward, you suggest that he hire a few potential customers to join his team of employees as product testers. And, maybe he should solicit globally. You are suggesting to Barclay that he put together a ___________. A. line organization model B. line and staff organization model C. matrix organization model D. cross-functional team Term (p. 214-215) Chang is a project manager at Paradox Industries. He is able to borrow specialists from the organization on a regular basis to assist in major projects. After the project ends, the specialists return to their functional units to await new assignments. Paradox Industries utilizes a: A. line organization model. B. bi-functional organization model. C. lateral transfer organization model. D. matrix organization model. Definition D. matrix organization model. Term (p. 217) _____________ is using communications technology and other means to link organizations and allow them to work together on common objectives. A. Networking B. Structural linking C. Functional sharing D. Strategic planning Definition A. Networking Term Definition(p. 217) Which of the following describes an environment in which data is instantly available via the Internet to organizational partners? A. Networking B. Real time C. Virtual business D. E-commerce B. Real time Term (p. 217) Which term describes a company being so open to other companies working with it that electronic information is shared as if the companies were one? A. Web-based corporations B. Webworking C. Transparency D. E-connected Definition C. Transparency Term (p. 217) Which of the following describes a temporary networked organization made up of replaceable firms that join and leave as needed? A. Web-based corporation B. Benchmark outsourcing system C. Network system D. Virtual corporation Definition D. Virtual corporation Term (p. 218) The process of rating an organization's practices, processes, and products against the best of the world is known as: A. webworking. B. outsourcing. C. benchmarking. D. core competencies. Definition C. benchmarking. Term Definition(p. 218) Which of the following describes the activity of a firm that assigns specific functions, such as accounting or legal work, to other organizations rather than performing these functions themselves? A. Functional sharing B. Outsourcing C. Benchmarking D. Virtual distribution B. Outsourcing Term (p. 218-219) __________ refer to those functions that an organization does as well as, or better than, any other organization in the world. A. Primary functions B. Comparative strengths C. Residual functions D. Core competencies Definition D. Core competencies Term (p. 219) Young people today are often called __________ because they have never known life without the Internet. A. the high-tech heroes B. Social networkers C. digital natives D. electronic eggheads Definition C. digital natives Term (p. 219) Which of the following are common responses of employees when faced with change? A. "That's the way we've always done things" B. "Perhaps I'll be able to get a promotion now" C. "I'm excited to learn something new" D. "This should be easy to accept" Definition A. "That's the way we've always done things"Term (p. 219) Which of the following describes the redesigning of an organization so that it can more effectively and efficiently serve its customers? A. Reinventing B. Restructuring C. Radical reorganizing D. Extroverted reorganizing Definition B. Restructuring Term (p. 220) An organization that has contact people at the top and the chief executive officer at the bottom is known as a(n): A. bureaucracy. B. oligarchy. C. improvised organization. D. inverted organization. Definition D. inverted organization. Term (p. 220) Empowering employees to better serve customers requires __________ front-line employees. A. fewer B. less training for C. more support for D. uniforms for Definition C. more support for Term (p. 218-219) _________ is the term used to describe those functions that a firm can do as well or better than others. It agrees to perform these functions inhouse, rather than outsourcing. A. Benchmarks B. Standard responsibilities C. Operational requirements D. Core competencies Definition D. Core competencies Term (p. 217) In today's competitive Definitionenvironment, cost containment is extremely important to survival. Which of the following increases efficiency in the production and distribution of goods? A. Personal computers B. Real time data C. Assembly lines D. Self-managed teams B. Real time data Term (p. 217) Which of the following statements best describes the evolution of organization design? A. Companies have evolved to crossfunctional teams because line models and line and staff models have become too costly to maintain. B. Most companies are finding that the stages of product development are much slower than in the past because new products are much more complicated in nature than products of several years ago. Matrix models work much better in the current environment. C. The development of new technology allows for companies to be much more self-contained and able to maintain their competitive advantage due to more privacy. D. Companies are now part of a vast network of global businesses, and part of a larger system. Definition D. Companies are now part of a vast network of global businesses, and part of a larger system. Term (p. 218) Companies benefit today by interfirm cooperation. One of the ways they cooperate is through networking. Another way is by seeking technological knowledge and learning new processes from other firms that usually fall outside of their respective industries. We call this: Definition C. benchmarkingA. competency capturing B. technology swapping C. benchmarking D. broadening the knowledge base Term . (p. 219) One of the most difficult management challenges today is managing change. This is because: A. change requires cooperation and an awareness of a need for change. B. change requires a lot of bail-out money from the government. C. change requires decentralization of decision-making. D. change will invariably result in an inverted organization and management does not want to relinquish its position power in order to make that happen. Definition A. change requires cooperation and an awareness of a need for change. Term (p. 220) In an inverted organization, the job of management is to: A. closely monitor employee performance. B. establish rules and regulations to guide worker behavior. C. make all of the basic decisions. D. assist and support front-line people. Definition D. assist and support front-line people. Term (p. 220) For an inverted organization to be effective, it requires: A. managers with strong position power. B. managers who are both technologically savvy and conceptually savvy. C. better educated, better trained, and better paid employees. D. a focus on what is best for production. Definition C. better educated, better trained, and better paid employees.Term (p. 218-219) Independence Electronics prides itself as a world-class producer of components used in CD and DVD players. The outstanding performance of the production department indicates that this activity is one of the firm's: A. fiscal responsibilities. B. core competencies. C. benchmark assets. D. target competitive advantages. Definition B. core competencies. Term (p. 218) Excite Enterprises, a corporation of amusement parks uses an accounting firm to handle the payroll and tax functions for the company. Using the services of another firm in this manner is an example of: A. outsourcing. B. functional reassignment. C. core competencies. D. benchmarking. Definition A. outsourcing. Term Bull's-eye, a regional discount retailer, carefully watches and compares its operation with the operations of its closest rivals. This firm does: A. outsourcing. B. functional positioning. C. core competency ranking. D. competitive benchmarking. Definition D. competitive benchmarking. Term (p. 217) HairTrend, a cosmetology trade publication, utilizes the resources of other organizations as needed. Business relationships are temporary and flexible. HairTrend is a networked organization made up of replaceable firms that join the network and leave it Definition B. a virtual corporation.as needed. This unique organization is an example of: A. competitive benchmarking. B. a virtual corporation. C. core competency ranking. D. real time transparency. Term (p. 218) Whirlpond, a manufacturer of home appliances, has historically produced the components for their products. However, Whirlpond now contracts with other firms to produce these components. This strategy of __________ is a current trend among U.S.manufacturers. A. outsourcing B. core positioning C. foreign competency D. competitive benchmarking Definition A. outsourcing Term (p. 220) Heather works as a sales representative for the Westerly Company. She really enjoys working for Westerly, because the company treats her and other sales representatives as highly valued employees. Sales reps at Westerly are given freedom and flexibility in their relationships with customers. While there are only a few layers of management at Westerly, Heather has found that these managers try their best to support and assist her efforts. Based on Heather's experience, it appears that Westerly is a(n): A. bureaucratic organization. B. inverted organization. C. tall organization. D. casual organization. Definition B. inverted organization. Term Definition(p. 220) The widely shared values within an organization that provide unity and cooperation to achieve common goals is together known as the: A. normative matrix. B. predefined group values. C. ethical system. D. organizational culture. D. organizational culture. Term (p. 221) The ____________ of a business firm is the system that details lines of authority, responsibility, and position, similar to the structure on organization charts. A. matrix reloaded structure B. formal organization C. informal organization D. normative design Definition B. formal organization Term (p. 221) All organizations have two organizational systems: A. the command system and the control system. B. the formal organization and the informal organization. C. the functioning system and backup system. D. the primary organization and secondary organization. Definition B. the formal organization and the informal organization. Term (p. 221) The __________ is the system of relationships that develop spontaneously as employees meet and form power centers. A. informal organization B. bureaucratic structure C. secondary organization D. formal organization Definition A. informal organizationTerm (p. 221) In open organizations the informal organization can be: A. a hindrance to effective management. B. an asset that promotes harmony among workers. C. a roadblock to the corporate culture. D. part of the formal organization. Definition B. an asset that promotes harmony among workers. Term (p. 221) The ___________ is the nerve center of the informal organization. A. organizational database B. intranet C. grapevine D. company newsletter Definition C. grapevine Term (p. 221) The informal organization of a business is probably best suited to: A. give workers a clear idea of where they stand in the organization. B. provide helpful guidelines about how to handle routine problems. C. provide a mechanism that generates careful reasoned decisions about critical issues. D. create a feeling of camaraderie among employees and encourage teamwork. Definition D. create a feeling of camaraderie among employees and encourage teamwork. Term (p. 221) A firm's formal organization would be better suited than its informal organization to: A. create an atmosphere of friendship and camaraderie among workers. B. find answers to critical problems that require logical analysis. C. find creative solutions to short-term problems. Definition B. find answers to critical problems that require logical analysis.D. find a way around bureaucratic rules and regulations in order to get things done quickly. Term (p. 222) According to the Spotlight on Small Businesses box, titled, "Keeping that Small Company Feeling", the main idea is to: A. restore the old corporate culture. B. develop a culture of innovation in large companies. C. bring in new progressive managers. D. implement a centralized form of management. Definition B. develop a culture of innovation in large companies. Term (p. 220) Zach recently got his Ph.D. in analytical chemistry and was fortunate to be asked to join the Weilman Lab at a prestigious eastern university. After a month on the job, he remarked to another graduate student at his former university that the spirit of help and cooperation at the Weilman lab was remarkable. He enjoyed going to work each day and sometimes exchanged calls with other lab partners in the evening with ideas to improve each other's experiments. Zach remarked, "Now I know why this lab is considered one of the best in the nation!" Zach is referring to: A. the formal organization. B. the inverted organization. C. the Balanced organization. D. the organizational culture. Definition D. the organizational culture. Term (p. 221) When Eric Schmidt became the CEO of Google, he reported that the company in the hands of founders Definition C. the formal organization.Larry Page and Sergey Brinn was running well, it just needed a little structure. CEO Schmidt helped develop: A. the innovative culture. B. the informal organization. C. the formal organization. D. the grapevine. Term (p. 221) Ashley experienced frustration with her new job at Walnut Securities, until she befriended a secretary from another department. Over lunch in the cafeteria, her new friend shared with Ashley the way things really work at Walnut Securities. Ashley quickly learned that: A. what she learned in her business classes didn't really help her in the real world. B. an unofficial informal organization exists that she can utilize to help her do her job. C. organizational culture can be negative. D. not all businesses have a formal organization. Definition B. an unofficial informal organization exists that she can utilize to help her do her job. Term (p. 222) The Spotlight on Small Business, titled,"Keeping that Small Company Feeling", illustrates that: A. maintaining a strong informal organization is vital in today's business environment. B. maintaining a strong informal organization is so much easier to effect in large companies because they have the money to make it happen. C. although the informal organization may provide fun and diversion in the workplace it breeds unethical behavior which only the formal organization can Definition A. maintaining a strong informal organization is vital in today's business environment.derail. D. getting carried away with maintaining a small company feeling can stifle innovation and growth. Term (p. 221) Carlos is the person to see in the welding department if you are a new employee. While he is not a manager, he is the person that most of the others in the department look to for advice and assistance. Carlos is an important member of the firm's: A. supervisory management. B. participatory control. C. informal organization. D. closet cabinet. Definition C. informal organization. Term (p. 222) One of Javier's coworkers was recently promoted to a middle management position at their company. He seems to have quickly distanced himself from Javier and their other coworker, Carlos. In fact, yesterday Carlos described the situation by saying, "He's gone to the dark side." Javier understands what Carlos means because management keeps themselves removed from other employees, and seldom seriously solicit ideas for improvements or change from those in the trenches. The disadvantage in continuing this type of organizational culture is: A. nobody takes management seriously. B. the company will have to look outside the firm for new managers. C. small, incremental improvements rather than radical change will become the norm. D. the informal organization can hinder effective management. Definition D. the informal organization can hinder effective management. division of laborDividing the required work among a group of employees is called? bureaucratic organization employees follow strict rules and regulations? equity Bill, a financial manager at Carlyle bank and trust always stives to treat each subordinate with respect and firness. Bills' treatment of employees is an example of Fayol's principle of ___. max weber As a manager of a retail clothing store, lance favors detailed job descriptions, formal rules and regulations, detailed records, and standardized procedures. He also believes that staffing and promotion decisions should be based strictly on the qualifications of the peopel under consideration. Lance's attitudes suggest that he is strongly influenced by the ideas of: centralized in a_______________ organization, decision-making authority is concerntrated at the top level of management. span of control the optimum number of subordinates a manager can supervise is referred to as the what?? centralized authority organizations that require consistent production standards to help create a high quality public image would tend to favor: level of standardization of the work to be done which of the following factors help determine a manager's span of control? staff personnel employees who perform functions that advise and assist line personnel are known as: line organization responsibility an authority are clarly defined in a large business? the development of ways to produce a large quantitiy of product efficientlyorganization theorists emerged during the era of mass production, meaning: functional departmentalization employee skills can be developed in depth narrow as the head of the engineering department for her company jody works with her team on complex and challenging projects. The level of detail in this work requires jody to spend a significant amount of time with each team member time involvement of each project, Jody has a _______ span of control. centralized authority Management at Hottie potatee, a nationwide potato bar chain, believes that its customers value a predictable and consistent level of service and quailty. when customers stop at one of its potato bar chain restaurants anywhere in the U.S. they should know hottie potatee adopted a __________ structure. cross functional teams ________ work best when the voice of the customer is brought into the organization? networking is using communications technology and other means to link organizations and allow them to work together on common objectives benchmarking the process of rating an organization's practices, processes, and products against the best of the world is known as: digital natives young people today are often called ____ because they have never known life without the internet core competencies blank is the term used to describe those functions that a firm can do as well or better than others. it agrees to perform these functions in-house rather than outsourcing. outsourcingexcite a corporation of amusement parks uses an accounting firm to handle the payroll and tax functions for the company. Using the services of another firm in this manner is an example of: The design of a bureaucratic organization assumes a well educated workforce. Answer: False LG: 1/LL: 1 Page: 243 To better organize his business, Frank divides the required tasks into smaller jobs and assigns each job to a specific employee. This is an example of departmentalization. Answer: False LG: 1/LL: 2 Page: 240 Rationale: Dividing tasks into smaller jobs is called job specialization. Departmentalization refers to the process of setting up individual departments to do specialized tasks. The division of labor and specialization often improves an employee's job performance. Answer: True LG: 1/LL: 1 Page: 240 Economies of scale occur when a firm operates more efficiently as it grows larger. Answer: True LG: 1/LL: 2 Page: 241 Rationale: Economies of scale is the concept that the bigger the firm, the more efficient production becomes. This improved efficiency is the result of the specialization of labor and purchasing raw materials in bulk. 8-1. The driving force behind the change in business organizations is the change in consumer expectations. Answer: True LG: 1/LL: 1 Page: 240 8-2. The degree to which an organization allows lower level managers to make decisions determines the degree of decentralization. Answer: True LG: 2/LL: 1 Page: 245 8-3. An organizational hierarchy establishes one person at the top of an organization. Answer: True LG: 1/LL: 1 Page: 243 8-4. The greater the rate of employee turnover, the broader the span of control. Answer: False LG: 2/LL: 1 Page: 2468-5. The flatter an organization's structure, the fewer managers are needed. Answer: True LG: 2/LL: 1 Page: 248 8-6. In a line organization, there are many specialists who serve as advisors and assistants to the managers who make decisions. Answer: False LG: 3/LL: 1 Page: 251 8-7. While staff personnel have the authority to make policy decisions, line personnel have the authority to advise and make suggestions. Answer: False LG: 3/LL: 1 Page: 251 8-8. Cross-functional teams are self-managed groups of employees empowered to work with suppliers and customers to develop new products and give great service. Answer: True LG: 3/LL: 1 Page: 254 8-9. The design of a bureaucratic organization assumes a well educated workforce. Answer: False LG: 1/LL: 1 Page: 243 8-10. An organization's core competencies are those functions that the firm can perform as well or better than anyone else in the world. Answer: True LG: 4/LL: 1 Page: 257 8-11. Reengineering is intended to improve the performance of an organization through regular, incremental steps. Answer: False LG: 5/LL: 1 Page: 258 8-12. Reengineering is the fundamental rethinking and radical redesign of organizational processes in order to achieve dramatic improvements in performance. Answer: True LG: 5/LL: 1 Page: 258 ... 8-13. A firm's formal organization would be better suited than its informal organization to: A) create an atmosphere of friendship and camaraderie among workers.B) find answers to critical problems that require logical analysis. C) find creative solutions to short-term problems. D) find a way around bureaucratic rules and regulations in order to get things done quickly. Answer: B LG: 5/LL: 2 Page: 260 8-14. In an inverted organization, the job of management is to: A) closely monitor employee performance. B) establish rules and regulations to guide worker behavior. C) make all of the basic decisions. D) assist and support front-line people. Answer: D LG: 5/LL: 2 Page: 258 Rationale: In an inverted organization, the most important people are the front-line personnel who are in direct contact with the customers. These employees are given the flexibility and decision making authority to meet the needs of these customers. The job of management is to assist and support these contact people, not boss them around. 8-15. Excite Enterprises uses an accounting firm to handle the payroll and tax functions for the firm. Using the services of another firm in this manner is an example of: A) outsourcing. B) functional reassignment. C) core competencies. D) benchmarking. Answer: A LG: 4/LL: 2 Page: 257 8-16. As a new employee in a bureaucratic organization, Nancy can expect a great deal of independence and authority. Answer: False LG: 1/LL: 2 Page: 243 Rationale: In a bureaucratic organization, everyone is expected to follow specific rules. One of the problems with this type of organization is that employees have little flexibility to respond to customer wants and needs. 8-17. Centralized authority provides for the delegation of authority to employees who are then better able to respond to customers' needs. Answer: False LG: 2/LL: 1 Page: 2458-18. Departmentalization creates an environment in which people are trained in a variety of managerial responsibilities. Answer: False LG: 2/LL: 1 Page: 248 8-19. Rome Corporation is organized into departments such as finance, production, marketing, data processing, and accounting. Rome has chosen to departmentalize by function. Answer: True LG: 2/LL: 2 Page: 248 Rationale: Departmentalization by function means to group workers into departments based on similar skills, expertise, and resources. 8-20. Line managers issue orders, enforce discipline, and adjust the organization as conditions change. Answer: True LG: 3/LL: 1 Page: 251 8-21. In large businesses, a line organization provides firms the ability to respond quickly to a changing environment. Answer: False LG: 3/LL: 1 Page: 251 8-22. Line organizations clearly define the lines of authority and responsibility. Answer: True LG: 3/LL: 1 Page: 251 8-23. Matrix organizations bring together specialists from different parts of the firm to work on specific projects. Answer: True LG: 3/LL: 1 Page: 252 8-24. The team specialists in a matrix organization remain part of the traditional line and staff structure. Answer: True LG: 3/LL: 1 Page: 252 8-25. A matrix organization produces an environment that discourages cooperation and teamwork. Answer: False LG: 3/LL: 1 Page: 252 8-26. Cross-functional teams are self-managed groups of employees empowered to work with suppliers and customers to develop new products and give great service. Answer: True LG: 3/LL: 1 Page: 254 8-27. Cross-functional teams serve as advisory committees offering their expertise to line decision makers.Answer: False LG: 3/LL: 1 Page: 254 8-28. Networking uses communication technology to link organizations allowing them to work together on common objectives. Answer: True LG: 4/LL: 1 Page: 255 8-29. The Internet makes real time availability of data possible. Answer: True LG: 4/LL: 1 Page: 255 8-30. Transparency describes the relationship between a firm and its stockholders. Answer: False LG: 4/LL: 1 Page: 255 8-31. Transparency allows two companies to work more efficiently together. Answer: True LG: 4/LL: 1 Page: 255 8-32. Benchmarking requires organizations to compare each function against the best in the world. Answer: True LG: 4/LL: 1 Page: 256 8-33. Competitive benchmarking rates an organization's products and operations against the industry average. Answer: False LG: 4/LL: 1 Page: 256 8-34. Competitive benchmarking compares a company's practices, processes, and products against the world's best. Answer: True LG: 4/LL: 1 Page: 256 8-35. Restructuring involves relatively minor changes to an organization to better meet the needs of management. Answer: False LG: 5/LL: 1 Page: 257 8-36. Inverted organizations empower employees by adding multiple layers of management and long lines of communication. Answer: False LG: 5/LL: 1 Page: 258 8-37. In an inverted organization, the purpose of management is to assist and support first-line employees, not boss them around. Answer: True LG: 5/LL: 1 Page: 2588-38. A firm's informal organization refers to the structure that identifies the authority, responsibility, and position of people within the organization. Answer: False LG: 5/LL: 1 Page: 260 8-39. The informal organization of a business can help generate creative solutions to short-term problems. Answer: True LG: 5/LL: 1 Page: 260 8-40. The formal organization of a firm provides the lines of authority to follow in routine situations. Answer: True LG: 5/LL: 1 Page: 260 8-41. Organizing a business begins with: A) acquiring the necessary resources. B) choosing the best qualified employees. C) developing an efficient plan of action. D) determining the work to be done. Answer: D LG: 1/LL: 1 Page: 240 8-42. Dividing the required work among a group of employees is called a: A) departmentalization. B) delegation of responsibility. C) division of labor. D) separation of control. Answer: C LG: 1/LL: 1 Page: 240 8-43. Dividing tasks into smaller jobs is called: A) job enrichment. B) job specialization. C) departmentalization. D) division of authority. Answer: B LG: 1/LL: 1 Page: 240 8-44. The process of setting up individual departments to do specialized tasks is called: A) departmentalization. B) a division of labor. C) job specialization. D) delegation of authority. Answer: A LG: 1/LL: 1 Page: 2408-45. In a bureaucratic organization: A) departments communicate with each other on a regular basis. B) employees follow strict rules and regulations. C) customer satisfaction is the number one priority. D) the first-line workers are empowered to respond to the needs of customers. Answer: B LG: 1/LL: 1 Page: 243 8-46. One advantage of a bureaucratic organization is that: A) it is very responsive to the wants and needs of customers. B) there are very few layers of management. C) it encourages cooperation among different departments within the organization. D) employees know what is expected of them. Answer: D LG: 1/LL: 1 Page: 243 economies of scale the situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase hierarchy a system in which one person is at the topf of the organization and there is a ranked or sequential ordering from the top down of managers who are responsile to that person chain of command the line of authority that moves from the top of a hierarchy to the lowest level bureaucracy an organization with many layers of managers who set rules and regulations and oversee all decisions centralized authority an organization structure in which decision making authority is maintained at the top level of management decentralized authority an organization structure in which decision making authority is delegated to lower level managers more familiar with local conditions than headquarters management could bespan of control the optimal number of subordinates a manager surpervises or should supervise tall organization structure an organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management flat organization structure an organization structure that has new layers of management and a broad span of control departmentalization the dividing of organizational functions into separate units line organization an organization that has direct two way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor line personnel employees who are part of the chain of command that is responsible for achieving organizational goals staff personnel employees who advise and assist line personnel in meeting their goals matrix organizations an organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line and staff structure cross functional self manage teams groups of employees from different departments who work together on a long term basis networking using communications technology and other means to link organizations and allow them to work together on common objectivesreal time the present moment or the actual time in which something takes place virtual corporation a temporary networked organization made up of replaceable firms that join and leave as needed benchmarking comparing an organizations practices, processes, and products against the worlds best core competencies those functions that the organization can do as well as or better than any other organization in the world digital natives young people who have grown up using the internet and social networking restructuring redesigning an organization so that it can more effectively and efficiently serve it customers inverted organization an organization that has contact people at the top and the ceo at the bottom of the organization chart organization (or corporate) culture widely shared values within an organization that provide unity and cooperation to achieve common goals formal organization the structure that details lines of responsibility, and position; that is, the structure shown on org charts informal organization the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal org Operations Management The development and administration of the activities involved in transforming resources into goods and servicesA specialized area in management that converts or transforms resources (including human resources) into goods and services. Manufacturing The activities and processes used in making tangible products; also called production Production the act of making, creating or manufacturing Operations the activities and processes used in making both tangible and intangible products. Inputs labor, machinery, buildings and other resources used to produce outputs Outputs The goods, services, and ideas that result from the conversion of inputs Standardization The making of identical interchangeable components or products modular Design The creation of an item in self-contained units, or modules, that can be combined or interchanged to create different products Customization Making products to meet a particular customer's needs or wants Capacity The maximum load that an organizational unit ca carry or operate. Fixed-position layout A layout that brings all resources required to create the product to a central location Project Organization A company using a fixed-position layoutProces layout A layout that organizes the transformation process into departments that group related processes. intermittent organization Organizations that deal with products of a lesser magnitude than do project organizations; their products are not necessarily unique but possess a significant number of differences. Product layout A layout requiring that production be broken down into relatively simple tasks assigned to workers, who are usually positioned along an assembly line Continuous manufacturing organizations Companies that use continuously running assembly lines, creating products with many similar characteristics Computer-assisted design It is use to design of components, products, and processes on computers instead of paper. CAD Computer-assisted manufacturing Manufacturing that employs specialized computer systems to actually guide and control the transformation processes. CAM Flexible manufacturing The direction of machinery by computers to adapt to different versions of similar operations. computer-intergrated manufacturing a complete system that designs products manages machines and materials, and controls the operations function. CIM Supply Chain management Connecting and integrating all parties or members of the distribution system in order to satisfy customers Purchasing The buying of all the materials needed by the organization; also called procurement InventoryAll raw materials, components, completed or partially completed products, and pieces of equipment a firm uses Inventory Control The process of determining how many supplies and goods are needed and keeping track of quantities on hand, where each item is, and who is responsible for it Economic Order Quantity model a model that identifies the optimum number of items to order to minimize the costs of managing (ordering, storing, and using) them. EOQ Just-in-time inventory management a technique using smaller quantities of materials that arrive "just in time" for use in the transformation process and therefore require less storage space and other inventory management expense Material-requirements planning A planning system that schedules the precise quantity of materials needed to make the product. Routing The sequence of operations through which the product must pass Scheduling The assignment of required tasks to departments or even specific machines, workers, or teams Quality control The processes an organization uses to maintain its established quality standards Total quality management a philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction Statistical process control a system in which management collects and analyzes information about the production process to pinpoint quality problems in the production systemBenchmarking A primary tool of the continuous improvement process. ISO9000 A family of standards, supported by the international organization for standardization, representing an international consensus on good quality management practices. ISO9000 addresses busines processes rather than specific outcomes ISO14000 Standards of the International Organization for Standardization concerned with "environmental management" aimed at minimizing harmful effects on the environment production The creation of finished goods and services using the factors of production:land,labor,capital,entrepreneurship,and knowledge. production management The term used to describe all the activities managers do to help their firms create goods. operations management A specialized area in management that converts or transforms resources (including human resources) into goods and services. form utility The value added by the creation of finshed goods and services,such as the value added by taking silicon and making computer chips or putting services together to create a vacation package. process manufacturing That part of the production process that physically or chemically changes materials. assembly process That part of the production process that puts together components. continuous process A production process in which long production runs turn out finished goods over time. intermittent processA production process in which the production run is short and the machines are changed frequently to make different products. computer-aided process (CAD) The use of computers in the design of products. computer-aided manufacturing (CAM) The use of computers in the manufacturing of products. computer-integrated manufacturing (CIM) The uniting of computer-aided design (CAD) with computeraided manufacturing (CAM). flexible manufacturing Designing machines to do multiple tasks so that they can produce a variety of products. lean manufacturing The production of goods using less of everything compared to mass production. mass customization Tailoring prodcuts to meet the needs of individual customers. facility location The process of selecting a geographic location for a company's operations. facility layout The physical arrangement of resources (including people) in the production process. materials requirement planning (MRP) A computer-based production management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place. enterprise resource planning (ERP) A computer application that enables multiple firms to manage all of their operations (finance, requirements planning, human resources, and order fulfillment) on the basis of a single, integrated set of corporate data.purchasing The function in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for goods and services. just-in-time (JIT) inventory control A production process in which a minimum of inventory is kept on the premises and parts,supplies,and other needs are delivered just in time to go on the assembly line. quality Consistency producing what the customer wants while reducing errors before and after delivery to the customer. six sigma quality A quality measure that allows only 3.4 defects per million oppurtunities. statistical quality control (SQC) The process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning. statistical process control (SPC) The process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standardsare recognized and can be corrected if beyond the set standards. ISO 9000 The common name given to quality management and assurance standards. ISO 14000 A collection of the best practices for managing an organization's impact on the environment. program evaluation and review technique (PERT) A method for analyzing the tasks in completing a given project,estimating the time needed to complete each task,and identifying the minimum time needed to complete the total project. critical pathIn a PERT network, the sequence of tasks that takes the longest time to complete. Gantt chart Bar graph showing production managers what projects are being worked on and what stage they are in at any given time. A basic characteristic of flexible manufacturing is that it: relies heavily on labor, since humans are more adaptable than machines. uses machines designed to perform multiple tasks so they can be used to produce a variety of products. Operations management planning does not include decisions about: where to locate a business facility and how it will be configured. materials requirement planning. quality control. the acquisition of financing for projects. 1) Which of the following is NOT a typical supply chain member? A) resellers B) customers C) intermediaries D) government agencies E) raw materials supplier D ________ the manufacturer or service provider is the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service. A) Downstream from B) Upstream from C) Disintermediated from D) Horizontal to E) Parallel with B 3) Another term for the supply chain that suggests a sense and respond view of the market is ________. A) supply and demand chain B) demand chain C) channel of distribution D) distribution channel E) physical distribution b4) Most producers today sell their goods directly to ________. A) final users B) final users and marketing members C) intermediaries D) warehouses E) third-party logistics providers c 6) From the economic system's point of view, the role of marketing intermediaries is to transform the assortment of products made by producers into the assortment of products wanted by ________. A) channel members B) distributors C) consumers D) manufacturers E) marketers c 7) Producers benefit from using intermediaries because they ________. A) offer greater efficiency in making goods available to target markets B) bring a fresh point of view to strategy development C) eliminate risk D) are generally backlogged with orders E) refuse to store products for longer than a few days a 8) Intermediaries play an important role in matching ________. A) dealer with customer B) supply and demand C) product to region D) manufacturer to product E) information and promotion b 9) Channel members add value by bridging the major gaps of ________ that separate goods and services from those who would use them. A) time, need, and form B) place, possession, and form C) time, place, and possessionD) place, time, and need E) place, need, and distribution c 13) In marketing terms, we say that the number of intermediary levels indicates the ________ of a channel. A) depth B) complexity C) involvement D) length E) width d 14) At minimum, a marketing channel consists of a producer and a(n) ________. A) wholesaler B) agent C) broker D) intermediary E) customer e 15) To a producer of goods, a greater number of channel levels means ________ and greater channel complexity. A) less distance between producer and end consumer B) less control C) fewer potential ideas D) higher taxes E) fewer channel partners b 16) Which of the following is an example of a complete business-to-business channel? A) producer to retailer to consumer B) producer to wholesaler to retailer to consumer C) producer to sales branch D) business distributor to business customer E) producer to distributor to business customer e 20) Joanie Calvert is experiencing a disagreement with intermediaries in the channel over who should do what and for what rewards. Joanie is experiencing ________. A) a tying disagreement B) channel conflictC) channel disintermediation D) third-party logistics E) channel intermediation b 21) ________ conflict, which occurs between different levels of the same channel, is more common than ________ conflict, which occurs among firms at the same level of the channel. A) Horizontal; vertical B) Vertical; horizontal C) Contractual; corporate D) Corporate; franchise E) Wholesaler; retailer b 29) The most common type of contractual relationship in business is the ________. A) franchise organization B) administered marketing system C) conventional marketing channel D) corporate VMS E) horizontal marketing system a 36) Due in a large part to advances in technology, ________ is a major trend whereby product and service producers are bypassing intermediaries and going directly to final buyers, or radically new types of channel intermediaries are emerging to displace traditional ones. A) the vertical marketing system B) the corporate marketing system C) disintermediation D) the corporate merger E) the hostile takeover c 37) The four major steps of designing a channel system are analyzing consumer needs, setting channel objectives, ________, and evaluating the alternatives. A) establishing a budget B) identifying major channel alternatives C) seeking regulatory approval D) seeking legal advice E) measuring objectives b39) To increase a channel's service level, the channel must provide a greater assortment of products, more add-on services, or ________. A) lower prices B) fewer middlemen C) faster delivery D) more competition E) less follow-up c 46) Sometimes a producer chooses only a few dealers in a territory to distribute its products or services. Generally these dealers are given a right to ________ distribution. A) exclusive B) selective C) intensive D) administered E) corporate a 48) When establishing the responsibilities of channel members, the producer establishes a list price, sets discounts for intermediaries, and defines each channel member's ________. A) sales limits B) territory C) legal rights D) customers E) mission b 51) China and India each contain more than one billion people. However, companies can access only a small percentage of these potential markets due to ________. A) inadequate distribution systems B) indifference toward Western products C) high regional taxes D) the religious caste system E) insurmountable language barriers a 58) Marketing logistics involves getting the right product to the right customer in the right place at the right time. Which one of the following is NOT included in this process?A) planning the physical flow of goods and services B) implementing the plan for the flow of goods and services C) controlling the physical flow of goods, services, and information D) gathering customer's ideas for new products E) planning the flow of logistics information to meet customer requirements at a profit d 59) Marketing logistics involves which of the following distribution flows? A) outbound and inbound only B) outbound, inbound, and reverse C) inbound and reverse only D) outbound and reverse only E) outbound only b 60) ________ logistics controls the movement of products from points of production to consumers. A) Inbound B) Reverse C) Outbound D) Vertical E) Horizontal c 62) Which of the following is NOT an area of responsibility for a logistics manager? A) information systems B) warehousing C) promotions D) inventory E) purchasing c 66) To reduce inventory management costs, many companies use a system called ________, which involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation. A) reduction-inventory management B) just-in-time logistics C) limited inventory logistics D) supply chain management E) economic order quantity b67) Through the use of ________, or "smart tag" technology, a company is able to locate a product's exact position within the supply chain. A) RFID B) PRM C) VMS D) IT E) 3PL a 69) In the proper order, identify the correct terms for these intermodal transportation combinations: rail and truck, water and truck, water and rail. A) fishyback; airtruck; trainship B) piggyback; airtruck; fishyback C) trainship; fishyback; piggyback D) piggyback; fishyback; trainship E) piggyback, fishyback; birdyback d 74) Today, a growing number of firms now outsource some or all of their logistics to ________. A) cross-functional teams B) disintermediaries C) horizontal channel members D) third-party logistics providers E) competitors d 75) UPS Supply Chain Solutions, which handles all of its clients' "grunt work" associated with logistics, is an example of ________. A) integrated logistics management B) a distribution center C) selective distribution D) a third-party logistics provider E) a cross-functional, cross-company team d 87) Which product will most likely be exclusively distributed? A) BMW cars B) Levi's blue jeans C) Bazooka bubble gumD) Prairie Farms yogurt E) Coca-Cola a 92) Grayville Rock and Gravel, located in a seaport town, sells rock, gravel, and sand to local markets. It has just been awarded a contract with a company 500 miles down the coast. Management should consider switching from truck to ________ transport. A) water B) rail C) pipeline D) air E) none of the above a 100) In using air transportation and then expedited truck carriers to deliver specialty items to customers outside of a designated delivery range, Miller Meats is using ________. A) all of its supply chain B) all of its value delivery network C) direct marketing channels D) intermodal transportation E) a horizontal marketing system d 109) When Sherwin Williams Paint Company has single ownership of integrated, successive stages of production and distribution, it has created a corporate VMS. true 110) Disintermediation as a trend is on the rise in U.S. business. true 112) The faster the delivery, the greater the assortment provided, and the more add-on services supplied, the more the channel's service level is restricted. false 114) Intensive distribution seeks many outlets in a market, while selective distribution seeks only one outlet in a given market area. false115) The producer and intermediaries need to agree on the terms and responsibilities of each member, including price policies, conditions of sale, territorial rights, and specific services to be performed by each party. true 120) Integrated logistics management aims to provide better customer service and trim distribution costs through teamwork, both inside the company and among all the marketing channel organizations. true 121) Judy Smith is the manager of the local McDonald's franchise in Cartersville. Recently the home office did not let her participate in co-op advertising like the other McDonald's in her district. Now she is irritated and demands fairness. This is an example of horizontal conflict. false 1) ________ includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use. A) Franchising B) Retailing C) Brokering D) Wholesaling E) Disintermediation b 2) In recent years, ________ has been growing fast. This includes selling to final consumers through direct mail, catalogs, telephone, and the Internet. A) social marketing B) shopper marketing C) franchising D) nonstore retailing E) e-commerce d 5) Which type of stores usually carry more specialty goods for which customers like to be "waited on" and have much higher operating costs, which are passed along to the customer? A) self-service stores B) category killer stores C) full-service storesD) independent stores E) specialty-service retailers c 8) ________ are flourishing due to increased use of market segmentation and market targeting. A) Chain stores B) Specialty stores C) Superstores D) Discount stores E) Off-price stores b 11) ________ are facing slow sales growth because of slower population growth, increased competition, and the rapid growth of out-of-home eating. A) Convenience stores B) Department stores C) Chain stores D) Supermarkets E) Hypermarkets d 13) Which type of small store carries a limited line of highturnover convenience goods and makes most of its revenues from cigarette, beverage, and gasoline sales? A) convenience B) chain C) department D) supermarket E) hypermarket a 17) ________ retailers in the United States are growing faster than product retailers. A) Discount B) Merchant C) Service D) Specialty E) Off-price c 18) ________ sell standard merchandise at lower prices by accepting lower margins and selling higher volume. A) Merchant wholesalersB) Discount stores C) Full-service retailers D) Limited-service retailers E) Factory outlets b 19) Early ________ cut expenses by offering few services and operating in warehouse-like facilities in low-rent, heavily traveled districts. A) chain stores B) factory outlet malls C) discount stores D) off-price retailers E) full-service retailers c 30) Until retailers ________ and ________ their markets, they cannot make consistent decisions about product assortment, services, pricing, advertising, store décor, or any of the other decisions that must support their positions. A) compete with; position B) target; compete with C) define; profile D) limit; serve E) divest; eliminate c 31) Service differentiation among retailers has ________. A) increased B) decreased C) stayed the same D) franchised E) tripled b 33) A retailer's ________ should differentiate the retailer while matching target shoppers' expectations. One strategy is to offer merchandise that no other competitor carries. A) agent B) broker C) product assortment D) environment E) distribution strategy c36) While all retailers would like to achieve ________ while charging ________, the two seldom happen together. A) low volume; high markups B) low volume; low markups C) high volume; high markups D) high volume; low markups E) high volume; cut-rate markups c 37) In-store demonstrations, displays, contests, and visiting celebrities are examples of ________. A) franchises B) sales promotions C) agent promotions D) broker promotions E) product life-cycling b 45) Today's trend in retail clusters is toward ________, huge unenclosed shopping centers consisting of a long strip of retail stores, including at least one large, freestanding anchor store like Walmart. Each store has its own entrance with parking directly in front for shoppers who wish to visit only one store. A) shopping malls B) power centers C) superstores D) chain stores E) regional shopping centers b 47) In response to a(n) ________, many retailers have cut costs, used price promotions, and added new value pitches to their positioning. A) down economy B) up economy C) dot-com meltdown D) dot-com boom E) shift in retail technology a 60) Which wholesaler's channel function is demonstrated when a wholesaler's sales force helps a manufacturer to reach many small customers at a low cost? A) bulk-breaking B) selling and promoting C) buying and assortment buildingD) warehousing E) rackjobbing b 102) Marketers who use shopper marketing use the retail store itself as an important marketing medium. true 103) Department stores carry narrow product lines with deep assortments within those lines. false 104) In recent years, convenience stores have redesigned their stores to closely focus on serving their primary target market made up of young, blue-collar men. false 110) Chain stores are located near residential areas and are open long hours, seven days a week; they carry a limited line of high-turnover goods. false 111) In a retailer cooperative, independent retailers contract with each other to set up a central buying operation and conduct joint promotional efforts. true 113) To create the right atmosphere, some retailers control every aspect of the consumer's store experience, including what customers hear and smell. true 114) Power centers are decreasing in number. false 120) In an automated warehouse, orders are fed directly from the retailer's information system to the wholesaler's, and the items are picked up by mechanical devices and taken to a shipping platform where they are assembled. true 121) Full-service retailers such as JC Penney provide more sales assistance because they carry more shopping goods about which customers need information.false 1) A company's total marketing communications mix consists of a special blend of advertising, sales promotion, public relations, personal selling, and direct-marketing tools that the company uses to communicate customer value and build customer relationships. This is also called ________. A) direct marketing B) integrated marketing C) the promotion mix D) competitive marketing E) target marketing c 2) The use of short-term incentives to encourage the purchase or sale of a product or service is called ________. A) direct marketing B) sales promotion C) personal selling D) public relations E) publicity b 3) Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor is called ________. A) sales promotion B) advertising C) direct marketing D) personal selling E) public relations b 5) Which of the following is NOT a major category in a company's promotion mix? A) sales promotion B) strategic positioning C) direct marketing D) public relations E) advertising b 9) Today's consumers do not need to rely on marketer-supplied information about products and services because they can use ________ to seek out a wealth of information.A) marketing communications B) direct marketing C) the Internet and other technologies D) mass market media E) informative advertising c 11) Moving away from ________, marketers have been shifting toward highly focused marketing, spawning a new generation of more specialized and highly targeted communications efforts. A) mass marketing B) advertising C) direct marketing D) pull strategies E) push strategies a 18) Advertising, sales promotion, personal selling, public relations, and direct marketing are all ________. A) communications channels that should be integrated under the concept of integrated marketing communications B) communications channels focused more on narrowcasting than broadcasting C) promotional tools used for push strategies but not pull strategies D) promotional tools used for pull strategies but not push strategies E) promotional tools adapted for use in mass marketing a 21) Integrated marketing communications produces better communications ________ and greater ________ impact. A) consistency; sales B) sales; consistency C) marketing; competitive D) variety; production E) branding; quality a 27) In the communication process, the reaction of the receiver after being exposed to a message is called the ________. A) response B) answer C) noiseD) feedback E) decoding a 38) In the model of buyer-readiness stages, the first stage is ________. A) preference B) knowledge C) liking D) awareness E) insistence d 42) Though a popular appeal, when used poorly ________ can detract from comprehension, quickly wear out its welcome, overshadow the product, or even irritate consumers. A) humor B) nonpersonal communication C) direct marketing D) integrated marketing E) noise a 51) Creating word-of-mouth campaigns by cultivating opinion leaders and getting them to spread information about a product or service to others in their communities is known as ________. A) sales promotion B) indirect marketing C) buzz marketing D) stealth marketing E) public relations c 54) To ________, a marketer can ask target audience members whether they remember the message, how many times they saw it, and what points they remember. A) select a message source B) collect feedback C) select a message channel D) plan a media purchase E) design a marketing appeal b61) Advertising has some shortcomings. What is NOT one of them? A) It is impersonal. B) It can be very costly. C) It slowly reaches many people. D) It carries on one-way communication with the audience. E) It does not make audience members feel the need to respond. c 65) "Buy it now" is the message of ________. A) personal selling B) advertising C) a nonpersonal communication channel D) sales promotion E) publicity d 69) Which promotional mix strategy directs marketing efforts toward final consumers? A) pull B) blitz C) push D) buzz E) pulse a 70) Which promotional mix strategy directs marketing efforts toward market channel members? A) pull B) blitz C) push D) buzz E) pulse c 101) A company's marketing communications mix is also called its promotion mix. true 110) The communications process should start with mass media advertising to reach many consumers. false111) The four major communication functions are encoding, decoding, response, and noise. false 114) Awareness, knowledge, and preference are buyerreadiness stages. true 115) There are three types of appeal from which marketers may choose as they design their message content. These types are rational, emotional, and moral appeals. true 116) Buzz marketing involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities. true 124) Advertisements for prescription drugs often feature potential benefits and negative side effects that consumers may experience with use of the medication. These ads present twosided arguments. true __________ is the specialized area of management that converts or transforms resources into goods and services. A. Logistics management B. Resource engineering C. Intrapreneuring D. Operations management Operations management __________ is the creation of goods and services using land, labor, capital, entrepreneurship, and knowledge. A. Resource recombination B. Supply chain management C. Production D. Purchasing Production ___________ utility is the value added by the creation of finished goods and services using raw materials, components, and other inputs. A. Manufacturing B. MarginalC. Consumption D. Form Form In ___________, materials are physically or chemically changed to produce a product. A. process manufacturing B. assembly processes C. utilitarian production D. diffusive manufacturing Process manufacturing A(n) __________ puts together components to make a product. A. modular process B. compression process C. assembly process D. econometric process Assembly process A production process characterized by long production runs to turn out finished goods over time is known as a(n): A. assembly process. B. continuous process. C. extended process. D. unrestricted process. Continuous process In the past, the idea behind mass production was to: A. produce goods of the highest possible quality. B. give producers the maximum flexibility to respond to customer preferences. C. make large quantities of a limited variety of products at very low cost. D. give workers more control over their work environment. Make large quantities of a limited variety of products at very low cost In _________, machines are designed to do multiple tasks so that they can produce a variety of products. A. systems engineering B. microdesign C. modular construction D. flexible manufacturing Flexible manufacturingThe goal of lean manufacturing is to: A. keep inventories of finished goods as high as possible. B. produce goods and services with less of everything that goes into the process. C. produce a very limited variety of goods. D. become more self sufficient by producing major components rather than buying them. Produce goods and services with less of everything that goes into the process A production process characterized by a short production run and frequent adjustments to machines so that different products can be produced is known as a(n): A. just-in-time process. B. lean manufacturing system. C. analytic process. D. intermittent process. Intermittent process __________ is the process of selecting a geographic location for a company's operations. A. Facility location B. Facility layout C. FRP D. Geographic requirements planning Facility location Contemporary producers and their suppliers: A. locate in areas where they can share the same labor. B. know that it is not necessary to locate close to international customers due to technology such as the Internet. C. locate close together to decrease the cost of distribution. D. have advanced beyond ERP to more sophisticated systems. Locate close together to decrease the cost of distribution Operations management becomes a(n) ____________ when companies outsource several processes and create a network of firms that cooperatively produce products and services. A. open operation B. closed operation C. interfirm process D. conjoined process Interfirm process__________ is the physical arrangement of resources in the production process. A. Facility location B. Facility layout C. ERP D. RRL Facility layout Firms often use a(n) _____________ when working on a major project involving the production of a large item such as an airplane, ship, or bridge. A. assembly line layout B. continuous production process C. fixed-position layout D. process manufacturing technique Fixed-position layout Unlike an assembly line where workers perform only a few tasks, in a _________ layout, teams of workers combine to perform a variety of tasks needed to produce more complex units of a final product. A. modular B. spoke and wheel C. network D. cluster Modular In manufacturing, a __________ is used to produce large quantities of a few types of products. A. assembly-line layout B. process layout C. modular layout D. fixed-position layout Assembly-line layout In manufacturing, a __________ is frequently used in operations that serve different customers' different needs. A. product layout B. process layout C. modular layout D. fixed-position layout Process layoutTo reduce the cost of holding too much inventory, many companies have implemented: A. ABC inventory management. B. first-in, last-out inventory control. C. just-in-time inventory control. D. maximum inventory management. Just-in-time inventory control ____________ examines statistical samples of product components at each stage of the production process and plots the results on a graph in order to spot and correct any variances from desired quality levels. A. CAD/CAM B. Econometrics C. Analysis of variance D. Statistical process control Statistical process control planning the management function concerned with anticipating future trens and determining the best strategies to achieve an organization's goals and objectives is known as: leading ______ is the management function of creating a vision for the organization and guiding, training, coaching and motivating employees to help achieve the goals and objectives of the organization. controlling when managers determine that an organization is not making sufficient progress toward achieveing its golas and objectives and they develop corrective measures, they are involved in: tactical the type of planning that is concerned with developing detailed short term actions about what is to be done, who is to do it, and how it is to be done is known as ____ planning. developing tactical plans and controlling middle managers are responsible for: technical and human relations skills supervisory managers spend most of their time on: technical skillsrob intends to major in accounting because he is confident that an ability to read and interpret financial and accounting data is the way to get to the top in business. Rob seems to be concerned with developing his: autocratic the ______ style of leadership is characterized by making managerial decisions without consulting others. both a vision, moral and ethical foundation for growth best summarizes the type of leader future organizations are likely to need?in the future, organizations will need leaders who supply: production ____ is the creation of goods and services using land, labor, capital, entreprenurship, and knowledge. good experiences for those who use the service operations management in the service sector is focused on creating: continuous process a production process characterized by long production runs to turn out inished goods over time is known as a large quantities of limited variety of products at very low cost in the past, the idea behind mass production was to: produce goods using less of all types of resources the main objective of lean manufacturing is to: facility layout ____ is the physical arrangement of resources in the production process. materials requirement planning MRP is the acronym for: six sigma approach to quality control _____detects potential problems early to prevent their occurrencereducing time to market millennium a leading producer of environmentally friendly cleaning agents is looking for a site for a new production facility. the company is mainly focusing on sites that are close to major highways and rail hubs and are not too far from some major population centers. this suggests that an important consideration for millennium is: become certified in ISO 9000 standards xsport industries is a us based manufacturer of sporting goods. recently, it has decided to make a major push to sell its products in the european union. in order to succeed in this new market xsport will need to: A must be completed before B can begin A PERT network consists of activites linked by arrows. Suppose two of the activites on the network are labeled A and B. An arrow from A to B indicates that: A When Elaine accepted a position with Cannon Corporation in Dallas, Texas, she felt uneasy. She was new to the area and new to this company. However, she was pleased that her new job offered her the opportunity to play on the company volleyball team. She quickly made new friends and, through her new friends, learned about the city. Apparently, her new job satisfies Elaine's ________ needs. A. social B. esteem C. self-actualization D. physiological C A central characteristic of "management by objectives" is that: A. goals are set by top management and followed without question by others within the organization. B. employees are given complete freedom to set their own goals as long as they are consistent with broad guidelines established by top management. C. goals are set through a process involving all members of the organization.D. it assumes that management must motivate employees, since employees are incapable of motivating themselves. A Kanetra believes that if she leaves her employees unsupervised for a few minutes they will do nothing but slack off. She is known as the "Dragon Lady" (at least behind her back) for the harsh criticism and punishment she disburses whenever an employee makes an error. Kanetra is a __________ manager. A. Theory X B. Theory Y C. Theory Z D. Theory plus B Herzberg's research found that safe working conditions and good pay: A. are important motivators for most employees. B. helped maintain worker satisfaction, but did little to increase motivation. C. had no impact on worker morale. D. were very important motivators for professional employees and managers, but were poor motivators for unskilled employees. B Which of the following statements about worker motivation is most consistent with the findings of the Hawthorne studies? A. Worker motivation will fall significantly if lighting conditions, temperature, and other elements of the physical environment are not kept at their optimal levels. B. Employees are more motivated if they feel they are part of a special group or project. C. The best way to motivate employees is to offer pay raises, bonuses, and other financial incentives to employees who meet or exceed clearly specified goals. D. Worker motivation is unimportant in determining the level ofworker productivity, because productivity is primarily determined by external factors such as the speed of the machinery the employees operate. B Marla always strives to excel in her career. Several years ago, she finished College, finally achieving a Ph.D. Although she works as an educator and has a secure position at an urban college, she does not hold a faculty position at a prestigious university. It is obvious to her colleagues that Marla is unsatisfied with her position at work. She constantly gives coworkers subtle reminders of her superior academic credentials and only participates in work activities where she will assume a leadership role. Analyzing Marla's situation using Maslow's hierarchy of needs, which of the following needs are unmet? A. self-actualization needs B. esteem needs C. social needs D. physiological needs B Which of the following practices would be most consistent with the views of scientific management? A, job enlargement B. job simplification C. job enrichment D. job rotation D As a manager, Charlene works hard to ensure that employees are treated fairly, yet she still gets feedback that indicates that some employees don't believe she is fair. This problem most likely result from the fact that: A. Charlene doesn't understand that employees are not concerned with equity, only with getting the biggest possible reward for the least possible effort. B. "Fair treatment" is a hygiene factor rather than a motivator. C. Attempts to treat employees fairly only work in an Asian or European culture. American employees tend to be individualists who believe that rewarding results are more important than perceptions of fairness.D. Equity judgments are based on perceptions, and the perceptions of employees are not always accurate. A Which of the following statements is the best description of how scientific management viewed employees? A. Employees are like machines that must be programmed to perform in a certain way B. Most employees are creative and intelligent individuals who should be given a great deal of freedom and flexibility in how they perform their jobs C. Employees will only exert their maximum effort if they believe that their goals are attainable D. Employees are individuals who do not respond in the same way to a particular A Working conditions recently changed at the Great Barriers Corporation. Managers and employees now answer their own phones, and even top managers are addressed by their first name. The company even eliminated executive washrooms and parking spaces. Great Barriers implemented all of these changes to motivate employees to work more productively by creating a team spirit within the company. Great Barriers' efforts are consistent with an attempt to: A. improve motivation through open communication. B. fully implement the scientific management approach developed by Taylor. C. establish a pure Type J approach to management. D. ensure that maintenance factors are satisfactory. According to Herzberg, job-related factors that motivated workers to work harder and more productively had one thing in common: they were easy to explain and easy to measure. they focused on making the jobs performed by employees simpler to accomplish. they were related to job content. An important criterion that helps to determine the type of management style [Type A, J, or Z] that works best for firms is:the education level of the workforce. the marital and family status of the workforce. the general culture that surrounds the firm. Which of the following statements would a proponent of management by objectives likely make? Top management is best qualified to set the organization's overall goals When all is said and done, employees must motivate themselves Ramon works at Chicago Medical Instruments. His job was recently redefined so that he now has more flexibility in the hours he works and more say in the procedures used on the job. This suggests that Chicago Medical Instruments is trying to change Ramon's job so that it has more: feedback. autonomy. At Livwell Pharmaceuticals, researchers know that the objective is to develop three new cancer fighting medicines each year. After that, they work on their own to develop the new drugs. Managers at Livwell practice ______________. free-rein leadership Bing spent several hours reviewing sales and expense reports for her tea importing business, in order to determine if she had reached her profit goals for last month. Bing's efforts are part of the ___________ function of management. controlling Engineers at New Generations Computer Company provided three design approaches for the new keyboard the company was planning to produce and sell. Designers got together and used a problem solving approach called ________ to finalize their selection. PMI When managers identify a market trend that suggests a new opportunity and then devise a strategy to go after this new opportunity, they are ____________. planning As David progressed in his career from a territory sales manager, to a regional sales manager, to the director of sales, he found that he utilized more ________ skills and less _______ skills. conceptual; technical Today's progressive managers: tend to emphasize teamwork and cooperation rather than discipline and order-giving.Which of the following activities is part of the organizing function of management? providing the resources that workers need in order to provide faster and better customer service. Ed Flavorman, the chief executive of Flavor Best Ice Cream, believes that alternative plans are almost as important as the primary operational plans because the market is so competitive and unpredictable. Ed endorses: contingency planning. The _________ analysis is a tool used in the planning process that helps companies evaluate changes in external environments and assess strengths and weaknesses within the firm. SWOT Which of the following statements about effective leadership is the most accurate? The most effective leadership style depends on who is being led and in what situation. Basic principles of organization design are usually the same for large and small businesses. As the head of the marketing department, Jody works with others on complex and challenging projects. The level of detail in this work requires Jody to spend a significant amount of time with her employees providing advice and support. Within the marketing department, Jody probably has a(n) ________ span of control. narrow If a firm decides to let another company that specializes in accounting services handle all of its financial records and prepare its tax forms. This is an example of: outsourcing Groups of employees from different departments who work together on a long-term basis are members of: cross-functional self-managed teams. Which of the following positions in a firm would be classified as a staff position?a lawyer employed in the legal department of a manufacturing corporation The _____________ consists of the relationships that develop spontaneously as employees meet and form power centers. informal organization Within its production department, Marlin Manufacturing has shift leaders, supervisors, assistant plant managers, plant managers, product group managers, assistant division managers, division managers, an assistant vice president for production, and a vice president in charge of production. Marlin Manufacturing is an example of a(n) ____________ organization. tall In a(n) _____________ organization, decision-making authority is maintained at the top level of management. centralized The process of rating an organization's practices, processes, and products against the best of the world is known as: benchmarking Mo was hired by a firm that has a very bureaucratic organization. Mo is likely to encounter which of the following conditions in his firm? many rules and regulations that employees are expected to follow In a just-in-time (JIT) inventory system, suppliers: Become more like a department in the producing firm rather than a separate business. In recent years, the service sector of the U.S. economy has: Grown much more rapidly than the manufacturing sector. The purpose of determining the critical path on a PERT network is to: Identify the sequence of tasks that takes the longest to complete. For services, the facility layout is designed to: Help customers find things, buy things, including on the InternetA firm would be most likely to employ statistical process control (SPC) if it wanted to: Make sure products meet quality standards all along the production process. A Chinese flash drive company outsources the production, promotion, and distribution of its products, and maintains internal control of design and engineering functions. In order to compete well in the dynamic environment of high technology products, its operation focuses on making certain all partner companies work cooperatively via internet-based communication. This contemporary operations concept is called a(n) _________. interfirm process Enterprise resource planning (ERP) is considered more sophisticated than MRP primarily because it can: Monitor processes in multiple firms at the same time. At Stevens Manufacturing workers are organized in teams that combine their efforts to produce complex units of a final product. Stevens is using a facility layout known as a(n): Modular layout. Today, production techniques are significantly faster without added costs due to the fact that ____________ create designs, make design changes, and actually produce the product. CAD and CAM The goal of lean manufacturing is to: produce goods and services with less of everything compared to mass production. Weldon Task has just successfully negotiated a new long-term sales agreement with a major client. The personal satisfaction Weldon has about his efforts is his ________ reward. intrinsic Which of the following statements is the best description of how scientific management viewed workers? Workers are like machines that must be programmed to perform in a certain way.The most important impact of the Hawthorne studies was that it: changed the direction of research away from Taylor's scientific management toward the study of human-based management. According to Maslow, a higher order need: becomes a source of motivation after lower order needs are satisfied. According to Herzberg, a sense of achievement, earned recognition, and interest in the work itself were: motivators Ramon works at Chicago Medical Instruments. His job was recently redefined so that he now has more flexibility in the hours he works and more say in the procedures used on the job. This suggests that Chicago Medical Instruments is trying to change Ramon's job so that it has more: autonomy At Virtual Frontier International, employees tend to work with little direct supervision. They are expected to use creativity and imagination on the job because management believes they are committed and professional workers. The management style at Virtual Frontier reflects ____________ attitudes about workers. Theory Y Employees will evaluate an opportunity by first determining if they think they can achieve it; then, they make some determination as to whether they will be rewarded for their effort, and lastly, they think about the type of reward that would be worth their effort. These thoughts correspond with: Expectancy Theory According to equity theory, which of the following statements is most accurate? Workers perceptions of fairness will affect their level of motivation. Which of the following statements about cultural differences in the workplace is most accurate? Motivating employees across the globe is an ongoing challenge for most companies._____________ workers do not have the expectation of regular, full time employment. Contingent Which of the following firms would have the strongest incentive to adopt a job sharing plan? GHI Health Services wants to reduce absenteeism and tardiness. In coming years, high tech growth areas such as computers, biotechnology, and robots are likely to experience a: shortage of skilled labor. A(n) __________ is a financial incentive a firm offers to encourage employees to accept an early retirement offer. golden handshake Which of the following types of work would be best suited to the use of on-the-job training as the primary training method? checking out customers at a local convenience store A common way of compensating teams is a ___________ system, in which bonuses are based on improvements over a previous performance baseline. gain-sharing Ben Eisner is a human resource manager at Claymont Communications who is currently involved in human resource planning. Which of the following tasks would Ben perform as a part of the planning process? Prepare a human resource inventory. Probably the most controversial program enforced by the Equal Employment Opportunity Commission concerns: affirmative action. The information contained in performance appraisals helps managers: make decisions about promotions, compensation, training, and firing. Which of the following would be used by a manager who wanted to fill a position using an internal source? promotion of a current employeeIn order to level the playing field in trade between the U.S. and China, U.S. policymakers have called upon China's government to allow the Yuan (China's currency) to float freely, as other world currencies. Through government regulation, China maintains an undervalued currency, which results in: Choose one answer. a. More buying power for Chinese consumers who want to purchase U.S. goods and goods from other countries. b. Maintaining robust Chinese exports and a favorable balance of trade for China. c. Developing better relations with industrialized countries who want to increase the value of their exports. d. Stability and strength of the Chinese Yuan against the U.S. dollar and the euro. b. Maintaining robust Chinese exports and a favorable balance of trade for China. A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs). Why do these investments by governments with surplus cash flows worry trade experts? Choose one answer. a. SWFs invest in high risk start-ups with no proven history of producing goods and services that developing or developed countries need. They may likely undermine the years of development of growing economies. b. SWFs have a greater risk of going bankrupt than other investments because governments are not good at running businesses. c. Some fear that governments investing their SWFs in large firms may gain control of natural resources, sensitive technologies, and the decision making of management. d. Some trading experts believe that SWFs are supported by terrorist organizations, and their strategy is an indirect way to undermine the creation of U.S. jobs. c. Some fear that governments investing their SWFs in large firms may gain control of natural resources, sensitive technologies, and the decision making of management.Denmark requires foreign companies that sell butter in Denmark to sell it in cubes, not tubs. This type of requirement is known as a: Choose one answer. a. protective tariff. b. revenue tariff. c. quota. d. nontariff barrier. d. nontariff barrier Mini-Case

Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contact lens, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eye wear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames.
A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"!
 
The company was informed by the Japanese Ministry of Trade that they could only export 1.5 million pairs of eyeglasses to the Japanese market during a given year. The Japanese have imposed a(n): Choose one answer. a. revenue tariff. b. embargo.c. import quota. d. limit order. c. import quota. The value of goods imported into France exceeds the value of French exports. This indicates that France: Choose one answer. a. Has an exchange rate decrease. b. Utilizes high tariffs. c. Has a budget deficit. d. Has a trade deficit. d. Has a trade deficit. U.S. firms that produce sophisticated military hardware are prohibited from exporting that equipment to "unfriendly" governments, such as Iran. This complete ban on exporting sensitive technology to specific countries is an example of a(n): Choose one answer. a. import quota. b. boycott. c. tariff. d. embargo. d. embargo. The three countries participating in NAFTA are: Choose one answer. a. Canada, Panama, and the United States. b. Mexico, Panama, and the United States. c. Canada, Nicaragua, and Mexico. d. Canada, Mexico, and the United States. d. Canada, Mexico, and the United States.Which of the following is an advantage of offshore outsourcing? Choose one answer. a. Companies can create efficiencies by hiring low-wage employees. b. Wages increase in the home country. c. Product quality improves permitting firms to charge more for their products. d. Communication between the company and its customers improves. a. Companies can create efficiencies by hiring low-wage employees. A sociological challenge that must be overcome in order to be successful in the global market is: Choose one answer. a. A lack of cultural understanding. b. An overly anxious desire to please at all cost. c. Inequality of global natural resources. d. Wealth management. a. A lack of cultural understanding. Nike _________________ its products in foreign countries, where labor is cheap and production sites are owned by other companies. This strategy allows Nike to experiment in new markets without incurring large start-up costs involved with building their own production facilities. Choose one answer. a. contract franchises b. pays governments to market c. globally licenses d. contract manufactures d. contract manufacturesReviewing the recent experience of the United States in global markets reveals that the U.S has: Choose one answer. a. a merchandise trade surplus with the rest of the world. b. a large trade deficit with China. c. avoided becoming a debtor nation. d. attracted very little foreign direct investment. b. a large trade deficit with China. _____________ is buying products from another country. Choose one answer. a. Importing b. Outsourcing c. Retailing a. Importing Rosa's aunt was taking a cruise to Brazil. She suggested to Rosa that she would be glad to buy her some jewelry while in port in Rio de Janeiro because the exchange rate would be to her benefit. This means: Choose one answer. a. The currency in Rosa's home country is weak against the Brazilian currency. b. The currency in Rosa's home country will be almost equal to the Brazilian currency; otherwise it would not be a good exchange. c. The currency in Rosa's home country is devalued. d. The currency in Rosa's home country has strength against the Brazilian currency. d. The currency in Rosa's home country has strength against the Brazilian currency. As students think about a career in the business world today, which of the following is a good strategic suggestion? Choose one answer.a. Studying a foreign language. b. Securing a job with a large multinational corporation. c. Stay away from franchising due to the saturation of this form of business globally. d. Avoid spending a lot of time studying fluctuations in currencies because a global currency is eminent. a. Studying a foreign language. __________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries. Choose one answer. a. Comparative advantage b. Absolute advantage c. Complete advantage d. Dumping advantage b. Absolute advantage _______ tariffs are designed to raise money for the government. Choose one answer. a. Regulatory b. Revenue c. Price d. Profit b. Revenue A benefit of contracting with export trading companies is: Choose one answer. a. They are the experts in establishing trading partners abroad, and negotiating all the details in retaining customers. b. They are experts in staying out of the financial transactionsof establishing new markets. c. They will always assume the risk if your product does not sell to the foreign customer. d. They keep you legal because they serve as the franchisor and make certain that your products meet ISO requirements. a. They are the experts in establishing trading partners abroad, and negotiating all the details in retaining customers. One of the purposes of Export Assistance Centers is to: Choose one answer. a. help multinational corporations reach agreements with foreign governments. b. provide subsidies to domestic firms hurt by dumping by foreign firms. c. provide trade-finance support for small and medium-sized firms involved in direct exporting. d. encourage domestic firms to become more competitive by forming keiretsu-like organizations, much like those found in Japan. c. provide trade-finance support for small and medium-sized firms involved in direct exporting. One objective of NAFTA is: Choose one answer. a. increase trade barriers between the countries involved. b. decrease investment opportunities in the countries involved. c. promote conditions of fair competition for the three trading partners. d. improve working conditions in Central America. c. promote conditions of fair competition for the three trading partners. Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of: Choose one answer.a. negotiated rate adjustments between the U.S. government and the World Trade Organization. b. decisions made by the Federal Reserve Board of Governors in order to implement monetary policy. c. fluctuations in the world price of gold. d. changes in the supply of and/or demand for dollars in the global currency market. d. changes in the supply of and/or demand for dollars in the global currency market. In an effort to promote the importance of a valuable education, the faculty and staff at the local community college are trained to ask each student about their career preferences, rather than suggest courses that may not benefit the student's future goals. Although it would be tempting to suggest courses just to increase the College's enrollment, employees know that it is more important to serve each student well, even if it means suggesting courses and/or degrees offered at other institutions. This approach is consistent with: Choose one answer. a. an integrity-based ethics code. b. a compliance-based ethics code. c. a response to a government mandate. d. a personal responsibility commitment. a. an integrity-based ethics code. Which of the following terms describes someone who reports illegal or unethical behavior? Choose one answer. a. whistleblower b. horn blower c. watch tower sentinel d. integrity watchdog a. whistleblowerCompliance based ethics codes typically: Choose one answer. a. rely on laws and regulations outside the firm for guidance. b. have a strong affinity for shared accountability among employees. c. promote a "do-it-right" climate. d. enable responsible employee conduct. a. rely on laws and regulations outside the firm for guidance. Which of the following indicates that U.S. businesses are demanding socially responsible behavior from their international suppliers? a. The establishment of the Equal Opportunity Employment Commission b. The decision of Wal-Mart to open stores globally c. The decision of Phillips-Van Heusen to cancel orders from suppliers that violate its ethics code d. The creation of the North American Free Trade Zone (NAFTA) between the U.S., Canada, and Mexico c. The decision of Phillips-Van Heusen to cancel orders from suppliers that violate its ethics code Corporate ________ covers issues such as setting minority hiring practices, manufacturing safe products, and minimizing pollution. a. responsibility b. philanthropy c. diversity d. structure and strategy a. responsibility The boxed material entitled "Reaching Beyond Our Borders" that told the story about Joe, the Motorola engineer, suggests that U.S. firms operating overseas are:a. Not as flexible on social issues as local employees would like them to be. b. Exploiting employees by working them long hours at low pay. c. Complying with the ethical standards of the people they employ, in the countries in which they are operating. d. Responding to their stockholders desire for profits. c. Complying with the ethical standards of the people they employ, in the countries in which they are operating. A(n) _______ -based ethics code defines corporate values; creates a supportive environment, and, stresses shared accountability among employees. . a. social b. corporate responsibility c. compliance d. integrity d. integrity Ethical dilemmas in business: . a. force us to make poor choices. b. always end up bringing out the best in us. c. often force us to choose between equally unsatisfactory alternatives. d. define us as being moral absolutists or moral situationalists. c. often force us to choose between equally unsatisfactory alternatives. Several outside groups regularly monitor the activities of Metro Chemical Corporation. These groups are interested in the firm's involvement and enforcement of their ethical and social responsibility policies. Who of the following is the leastlikely to be among the "watchdog" groups? . a. The financial officer of a church with funds invested in the chemical company. b. Overseers from the World Trade Organization (WTO). c. A student in environmental engineering attending a local college. d. The president of the union representing the workers at the chemical company. b. Overseers from the World Trade Organization (WTO). Which of the following would be a unique focus of an integritybased ethics code? . a. Increased control over employee actions. b. Shared accountability among employees. c. Increased penalties for code violators. d. Improved awareness of the relevant laws. b. Shared accountability among employees. Which of the following industries has been deregulated? . a. Chemicals b. Agriculture c. Airlines d. Steel c. Airlines Mini-Case

Brian and Sondra have just opened a new Cajun restaurant on the edge of town, Cajun Cookin' Inc. They own the land and building and have a brand-new kitchen as well as a lovely seating area, filled with mementos from the South. They have a liquor license and make wonderful Southern drinks. They are quite pleased that members of thecommunity are helping their business grow by coming in for a meal or a drink after work. They are good businesspeople who pay their bills on time and as a result have great relationships with the vendors that supply them food.
 
One day as Brian was speaking with one of his customers a shriek went up from the other side of the restaurant. When he rushed over, he found that one of his customers had spilled hot tea on her arm. If this customer was so inclined, she could __________ and the court would likely find in her favor. . a. sue Brian for breach of contract b. sue the restaurant for negligence c. sue the restaurant under statutory law d. She can do nothing about this except not go to the restaurant ever again. b. sue the restaurant for negligence A government policy aimed at reducing the purchase of a specific good through increased taxes has been most often applied to: . a. beer. b. sports cars. c. white bread. d. diet soft drinks. a. beer. Allison is concerned that she is not getting full disclosure of information from a mortgage broker who is hoping to refinance the mortgage on her house. Having recently studied business law, you suggest to Allison that she contact the ________________________ that was formed after the Dodd-Frank Wallstreet Reform and Consumer Protection Act became law. . a. Federal Trade Commission (FTC)b. Consumer Financial Protection Bureau (CFPB) c. Due Diligence Agency (DDA) d. Financial Fairness Consortium (FFC) b. Consumer Financial Protection Bureau (CFPB) The number of personal bankruptcies has: . a. significantly decreased as a result of the Bankruptcy Reform Act. b. increased. c. nearly reached the level of business bankruptcies. d. remained unchanged. b. increased. Your 15-year-old brother comes home with the great news that he has decided to buy his first car and has just agreed to give $10,000 to a complete stranger. He signed the contract and just needs to pay the stranger and pick up the car. Your dad is upset and calls the stranger to tell him your brother will not be buying the car. The stranger can: . a. sue your brother for breach of contract. b. sue your dad for breach of contract. c. sue your brother for specific performance. d. do nothing. d. do nothing. Some economists advocate a ____________ on the consumption of such products as gasoline, liquor, cigarettes, and even soda pop, in the hope that consumers will think about how their purchases are having negative impacts on themselves and their environment. . a. progressive taxb. sin tax c. flat tax d. tax credit b. sin tax A(n) __________ occurs when one party fails to follow the terms of a contract. . a . breach of contract b. discharge of obligation c. obligation failure of enforcement d. infringement of contract a. breach of contract You and your boss agree to terminate your employment contract because you want to devote more time to school. This breach of contract would likely be resolved by: . a. a specific performance requirement. b. the payment of damages. c. a judge. d. a discharge of obligation. d. a discharge of obligation. The body of law created by court decisions rendered by judges is called __________ law. . a. precedent b. statutory c. common d. tortc. common Naomi is planning to invest in a new online franchise - the Novel Artist, Inc. The franchisor provides proprietary software and training for designing invitations and cards for special occasions such as weddings, graduations, and birth announcements. The franchisee is obligated to pay a monthly fee to the franchisor. Naomi will use the software to create her own special designs that she will ultimately feature on her website. She also has chat availability so she can accommodate customers with special requests. Order turn-around time must be fast. She can only take on as many clients as she can make good on delivery. An advantage of Naomi's online franchise is: . a. She has a limited territory. b. She has a narrow product offering. c. She does not need name recognition or marketing assistance. d. She has an unlimited territory. d. She has an unlimited territory. In the Legal Briefcase box, "Virtual Companies," . a. The box discusses the Vermont Teddy Bear Company and the difficulty the company experienced when transitioning from an S-Corporation to a C-Corporation. b. The box talks about a newly created LLC in Vermont called the Virtual Company, where all official filing is electronic, and members contribute their skills through electronic communication. c. The box discusses how the state of Vermont wants to attract business, yet refuses to permit the electronic submission of filing for any form of business ownership. d. The box talks about the Vermont maple syrup industry and how due to the fact that it is a seasonal business, it cannot exist virtually. The labor intensive business requires the expertise of experienced tree tappers.b. The box talks about a newly created LLC in Vermont called the Virtual Company, where all official filing is electronic, and members contribute their skills through electronic communication. Marco is a franchisee with Daggies, a chain of sandwich shops. His business was doing well until several Daggies franchisees got in trouble and were forced to close their shops. Soon afterward, Marco's business deteriorated and he too was forced to close. This is an example of: . a. An economic shakeout at work. b. The coattail effect. c. The law of diminishing returns. d. Management by exception. b. The coattail effect. In the Thinking Green box titled, "Play Ball but Play Green", The Washington Nationals baseball team is featured as a franchised business that demonstrates environmental stewardship by: . a. Replacing all sod in the stadium with astro-turf to conserve water. b. Building a LEED certified building and initiating recycling programs. c. Joining several other baseball franchises and only washing uniforms in phosphate-free detergents because the run-off eventually ends up in our drinking water supply. d. Painting the steel beams and seats in the stadium "green" and continuously flashing the words "green" on the display monitors to remind everyone to use the waste cans and to clean around their seats before departing the stadium. b. Building a LEED certified building and initiating recycling programs. A(n) _________ occurs when one company buys the property and obligations of another company.. a. cooperative b. hostile takeover c. leveraged buyout d. acquisition d. acquisition Compared to partnerships and sole proprietorships, a major advantage of the C (conventional) corporation as a form of business ownership is that it: . a. Has the ability to raise more money. b. Is easier and less expensive to form. c. Qualifies for simplified tax treatment. d. Creates unlimited liability for its owners. a. Has the ability to raise more money. Mel, Tim, and Bill agreed to partner in a small rehab business. Initially, they were enthusiastic contributors until their first project took more work than Mel initially estimated; Tim wanted morning meetings and long lunch hours; and, Bill decided to go on vacation even though the project was not complete and ready to sell. As the Spotlight on Small Business box, titled, "The Ties That Bind" indicates, . a. It's smart to begin the partnership with honest communication of what each partner expects to give and get from the partnership. b. Organize the business as a limited liability company to reduce the financial risks that put pressure on members of the partnership. c. Designate one of the partners as the primary partner with final authority to call all the shots. d. Enter into partnerships with people who have similareducational and cultural backgrounds and similar personalities. a. It's smart to begin the partnership with honest communication of what each partner expects to give and get from the partnership. Several years ago, Regis Corporation, a very large hair styling salon company purchased 60 "Your Father's Mustache" salons. Although this was initially an acquisition, the merging of these two businesses was a(n) ___________. Regis went on to purchase several hair care product companies. Joining forces with hair care product companies would represent a ____________. . a. conglomerate merger; horizontal merger b. vertical merger; horizontal merger c. horizontal merger; vertical merger d. conglomerate merger; conglomerate merger c. horizontal merger; vertical merger When a sole proprietor dies: . a. The sole proprietor's heirs have the option of taking over the business. b. The business is sold to a larger corporation. c. The company continues to function as it always has. d. The company always closes down. a. The sole proprietor's heirs have the option of taking over the business. _____________ are companies that are similar to S Corporations but are not restricted with similar eligibility requirements. . a. Regulated equity companies b. Corporate cooperativesc. Limited liability companies d. Private drawing companies c. Limited liability companies A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a: . a. corporate raider. b. takeover specialist. c. financial capitalist. d. venture capitalist. d. venture capitalist. Located on Monsanto's world headquarters campus, the Nidus Center is a unique ___________ facility. The tenants are biotechnology companies who are at various stages of product development. The agricultural giant, Monsanto, the Danforth Foundation, Washington University St. Louis, St. Louis University, and several venture capital firms contribute seed money for these small start-up ventures that receive approval to further develop their ideas at the Nidus Center. . a. incubator b. Intrapreneurial c. enterprise zone d. micropreneurial a. incubator As a result of corporate downsizing, Alex lost his job as an information systems manager for a large telecommunications company. A bonafide computer geek in his own right, Alex knew that several of his past company contacts often outsourced their computer problems. He decided it was a good time to test the waters and see if he could secure enough computer clients to be in business for himself. His successdemonstrated that: . a. starting your own business can quickly provide security and profits. b. people always tend to hire people they know from past associations. c. the service sector is not an area of significant growth. d. successful big businesses often create profitable opportunities for small businesses. d. successful big businesses often create profitable opportunities for small businesses. The U.S. government's Immigration Act of 1990: . a. encouraged entrepreneurs to come to the U.S. through "investor visas". b. established a government program to teach American workers displaced by immigration how to start their own businesses. c. established guidelines to help entrepreneurs recruit legal aliens as a source of low cost labor. d. proposed an exchange program for American and European entrepreneurs to temporarily live internationally in order to open up foreign branches for their businesses. a. encouraged entrepreneurs to come to the U.S. through "investor visas". A successful web-based strategy that helps a business spread the word about its web site and products is called _____________. . a. wildfire marketing b. "its all about the buzz" c. social marketingd. affiliate marketing d. affiliate marketing One of the challenges of running a home-based business is: . a. an increase in business risk. b. managing the extra time on your hands. c. keeping work and family tasks separate. d. burdensome tax laws. c. keeping work and family tasks separate. Peppy knows a lot about marketing, but not much about the legal or financial aspects of starting a new business. He wants to consult with a lawyer and accountant, but his budget is tight with all of the expenses involved in getting Peppy's Pizzazzeria up and running. Peppy should: . a. delay talking with a lawyer and accountant until the business has established a positive cash flow for at least one year. b. trust his basic instincts and try to put it together without the advice of lawyers and accountants. c. consult with a lawyer and accountant even though the budget is tight. d. immediately hire full time lawyers and accountants for his staff. c. consult with a lawyer and accountant even though the budget is tight. According to SBA guidelines, a manufacturing firm with 1,000 employees: . a. would be classified as a large firm in the industrial sector. b. may be classified as a small business depending upon the size of other firms in the industry.c. is too small to achieve the efficiencies of large scale production. d. is classified as an S corporation. b. may be classified as a small business depending upon the size of other firms in the industry. Small businesses are important to the U.S. economy because: . a. they fill-in the gaps when large businesses want to let workers go on vacation; or when large businesses want to temporarily cease production b. banks and other financial services companies would not have borrowing customers, because small businesses borrow more than large businesses c. they pay most of the tax revenue collected by the U.S. government d. they create over 60% of new jobs each year and generate over 50% of the U.S. GDP d. they create over 60% of new jobs each year and generate over 50% of the U.S. GDP Successful entrepreneurs are self-nurturing. This means they: . a. look to others for strength and encouragement. b. self-finance their business with no assistance from others. c. perform all business operations by themselves. d. believe in themselves and their ideas. d. believe in themselves and their ideas. How are managers today different from managers in the past? . a. Managers today are more likely to reprimand workers b. Managers in the past would use praise and gentle suggestionsc. Managers in the past were less loyal to their employer d. Managers today emphasize teamwork d. Managers today emphasize teamwork The revolution in management that is currently underway suggests that the most effective managers of the future will: . a. be very strict in their treatment of workers. b. emphasize individual initiative rather than teamwork. c. specialize in performing one of the four management functions. d. emphasize team work. d. emphasize team work. __________ planning determines the major goals of an organization and lays the foundation for obtaining and using resources to achieve those goals. . a. Strategic b. Contingency c. Central d. Tactical a. Strategic One difference between managers and leaders is that: . a. managers are found in businesses while leaders operate in nonprofit organizations. b. mangers work to achieve stability while leaders embrace change. c. managers use an autocratic approach while leaders embrace a democratic style. d. all employees can manage, but only top managers can lead.b. mangers work to achieve stability while leaders embrace change. Which of the following is involved in setting work standards and schedules needed to implement the firm's tactical objectives? . a. Mission statement b. Tactical planning c. Operational planning d. Contingency planning c. Operational planning A(n) __________ is used by an organization to show who is accountable for the completion of specific work and who reports to whom. . a. balance sheet b. Venn diagram c. stakeholder outline d. organization chart d. organization chart ___________ skills involve a manager's ability to picture the organization as a whole and the relationship among its various parts. . a. Creative b. Technical c. Conceptual d. Autonomic c. ConceptualWhen we think of successful music entertainment groups of the past sixty years, the Beatles™ almost always appear in the top 5! In the early days, the entertainment group's life cycle could have ended as so many other rock groups do - here today, gone tomorrow. The four musicians were definitely creative and passionate about their craft and genre of music. As the informal leader of the group, John Lennon _____________ the others to make important compositional contributions. All four members had the opportunity to create musical compositions and receive copyright credit for their contributions. . a. transformed b. enabled c. empowered d. commanded c. empowered Jamal is part of a management group that is examining whether his company, State Engineering, should offer some important new services that would broaden its business by appealing to a different group of potential clients. Jamal's group is involved with: . a. contingency planning. b. operational planning. c. strategic planning. d. tactical planning. c. strategic planning. By completing the courses needed to obtain a college major in accounting, marketing, or some other field, a student can go a long way toward acquiring the _________ skills managers need to rise through the ranks of their area of specialization. . a. autocraticb. technical c. human relations d. secondary b. technical Mini-Case

Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have declined for four consecutive years and the firm's accountants have reported net losses in each of the last two years. Employees appear demoralized and frustrated. Recently, Angelica met with managers from marketing, production, and finance to listen to their views regarding the company's problems. The managers unanimously agreed that the main problem was a lack of communication between the several functional areas of the business. Each manager felt that the firm could increase quality and customer satisfaction with better interdepartmental communication. Angelica also met with marketing and production employees to get their respective opinions on the problems of the firm. One employee from the production department observed that, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained that, "This place is so bogged down with rules and regulations that there is no opportunity to be creative." Several employees shared their opinions regarding their bosses. Specifically, one employee expressed "My boss never pays attention to my ideas. He just issues orders and expects me to obey them." Angelica decided, after listening to many comments from employees, suppliers, and customers, that the only way to end Mucho Dinero's slide was to completely rethink the firm's structure and to make radical changes in its organization. She presented her ideas to the board of directors, promising to voluntarily resign if her efforts to reorganize did not return the firm to profitability.
 
Angelica's decision to completely redesign Mucho Dinero's organization indicates that she believes the best approach to her firm's problems is: . a. competitive benchmarking. b. flexible departmentalization. c. restructuring. d. organizational therapy.c. restructuring. Multinational pharmaceutical companies who during the past 20 years preferred to contract with companies in India and other places with cheap labor are turning back to the U.S. to produce their products. The recent popularity of _______________ is due to compliance issues and legal issues, as well as the quality of output. . a. market transition b. market transformation c. outsourcing d. insourcing d. insourcing In recent years, large organizations have tried to improve their efficiency in communication and decision making by: . a. creating specific rules for everyone to follow. b. eliminating several layers of management. c. restructuring into a bureaucratic organization. d. reducing the span of control for managers. b. eliminating several layers of management. During the past six years, the marketing department manager at Creative Concepts International made a strong push to hire mover/shaker professionals that had superior performance records prior to joining this company. It didn't take long for these enthusiastic marketers to recognize the many talents within their department. They marveled at how much they were like each other and how they seemed to agree with each other's work styles and ideas. After a while, it became difficult for others in the organization to present to this group. If the idea did not originate within the marketing department, marketers did not give it much credence. Management counselors would describe this phenomenon as _____. .a. departmentalization clique b. inter-office competition c. forward thinking friction d. groupthink d. groupthink In open organizations the informal organization can be: . a. a hindrance to effective management. b. an asset that promotes harmony among workers. c. a roadblock to the corporate culture. d. part of the formal organization. d. part of the formal organization. Carlos is the person to see in the welding department if you are a new employee. While he is not a manager, he is the person that most of the others in the department look to for advice and assistance. Carlos is an important member of the firm's: . a. supervisory management. b. participatory control. c. informal organization. d. closet cabinet. c. informal organization. Heather works as a sales representative for the Westerly Company. She really enjoys working for Westerly, because the company treats her and other sales representatives as highly valued employees. Sales reps at Westerly are given freedom and flexibility in their relationships with customers. While there are only a few layers of management at Westerly, Heather has found that these managers try their best to support and assist her efforts. Based on Heather's experience, it appears that Westerly is a(n): .a. bureaucratic organization. b. inverted organization. c. tall organization. d. casual organization. b. inverted organization. Max Weber favored which of the following? . a. Inverted organizations b. Worker participation in decision making c. Staffing and promotions based on qualifications d. Flat organizations c. Staffing and promotions based on qualifications Which of the following is an advantage of a line organization in a large business? . a. It does not require specialists to advise people along the line b. Responsibility and authority are clearly defined c. Each worker has several supervisors d. It is very flexible b. Responsibility and authority are clearly defined Which of the following is considered to be an advantage of functional departmentalization? . a. Employees begin to identify with their department and its goals rather than with the goals of the entire organization b. People in the same department tend to think very differently c. Departments are isolated from one anotherd. Employee skills can be developed in depth d. Employee skills can be developed in depth Production management is the traditional term used to describe all the activities managers do to help their firms create: . a. resources. b. goods. c. services. d. equities. b. goods. Experts in operations management for service industry type businesses stress: . a. using records from accounting to determine what business to go after. b. relying on one's individual operation as opposed to developing partnerships. c. training employees on quality management. d. training employees to always adhere to only one way of doing things. c. training employees on quality management. Contemporary operations management planning is an interfirm process. This means: . a. the process must integrate all of the functional units of a firm's operation, including production, marketing, finance, and logistics. b. the process is a confidential plan that is not shared with suppliers or customers. It stays within the firm. c. it is a process where several firms work closely together toproduce goods and services, and anticipate a changing environment. d. it is a process that seeks stability by adhering to top down management. c. it is a process where several firms work closely together to produce goods and services, and anticipate a changing environment. SitRite Furniture Company uses labor and machinery to transform wood, plastic, metal and cloth into comfortable chairs, sofas, and love seats. This process creates: . a. form utility. b. place utility. c. use facility. d. intangible productivity. a. form utility. For most service businesses the quality standard has become: . a. providing prompt and predictable service. b. providing a competitive level of service at the lowest cost. c. delighting customers by anticipating their needs. d. less important than it is for manufacturing businesses. b. providing a competitive level of service at the lowest cost. Initially, ATM's (automated teller machines) were introduced so that customers could make withdrawals from their bank accounts, day or night. As the technology improved, the machines offered a variety of services including the acceptance of deposits, the ability to get credit card advances, check your bank account balances, and even purchase prepaid cell phone credit. ATMs now offer: . a. flexible manufacturing for its customers.b. lean services because it only needs to keep a certain amount of cash in each machine. c. technology similar to CAD. d. faster service and mass customization. d. faster service and mass customization. Operations management in the service sector is focused on creating: . a. good experiences for those who use the service. b. jobs for the local community. c. additional customer expectations. d. inexpensive ways to get things done. a. good experiences for those who use the service. ____________ examines statistical samples of product components at each stage of the production process and plots the results on a graph in order to spot and any variances from desired quality levels. . a. CAD/CAM b. Econometrics c. Analysis of variance d. Statistical process control d. Statistical process control A PERT network consists of activities linked by arrows. Suppose two of the activities on the network are labeled "A" and "B". An arrow from "A" to "B" indicates that: . a. the same resources used to complete "A" are also used to complete "B". b. "A" and "B" can be completed at the same time.c. "A" takes longer to complete than "B". d. "A" must be completed before "B" can begin. d. "A" must be completed before "B" can begin. A firm that is certified as meeting both ISO 9000 and ISO 14000 standards has demonstrated: . a. world-class management of both quality and environmental standards. b. sound financial and marketing practices. c. ethical treatment of both customers and employees. d. that its recruitment and training programs for employees protect and promote basic human rights. a. world-class management of both quality and environmental standards. __________ involves computers directly in the production process. . a. CAD b. CAM c. AMDA d. AMCAP b. CAM In ___________, materials are physically or chemically changed to produce a product. . a. process manufacturing b. assembly processes c. utilitarian production d. diffusive manufacturing a. process manufacturingEfforts to redesign and rebuild America's manufacturing base are likely to: . a. fade in importance as foreign manufacturers continue to gain control of important markets. b. continue to be an important issue in the near future. c. focus on government efforts to foster performance in a few key industries. d. give way to an intense effort to convert the U.S. to an entirely service-based economy. b. continue to be an important issue in the near future. The Ritz-Carlton hotel offers restaurants with the finest service, elevators that run smoothly, and a front desk that processes people quickly. Many times fresh-cut flowers are in the lobbies and dishes of fruit are in each room. __________ is responsible for implementing these customer benefits. . a. Human resources management b. The management staff c. Operations management d. Production management c. Operations management Most new manufacturing facilities use: . a. continuous processes. b. intermittent processes. c. traditional processes. d. synthetic processes. b. intermittent processes. Which of the following statements best reflects the approach state and local governments take to influence the locationdecisions of businesses? State and local governments: . a. often engage in fierce competition to attract businesses, including the offer of tax breaks, zoning changes, and financial aid b. try to avoid competition with other areas, because such competition usually backfires and creates ill-will c. no longer pursue new businesses, because they have found that attempts to attract businesses are usually too expensive to justify the results d. work primarily through the federal government and the Small Business Administration to obtain financial assistance for firms seeking to locate in their area a. often engage in fierce competition to attract businesses, including the offer of tax breaks, zoning changes, and financial aid Cooltreet, Inc., combines sugar, cream, eggs, and flavorings, then churns and cools the resulting mixture to a very low temperature until it freezes, creating ice cream. The method Cooltreet uses is an example of: . a. an analytic production system. b. a process manufacturing. c. an assembly process. d. a symbiotic process. b. a process manufacturing. ___________ utility is the value added by the creation of finished goods and services using raw materials, components, and other inputs. . a. Manufacturing b. Marginal c. Consumptiond. Form d. Form Courtney was planning a new product launch. She knew that the art department was ready to work on the promotional pieces now, but they couldn't start until the strategy group established the price point and the purchasing group obtained the paper needed to make the promotional piece. Establishing price points would take about a week and was dependent on manufacturing getting the costs to the strategy group. This was expected a week from today. The purchasing group indicated the paper could be obtained locally the same day it was requested. Assuming things go as planned and based on this information, when will the art department be able to begin work on the promotional pieces? . a. Immediately b. 1 week c. 2 weeks d. 1 month c. 2 weeks Operations management is a specialized area in management that converts resources into: . a. services, rather than goods. b. goods, rather than services. c. both goods and services. d. financial data. c. both goods and services. ___________ is the characteristic of work concerned with the degree of freedom, independence and discretion an employee has in scheduling work and determining procedures. . a. Autonomyb. Interdependence c. Feedback d. Task significance a. Autonomy Matt works for a sports marketing firm. He feels that he has been treated unfairly by the organization. He helped three other employees organize a series of successful street hockey tournaments in different regions of the country. While the other employees were given a bonus and corporate recognition, his efforts were ignored. According to equity theory, Matt is likely to respond by: . a. ignoring the perceived inequity. b. reaching the conclusion that his treatment is not related to the treatment of others. c. reducing his efforts on future projects. d. threatening the boss. c. reducing his efforts on future projects. _________ is the term William Ouchi used to refer to the management approach typically used by firms in the United States. . a. Type A b. Type Z c. Theory Q d. Theory J a. Type A Maslow placed _________ needs at the highest level of his hierarchy. . a. self-actualizationb. esteem c. deferred d. social a. self-actualization Which of the following is not considered one of Herzberg's strategies for creating enthusiasm at work? . a. Focus on making the job interesting b. Similar pay and benefits for a similar job c. Company and management support in achieving employee objectives d. Provide opportunities for advancement and added responsibility b. Similar pay and benefits for a similar job A strength of Generation X managers is likely to be their: . a. loyalty to the firm. b. individualistic approach to problem solving. c. ability to provide feedback to employees. d. willingness to sacrifice other aspects of their lives to achieve success in the workplace. c. ability to provide feedback to employees. Herzberg's research indicated that employees are motivated by job content. Contemporary managers focus on _____________ by increasing the significance of the job, and even providing the employee with important feedback. . a. rotating the job b. enriching the jobc. simplifying the job d. reducing the responsibilities in the job b. enriching the job Douglas McGregor described two very different sets of managerial attitudes about employees, which he called: . a. the positive view and the negative view. b. the macro perspective and the micro perspective. c. Theory X and Theory Y. d. individualism and collectivism. c. Theory X and Theory Y. According to Herzberg, a sense of achievement, earned recognition, and interest in the work itself were all: . a. important motivators. b. hygiene factors. c. ways for employees to meet their social needs. d. consistent with his Theory X approach to motivation. a. important motivators. __________ is the degree to which a job requires doing a task with a visible outcome from beginning to end. . a. Task significance b. Autonomous responsibility c. Job specification d. Task identity d. Task identity Probably the most controversial program enforced by the Equal Employment Opportunity Commission concerns:. a. mandatory retirement. b. affirmative action. c. equal pay reporting. d. green card requirements for illegal aliens. b. affirmative action. Mario's business was growing at a steady rate, but he knew he could do better! In order to capture more business, he would have to hire a few more sales professionals to sell into new markets. As he pondered his staffing needs, his sister who worked in HR informed him that he needed to do a job analysis before hiring. Which of the following would be a logical part of a job analysis for a sales position? . a. Asking the current sales reps to create a log of their daily and weekly activities b. Asking the HR specialist to create an online application for the position(s) c. Training new recruits d. Determining how many sales reps other companies typically have on staff a. Asking the current sales reps to create a log of their daily and weekly activities Which of the following statements about home-based work and telecommuting is most accurate? . a. Although home-based work may become very popular in the future, only a small percentage of workers currently work at home on a regular basis. b. Telecommuting offers big advantages for many workers, but is likely to increase costs for employers significantly. c. Home-based work tends to increase the productivity of almost all workers, since people tend to be more productivewhen they are comfortable and can work flexible hours. d. Home-based work allows workers to choose their own hours and interrupt work for child care and other tasks, but this freedom and flexibility can create problems for some workers. d. Home-based work allows workers to choose their own hours and interrupt work for child care and other tasks, but this freedom and flexibility can create problems for some workers. The Creative Director at Image First Promotion Company got word yesterday that the firm lost the Hottie Potatee account. As its second best customer, the Director must quickly perform damage control and unfortunately dismiss two creative writers and one web development content provider. As he prepares to call each of them to his office and perform the dismissals, he decides to make one final call to the company HR manager to make certain that he is doing and saying the right things. The HR manager will disagree with which of the following statements? . a. He will offer each employee a three-month severance package, as long as they agree to sign a non-compete agreement for that time period. b. He will be consistent in his remarks to the three employees. c. He will create a story that their jobs are being eliminated due to new technology since revealing that the firm lost a major account could tarnish the image of the firm. d. Assure each employee that they can count on him for future job references and that he will be honest with anyone inquiring as to why they were dismissed. c. He will create a story that their jobs are being eliminated due to new technology since revealing that the firm lost a major account could tarnish the image of the firm. One of the most important responsibilities for professionals in the human resources field is: . a . understanding the ethical perspective of each employee. b. filing employee medical claims.c. to always "right past wrongs." d. staying current with employment-related legislation. d. staying current with employment-related legislation. Which of the following workers would be the best example of a contingent worker? . a. an assembly line worker who belongs to a union and has 17 years of seniority b. an accountant hired to help during the busy tax season c. an elementary school teacher who just received tenure d. an electrical engineer who frequently travels out of the country to the various manufacturing facilities owned and operated by his firm b. an accountant hired to help during the busy tax season A firm would implement a policy of holding exit interviews if it wanted to: . a. find out why so many of its good employees were quitting. b. implement a golden handshake policy. c. allow immediate supervisors one more chance to convince retiring workers to stay on the job. d. make sure workers who agreed to telecommute understood their new responsibilities. a. find out why so many of its good employees were quitting. Corporate managers who supervise, coach, and guide lowerlevel employees and serve as their organizational sponsors are called: . a. networkers. b. role models. c. mentors.d. corporate guides. c. mentors. As an important step in the human resource selection process, which of the following will expedite the process of conducting background investigations and promises to get suitable results? . a. Hiring services such as LexisNexis to conduct criminal checks and driving records. b. Dedicating one human resource expert to making personal calls and doing all the background checks. c. Minimalizing the types of questions the company asks at this juncture. d. If there is a need to skip one of the selection process steps, most companies have found that this one can be eliminated. a. Hiring services such as LexisNexis to conduct criminal checks and driving records. Which of the following is a challenge that is facing the human resource managers of today? . a. too many unemployed scientists and computer engineers b. an increasing number of Gen Yers in the workforce c. a shift in employee attitudes toward work d. an increased demand for uniformity in benefits offered to employees c. a shift in employee attitudes toward work Almost overnight, several police persons, all members of the police force of the growing suburb of Mayberry called in sick. As the dispatcher took those calls - one right after the other, she speculated that there could be more to this story than she was hearing. In fact, she thought it might be related to the emotional banter she heard the night before in the locker room as several members of the force were leaving their shifts. The group was not happy with the recent changes in scheduling, the excessive over-time hours, and, management's reluctance tobegin negotiations on a new benefits package. She heard one person saying, "It's time for a mental health day!" Although it is illegal for police to strike, they may be claiming to have _______. . a. Saturday nite fever b. the blue flu c. a lockout d. a shutterbug b. the blue flu A labor dispute between the AFL-CIO and Gainesville Brewery is into its eighth month. The AFL-CIO has called on its membership and the general public to refuse to purchase Gainesville products. The AFL-CIO is calling for a: . a. general boycott. b. secondary boycott. c. primary boycott. d. public boycott. c. primary boycott. The leadership of _____________ was instrumental in bringing about the merger between the American Federation of Labor and the Congress of Industrial Organizations in 1955. . a. George Meany b. Terence K. Powderly c. Ronald Reagan d. Samuel Gompers d. Samuel Gompers A key difference between a mediator and an arbitrator is that: .a. a mediator is appointed by labor and management, while an arbitrator is appointed by the federal government under terms set forth in the Taft-Hartley Act. b. a mediator is an unpaid volunteer, while an arbitrator is a paid professional. c. an arbitrator can settle a labor-management dispute by rendering a binding decision, while a mediator can only make suggestions and encourage the two sides in a dispute to continue negotiating. d. a mediator is a lawyer who represents either labor or management in a labor dispute, while an arbitrator is an impartial advisor who listens to both sides of the dispute and offers suggestions that help the two parties reach a mutually acceptable agreement. c. an arbitrator can settle a labor-management dispute by rendering a binding decision, while a mediator can only make suggestions and encourage the two sides in a dispute to continue negotiating. Closed shops were declared illegal by the: . a. Taft-Hartley Act. b. Norris-LaGuardia Act. c. National Labor Relations Board in 1929. d. U.S. Supreme Court in 1946. a. Taft-Hartley Act. In a(n) _______, all of the members are skilled specialists in a particular trade. . a. ESOP b. craft union c. industrial union d. trade federationb. craft union If management and union officials cannot resolve a grievance, a(n) _________ is asked to listen to the arguments of each side and to make a decision that both sides will have to comply with. . a. confirmer b. counselor c. arbitrator d. mediator c. arbitrator The justification for dues or fees paid by nonunion members to the union in a(n) _________ shop is that the union represents all workers in collective bargaining, not just those who belong to the union. . a. closed b. agency c. fee simple d. union b. agency During the first decade of the 21st century, the AFL-CIO saw its membership significantly decline when ___________________________________. . a. Seven of its member unions split to form a new union, the CtW [Change to Win]. b. Its large representation decided to merge with the manufacturers and craft unions. c. Members looking for a better bargain with respect to membership dues elected to form independent unions.d. The stronger member unions refused to acknowledge international member groups, and essentially voted them out of the union. a. Seven of its member unions split to form a new union, the CtW [Change to Win]. Under a(n) ___________ shop agreement, workers must belong to the union before they are hired. . a. open b. union c. agency d. closed d. closed The __________ was set up as a federation of many separate craft unions. . a. Knights of Labor b. Committee of Industrial Organizations c. League of Unions d. American Federation of Labor (AFL) d. American Federation of Labor (AFL) The first federal minimum wage was established by the: . a. Fair Labor Standards Act. b. Wagner Act. c. Minimum Compensation Act. d. Pay Equity Act. a. Fair Labor Standards Act. The Industrial Revolution was characterized by a(n): .a. increased emphasis on production, resulting in longer hours and less job security for most workers. b. migration of manufacturing jobs from the Midwest and Northeast to the South as firms began locating in areas where labor costs were lower. c. rapid improvement in the wages and working conditions of most workers, resulting in a decline in the need for labor unions. d. movement away from scientific management, and a greater acceptance of the ideas of Herzberg and Maslow. a. increased emphasis on production, resulting in longer hours and less job security for most workers. Drug problems among workers is costing the U.S. economy upwards of ______ in lost work, health care costs, and even crime and accidents. . a. $100 million b. $50 billion c. $414 billion d. $50 thousand c. $414 billion One strategy unions must adapt in order to grow in the future is to: . a. find ways to appeal to white-collar, female, and foreign-born workers. b. find ways to prevent foreign companies from entering the U.S. market. c. go back to the old methods of aggressive tactics and confrontation that were used successfully in the past. d. emphasize recruiting efforts in the manufacturing sector of the economy.a. find ways to appeal to white-collar, female, and foreign-born workers. The _________ Act established the National Labor Relations Board. . a. Wagner b. Taft-Hartley c. Norris-LaGuardia d. Fair Labor Standards a. Wagner Bob believes that management is treating him unfairly because of his efforts to organize a vote for union representation. Which organization should Bob contact to report his concerns? . a. Federal Board of Labor Rights b. National Labor Relations Board c. Federal Trade Commission d. Federal Commission on Unfair Labor Practices b. National Labor Relations Board Mini-Case

The workers at Endrun Corporation are not affiliated with a union. Until recently, the workers felt they were well paid and treated fairly by the company, so they had little interest in seeking union representation. However, worker morale at Endrun has declined steadily since the board of directors fired the old CEO last year and replaced him with Ty Runt, a no-nonsense, autocratic manager with a reputation for cutting costs. As soon as he took over, Ty fired other members of the old top management team and replaced them with people who shared his views. Together, the new management team made a series of moves that did not sit well with Endrun's workers. First, they announced changes in work procedures designed to speed up the production line. Many workers complained that the new methods cut corners and were unsafe, but management refused to listen. A few months after changing work methods, the company told workers that itwas reducing their health benefits. This led to even greater worker unrest. Finally, just a few weeks ago, workers received word that the wages of all production line employees would be cut by 6 percent. Many employees felt this was the last straw, especially since the company's board of directors recently approved big salary increases and more lucrative stock option plans for Ty and his management team. A spokesperson for the board explained that the raises were justified because of the management team's "outstanding efforts to reduce costs, increase productivity, and improve the company's profits."

Several disgruntled employees, led by Ima Striker and Boyd Cotter, now believe it is time to obtain union representation. Top managers at the company have hinted that workers who actively participate in the union campaign may be among the first workers laid off if the company decides to downsize. Ima and Boyd are not intimidated by these management threats. "I wish we didn't have to do this," Ima recently told many of her fellow workers at the plant. "But someone has to stop Ty Runt and his team from ruining our jobs."
 
After gaining union representation, any workers with complaints regarding promotions, layoffs, and job assignments will file a(n) ________ with their shop steward. . a. grievance b. arbitration request c. injunction d. yellow-dog contract a. grievance The steps Ima, Boyd and their fellow workers must take to get the union legally recognized as the authorized bargaining agent are parts of the __________ process. . a. accreditation b. arbitration c. certification d. collective bargaining c. certificationThe Taft-Hartley Act: . a. established the first minimum wage. b. allowed individual states to pass right-to-work laws prohibiting compulsory union membership. c. required management to bargain in good faith with union representatives. d. set up the process by which unions could be recognized as the exclusive bargaining agents for a group of workers. b. allowed individual states to pass right-to-work laws prohibiting compulsory union membership. The significant increase in consumer demand following World War II marked the beginning of the: . a. production era. b. selling era. c. marketing concept era. d. customer relationship era. c. marketing concept era. Understanding consumers in marketing is considered so important that a whole area of marketing called _____________________ emerged. . a. customer programming b. consumer behavior c. individual benchmarking d. customers competency b. consumer behavior A consumer's decision-making process is influenced by his/her _________, consisting of those people who help shape theconsumer's beliefs, attitudes, values or behavior. . a. reference group b. focus group c. target audience d. social class a. reference group Which of the following describes individuals that want goods and services for personal consumption and have the resources to buy them? . a. secondary market b. business-to-business market c. market segmentation d. consumer market d. consumer market A comparison of the marketing concept and customer relationship management indicates that customer relationship management: . a. and the marketing concept are in fact identical. b. attempts to improve profits by keeping quality high, while the marketing concept attempts to improve profits by a careful design of the promotional mix. c. turns the marketing concept upside down. The marketing concept emphasized that marketing was the most important function performed by a firm, but customer relationship management views management to be the most important function. d. extends the marketing concept by calling for the firm to learn more about its customers so that it not only satisfies them, but exceeds their expectations over time.d. extends the marketing concept by calling for the firm to learn more about its customers so that it not only satisfies them, but exceeds their expectations over time. People with unsatisfied wants and needs who have both the ability and the willingness to buy are: . a. a market. b. stockholders. c. a profit center. d. a marketing mix. a. a market. A ________ marketing strategy develops products and promotions designed to please large groups of people. . a. volume b. mass c. relationship d. value b. mass ____________ is the process of identifying factors that can affect marketing success. . a. Environmental scanning b. Target marketing c. Niche marketing d. Segmentation analysis a. Environmental scanning Firms that adopt a relationship marketing strategy attempt to: .a. develop products that meet the specific requirements of individual customers. b. maximize their market share by designing products that appeal to large numbers of customers. c. develop their promotional efforts utilizing mass media such as television, newspapers and radio in order to relate to a large audience. d. maximize market share by controlling production costs and maintaining low prices. a. develop products that meet the specific requirements of individual customers. The best remedy for staving off perceptions of inequity is: Keeping employees' pay rates as a guarded secret between HR department and the supervisor. Hiring at least one person fewer than you believe the work situation requires. Frequent and open communication among all employees and managers. OriginalAl phabetical Motivation is the set of forces that initiates, directs, and makes people persist in their efforts to accomplish a goal. True The three components of ____ are initiation of effort, direction of effort, and persistence of effort. Motivation As seen in class, job performance is a(n) ____ function of motivation, ability, and situational constraints. additive In the relationship: "‟??‟ = Motivation „?‟ Ability „?‟ Situational Constraints", what belongs in the spaces „??‟ and „?‟ a. Job performance, + The phenomenon known as the Hawthorne effect is a. The tendency for people to base their evaluations of equity on other members of their group; b. The tendency for people to behave differently when they know they are being studied;c. The tendency for people to perform poorly when distracted by too much attention; d. The tendency for people to respond to threats with a reduction in productivity; b. The tendency for people to behave differently when they know they are being studied; The Hawthorne Studies proved that financial incentives weren‟t necessarily the most important motivator for workers. True A major advantage of a piecework pay system is that it: a. creates a powerful incentive to work efficiently. b. encourages cooperation and teamwork among employees. c. is a system that is strongly supported by both unions and management. d. minimizes the need for training and development. e. requires a minimum of paperwork and record keeping. a. creates a powerful incentive to work efficiently. According to job enrichment theory, one of the characteristic of a job that contributes to improved motivation and worker performance is higher than average pay. False Managers who advocate job enrichment focus on creating jobs with a. lots of job rotation. b. repetitive motions. c. simplified tasks so that the worker can achieve high levels of production. d. skill variety and autonomy. e. very specialized and difficult tasks. d. skill variety and autonomy. The personal satisfaction people feel when they have done a job well is a(n) _______ reward. Intrinsic ___ is a feeling of intrinsic motivation, in which workers perceive their work to have meaning, and perceive themselves to be competent, having an impact, and capable of selfdetermination.a. Empowerment b. Autonomy c. Motivation d.Job satisfaction e. Self-actualization d. Job Satisfaction 12. Empowerment 13. Enabling a. Giving employees the authority and responsibility to make decisions b. Giving workers the education tools needed to make decisions 12.a 13. b 14. Commitment 15. Engagement 16. Motivation a. Positive attitude towards the job b. Positive attitude towards the organization c. The reason for an action, that which gives purpose and direction to behavior 14. positive attitude towards the organization 15. Positive attitude towards the job 16. The reason for an action, that which gives purpose and direction to behavior Burnout is a result of the erosion of a. Commitment b. Engagement c. Motivation d.All of the above e.None of the above All of the above Feedback helps enrich a job by satisfying an employee‟s esteem needs True 19. A hierarchy of human needs can be used to explain motivation; 20. Employees compare their effort and their rewards againstthose of people in similar positions; 21. The amount of effort employees devote to a task depends on the anticipated outcomes associated with performance; 22. The characteristics of the job itself will affect worker motivation. 19. A hierarchy of human needs can be used to explain motivation; 20. Employees compare their effort and their rewards against those of people in similar positions; 21. The amount of effort employees devote to a task depends on the anticipated outcomes associated with performance; 22. The characteristics of the job itself will affect worker motivation. a. Abraham Maslow‟s pyramid b. Equity theory c. Expectancy theory d. Hygiene and motivation factors e. Theory Y 19. Abrahams Maslow's pyramid 20. Equity theory 21. Expectancy theory 22. Hygiene and motivation factors 23. Employees will be motivated to perform well at work if they can satisfy their unmet needs by achieving the organization‟s goals; 24. Ensure that the reward workers receive is perceived as fairly compensating them for their efforts when compared to others in similar positions; 25. One should rely on rewards rather than threats and punishment as the primary means of motivating employees, while recognizing that different employees are motivated by different types of rewards; 26. Setting up achievable tasks and valued rewards for individuals will result in effort; 27. The key to improving motivation is to provide interesting, challenging jobs that offer chances forrecognition, advancement, and growth. a. Equity Theory b. Expectancy Theory c. Maslow‟s Pyramid of Needs d. Theory Y e. Herzberg‟s Hygiene and Motivation Factors 23. Maslow's pyramid of Needs 24. Equity theory25. Theory Y 26. Expectancy Theory 27. Herzberg's Hygiene and Motivation Factors 28. Adams‟ equity theory 29. Herzberg‟s factor theory 30. Maslow‟s hierarchy of needs theory 31. McGregor‟s Theories X and Y 32. Vroom‟s expectancy theory a. Applies the insights of the Hawthorne studies to propose a working environment that uses people‟s creativity and sense of work as fulfilling in and of itself; b. Not all actions geared towards meeting people‟s needs motivate people; c. People‟s effort will depend on the ratio between their rewards and those of other members of the organization; d. Peoples‟ psychological needs are predictable and orderly; e. Proposes a model of how individuals uniquely will exert effort in their employment. 28. c 29. b 30. d 31. a 32. e a. It is best to run an organization in a hands-off, decentralized manner b. It is very difficult to design appropriate team or collective reward systems, because the relationship between effort and reward is highly personal c. Often, rewarding people does not result in increases in performance d. There are factors in the workplace (like safety and pay) that, while necessary, do not act as motivators e. Under certain circumstances, coercion and monetary rewards will be appropriate, and effective, motivators a. Theory's X and Y b. Expectancy Theory c. Equity Theory d. Hygiene Theory e. Maslow's Hierarchy of Needs model Which of the following statements is false? a. Abraham Maslow believed that motivation arises from thedesire to satisfy unmet needs; b. According to Maslow, a satisfied need is no longer a motivator; c. According to Maslow, people will try to satisfy lower order needs before they turn their attention to higher order needs; d. Maslow believed that lower-level needs may emerge at any time when they are not met and take our attention away from higher level needs; e. Maslow warned that self-actualization is unattainable. e. Maslow warned that self-actualization is unattainable. In order to motivate their employees, managers in less developed nations should establish working conditions that focus on meeting their employee‟s self-actualization needs False According to Maslow, the primary source of motivation for most employees in the United States would stem from the desire to satisfy their physiological and safety needs. False Which would be the best motivator at each stage of Maslow‟s hierarchy of needs? 41. Belonging 42. Esteem 43. Physiological 44. Safety 45. Self-actualization a. Care b. Coercion c. Money 41. Care 42. Care 43. Money 44. Money 45. Care At what level of the Maslow hierarchy of needs does the hierarchical / bureaucratic paradigm work best? a. Self-actualization needs b. Social and esteem needs c. Physiological and safety needs c. Physiological and safety needsTheory Y managers would tend to a. Assume that most employees dislike their jobs b. Have confidence in the ability of employees to solve problems that arise during work; c. Pay attention to work conditions as a way to improve motivation; d. Rely on monetary rewards to motivate employees e. All of the above. b. Have confidence in the ability of employees to solve problems that arise during work; 48. Theory X 49. Theory Y 50. Theory Z a. Assumes that employees dislike work, and will avoid it if possible b. Assumes that employees seek participation and cooperation c. Assumes that employees will react strongly and positively to empowerment 48. a 49. c 50. a Match the motivational tool with the kind of organizational behavior theory that it is most associated with 51. Belonging and esteem 52. Empowerment 53. Good pay a. Theory X b. Theory Y c. Theory Z 51. Theory Z 52. Theory Y 53. Theory X According to Herzberg‟s views, which of the following strategies would be most likely to result in a higher level of worker motivation? a. Improvements in job-related pay b. Improvements in physical working conditions c. Making the work itself more interesting and challenging d. Providing clear and fair workrules and policies e. Using time-motion studies to find efficient techniques for employees to use c. . Making the work itself more interesting and challenging Herzberg found that the factors that ranked high as motivators were usually associated with job content rather than the work environment True According to Herzberg, when a hygiene factor is not fulfilled, employees will become dissatisfied True How are commitment and engagement related to Herzberg‟s motivation factors? 57. Commitment 58. Engagement a. Hygiene factors b. Motivation factors 57. motivation factor 58. motivation factor Match the variables of expectancy theory with the motivational techniques that best address them. 59. Expectancy 60. Instrumentality 61. Valence a. Bonuses, flexible time and "cafeteria-style" benefits b. Clear goals c. Employee training 59. Clear goals 60. Employee training 61. Bonuses, flexible time and "cafeteria-style" benefits According to a survey done on teaching evaluations, engineering students consider the improvement of teaching to be the most important outcome of the evaluation process. For engineering students who believe their efforts will lead to better teaching, the motivation to fill out a teaching evaluation would have a ____. a. Low valence b. Weak expectancy c. Weak instrumentality d. High valence e. Strong instrumentalitye. strong instrumentality Suppose that you are considering a high paying, stressful job out of college (investment banking, anyone?) Which are the aspects of the job that are associated with each component of expectancy theory? 63. Ability to payoff school debts, chances of long term success 64. Excellent training and networking opportunities 65. High pay a. Expectancy b. Instrumentality c. Valence 63. Expectancy 64. Instrumentality 65. Valence The basic principle of equity theory is that employees try to a. Achieve the mutually agreed upon goals of management and employees; b. Earn as much as possible with as little work as possible; c. Ensure that performance standards are fair and attainable; d. Impress others in the organization; e. Maintain equity between inputs and outputs compared to people in similar positions. e. Maintain equity between inputs and outputs compared to people in similar positions. The personal satisfaction people feel when they have done a job well is a(n) __________ reward. intrinsic Rewards that come from someone else in recognition of good work are _________ rewards. extrinsic intrinsic rewards are: An intrinsic reward is the personal satisfaction someone feels from doing a job well and completing goals. extrinsic rewards are: An extrinsic reward is given to a recipient in recognition of good work or superior performance. This may be a tangible reward such as a pay raise, or an intangible reward such as praise. The key factor is that it is recognition passed along by another party, usually a supervisor.Weldon Taskman has just successfully negotiated a new longterm sales agreement with a major client. The personal satisfaction Weldon has about his efforts is his _______ reward. intrinsic Maureen's supervisor was so impressed by her work that he named her the employee of the month. This praise from her supervisor is an example of a(n) _________ reward. extrinsic At Qliktech, the company CEO, Lars Bjork, honors employees who demonstrate the company's core values. Qliktech holds a summit each year, where it selects and awards one employee in each of several values categories that include (1) challenge; (2) move fast; (3) be open and straightforward; (4) teamwork for results; and (5) take responsibility. Rather than posting core values for everyone to pass by each day, the CEO finds that providing _________ rewards once each year provides the message to all employees that these are important values. extrinsic JOB PRODUCTION SCIENTFIC MANAGEMENT ... _________________ was the father of scientific management. Frederick Taylor One of the elements essential to Frederick Taylor's approach to improving worker productivity was: rules of work. ______________ was the dominant strategy for improving worker productivity during the early 1900s. Scientific management According to the principles of scientific management, the best way to improve productivity is to: use time-motion studies to find the best method of doing each job, then teach those methods to employees.Which of the following statements is the best description of how scientific management viewed employees? Employees are like machines that must be programmed to perform in a certain way JOB MOTIVATION: HAWTHRONE EFFECT ... The Hawthorne studies were conducted by ____________ and his colleagues from Harvard University. Elton Mayo The Hawthorne studies concluded that worker motivation: improved when employees felt like their ideas were respected. The most important impact of the Hawthorne studies was that it: changed the direction of research away from Taylor's scientific management toward the study of human-based management. The tendency for people to behave differently when they know they are being studied is known as the: Hawthorne effect Dr. Mo T. Vadar, a professor of psychology at a respected university, is planning a study of the factors that affect the motivation of employees. Dr. Vadar is concerned that the results of his experiments may be misleading because employees in an experimental group tend to behave differently when they know they are being studied. This concern shows that Dr. Vadar is aware of the: Hawthorne effect JOB MOTIVATION:MOTION ECONOMY ... Frank and Lillian Gilbreth developed the principle of ___________, which said that every job could be broken down into a series of elementary motions. motion economy Frank and Lillian Gilbreth thought that every job could be broken down into a series of elementary motions that they called:therbligs. Wally Tormach is a professional house painter. During busy periods, he often hires college students as helpers on his jobs. Wally tells his helpers that he has determined the most efficient way to paint a house and he expects them to follow his instructions exactly. Wally's approach is consistent with the ideas of: Frederick Taylor. JOB MOTIVATION: MASLOW ... The concept that a hierarchy of human needs could be used to explain motivation was developed by: Abraham Maslow Maslow was mainly concerned with explaining how: human motivation was related to a hierarchy of needs. According to Maslow, a higher order need: becomes a source of motivation after lower order needs are satisfied. Maslow placed _________ needs at the highest level of his hierarchy. self-actualization Maslow classified the needs for basic items such as food, water, and shelter as: physiological needs. Maslow called the needs people have for security at work and at home: safety needs. In Maslow's hierarchy of needs, the desire for love and acceptance would fall into the category of: social needs Maslow would classify the need for recognition from others and for self respect as _________ needs. esteem needsIn Maslow's hierarchy, __________ needs refer to the desire to reach one's fullest potential. self-actualization The need __________ would be classified as a social need. loved and appreciated Most employees in less-developed nations are motivated by the desire to satisfy: physiological needs. Employees in the United States and other developed nations are least likely to be motivated by the desire to satisfy __________ needs: physiological needs. Management theory/Peter Drucker ... Management by objectives was developed by: Peter Drucker. Management by objectives is most effective in organizations that: are relatively stable According to __________ the amount of effort employees devote to a task depends on their expectations of the outcome. expectancy theory According to expectancy theory, the amount of effort employees exert on a specific task depends on their: expectations of the outcome. Reprimands, pay reductions, and suspensions are all examples of: negative reinforcement. JOB MOTIVATION THEORIES/HERZBERG ..._____________ studied how the characteristics of the job itself affected worker motivation. 1. Frederick Herzberg According to Herzberg, which of the following groups of motivational factors would give employees the most satisfaction? interesting work, earned recognition and growth opportunity Job security, status, pay, friendly boss, and safe conditions are considered hygiene factors that may cause some dissatisfaction if missing, but do not necessarily motivate employees to work to their full potential. Herzberg found that good pay: was a hygiene factor rather than a motivator. Herzberg found that factors that provided the highest level of motivation were mostly associated with: job content such as a sense of achievement, the chance to be recognized, and interesting work. Herzberg's research indicated that employees are motivated by job content. Contemporary managers focus on _____________ by increasing the significance of the job, and even providing the employee with important feedback. enriching the job MORE JOB MOTIVATORS ... You are a graduate teaching assistant in the Biology department at Fairview University. You have several graduate student friends who have graduate appointments in the business department and the English department. While everyone's compensation and employee benefits are exactly the same, your department requires you to always show-up and tutor students at least four hours each day and to serve on one university committee each semester. Graduates students at the other departments are not required by their management to follow these rules. Lately, you are doing your best to limit your daily obligation to 2 ½ to 3 hours each day. The motivational theory that most closely correlates with your actions is: equity theorymotivational strategy that emphasizes motivating employees by making the work itself more interesting, meaningful, and rewarding. job enrichment Managers who advocate job enrichment focus on creating jobs with Skill variety and autonomy. The degree to which a job has a substantial impact on the lives or work of others in the organization is referred to as: task significance. the strategy of moving employees from one job to another to make the work more interesting and challenging, thus increasing worker motivation. is called job rotation __________ is the degree to which a job requires doing a task with a visible outcome from beginning to end. Task identity Every month Sam Tabor is assigned a different job at Russo & Daughters Financial Consulting. Sam enjoys the task variety and finds that switching jobs on a regular basis keeps the work from becoming boring. Russo & Daughters is using a technique known as job: rotation At Boss Motorcar Company, employees are grouped into teams. Each team is responsible for assembling an entire automobile. Boss gives each team freedom and flexibility to decide how to divide-up the work. The company keeps the employees informed about how their cars are selling, and even shows them the comments customers make about quality and performance on customer satisfaction questionnaires. Boss Motorcar Company is using a job enrichment In a high-context culture: relationship building and group trust is considered very important and occurs before performing business tasks.In a low-context culture: relationship building is considered a waste of time. MANAGEMENT THEORIES/MCGREGOR & OUCHI ... ________ used the terms Theory X and Theory Y to describe different attitudes managers have about employees. Douglas McGregor Douglas McGregor described two very different sets of managerial attitudes about employees, which he called: Theory X and Theory Y. Theory ___ managers see employees as having a general dislike for work and an unwillingness to accept responsibility. Theory X Theory ____ assumes that the average person likes work, and has a relatively high degree of imagination and creativity. Theory Y Theory Y managers prefer: empowerment and letting employees design solutions. To be competitive, ____________ recommended that American firms adopt a new management style that was a hybrid of the approaches used by Japanese firms and those used by American firms called _________. William Ouchi, Theory Z William Ouchi called the management approach typically used by Japanese firms: Type J Which of the following is a characteristic of Type J management? lifetime employment _________ is the term William Ouchi used to refer to the management approach typically used by firms in the United States. Type AWhich of the following is a characteristic of Type A management? individual decision-making _________ blends Japanese and American management practices into a hybrid approach which calls for long-term employment, collective decision making, and individual responsibility for the outcome of decisions. Theory Z The generation born between 1980 and 2000 is known as Generation: Y Baby Boomers as managers need to understand that: Gen X and Gen Y employees will be motivated by flexibility in the workplace. Your textbook referred to a Gallup poll taken in 2011 that indicated that only 47% of workers surveyed felt loyalty toward their employer. This figure was down from 59% just three years earlier. This reflects a serious concern about the _________________. need to examine why workers are actively disengaged at their jobs Kanetra believes that if she leaves her employees unsupervised for a few minutes they will do nothing but slack off. She is known as the "Dragon Lady" (at least behind her back) for the harsh criticism and punishment she disburses whenever an employee makes an error. Kanetra is a __________ manager. Theory X At High Stakes International, employees tend to work with little direct supervision since employees are considered trustworthy and committed. Management's expectation for employee creativity is high. The management at High Stakes reflects ____________ attitudes about employees. Theory Y Maslow would classify the need for recognition from others and for self respect as _________ needs. esteemThe degree to which a job has a substantial impact on the lives or work of others in the organization is referred to as: task significance The purpose of management by objectives is to: help employees motivate themselves with a goal-setting model that involves, discussion, review, and evaluation by management and employees According to Herzberg, the difference between motivators and hygiene factors is: overall, motivators related to greater job satisfaction, while hygiene factors made the work place a satisfying place to thrive. The Hawthorne studies concluded that worker motivation: improved when employees felt like their ideas were respected. The basic principle of equity theory is that employees try to: maintain equity between inputs and outputs compared to people in similar positions. The practice of moving employees from one job to another to make work more interesting is called: job rotation According to Victor Vroom, which of the following questions is an employee likely to ask before deciding to exert his or her maximum effort toward completing a task? Is the reward for completing the task worth the effort involved? According to __________ the amount of effort employees devote to a task depends on their expectations of the outcome. expectancy theory In Maslow's hierarchy of needs, the desire for love and acceptance would fall into the category of: social needs. Baby Boomers as managers need to understand that Gen X and Gen Y employees will be motivated by flexibility in the workplace. Management by objectives is most effective in organizations that:are relatively stable. As a group, Millennials tend to be: adaptable, tolerant, and tech savvy. Maureen's supervisor was so impressed by her work that he named her the employee of the month. This praise from her supervisor is an example of a(n) _________ reward. extrinsic Herzberg found that factors that provided the highest level of motivation were mostly associated with: job content ________ is a system of goal setting and implementation that involves a cycle of discussion, review, and evaluation of objectives among top and middle managers, supervisors, and employees. Management by objectives Reprimands, pay reductions, and suspensions are all examples of: negative reinforcement A key idea in reinforcement theory is that: managers can use both rewards and punishment to influence employee behavior. The concept that a hierarchy of human needs could be used to explain motivation was developed by: Abraham Maslow ______________ was the dominant strategy for improving worker productivity during the early 1900s. Scientific management Weldon Taskman has just successfully negotiated a new longterm sales agreement with a major client. The personal satisfaction Weldon has about his efforts is his _______ reward. intrinsic Theory ____ assumes that the average person likes work, and has a relatively high degree of imagination and creativity.Y Managers who advocate job enrichment focus on creating jobs with Skill variety and autonomy The major benefit of open communication in a company setting is: motivated employees The first step toward establishing open communication within an organization is to: create an organizational culture that rewards listening According to Herzberg, a sense of achievement, earned recognition, and interest in the work itself were all: important motivators The most important impact of the Hawthorne studies was that it: changed the direction of research away from Taylor's scientific management toward the study of human-based management. One of the elements essential to Frederick Taylor's approach to improving worker productivity was: rules of work A strength of Generation X managers is likely to be their: ability to provide feedback to employees Theory ___ managers see employees as having a general dislike for work and an unwillingness to accept responsibility. X