Posted: February 9th, 2015

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ADMG 201 SECOND EXAM STUDY GUIDE: 50 QUESTIONS WILL BE

CHOSEN FROM THIS STUDY GUIDE FOR THE EXAM.

Chapter 5

1. _____ is the process of creating and managing a business to achieve desired objectives.
2. Entrepreneurship
3. Bootstrapping
4. Intrapreneuship
5. Innovation
6. Brainstorming
7. A _____ is best described as any independently owned and operated business that is not

dominant in its competitive area and does not employ more than 500 people.

1. publicly owned business
2. limited liability company
3. small business
4. publicly traded company
5. for-profit corporation5-2

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3. Vernon runs Buzz, his own event management company, which frequently organizes large

corporate events. Vernon has established a good reputation for organizing corporate events with a

fair degree of professionalism at reasonable costs. Vernon works out of his old house with a staff

of about 55 employees. Vernon’s company is most likely to be categorized as a(n):

1. multinational corporation.
2. limited liability company.
3. franchise.
4. public sector holding.
5. small business.
6. Which of the following is an advantage for small businesses that choose to enter the retailing

industry?

1. Retailing is relatively difficult field to gain entry.
2. Retailing requires a large capital investment in the initial stages.
3. Retailing allows small business to focus on specific groups of consumers.
4. Retailing requires sophisticated machinery and technical expertise.
5. Retailing suffers from heavy competition and losses only in the initial stages.
6. Which of the following reasons makes retailing an attractive industry for small businesses?
7. Retailing eliminates the need for any entrepreneurial skills.
8. Retailing offers high barriers to entry.
9. Retailing eliminates the need to engage in active interactions with the final customers.
10. Retailing requires low initial financing.
11. Retailing limits a firm’s need to focus on specific groups of consumers.
12. Many service providers are considered retailers because they:
13. require a high initial start-up cost.
14. provide their services directly to ultimate consumers.
15. sell their services from a single store location.
16. focus on large market segments and institutional buyers.
17. employ only a small number of people.5-3

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Education.

7. Which of the following traits will help entrepreneurs succeed?
8. Risk aversion
9. Intolerance
10. Frugality
11. Impulsivity
12. Neuroticism
13. One of the major reasons people want to own and operate their own business is to:
14. avoid the risk of competition.
15. be their own boss.
16. avoid multi-tasking.
17. reduce stress levels.
18. avoid direct responsibility of the operations.
19. Which of the following is an advantage of a small business?
20. Greater adaptability to changing market demands
21. Highly trained and competent staff
22. Low levels of stress in managing the business
23. Diverse and large workforce
24. High success rates
25. Red Carpet Inc. is a small apparel store started by an aspiring designer. The store needs to

compete against larger, well-established multinational brands. Which of the following strategies

will most help Red Carpet Inc. avoid competition from larger firms?

1. Red Carpet Inc. should have multiple levels of management like the larger firms.
2. Red Carpet Inc. should target large market segments that the competitors serve.
3. Red Carpet Inc. should expand the scale of production to enjoy greater economies of scale.
4. Red Carpet Inc. should start to work with customers only when the products are ready for sale.
5. Red Carpet Inc. should focus on and target small market niches or product needs.5-4

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Education.

1. Which of the following is a disadvantage of small-business ownership?
2. High cost of formation
3. Bureaucratic decision-making process
4. Ability to focus upon specific groups of customers
5. Worries about employee problems or competition
6. Limited scope for innovation
7. Carol has recently opened a restaurant in her neighborhood. Which of the following is NOT likely

to be a source of stress?

1. Competition
2. Reputation
3. Rent increases
4. Employee issues
5. Changing market demand
6. Gerald started a business using the savings from his previous job. He planned to run his business

on the revenue generated from sales. However, a few months later, Gerald found it difficult to pay

his staff, rent, and other expenses. Seasonal sales and inability to secure sufficient credit from

local banks made it difficult for Gerald to operate the business normally. Which of the following

causes of small business failure does this scenario best illustrate?

1. Undercapitalization
2. Trade credit
3. Economies of scale
4. Debt financing
5. Debt factoring5-5

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Education.

4. Which of the following is the shortest path to business failure?
5. Overcapitalization
6. Undercapitalization
7. Rent increases
8. Competition
9. Changing market demand
10. A business plan should do all of the following EXCEPT:
11. provide the rationale for the business.
12. include estimates of income and expenses.
13. establish a strategy for acquiring sufficient funds.
14. include an analysis of the competition.
15. limit the business’s flexibility and decision-making ability.5-6

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Education.

6. Arnold approached a bank to get a loan for a business he planned to launch later in that year. He

explained his business idea and its capital requirements to the bank manager. The manager

listened to the plan and asked Arnold to provide a formal document that included a rationale for

the business, an explanation of how it will achieve its goals, an analysis of the competition, and

estimates of income and expenses among other information. Which of the following documents

does the bank expect from Arnold in this scenario?

1. A business plan
2. A cash flow statement
3. A promissory note
4. A balance sheet
5. A marketing plan
6. To make profits from a small business, the owner must first provide or obtain _____ to start the

business and keep it running smoothly.

1. products
2. employees
3. profits
4. supplies
5. capital
6. Persons or organizations that agree to provide some funds for a new business in exchange for

ownership interest or stock are called ____.

1. intrapreneurs
2. category captains
3. venture capitalists
4. trade debtors
5. franchisers5-7

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Education.

9. Securing a mortgage from a bank for a new business venture is an example of:
10. equity financing.
11. venture capitalism.
12. debt financing.
13. trade credits.
14. collaterals.
15. When an entrepreneur takes out a loan from a bank, the bank will require him to put up _____,

which is a financial interest in the property or fixtures of the business, to guarantee payment of the

loan.

1. collateral
2. venture capital
3. trade credit
4. business plan
5. cash flow statement
6. Since Eva Carl has decided to use her savings to purchase the rights to own and operate a

McDonald’s fast-food restaurant rather than starting her own restaurant, she is probably a(n)

____.

1. trade creditor
2. franchisee
3. franchiser
4. intrapreneur
5. venture capitalist5-8

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Education.

2. Which of the following is an advantage that purchasers of a popular franchise experience?
3. They get access to the already established brand name or brand equity.
4. They have great flexibility to make decisions for their individual franchise outlets.
5. They can enjoy their total profits without having to share anything with the franchisers.
6. They can easily add or delete a good or service from the existing product line.
7. They are free to vary their operational processes based on their needs and constraints.
8. One of the main drawbacks of franchising is that it requires the franchisee to:
9. invest a lot of time and effort in setting up the business.
10. take sole responsibility for all decisions in the business.
11. share the profits of the business with the franchiser.
12. build the brand appeal for the franchise outlet on his or her own.
13. invest considerable capital in national and local advertising programs.
14. Paul has recently quit his job as an investment banker. He plans to open a restaurant. He has two

options: he can either start his own new restaurant from scratch or purchase a franchise from an

already established restaurant or fast food chain. His wife, Lisa, supports the former plan. Which

of the following statements strengthens the argument in favor of Lisa’s choice of opening a

restaurant independently?

1. It is easier and faster to build a business from scratch.
2. It is easier to reach the break-even point through an independent business.
3. It is more difficult to attract customers in a franchise business as the entrepreneur has to

personally build the brand appeal.

1. It is easier and more flexible to make and execute decisions in an independent business.
2. It is easier to succeed in a business built from scratch as the products and the business format

are already proven.5-9

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Education.

5. Millennials number around 75 million and represent a huge business opportunity in the United

States. Which of the following is a defining feature of the millennials?

1. Baby boomers above the age 50
2. First generation immigrants
3. People born at the turn of the millennium between 1999 and 2001
4. People from immigrant communities who migrated to U.S. between 1946 and 1964
5. People born between 1977 and 1994
6. Sally is a human resource manager at a company. A survey of the company’s employees revealed

that more than 80 percent of the employees belonged to the demographic segment Generation Y.

In this scenario, which of the following HR strategies should Sally implement in order to best serve

the needs of the employees?

1. Sally should solely use financial rewards to motivate the employees to improve their

productivity.

1. Sally should keep the training sessions highly formal with no scope for entertainment.
2. Sally should restrict the employees from using work from home or telecommuting options.
3. Sally should avoid giving regular, direct feedback to the employees.
4. Sally should use recognition and advancement as the driving forces to motivate employees.
5. Which of the following demographic segments should small retailers specializing in ethnic

products and small service providers target?

1. Immigrants
2. Echo boomers
3. Baby boomers
4. Generation X
5. Drivers5-10

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Education.

8. Which of the following demographic trends has made health care and financial planning industries

attractive for small businesses in the United States?

1. Decreasing population of millennials
2. Increasing income among generation X
3. Aging baby boomers who are wealthy
4. Reducing entrepreneurial spirit among young generations
5. Increasing imports into the economy
6. Which of the following is an implication of technological advances to small businesses?
7. It fails to make any significant changes as small businesses cannot afford to use sophisticated

technology in their operations.

1. It reduces a small business’s ability to adapt to changing trends and market demands.
2. It increases the ratio of baby boomers as employees in small businesses.
3. It provides new opportunities for small businesses to expand their operations abroad.
4. It reduces a small company’s ability to customize their services and products.
5. Norton is a human resource manager at a large multinational company. After a drastic drop in

revenue, his company is thinking of ways to correct the situation. At a meeting with the top

management, the CEO suggested that 20 percent of the employees should be eliminated. This

move would help the company cut costs and continue functioning on the current projects. In this

scenario, which of the following strategies is this MNC planning to use?

1. Debt financing
2. Intrapreneruship
3. Crowdsourcing
4. Franchising
5. Downsizing5-11

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Education.

Chapter

1.

6

The main focus of the process of management is:

1. initiating corporate social responsibility initiatives.
2. locating potential sources of raw materials.
3. coordinating resources to achieve objectives.
4. regulating the growth of small businesses to maintain the monopoly of larger companies.
5. creating a heightened sense of employee empowerment in the company.
6. _____ make decisions about the use of an organization’s resources and are concerned with

planning, organizing, staffing, directing, and controlling the organization’s activities.

1. Managers
2. Shareholders
3. Employees
4. Consumers
5. Suppliers
6. If a manager is concerned about doing the work with the least cost and waste, then her

primary managerial concern is:

1. efficiency.
2. effectiveness.
3. delegation.
4. hiring.
5. expertise.
6. All of the following are typical resources that must be acquired by each organization in the pursuit

of its objectives EXCEPT:

1. people.
2. raw materials and equipment.
3. money.
4. information.
5. laws and regulations.5-12

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Education.

5. Managers need adequate _____ resources to pay for essential activities.
6. human
7. natural
8. financial
9. renewable
10. biological
11. All of the following are major management functions EXCEPT:
12. directing.
13. staffing.
14. advertising.
15. organizing.
16. controlling.
17. Determining an organization’s objectives and deciding how to accomplish them are part of the

management function known as:

1. planning.
2. organizing.
3. staffing.
4. controlling.
5. directing.
6. Forecasting is most closely associated with the management function of:
7. planning.
8. directing.
9. staffing.
10. organizing.
11. retailing.5-13

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Education.

9. A declaration of an organization’s fundamental purpose and basic philosophy is known as a(n):
10. protocol.
11. mission.
12. referendum.
13. agenda.
14. goal.
15. Which of the following statements is true with regard to goals of a company?
16. A company can have only one goal that combines all elements of its mission statement.
17. A goal is defined as a declaration of a company’s fundamental purpose and basic philosophy.
18. Once a goal is set, companies typically do not need to review the goal or monitor progress

against the goal set.

1. A goal merely states what a company seeks to achieve without stipulating any standards of

quality or amount of time needed to reach the goal.

1. An attribute, a target, and a time frame are the three elements of the goals set by a company

to achieve its mission.

1. _____ are very short-term plans that specify what actions individuals, work groups, or departments

need to accomplish in order to achieve the tactical plan and ultimately the strategic plan.

1. Operational plans
2. Contingency plans
3. Strategic plans
4. Tactical plans
5. Executive-level plans5-14

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Education.

2. Dividing work into small units and assigning it to specific individuals is a task related to the

management function of:

1. planning.
2. organizing.
3. staffing.
4. controlling.
5. directing.
6. Which of the following statements is true of the management function of organizing?
7. Organizing is the process of evaluating and correcting activities to keep the organization on

course.

1. Organizing involves determining and administering appropriate rewards and recognition for

employees in an organization.

1. Organizing ensures that an organization has enough employees with appropriate skills to do

the work.

1. Organizing designs the map that lays the groundwork for other management functions.
2. Organizing helps create synergy, whereby the effect of a whole system equals more than that

of its parts.

4. Maria and Harold have just finished interviewing four candidates who want to work for Jackson

Office Supplies Inc., a large company based in Houston. In which of the following management

functions are Maria and Harold involved?

1. Planning
2. Analyzing
3. Staffing
4. Controlling
5. Directing5-15

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Education.

5. Providing incentives to employees to motivate them toward achieving organizational objectives

relates to the management function of:

1. planning.
2. organizing.
3. marketing.
4. controlling.
5. directing.
6. When Betsy pointed out to her supervisor that the furniture assemblers at their manufacturing

plant were using 20 percent more nails in the current month when compared to the preceding

months, she was involved in the management function of:

1. planning.
2. organizing.
3. staffing.
4. controlling.
5. directing.
6. For an organization, the first step in the management function of controlling is to:
7. ask its employees to fix the problems.
8. take corrective actions when necessary.
9. investigate the causes of any deviations.
10. measure the actual performance.
11. identify deviations from the standard.
12. In an organization, decisions regarding adding new products, acquiring companies, and moving

into foreign markets would most typically be made by:

1. the first-line management.
2. a sales manager.
3. the middle management.
4. a production manager.
5. the top management.5-16

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9. _____ are responsible for tactical planning that will implement the general guidelines established

by top management.

1. Chief executive officers
2. Middle managers
3. Top managers
4. First-line supervisors
5. Office managers
6. The specific operations of the organization, plant, division, or department would most typically

involve the _____ of the company.

1. top management
2. middle management
3. first-line management
4. board of directors
5. stockholders
6. Positions such as foremen, supervisors, and office service managers are a part of the _____ of the

company.

1. top management
2. first-line management
3. middle management
4. executive levels
5. strategic planning division5-17

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Education.

2. _____ managers spend most of their time directing and controlling the daily operations of the

organization.

1. Product
2. Middle
3. Top-level
4. First-line
5. Division
6. A marketing manager is primarily responsible for:
7. using the money available to the company to attain its objectives.
8. hiring employees and dealing with them in a formalized manner.
9. planning, pricing, and promoting products and overseeing their distribution.
10. managing an entire business of a major segment of the business.
11. implementing, maintaining, and controlling technology applications required by the company.
12. Which of the following is a feature of democratic leadership?
13. Encouraging employees to discuss concerns and provide inputs
14. Using economic rewards solely to motivate employees
15. Allowing the employees complete autonomy to work on their own
16. Monitoring employee actions very closely and in great detail
17. Making decisions and telling the employees what must be done and in what manner5-18

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5. A(n) _____ leadership style is best for stimulating unskilled or unmotivated employees.
6. bureaucratic
7. democratic
8. free-rein
9. autocratic
10. inclusive
11. Which of the following is true of authentic leaders?
12. Authentic leaders display all the characteristics of autocratic leaders.
13. Authentic leaders make all the relevant decisions and inform employees what they have to do

and how.

1. Authentic leaders are an exclusive group of leaders whose leadership behaviors are

distinctive.

1. Authentic leaders are identified by the way in which they conduct themselves with

stakeholders.

1. Authentic leaders are concerned about the task at hand, rather than establishing lasting

relationships with stakeholders.

7. Managers at Sprocket Inc. have recognized declining sales on their water purifier and must make

a decision about what to do. Their next step is to:

1. define the situation.
2. develop options.
3. analyze options.
4. select the best option.
5. implement the decision.5-19

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8. When analyzing options in the decision-making process, managers must consider the

appropriateness and _____ of each option.

1. novelty
2. practicality
3. creativity
4. universality
5. validity
6. Which of the following best describes the importance of monitoring the consequences of

decisions?

1. The consequences of decisions may not be apparent quickly enough without monitoring.
2. Monitoring the consequences of decisions is the immediate logical step after selecting the best

option.

1. Monitoring the consequences acts like a financial barometer of how expensive decisions are.
2. Shareholders like to see the consequences of decisions on annual reports.
3. Monitoring the consequences of decisions is not important and it is expensive.
4. A(n) _____ is a calendar, containing both specific and vague items, that helps a manager figure

out what must be done and how to get it done to meet the objectives set by the organization.

1. log sheet
2. flowchart
3. proforma
4. referendum
5. agenda5-20

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Education.

Chapter 7

1. _____ refers to a firm’s shared values, beliefs, traditions, philosophies, rules, and role models for

behavior.

1. Organizational chart
2. Centralization
3. Organizational culture
4. Organizational structure
5. Business record
6. Which of the following is NOT part of organizational culture?
7. Values
8. Beliefs
9. Role models
10. Traditions
11. Religion
12. Which of the following statements is true about organizational culture?
13. It is absent in small organizations.
14. It can only be communicated formally.
15. It can only be seen in nonprofit organizations.
16. It is also reflected in an organization’s relationships with stakeholders.
17. It doesn’t encompass employee behavior and ways of dealing with problems.
18. Which of the following statements is true about organizational structure?
19. It is not applicable to informal organizations.
20. It is the arrangement or relationship of positions within an organization.
21. It is usually not seen in government and nonprofit organizations.
22. It does not require a lot of planning in small organizations.
23. It remains the same even as the company grows in size.5-21

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5. Which of the following statements is true about an organizational chart in the context of

organizational structure?

1. It only lists the financial assets of an organization.
2. It is essentially designed for the customers of an organization.
3. It can only be accessed by the owners of an organization.
4. It gives information about an organization’s chain of command.
5. It cannot represent the evolution or growth of an organization.
6. _____ is the division of labor into small, specific tasks and the assignment of employees to do a

single task.

1. Specialization
2. Delegation
3. Departmentalization
4. Outsourcing
5. Centralization
6. _____ is the grouping of jobs into working units usually called units, groups, or divisions.
7. Downsizing
8. Specialization
9. Delegation
10. Departmentalization
11. Centralization
12. All of the following are approaches to departmentalization EXCEPT:
13. function.
14. product.
15. geographic region.
16. customer.
17. seniority.5-22

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9. Small businesses commonly employ:
10. line departmentalization.
11. customer departmentalization.
12. functional departmentalization.
13. product departmentalization.
14. geographical departmentalization.
15. A company that has departments for marketing, finance, personnel, and production is organized

by:

1. product.
2. function.
3. territory.
4. customer.
5. geographic region.
6. If the type of departmentalization used by an organization tends to emphasize departmental units

rather than the organization as a whole and decision making is slow, then these would be

weaknesses indicative of _____ departmentalization.

1. geographical
2. functional
3. product
4. customer
5. process5-23

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2. Which of the following concepts deals with giving employees the power to make commitments and

use resources to accomplish the assigned tasks?

1. Delegation of authority
2. Accountability
3. Downsizing
4. Departmentalization
5. Specialization
6. _____ is the principle that employees who accept an assignment and the authority to carry it out

are answerable to a superior for the outcome.

1. Accountability
2. Specialization
3. Decentralization
4. Delegation of authority
5. Centralization
6. Which of the following statements is true about delegation of authority in the context of an

organization?

1. It does not relieve the superior of accountability for the delegated job.
2. It does not give the employees the power to make decisions about using resources to

accomplish the assigned tasks.

1. It does not hold the employee to whom the authority was delegated accountable for the results

of the task.

1. It often puts additional pressure and burden on managers who are delegating tasks to

subordinates.

1. It is a concept found only in small businesses and proprietorships.5-24

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5. _____ is usually preferred when the decisions of a company are very risky and low-level managers

lack decision-making skills.

1. Decentralization
2. Delegation of authority
3. Centralization
4. Employee empowerment
5. Specialization
6. When an organization has a structure in which decision-making authority is delegated as far down

the chain of command as possible, it is said to be exercising:

1. centralization.
2. overcentralization.
3. downsizing.
4. overspecialization.
5. decentralization.
6. Span of management refers to the:
7. number of subordinates working for a manager.
8. experience in terms of years of managers in a company.
9. the duration of time required for an employee to get promoted to the manager’s position.
10. the number of roles that the management of an organization performs.
11. the number of managers working at the top management.5-25

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8. Which of the following statements is true about span of management?
9. According to experts, top managers should directly supervise more than 10 to 20 people.
10. A narrow span of management exists when a manager directly supervises only a large number

of subordinates.

1. Narrow spans of management are more common in decentralized firms.
2. A narrow span of management is appropriate when superiors and subordinates are not in

close proximity.

1. In narrow spans of management, the level of interaction between superiors and subordinates

is low, few problems arise, subordinates are highly competent.

9. Organizational layers, in the context of assigning responsibility in an organization, refer to:
10. the levels of management in an organization.
11. the levels of stakeholders present outside of an organization.
12. the levels of roles that an employee has to go through to acquire a position at the top

management.

1. the several roles in which the employees have job specializations in an organization.
2. the levels of communication through which an employee has to go through in order to

approach different departments.

1. Which of the following statements is true about organizational layers?
2. Administrative costs are lower in tall organizations when compared to flat organizations.
3. In a tall organization, the span of management is narrow.
4. Communication is faster in tall organizations when compared to flat organizations.
5. Flat organizations employ more number of managers compared to tall organizations.
6. Managers in tall organizations spend more time supervising and working with subordinates

when compared to mangers in flat organizations.5-26

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1. A disadvantage of line structure is that it:
2. results in excessive delegation of authority to employees.
3. makes decision making more complicated for managers.
4. provides no direct lines of authority.
5. creates work duplication and confusion.
6. requires managers to possess a wide range of knowledge and skills.
7. Which of the following statements is true about the line-and-staff structure?
8. It allows line managers to focus on their expertise in the business operation.
9. It creates intersecting lines of authority.
10. It eliminates overstaffing.
11. It provides clear and unambiguous lines of communication.
12. It gives staff managers authority over line managers.
13. Which of the following is NOT a basis for organizing using a multidivisional structure?
14. Geography
15. Projects
16. Product
17. Customer
18. Function
19. A _____ structure sets up teams from different departments, thereby creating two or more

intersecting lines of authority.

1. line
2. multidivisional
3. matrix
4. line-and-staff
5. traditional5-27

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5. Work groups:
6. have shared leadership roles.
7. have a specific purpose that is different from the broader organizational mission.
8. create collective work products.
9. have individual accountability.
10. measure performance directly by assessing collective work.
11. Teams:
12. have a strong, clearly focused leader.
13. have individual accountability.
14. share leadership and create collective work products.
15. don’t perform real work.
16. measure effectiveness indirectly.
17. A permanent, formal group that performs a specific task is a:
18. task force.
19. committee.
20. project team.
21. product-development team.
22. self-directed work team.
23. Which of the following is a temporary group of employees, usually chosen for their expertise,

responsible for bringing out a specific change?

1. Self-directed work team
2. Committee
3. Work group
4. Quality-assurance team
5. Task force5-28

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Education.

9. Which of the following statements is true about task forces?
10. They are usually permanent.
11. They comprise members from a single functional department.
12. Their membership is usually based on organizational position rather than expertise.
13. They are responsible for routine quality checks.
14. They may occasionally comprise of individuals from outside the organization.
15. Project teams:
16. are permanent, formal groups.
17. are composed of individuals from one functional area.
18. never last for more than six months.
19. run their operation and have control of a specific work project.
20. only solve specific quality problems.

Chapter 10

1. All of the following are activities performed by human resources managers EXCEPT:
2. planning.
3. recruiting.
4. selling.
5. training.
6. compensating.5-29

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Education.

2. A human resources manager deciding how many new employees an organization will need to fill

vacant positions in the near future is engaging in the activity of ____.

1. recruiting
2. planning
3. training
4. selling
5. compensating
6. _____ involves determining, through observation and study, the specific tasks that comprise a job

and the knowledge, skills, and abilities necessary to perform the job.

1. Job description
2. Job specification
3. Job design
4. Job analysis
5. Job appraisal
6. An overview of a job’s title, tasks, relationships with other jobs, the physical and mental skills

required, duties, responsibilities, and working conditions is referred to as the:

1. job appraisal.
2. job portfolio.
3. job description.
4. job analysis.
5. job specification.
6. The qualifications necessary for a specific job, in terms of education, experience, and personal

and physical characteristics are spelled out in the ____.

1. job evaluation
2. job specification
3. job analysis
4. job description
5. job assessment5-30

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Education.

6. ______ refers to forming a pool of qualified applicants from which management can select new

employees.

1. Planning
2. Training
3. Compensating
4. Appraising
5. Recruiting
6. When compared to the external sources of recruitment, recruiting from internal sources:
7. results in higher turnover.
8. incurs higher costs.
9. increases the possibility of lockouts.
10. decreases picketing.
11. improves employee morale.
12. Which of the following is an internal source of recruitment for an organization?
13. Vocational schools
14. Current employees
15. Social networking sites
16. Competing firms
17. Colleges
18. A characteristic of search firms known as headhunters is that they:
19. focus on internal rather than external sources of recruitment.
20. specialize in recruiting employees for entry-level jobs.
21. look for qualified candidates who are working for other companies.
22. undertake training for unusual job requirements or skillsets.
23. operate as career planners for employees within organizations.5-31

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Education.

1. Which stage of the employee selection process allows management to obtain detailed information

about an applicant’s experience and skills, reasons for changing jobs, and an idea of whether the

person would fit in with the company?

1. Orientation
2. Training
3. Testing
4. Reference checking
5. Interviewing
6. During which stage of the selection process is a candidate expected to undergo physical

examinations to determine his or her suitability for a specific job?

1. Orientation
2. Reference checking
3. Interviewing
4. Filling out the application form
5. Testing
6. Reference checking usually involves:
7. monitoring the working conditions in a firm.
8. checking a company’s compliance with its policies.
9. assessing an applicant’s potential for a job.
10. checking the previous work experience of a candidate.
11. identifying possible sources for recruitment.5-32

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Education.

3. Vikram is an employee of the Monsanto research lab. In an effort to improve his managerial skills

and prepare him for a promotion, his company sends him on a series of experiential management

training exercises at company expense. By helping him increase his knowledge, Vikram’s

company is involved in:

1. development.
2. orientation.
3. testing.
4. grade assignment.
5. performance appraisal.
6. When Sophia Smith moved to a new job that involved more responsibility and an increase in

compensation, the move would typically be considered a(n):

1. transfer.
2. conciliation.
3. separation.
4. arbitration.
5. promotion.
6. Joe was recently moved to a new position in his company that involved learning new skills and

undertaking work assignments. However, he received no salary raise. Joe’s change in position

can best be described as a(n):

1. promotion.
2. lockout.
3. separation.
4. arbitration.
5. transfer.5-33

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Education.

16 Which of the following statements is true of a separation?

1. It is an employee’s departure from an organization due to termination or some other reason.
2. It is an employment change that involves demotion.
3. It is an advancement to a higher-level job.
4. It is a temporary suspension of employment due to violation of work rules.
5. It is a horizontal move from one job to another within the same company.
6. Socorro was terminated from her job by her employer because she was repeatedly late to work.

She contributes to her company’s turnover through:

1. conciliation.
2. demotion.
3. transfer.
4. separation.
5. arbitration.
6. Human resources departments strive to:
7. increase lockouts.
8. avoid arbitration to resolve third party issues.
9. minimize losses due to separations and transfers.
10. discourage strikebreaking.
11. fire employees because of their race, religion, gender, or age.
12. Financial compensation falls into two general categories:
13. time wages and piece wages.
14. wages and salaries.
15. wages and benefits.
16. commissions and incentives.
17. salaries and benefits.5-34

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Education.

1. Which of the following statements is true of payment using time wages?
2. It encourages employees to be more productive.
3. It provides incentives to increase productivity.
4. It is primarily used for skilled craftworkers.
5. It is appropriate when employees are continually interrupted.
6. It is used when quantity is more important than quality.
7. In a sales company, employees are paid a percentage of their sales in order to motivate them to

sell as much as they can. The company incorporates _____ as an incentive system.

1. commissions
2. time wages
3. profit sharing
4. salaries
5. bonuses
6. Which of the following statements is true of salary as employee compensation?
7. It involves distributing a percentage of company profits.
8. It is a nonfinancial reward.
9. It is associated with white-collar workers.
10. It involves paying a percentage of an employee’s sales.
11. It a monetary reward for exceptional performance.
12. If a company pays its workers additional compensation at the end of the year as a “thank you” for

good work, this monetary reward would most likely be categorized as:

1. wages.
2. commission.
3. a salary.
4. a benefit.
5. a bonus.5-35

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Education.

4. Which of the following forms of compensation is NOT a benefit?
5. Paid vacation
6. Health insurance
7. Pension plans
8. Commissions
9. Child care
10. Which of the following objectives do labor unions strive to achieve?
11. Reduced pay
12. Increased job security
13. Less safe working conditions
14. Increased work hours
15. Increased lockouts
16. One reason for deterioration of union growth is because:
17. traditional union members lack organization.
18. of the shift from a service to a manufacturing economy.
19. the unions are not backed by the power of a large group.
20. the proportion of blue-collar jobs is increasing.
21. of the increasing automation of factories.
22. Which of the following statements is true of a strike?
23. It prevents people from purchasing a company’s products.
24. It is started by the management.
25. It halts or disrupts the normal working of a firm.
26. It is one of the least effective labor weapons.
27. It seldom disrupts normal working conditions.5-36

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Education.

8. A boycott takes place when:
9. a union and management negotiate a labor contract with the help of a mediator.
10. employees of a company refuse to work as a protest against unfair management practices.
11. management closes a work site so that employees cannot go to work.
12. union members protest against management practices by marching outside the employer’s

work site.

1. union members are asked to refrain from purchasing the products of a company whose

policies do not favor union members.

9. If a neutral party is brought in to settle a labor-management dispute and if his or her solution is

legally binding and enforceable, the neutral party is most likely to be involved in ____.

1. conciliation
2. picketing
3. mediation
4. arbitration
5. strikebreaking
6. Which of the following is a primary diversity characteristic?
7. Gender
8. Income
9. Marital status
10. Religion
11. Military experience5-37

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Education.

Chapter 13

1. Which of the following scenarios makes a reference to E-business?
2. Alexis purchases a tablet PC through an online retail store.
3. Keisha purchases tickets for a football match from the stadium.
4. Malik buys a laptop from an electronics store located a few blocks away from his home.
5. Laila buys her favorite brand of cereal from a nearby supermarket.
6. Joshua purchases fruits and vegetables from a roadside farmer’s market.
7. Which of the following statements is true of digital communication?
8. It has significantly reduced the connectivity between businesses and customers.
9. It has made it possible for businesses to reach previously inaccessible markets.
10. It has adversely affected businesses’ network with manufacturers.
11. It does not include banner ads.
12. It denies customers control over information they view.
13. In the context of digital communication, _____ is the ability of the marketer to identify customers

before they make a purchase.

1. control
2. interactivity
3. connectivity
4. addressability
5. accessibility
6. ____, in the context of digital communication, refers to the ability of customers to express their

needs and wants directly to the firm in response to its marketing communications.

1. Addressability
2. Accessibility
3. Connectivity
4. Interactivity
5. Control5-38

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Education.

5. _____ refers to marketers’ ability to obtain digital information in the context of digital

communication.

1. Control
2. Accessibility
3. Connectivity
4. Addressability
5. Interactivity
6. In the context of digital communication, _____ refers to consumers’ ability to get in touch with

marketers along with other consumers.

1. connectivity
2. control
3. addressability
4. accessibility
5. interactivity
6. In the context of digital communication, _____ refers to the customer’s ability to regulate the

information they view as well as the rate and exposure to that information.

1. addressability
2. accessibility
3. interactivity
4. connectivity
5. control5-39

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Education.

8. Which of the following statements is true about digital media in the context of business?
9. It has significantly increased the costs of businesses.
10. It makes the quality of products less important.
11. It can also improve communication within and between businesses.
12. It lacks potential to have a long-term impact on economic growth.
13. It greatly helps private organizations but is ineffective for government organizations.
14. One challenge that digital media has created for businesses is:
15. employees wasting time surfing the Internet.
16. increase in the cost of communication.
17. reduced access to information.
18. difficulty in conducting market research.
19. hampered communication within businesses.
20. Which of the following statements is true about digital media?
21. They make customer communications interactive.
22. They limit the companies’ reach to new target markets.
23. They limit marketers from utilizing new resources.
24. They make communication complex and expensive.
25. They limit consumers’ access to information about products.
26. Which of the following statements is true about digital media?
27. They hold little relevance to brick-and-mortar companies.
28. They do not relieve businesses of the task of achieving the right marketing mix.
29. They do not help businesses enhance the benefits of their products.
30. They do not give businesses the scope to offer more products than traditional stores.
31. They make it more difficult to anticipate customer needs.5-40

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Education.

2. Which of the following statements is true about the impact of digital media in the marketing mix?
3. Digital media has increased the opportunities for word-of-mouth marketing.
4. For the business that wants to compete on price, digital marketing provides no opportunities.
5. The concept of online shopping created by the digital media can be found only in the western

world.

1. Consumer consumption patterns have undergone little change with the advent of digital media.
2. Social networking sites are the least useful when it comes to boost the brand exposure of a

firm.

3. Supernova Inc. is a gadgets and accessories retailer which has recently introduced a new

concept. A customer can order products not usually available in its stores from Supernova’s

website; the products are then shipped to the Supernova store nearest to the customer. The

customer can pick up the products from the store at his convenience without having to pay any

shipping charges. This concept is called ____.

1. digital shipping
2. viral marketing
3. brick and mortar
4. traditional retail
5. site to store
6. Marketers’ ability to process orders electronically and increase the speed of communications

thereby reducing costs, inefficiencies, and redundancies most relates to which element of the

marketing mix?

1. Pricing
2. Promotion
3. Distribution
4. Communication
5. Advertising5-41

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Education.

5. _____ is the most flexible element of the marketing mix.
6. Promotion
7. Distribution
8. Product
9. Price
10. Placement
11. A(n) _____ is a web-based meeting place for friends, family, co-workers, and peers that lets users

create a profile and connect with other users for a wide range of purposes.

1. peer-to-peer sharing
2. webcast
3. podcast
4. wiki
5. social network
6. Which of the following statements is true about social networking?
7. Social networks have existed in some form or other for 40 years.
8. As the number of social network users increases, interactive marketers are finding it difficult to

access new target markets.

1. Professionals such as professors, doctors, and engineers are yet to start using social

networks.

1. Social networks do not encompass certain demographic segments such as mothers.
2. Social networks are personal spaces of users and marketers refrain from using them to

advertise products.

8. Which service allows users to “like” a company’s profile and thereby interact and build a

relationship with the firm?

1. Facebook
2. Wikipedia
3. Twitter
4. Second Life
5. CafeMom5-42

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Education.

9. A factor that has sparked the rise of consumer-generated information is:
10. the increasing dominance of traditional media over digital media.
11. the reluctance of consumers to publish their thoughts and opinions on digital platforms.
12. the dwindling number of consumers using social networking sites.
13. the consumers’ tendency to trust other consumers over corporations.
14. the digital media which is gradually becoming less consumer driven.
15. Which of the following statements is true about Facebook?
16. It is essentially a microblogging site than a social network.
17. It allows users to write posts consisting of not more 140 characters.
18. It appeals to a wide demographic that includes parents and grandparents.
19. It is still overshadowed by the popularity of Myspace.
20. It does not allow users to create public profiles.
21. Which of the following statements is true about blogs?
22. They allow users to post content consisting of only 140 characters.
23. They give users the power to even post false or negative information.
24. They lack the potential to increase sales even if they contain positive reviews about products.
25. They cannot be spread across the Internet.
26. They are not even read by half of the Internet users.5-43

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Education.

2. Which of the following is NOT a reason why a company might maintain a blog?
3. To answer consumer concerns and questions
4. To defend corporate reputation
5. To build enthusiasm for its products
6. To highlight positive company news and information
7. To document internal operational flaws
8. _____ are websites where users can add to or edit the content of posted articles.
9. Online newspapers
10. Blogs
11. Wikis
12. Social networking sites
13. Virtual realities
14. Which of the following statements is true about media sharing sites?
15. They are more limited in scope in how companies interact with consumers.
16. They have minimal popularity which provides no potential for firms to reach a global audience

of consumers.

1. They do not allow firms to post videos or photographs like other sites.
2. They provide no visual ways through which businesses can share their corporate messages.
3. They are more limited in scope when it comes to viral marketing.
4. _____ is a tool that uses the Internet, particularly social networking and video sharing sites, to

spread a message and create brand awareness.

1. Print media
2. TV infomercial
3. Viral marketing
4. Community radio
5. Firewall5-44

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Education.

6. Which of the following statements is true about viral marketing?
7. It significantly increases the advertising costs of a company.
8. It does not use video and photo sharing sites.
9. It occurs when a message gets sent from person to person to person.
10. It involves the e-mailing of bulky video files that take a long time to load.
11. It essentially uses newspaper and magazine ads.
12. _____ is a photo sharing bulletin board site that combines photo sharing with elements of

bookmarking and social networking.

1. Pinterest
2. Final Cut Pro
3. Flickr
4. Wikipedia
5. Myspace
6. _____ are audio or video files that can be downloaded from the Internet via a subscription that

automatically delivers new content to listening devices or personal computers.

1. Podcasts
2. Wikis
3. Blogs
4. Social networking sites
5. Virtual realities5-45

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Education.

9. _____ allow users to develop avatars that live and play online, and sometimes even have their own

currency.

1. Virtual reality
2. Social networking sites
3. Wikis
4. Micro-blogs
5. Virtual worlds
6. The little black and white squares that sometimes appear in magazines, posters, and store

displays which let a consumer with a smart device view a website, video, or image with additional

marketing information is known as a(n):

1. tweet.
2. FB code.
3. QR code.
4. podcast.
5. widget.