Test Planning Table For Chapter 7: Learning Objective Knows Basic Understands Applies Principles

Chapter 07 - Management and Leadership
TEST PLANNING TABLE FOR CHAPTER 7
LL:1 LL:2 LL:3

Knows Basic Understands Applies Principles
Learning Objective
Terms and Facts Concepts and
Principles
1. Describe the 1,2,3,4,5,6,7,8, 9,10,11, 12,13,

changes occurring today 156,157,158 159,160 161
in the management
function.
2. Describe the four 14,15,16,17,18,19,20,21, 24,25, 26,27,28,29,

functions of 22,23, 169,170,171,172,173, 175,176,
management. 162,163,164,165,166,167, 174 275
168
3. Relate the planning 30,31,32,33,34,35,36,37, 64,65,66,67,68,69, 70,71,72,

process and decision 38,39,40,41,42,43,44,45, 197,198,199,200,201 202,203,204,205,206,
making to the 46,47,48,49,50,51,52,53, 207,208,209,210,
accomplishment of 54,55,56,57,58,59,60,61, 276,277,
company goals. 62,63, 285*
177,178,179,180,181,182,
183,184,185,186,187,188,
189,190,191,192,193,194,
195,196
4. Describe the 73,74,75,76,77,78,79,80, 93,94,95,96,97,98~, 99,100,101,102,103,

organizing function of 81,82,83,84,85,86,87,88, 225,226,227 228,229,230,231,232,
management. 89,90,91,92, 233,234,
211,212,213,214,215,216, 279,
217,218,219,220,221,222, 285*
223,224
5. Explain the 104,105,106,107,108,109, 130,131~, 132,133,134,135,136,

differences between 110,111,112,113,114,115, 246,247,248,249,250, 137,138,139,
leaders and managers, 116,117,118,119,120,121, 251~ 252,253,254,255,256,
and describe the various 122,123,124,125,126,127, 257,258,259,260,
leadership styles. 128,129, 278,280,
235,236,237,238,239,240, 281*,282*
241,242,243,244,245
6. Summarize the five 140,141,142,143,144,145, 152, 153,154,155,

steps of the control 146,147,148,149,150,151, 266,267,268 269,270,271,272,273,2
function of management. 261,262,263,264,265 74,
284*
Total number of test items: 285
True/false questions are in plain text.

Multiple choice questions are in bold text.
Questions on boxed material are in bold text with a tilde~.
Essay questions are in bold underlined text.
Minicase questions are in bold with an asterisk*.
7-1
Chapter 07
Management and Leadership Answer Key
True / False Questions
1. The main job of managers today is to watch over people to be sure they do what the
manager asks of them.
Answer: False
AACSB: Reflective Thinking
Bloom’s: Remember
Learning Objective: 07-01 Describe the changes occurring today in the management function
Level of Difficulty: 1 Easy
Topic: Definition of Management
2. The best way to get people to do what a manager wants is for the manager to reprimand
those who don't do things correctly.
Answer: False
Bloom’s: Remember
3. Managers in progressive firms of all kinds tend to be friendly, and treat employees as
partners.
Answer: True
Bloom’s: Remember
4. Managers must earn the trust of their employees.
Answer: True
Bloom’s: Remember
5. Because of their importance and skills, few managers lost their jobs in the recent
economic crisis.
Answer: False
7-2
Bloom’s: Remember
6. A modern manager's main job is to issue orders, then follow up to make sure employees
do as they were told.
Answer: False
Bloom’s: Remember
7. Managers in progressive organizations tend to emphasize teamwork and cooperation

rather than discipline and giving orders.
Answer: True
Bloom’s: Remember
8. Despite all of the changes in the business environment, the basic way a manager performs
his or her job has remained remarkably constant.
Answer: False
Bloom’s: Remember
9. Given the lack of discipline and short attention spans of today's workers, modern
managers must watch their workers closely, set strict rules, and vigorously enforce
policies.
Feedback: Today's managers emphasize teamwork and cooperation rather than discipline and
order giving. Managers now guide, train, support, motivate and coach employees.
Answer: False
Bloom’s: Understand
Level of Difficulty: 2 Medium
7-3
10. In most high-tech industries, the best way to respond quickly to rapid technological
changes is to keep most authority and responsibility in the hands of a few key managers
who provide precise, detailed directions to the workers.
Feedback: Managers of high-tech firms realize that workers often know much more about
technology than they do. Thus, most progressive managers emphasize teamwork and
cooperation rather than discipline and order giving.
Answer: False
11. Due to the fact that employees today often know much more about technology and the
technical aspects of their jobs than their managers do, progressive managers emphasize
teamwork and cooperation as a strategy for getting work done.
Feedback: Managers of high-tech firms realize that workers often know much more about
technology than they do. Thus, most modern managers emphasize teamwork and cooperation
rather than discipline and order giving.
Answer: True
12. John is the general manager of a retail outlet. By emphasizing teamwork and acting in a
role of coach rather than boss, John is considered to be a modern manager.
Feedback: Most modern managers tend to be more progressive. They choose to guide and
support their employees instead of giving orders.
Answer: True
AACSB: Knowledge Application
Bloom’s: Apply
Level of Difficulty: 3 Hard
7-4
13. As an office manager, Sylvie consistently tells her employees what to do, watches over
their tasks, and reprimands those who don't listen to her orders. Sylvie is a modern
manager.
Feedback: Most modern managers tend to be more progressive. They choose to guide and
support their employees instead of giving orders.
Answer: False
Bloom’s: Apply
14. Managers make decisions about how to use organizational resources to accomplish goals.
Answer: True
Bloom’s: Remember
Learning Objective: 07-02 Describe the four functions of management
Topic: Functions of Management
15. Financing is one of the four key functions of management.
Answer: False
Bloom’s: Remember
16. The four key management functions are planning, organizing, leading, and controlling.
Answer: True
Bloom’s: Remember
17. One trend of the leading management function is to empower employees, giving them as
much freedom as possible to become self-directed and self-motivated.
Answer: True
Bloom’s: Remember
7-5
18. Leading is the management function of designing the structure of the organization so that
everyone can function together.
Answer: False
Bloom’s: Remember
19. As a management function, the main focus of controlling is to keep complete and up-to-
date records of the organization's financial transactions for tax and regulatory purposes.
Answer: False
Bloom’s: Remember
20. The management function that involves guiding, training, and motivating others to work
toward the achievement of an organization's goals is called leading.
Answer: True
Bloom’s: Remember
21. In many smaller firms the manager's role is to direct the employees, telling them exactly
what to do.
Answer: True
Bloom’s: Remember
22. Planning is the function of management that includes anticipating future trends and
determining the best strategies and tactics to achieve an organization's goals and
objectives.
Answer: True
Bloom’s: Remember
7-6
23. Planning is a key management function because other management functions depend on
having a good plan.
Answer: True
Bloom’s: Remember
24. Managers focus on making efficient use of their organization's human resources, but leave
decisions about the efficient use of other resources such as buildings, machinery, and
supplies to engineers and accountants.
Feedback: Managers must practice the art of getting things done through organizational
resources including people, financial resources, information and all types of equipment and
assets.
Answer: False
25. Today's progressive organizations are designed around the needs of the customer. The idea
is to organize systems to be responsive to customer needs.
Feedback: Organizing includes designing the structure of the organization and creating
conditions and systems in which everyone and everything work together to achieve the
organization's goals and objectives.
Answer: True
26. Beth has spent the last two hours going over some consumer surveys to see how well her
company is achieving its goal of improving customer satisfaction. Beth's efforts are an
example of the controlling function of management.
Feedback: Controlling is the function concerned with determining whether or not an

organization is progressing toward achieving its goals and objectives.
Answer: True
Bloom’s: Apply
7-7
Topic: The Four Functions of Management
27. Jack, a manager with Tiny Tots Toy Company, has just participated in a meeting that
looked at future trends in the toy industry, and identified new challenges and opportunities
for Tiny Tots. Jack's participation in this meeting was part of the organizing function of
management.
Feedback: Jack's activities are part of the planning function. Planning involves anticipating
future trends and identifying business opportunities and challenges.
Answer: False
AACSB: Analytical Thinking
Bloom’s: Analyze
28. Harold is a no-nonsense boss who believes that the best way for an organization to
achieve its goals is for workers to follow their boss's orders. Thus, he tells workers exactly
what to do and how to do it. Harold's approach is an example of directing.
Feedback: Directing involves telling workers exactly what to do. This approach is still
common among managers in small companies, but managers in larger firms tend to rely more
on leading rather than directing.
Answer: True
Bloom’s: Apply
29. Rita is a manager of a medium-sized service company. She is currently involved in

redesigning her department to ensure that employees and other resources can respond
more quickly and efficiently to the needs of its customers. Rita's efforts are part of the
organizing function of management.
Feedback: Organizing involves designing the structure of the organization so that resources
can efficiently achieve the organization's objectives. One of the key objectives today is to find
ways to organize businesses so that they please the customer.
Answer: True
Bloom’s: Apply
7-8
30. Planning involves setting the organizational vision, goals and objectives.
Answer: True
Bloom’s: Remember
Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals
31. Progressive managers consider planning to be of little importance in today's rapidly

changing business environment.
Answer: False
Bloom’s: Remember
Topic: The Importance of Planning
32. Goals tend to be broad and focus on the long term while objectives tend to be specific and
more short term in their focus.
Answer: True
Bloom’s: Remember
33. A vision is a detailed set of specific steps that a firm must take to achieve its short-run
objectives.
Answer: False
Bloom’s: Remember
34. A statement about why an organization exists and what it is trying to achieve is called the
organization's directive.
Answer: False
Bloom’s: Remember
7-9
35. A vision is the overall explanation of why an organization exists and where it is trying to
head.
Answer: True
Bloom’s: Remember
36. A vision gives the organization a sense of purpose and a set of values that unite employees
toward a common destiny.
Answer: True
Bloom’s: Remember
37. A mission statement outlines the fundamental purposes of an organization.
Answer: True
Bloom’s: Remember
38. Today, a mission statement should also address social responsibility.
Answer: True
Bloom’s: Remember
39. Goals are broad, long-term accomplishments an organization wants to achieve.
Answer: True
Bloom’s: Remember
40. While goals are measurable, objectives are not.
Answer: False
Bloom’s: Remember
7-10
41. Goals are developed and agreed to by management so that the workers can follow them.
Answer: False
Bloom’s: Remember
42. Objectives should be expressed as broad, general principles rather than as specific short-
term results.
Answer: False
Bloom’s: Remember
43. Continuous planning is not necessary, because plans that worked well in the past are likely
to continue to work well in the future.
Answer: False
Bloom’s: Remember
44. Planning is a continuous process.
Answer: True
Bloom’s: Remember
45. The SWOT analysis helps firms identify competitive threats and market opportunities.
Answer: True
Bloom’s: Remember
7-11
46. An analysis of the business environment helps managers identify threats and opportunities
that face their firm.
Answer: True
Bloom’s: Remember
47. Strategic planning is now much easier than it used to be because managers have access to
very reliable computerized forecasting tools.
Answer: False
Bloom’s: Remember
48. Tactical planning deals with setting long-range goals, while strategic planning develops
the specific strategies needed to achieve the organization's operational goals.
Answer: False
Bloom’s: Remember
49. Strategic planning determines the major goals of the organization.
Answer: True
Bloom’s: Remember
50. Today's business environment changes so rapidly that strategic planning is becoming more
difficult and subject to change.
Answer: True
Bloom’s: Remember
7-12
51. Managers or teams of managers at the lower levels of an organization normally develop
strategic plans, but top managers do most of the tactical planning.
Answer: False
Bloom’s: Remember
52. Contingency planning involves developing alternative courses of action to be used if the
primary plans do not achieve the desired results.
Answer: True
Bloom’s: Remember
53. Operational planning looks at the organization as a whole, while strategic planning
focuses on specific departmental actions.
Answer: False
Bloom’s: Remember
54. One example of tactical planning is setting annual budgets and deciding on other details
and activities necessary to meet the strategic objectives.
Answer: True
Bloom’s: Remember
55. Many cities and businesses are now developing contingency plans to respond to potential
terrorist attacks.
Answer: True
Bloom’s: Remember
7-13
56. Instead of creating detailed strategic plans, the leaders of market-based companies
(companies that respond quickly to environmental changes) set flexible directions so as to
allow for change and seize opportunities when they come.
Answer: True
Bloom’s: Remember
57. Decision making occurs in all management functions.
Answer: True
Bloom’s: Remember
58. The first step in the rational decision-making model is to identify alternative solutions.
Answer: False
Bloom’s: Remember
59. The last step in the rational decision-making model is to determine whether the decision
was a good one and follow up.
Answer: True
Bloom’s: Remember
60. One step in the rational decision-making model is to develop alternatives.
Answer: True
Bloom’s: Remember
61. Brainstorming is coming up with as many solutions as possible in a short period of time
with a focus toward not censoring anyone's ideas.
Answer: True
7-14
Bloom’s: Remember
62. Problem solving is more formal than using the rational decision-making model.
Answer: False
Bloom’s: Remember
63. PMI is a problem-solving technique that involves listing pluses, minuses and
implications.
Answer: True
Bloom’s: Remember
64. A mission statement should provide a detailed explanation of how a company will
achieve its objectives.
Feedback: A mission statement is an outline of the organization's fundamental purposes, not a

detailed explanation of what is to be done and who is to do it. Figure 7.2 shows an actual
mission statement for Starbucks that clearly illustrates this.
Answer: False
65. The SWOT analysis focuses only on the internal activities of the firm, while a PERT
analysis is used to review the external environment in which the firm operates.
Feedback: SWOT stands for strengths, weaknesses, opportunities and threats. While the
strengths and weaknesses part of SWOT analysis focuses on internal aspects of the
organization, the opportunities and threats part of SWOT looks at the external environment in
which the organization operates.
Answer: False
7-15
66. Tactical planning involves making decisions about which customers to serve, what
products or services to sell, and the geographic areas in which the firm will compete.
Feedback: The fundamental nature of the topics described in this question would be
considered in the strategic planning process.
Answer: False
67. Contingency planning is most important in markets where conditions are relatively stable
and market growth is predictable.
Feedback: Contingency planning is the process of preparing alternative courses of action that
may be used if the primary plans don't achieve the organization's objectives. The need to
implement contingency plans is more likely to arise in markets where there is a great deal of
rapid change and uncertainty.
Answer: False
68. The top managers at the Sax Department Store find that their employees do not really
share a common sense of purpose or have a common set of values. This suggests that top
management has not provided a clear vision for the firm.
Feedback: A vision is a broad statement of why an organization exists and what it seeks to
accomplish. It is intended to give the organization a sense of purpose and provide workers
with a set of values and a sense of direction.
Answer: True
7-16
69. In order to ensure effective implementation, managers should make only one set of plans
and carefully follow them to ensure that the organization's objectives are achieved.
Feedback: Economic and competitive conditions change so rapidly that it is wise to have
alternative plans available in the event the primary plan does not achieve its objectives. This is
the idea behind contingency planning.
Answer: False
70. Lucy is part of the top management team at Cloudy Daze Rain Gear, a company that
produces umbrellas, raincoats, hats and all-weather shoes. As a member of top
management, Lucy is more likely to be involved in strategic planning than in tactical
planning.
Feedback: Top management normally carries out strategic planning, while lower-level
managers are usually responsible for tactical planning.
Answer: True
Bloom’s: Apply
71. Jamika is a manager at a well-known retail store. Each morning she determines the order
in which store projects are performed; she sets work schedules for employees and
standards that must be met. These activities suggest that Jamika is involved in operational
planning.
Feedback: Operational planning is the process of setting work standards and schedules that
are necessary to carry out tactical plans.
Answer: True
Bloom’s: Apply
7-17
72. Sharon needed to solve a problem quickly, so she called together the work team in her
department and asked them to list as many possible solutions as they could come up with
in a short period of time. During the process she encouraged responses and avoided
censoring what her workers said. Sharon is utilizing a problem-solving technique known
as brainstorming.
Feedback: Brainstorming is a problem-solving technique that encourages a group of people to

come up with as many suggestions for solving the problem as possible in a short period of
time, and with no censoring of ideas.
Answer: True
Bloom’s: Apply
73. After management has created a plan of action, the focus turns to the controlling function
to recheck and often redo the plan.
Answer: False
Bloom’s: Remember
Learning Objective: 07-04 Describe the organizing function of management
74. Organizing involves allocating resources, assigning tasks, and establishing procedures for
accomplishing the organizational objectives.
Answer: True
Bloom’s: Remember
75. The visual illustration of the relationships among the people within an organization that
shows who is accountable for the work and who reports to whom is called a Gantt Chart.
Answer: False
Bloom’s: Remember
76. Branch and plant managers and division heads are classified as first-line managers.
Answer: False
7-18
Bloom’s: Remember
Topic: Types of Managers and Leadership Styles
77. A CEO is often the president of the firm and is responsible for developing the strategic
plans.
Answer: True
Bloom’s: Remember
78. The recent recession eliminated many middle managers giving the remaining managers
more employees to supervise.
Answer: True
Bloom’s: Remember
79. Supervisory managers are those who directly oversee the activities of workers and
evaluate their daily performance.
Answer: True
Bloom’s: Remember
80. Middle managers usually are responsible for tactical planning and controlling.
Answer: True
Bloom’s: Remember
81. The CIO, COO, and CFO are classified as top management positions.
Answer: True
Bloom’s: Remember
7-19
82. In this day of rapidly changing technology, technical skills are the most important skills
for all levels of management.
Answer: False
Bloom’s: Remember
83. Conceptual skills refer to the ability of a manager to perform the tasks associated with a
specific discipline or department.
Answer: False
Bloom’s: Remember
84. First-line managers typically spend less time on conceptual tasks and more time on
technical skills.
Answer: True
Bloom’s: Remember
85. Most of a top manager's time is devoted to conceptual and human relations activities.
Answer: True
Bloom’s: Remember
86. The ability to plan, coordinate, and delegate are among a manager's most basic technical
skills.
Answer: False
Bloom’s: Remember
7-20
87. A person who is a good first-line manager is automatically likely to be a good middle or
top manager.
Answer: False
Bloom’s: Remember
88. Human relations skills include those associated with leadership, coaching, morale building
and supportiveness.
Answer: True
Bloom’s: Remember
89. The question of how to implement change within an organization is the responsibility of
the firm's CEO.
Answer: True
Bloom’s: Remember
90. Staffing involves recruiting, hiring, motivating, and retaining the best people available for
the organization.
Answer: True
Bloom’s: Remember
91. Due to the growth of the Internet, recruiting is less important today than in the past.
Answer: False
Bloom’s: Remember
92. Staffing is a less important management function today than in the past.
Answer: False
7-21
Bloom’s: Remember
93. Organizing involves developing a structure or framework that relates all workers, tasks
and resources to each other.
Feedback: Operationally, organizing means allocating resources, assigning tasks, and

establishing procedures for accomplishing the organizational objectives.
Answer: True
94. Top management is also known as first-line management because it deals with key
managerial decisions on a priority basis.
Feedback: Top management consists of the president and other key company executives. On
the other hand, first-line managers are immediately above an organization's workers.
Answer: False
95. Supervisory managers usually work more with ideas than with people.
Feedback: Supervisory managers are responsible for assigning specific jobs to workers and
evaluating their daily performance. Their jobs often bring them into direct contact with the
workers they supervise. Figure 7.6 illustrates this by showing that first-line managers rely
more on human relations skills than on conceptual skills.
Answer: False
7-22
96. Because of the complex nature of their jobs, top managers spend most of their time
developing and using technical skills.
Feedback: Top managers spend most of their time on tasks requiring conceptual and human
relations skills.
Answer: False
97. The experience gained by first-line managers as they perform their jobs enables them to
acquire all the skills they will need when promoted to higher levels of management.
Feedback: Different skill sets are needed at different levels of management. First-line
managers tend to use technical skills extensively, but spend much less time using conceptual
skills. On the other hand top managers use very few technical skills, but often perform tasks
requiring exceptional conceptual skills. Thus, the skills learned by a first-line manager may
not be very useful at higher levels of management.
Answer: False
98. According to the Reaching Across Our Borders box, business leaders must strive to
thoroughly understand a nation’s culture and respect its strengths and challenges in order
to be successful in the global market.
Feedback: Business leaders need to study countries and the impact they have on business
functions. It’s critical they also thouroughly understand a nation’s culture and respect its
strengths and challenges.
Answer: True
7-23
99. Mark is a manager for Cable Connection. He spends most of his time scheduling the
specific service calls that each employee performs during the day, verifying job
completion, and evaluating employee performance on each call. These responsibilities
suggest that Mark is a middle manager.
Feedback: First-line managers typically carry out the tasks that Mark is performing. Middle
managers generally are more involved in tactical planning and controlling.
Answer: False
Bloom’s: Analyze
100. Chris was recently promoted to a position as a first-line manager. At this level of
management, he will use human relations and conceptual skills as well as technical skills.
Feedback: Though they rely on technical skills more than managers at other levels, first-line
managers must also use human and conceptual skills to a certain degree. In fact, as Figure 7.6
shows, all three levels of management, to varying degrees, must use all three types of skills.
Answer: True
Bloom’s: Apply
101. Liz is a first-line manager at her company, which is very traditional in its approach to
management. In her position, Liz probably spends a lot of time giving employees detailed
and specific instructions.
Feedback: First-line managers are directly responsible for supervising workers and evaluating
their performance.
Answer: True
Bloom’s: Apply
7-24
102. Fatma wants to become a manager. However, she is shy and avoids conversation with
strangers. She is very comfortable with computers and information technology and has
great technical skills in these areas. Fatma's personal traits make her a good candidate for
a top management position.
Feedback: Top managers typically use few technical skills. Instead, almost all of their time is
devoted to human relations and conceptual tasks.
Answer: False
Bloom’s: Apply
103. Staffing is less important at Sony, IBM and other high-tech firms because these firms
sell technology.
Feedback: At most high-tech companies, like IBM and Sony, the primary capital equipment is
brainpower, so staffing is essential to obtain the best people available to accomplish these
companies' objectives.
Answer: False
Bloom’s: Apply
104. People who are good leaders also are almost always good managers.
Answer: False
Bloom’s: Remember
Learning Objective: 07-05 Explain the differences between leaders and managers, and describe the various leadership styles
105. Leadership is the management function of checking to determine whether or not an

organization is progressing toward its objectives, and taking corrective action if it is not.
Answer: False
Bloom’s: Remember
7-25
106. One difference between managers and leaders is that managers strive to achieve
stability while leaders embrace change.
Answer: True
Bloom’s: Remember
107. Management carries out of the vision created by leadership.
Answer: True
Bloom’s: Remember
108. Effective leadership includes the ability both to welcome change and to promote
ethical behavior.
Answer: True
Bloom’s: Remember
109. Good leaders motivate workers and create the environment for workers to motivate
themselves.
Answer: True
Bloom’s: Remember
110. Managers must lead by doing, not just by saying.
Answer: True
Bloom’s: Remember
111. A leader's most important job may be to transform the way the company does business
so that it's more effective and efficient.
Answer: True
7-26
Bloom’s: Remember
112. Researchers have determined that all effective leaders have similar traits.
Answer: False
Bloom’s: Remember
113. There is no single leadership style that works best in all situations.
Answer: True
Bloom’s: Remember
114. Research has shown that the democratic style of leadership is the most effective style
of leadership.
Answer: False
Bloom’s: Remember
115. Research on leadership supports the idea that the best leadership style depends on
several factors, including the people being led and the situation.
Answer: True
Bloom’s: Remember
116. The autocratic style of leadership can be very effective in emergency situations.
Answer: True
Bloom’s: Remember
7-27
117. The traits used by autocratic leaders include warmth, friendliness, and understanding.
Answer: False
Bloom’s: Remember
118. The traits that characterize participative leaders include flexibility, good listening
skills, and empathy.
Answer: True
Bloom’s: Remember
119. Autocratic leadership is most effective with workers who like to work independently
and make their own decisions.
Answer: False
Bloom’s: Remember
120. Research has shown that employee participation in decision making improves job
satisfaction.
Answer: True
Bloom’s: Remember
121. Free-rein leaders tend to carefully monitor their subordinates to make sure they are
doing the job in the correct way.
Answer: False
Bloom’s: Remember
7-28
122. Managers are most effective when they consistently use the same leadership style with
every employee assigned to their work group.
Answer: False
Bloom’s: Remember
123. In traditional organizations, directing includes both giving assignments to workers and
providing feedback on their performance.
Answer: True
Bloom’s: Remember
124. Empowerment means that more authority and responsibility is given to top
management.
Answer: False
Bloom’s: Remember
125. Enabling is the term used to describe the process by which employees recognize and
respect the authority of managers to issue orders.
Answer: False
Bloom’s: Remember
126. Knowledge management involves finding the right information, keeping the
information accessible, and making the information known to everyone in the firm.
Answer: True
Bloom’s: Remember
7-29
127. The focus of knowledge management is to make sure top managers have all of the
information they need to run the company.
Answer: False
Bloom’s: Remember
128. The first step to developing a knowledge management system is to develop the
technology to keep information secure.
Answer: False
Bloom’s: Remember
129. The amount of data gathered has grown so much that the term big data is used to
describe the vast amount of information available.
Answer: True
Bloom’s: Remember
130. A comparison of leadership and management suggests that leadership is about creating
a vision, while management is about carrying out that vision.
Feedback: Leadership is creating a vision, while management is the carrying out of the
leadership's vision.
Answer: True
131. The Adapting to Change box showed us that what people think of a company is
influenced by their responses on social media.
Feedback: Mary Barra of GM made a commitment to search for complaints, respond quickly,
and solve problems customers were posting on Twitter and Facebook. If GM didn't respond to
their customer base, their image could be tarnished.
Answer: True
7-30
132. Heather has a strong desire to maintain and preserve order and stability. She is very
good at developing tactical plans to achieve her company's goals and objectives. These
characteristics suggest that Heather has characteristics of an exceptional leader.
Feedback: One of the characteristics of leaders is that, rather than striving for order and
stability, they create and embrace change. The fact that Heather strives to produce order and
stability suggests she might be a good manager, and her planning skills reinforce this
conclusion. However, not all good managers make good leaders.
Answer: False
Bloom’s: Analyze
133. Brett heads a department in a major manufacturing corporation. He strives to maintain

a free-rein approach to leadership in most situations. Recently, Brett's company lost a
major contract that it needs to continue the current level of operation. The company needs
to take quick action to adjust, including slashing expenses. Under these conditions, Brett
should maintain his free-rein style of leadership.
Feedback: No single leadership style is always effective. The best style will depend on the
people being led, the organization, and the situation. Good managers often vary their
leadership styles as conditions change. In crisis situations, the autocratic approach is
sometimes more effective than a free-rein approach.
Answer: False
Bloom’s: Analyze
134. Lamont is quick and decisive. He makes most decisions by himself, issues orders, and
expects his subordinates to follow them without question. Lamont's behavior is an
example of the free-rein style of leadership.
Feedback: A free-rein manager is one who gives his or her subordinates a substantial amount
of freedom. Lamont's approach, with its emphasis on issuing orders without consultation, is
more consistent with the autocratic style of leadership.
Answer: False
7-31
Bloom’s: Apply
135. A recent customer survey has convinced top managers at Akwip Corporation that their
firm is doing a poor job of responding quickly to the needs of customers. The managers
are very concerned about this problem. Empowerment might be an approach that would
help Akwip improve its responsiveness.
Feedback: Empowerment means giving employees the authority and responsibility to respond
quickly to consumer requests.
Answer: True
Bloom’s: Analyze
136. Juanita is a project manager for a group of experienced and creative programmers at
Idle Time Gaming, a publisher of popular computer games. Since the programmers are
bright, creative, and highly motivated, Juanita brainstorms basic ideas with her group,
then allows the programmers a great deal of freedom to do what it takes to reach the
agreed-upon objectives. Juanita is using a free-rein leadership style.
Feedback: A free-rein leader gives subordinates a great deal of freedom to do whatever it

takes to accomplish the organization's objectives.
Answer: True
Bloom’s: Apply
137. Bryce has worked for Carolina Hotel for 10 years. Greg is a new employee at the
hotel. Rachel, who oversees both of these employees, may find that she should use a
different leadership style with Greg than with Bryce.
Feedback: An effective manager may use different leadership styles for different people or
situations. A new worker may require more direction, while a more experienced employee
may be more responsive to empowerment and a free-rein style of leadership. More
experienced workers may respond better to a more democratic style.
Answer: True
Bloom’s: Apply
7-32
138. Joseph, a department chair at a major university, always gives department faculty
members a chance to express their opinions and encourages them to participate in decision
making. Employees who work with Joseph are likely to have a high level of job
satisfaction.
Feedback: Joseph is using the democratic leadership style. Research has found that this style
usually increases the job satisfaction of employees.
Answer: True
Bloom’s: Apply
139. Zoe is a middle manager at Watta-Deihl Incorporated. The company's top management
has just announced that they are going to initiate a policy of empowerment. In order for
this policy to succeed, Zoe and other managers will need to adopt a more autocratic style
of leadership.
Feedback: Empowerment means giving employees more authority and responsibility to make
their own decisions. Autocratic leadership, which relies on issuing orders and expecting
people to follow them, is not consistent with empowerment. Managers in firms where
empowerment is practiced typically give fewer detailed instructions and spend more time
coaching, assisting and counseling workers.
Answer: False
Bloom’s: Apply
140. The steps of the controlling function include assigning tasks and establishing
procedures to accomplish organizational goals.
Answer: False
Bloom’s: Remember
Learning Objective: 07-06 Summarize the five steps of the control function of management
141. Controlling provides managers and workers with feedback that helps them adjust to
deviations from plans.
Answer: True
Bloom’s: Remember
7-33
142. If managers do a good job planning and organizing, there shouldn't be a need for them
to be involved with controlling.
Answer: False
Bloom’s: Remember
143. Two of the key components of the control process are setting clear performance
standards and communicating results and deviations to the employees involved.
Answer: True
Bloom’s: Remember
144. The first step in the controlling process is to monitor and record the actual results.
Answer: False
Bloom’s: Remember
145. Without clear standards, the control process is impossible to implement.
Answer: True
Bloom’s: Remember
146. In the control process, performance standards should be stated in general terms in
order to give management as much flexibility as possible.
Answer: False
Bloom’s: Remember
7-34
147. In order to be effective, performance standards must be specific, attainable, and
measurable.
Answer: True
Bloom’s: Remember
148. Accounting and finance are important for control systems because they provide the
numbers management needs to evaluate progress.
Answer: True
Bloom’s: Remember
149. External customers are those individuals or units that receive services from other units
within the same organization.
Answer: False
Bloom’s: Remember
150. A customer-oriented firm should focus exclusively on satisfying its internal

customers.
Answer: False
Bloom’s: Remember
151. When all is said and done, financial standards such as profit and return on investment
are the only relevant measures of how well a firm is meeting its goals.
Answer: False
Bloom’s: Remember
7-35
152. When setting standards used in controlling, it is better to simply state general goals
such as "better quality" or "higher levels of consumer satisfaction" than it is to spend a lot
of time and effort developing more specific standards.
Feedback: If standards are stated in very general terms, it becomes difficult to determine
whether the goals are being met. General and vague goals do not clearly identify what the
firm is trying to achieve.
Answer: False
153. Chase is a manager for World Graphic Design, Inc., a firm that designs and
manufactures greeting cards, invitations, announcements, and other event material. Chase
spends a lot of time trying to find the right people for various positions at his company.
These efforts are part of the controlling function of management.
Feedback: Controlling is concerned with checking to see whether the organization is meeting
its goals by setting standards, measuring actual performance, comparing actual results with
the desired standards, providing feedback, and taking corrective action if necessary. Staffing,
which is the process of finding the right people for various positions within an organization, is
part of the organizing function of management.
Answer: False
Bloom’s: Apply
154. Rebecca is concerned about the number of customers complaining about the poor
service provided by the department she manages for a hardware store. She is convinced
that her employees can provide better service and cut complaints significantly. Rebecca
has set a goal for her department to reduce customer complaints by 15% within six
months. This goal is an example of the type of performance standard needed for effective
controlling.
Feedback: An effective standard for the controlling process should be specific, attainable, and
measurable. It is also important to establish a time period for the achievement of the goal.
Assuming that she is correct about the ability to reduce complaints significantly, Rebecca's
standard satisfies these criteria.
Answer: True
Bloom’s: Apply
7-36
155. Pro Fit, Inc., a maker of men's sportswear, has just reported a record profit. This
proves that the firm is successfully achieving its goals.
Feedback: Although measures of financial success (such as profit) are very important
indicators of business performance, they are not the only measures. The purpose of a firm
today is to satisfy a broad group of stakeholders, including employees, customers, and the
people living in the local communities where the business has operations. The success of the
firm at satisfying the diverse interests of these groups cannot be measured by focusing on
financial criteria alone.
Answer: False
Bloom’s: Apply
Multiple Choice Questions
156. 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.
Answer: B
Bloom’s: Remember
7-37
157. One of the challenges facing today's managers is to:
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.
Answer: C
Bloom’s: Remember
158. 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.
Answer: B
Bloom’s: Remember
159. The revolution in management that is currently under way 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 teamwork.
Feedback: Management is experiencing a revolution. The manager of the future will likely be
working in teams and assuming completely new roles in the firm.
Answer: D
7-38
160. 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.
Feedback: Employees today are more educated and demand more self-direction. As a result,
today's managers are educated to guide, train, support, motivate, and coach employees rather
than to tell them what to do. These managers are likely to emphasize teamwork and
communication rather than discipline and order giving.
Answer: D
161. 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.
Feedback: The marketplace is now global, and the advent of the Internet means that
competition from global competitors is only a mouse click away.
Answer: B
Bloom’s: Apply
7-39
162. __________ is the art of utilizing organizational resources to accomplish goals at

work.
A. Socialization
B. Justification
C. Preparation
D. Management
Answer: D
Bloom’s: Remember
163.
One of the four primary functions of management is:
A. controlling.
B. marketing.
C. financing.
D. designing.
Answer: A
Bloom’s: Remember
7-40
164. 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.
Answer: C
Bloom’s: Remember
165. 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
__________ function of management.
A. controlling
B. leading
C. planning
D. organizing
Answer: D
Bloom’s: Remember
7-41
166. __________ 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
Answer: B
Bloom’s: Remember
167. ___________ 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
Answer: B
Bloom’s: Remember
7-42
168. ___________ 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
Answer: C
Bloom’s: Remember
169. 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.
Feedback: Today's organizations are being designed to focus on customer needs. Managers
want to organize the firm so that everybody in the organization is working to please the
customer, while keeping in mind that the firm must be profitable.
Answer: B
7-43
170. 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.
Feedback: Controlling is the management function that involves checking to see whether or
not an organization is progressing toward its goals and objectives, and taking corrective action
if it is not.
Answer: A
171. 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.
Feedback: Planning is the management function that includes anticipating trends and
determining the best strategies and tactics to achieve organizational goals and objectives.
Answer: B
7-44
172. 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
B. 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
Feedback: Leading involves creating a vision for an organization and guiding, training,
coaching and motivating workers so that they can work effectively within the organization.
Answer: D
173. 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
Feedback: Planning involves anticipating trends, identifying opportunities and challenges,

and devising strategies and tactics that will help the firm achieve its goals and objectives.
Answer: B
7-45
174. 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 long-term growth
objectives
Feedback: Organizing includes creating the conditions and systems in which everyone and
everything works together to achieve an organization's objectives. Many of today's
organizations attempt to organize in ways that enable them to please their customers at a
profit.
Answer: C
175. 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
Feedback: Leading involves communicating, guiding, training, coaching, and motivating

others to work effectively toward achieving an organization's goals.
Answer: C
Bloom’s: Apply
7-46
176. 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
Feedback: Controlling involves checking to determine whether goals and objectives are being
met, and taking corrective action if they are not.
Answer: A
Bloom’s: Apply
177. 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
Answer: D
Bloom’s: Remember
7-47
178. A vision for a company is:
A. an explanation of why the company 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.
Answer: A
Bloom’s: Remember
179. 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.
Answer: B
Bloom’s: Remember
180. 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
Answer: C
7-48
Bloom’s: Remember
181. __________ involves setting the organization's vision, goals, and objectives.
A. Organizing
B. Planning
C. Controlling
D. Directing
Answer: B
Bloom’s: Remember
182. ___________ are broad, long-term accomplishments an organization wants to

achieve.
A. Goals
B. Objectives
C. Directives
D. Agendas
Answer: A
Bloom’s: Remember
7-49
183. __________ are specific, short-term, 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
Answer: C
Bloom’s: Remember
184. 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
Answer: D
Bloom’s: Remember
7-50
185. __________ 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
Answer: A
Bloom’s: Remember
186. 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.
A. strategic
B. contingency
C. first-line
D. tactical
Answer: D
Bloom’s: Remember
7-51
187. __________ 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
Answer: B
Bloom’s: Remember
188. 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.
Answer: B
Bloom’s: Remember
7-52
189. 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
Answer: C
Bloom’s: Remember
190. 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
Answer: A
Bloom’s: Remember
7-53
191. 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
Answer: D
Bloom’s: Remember
192. _________ 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
Answer: A
Bloom’s: Remember
193. __________ is choosing among two or more alternatives.
A. Contingency planning
B. Decision making
C. Organizational selection
D. Utility analysis
Answer: B
7-54
Bloom’s: Remember
194. The first step in the rational decision-making model is to:
A. recruit team members to work on the problem.
B. gather data.
C. develop alternative responses.
D. define the situation.
Answer: D
Bloom’s: Remember
195. __________ 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
Answer: A
Bloom’s: Remember
7-55
196. 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.
Answer: C
Bloom’s: Remember
197. In a company in which an 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.
Feedback: A vision communicates why an organization exists and where it is going. A clear
vision gives employees a sense of purpose and a set of values.
Answer: C
7-56
198. 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.
Feedback: Goals are broad, long-term accomplishments an organization wishes to attain.

Objectives are specific, short-term statements detailing how to achieve the goals.
Answer: D
199. 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?
Feedback: In strategic planning, an organization answers basic questions such as which

customers to serve, what products to produce, and which geographic areas to select as
markets.
Answer: A
7-57
200. Because economic and 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.
Feedback: Contingency planning identifies alternative courses of action for use if the primary
plans do not achieve the objectives of the organization. This type of planning is necessary in
today's environment where economic and competitive conditions change frequently.
Answer: B
201. 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
Feedback: PMI is a problem solving technique that evaluates possible solutions by identifying
their pluses, minuses, and implications.
Answer: C
7-58
202. 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.
Feedback: Employees and managers often work together to design a mission statement that
reflects the organization's fundamental purposes.
Answer: B
Bloom’s: Apply
203. 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.
Feedback: Strategic planning involves setting the major goals of the organization and the
policies and strategies for obtaining and using resources to achieve those goals. This type of
planning looks at which customers to serve, what products or services to offer, and the
geographic areas where the firm will operate.
Answer: C
Bloom’s: Apply
7-59
204. 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
Feedback: A vision explains why an organization exists and where it is trying to go. The
purpose of a vision is to provide a sense of purpose and a common set of values to unite the
workers and give them a sense of direction.
Answer: A
Bloom’s: Apply
205. 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
Feedback: A mission statement is an attempt to reflect the organization's fundamental values.

It identifies the guiding principles of the organization.
Answer: B
Bloom’s: Apply
7-60
206. 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.
Feedback: Contingency planning involves developing alternative plans that can be used if the
primary plan proves unsatisfactory. This type of planning helps firms cope with changes in the
economic and competitive environment that might render the primary plan ineffective.
Answer: C
Bloom’s: Apply
207. When a firm makes use of 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.
Feedback: SWOT analysis identifies an organization's strengths, weaknesses, opportunities,

and threats. In the context of SWOT, strengths and weaknesses are internal to the firm. In
other words, strengths refer to what the firm currently does well, and weaknesses refer to the
areas where the company needs to improve.
Answer: D
Bloom’s: Analyze
7-61
208. 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.
Feedback: Tactical planning is concerned with developing specific short-run decisions about
what is to be done, who is to do it, and how it is to be done.
Answer: C
Bloom’s: Apply
209. 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.
Feedback: Operational planning is the process of setting work standards and schedules
necessary to implement tactical objectives. Lower-level managers such as supervisors and
department managers usually carry out this type of planning.
Answer: D
Bloom’s: Apply
7-62
210. 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 collecting needed information
C. Develop alternatives
D. Determining if the decision was a good one
Feedback: Carlos has already defined the situation—that of opening a graphic design service
business. He has described that he would like to locate the business in his home and who
some of the customers might be. Further he has collected information about how much money
he must earn. He is just beginning to consider whether he should work alone or with a partner
so he is in the develop alternatives step.
Answer: C
Bloom’s: Analyze
211. __________ 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
Answer: C
Bloom’s: Remember
7-63
212. 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.
Answer: C
Bloom’s: Remember
213. 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.
Answer: D
Bloom’s: Remember
214. General and divisional managers, plant managers, and deans and department heads at
colleges are classified as:
A. middle management.
B. supervisory management.
C. top management.
D. nominal management.
Answer: A
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Bloom’s: Remember
215. 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.
Answer: B
Bloom’s: Remember
216. ___________ skills involve a manager's ability to picture the organization as a whole
and the relationships among its various parts.
A. Creative
B. Technical
C. Conceptual
D. Autonomic
Answer: C
Bloom’s: Remember
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217. ____________ 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
Answer: C
Bloom’s: Remember
218. Leadership, coaching, and morale building are all part of a manager's _________
skills.
A. technical
B. theoretical
C. empirical
D. human relations
Answer: D
Bloom’s: Remember
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219. 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
Answer: A
Bloom’s: Remember
220. 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
Answer: B
Bloom’s: Remember
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221. 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)
Answer: D
Bloom’s: Remember
222. The further up the managerial ladder a person moves, the __________ his or her
original job skills become.
A. more important
B. less important
C. stronger
D. more tactical
Answer: B
Bloom’s: Remember
223. A chief operating officer (COO) would be classified as part of a firm's:
A. primary management.
C. top management.
D. first-line management.
Answer: C
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Bloom’s: Remember
224. ___________ involves recruiting, hiring, motivating, and retaining the best people
available to accomplish the company's objectives.
A. Directing
B. Planning
C. Leading
D. Staffing
Answer: D
Bloom’s: Remember
225. 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.
Feedback: First-line managers spend most of their time explaining procedures, assigning jobs,
and evaluating the performance of employees within their own areas. These activities require
human relations and technical skills. Top managers are more concerned with creating a vision,
strategic planning, and overseeing the operations of the organization as a whole. This requires
them to use conceptual and human relations skills.
Answer: B
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226. 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.
Feedback: Staffing is the function of hiring, motivating, and retaining the best people
available to accomplish the company's objectives.
Answer: A
Bloom’s: Apply
227. 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.
D. forward management.
Feedback: Supervisory (or first-line) managers are concerned with assigning workers to
specific jobs and evaluating the daily performance of those workers.
Answer: C
Bloom’s: Apply
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228. 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
Feedback: Technical skills involve the knowledge and ability to perform a specific task. A
portion of the course work in these technical areas is intended to enable the student to perform
specific activities.
Answer: B
Bloom’s: Apply
229. Which of the following persons is most likely to be involved in strategic planning?
A. chief executive officer
B. electrical shop supervisor
C. budget analyst
D. advertising manager
Feedback: Top managers, such as the chief executive officer of a firm normally develop
strategic plans.
Answer: A
Bloom’s: Apply
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230. 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.
Feedback: First-line managers are responsible for assigning specific jobs to workers and
evaluating the performance of employees on a daily basis.
Answer: B
Bloom’s: Apply
231. 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.
D. middle management.
Feedback: Tactical planning and controlling are primarily the responsibility of middle
managers. Examples of middle managers include plant managers, branch managers, deans and
department heads.
Answer: D
Bloom’s: Apply
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232. 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.
Feedback: As a first-line manager, Hollis will work with employees in ways that will require
him to use technical and human relations skills extensively. First-line managers spend little
time on activities requiring conceptual skills.
Answer: B
Bloom’s: Analyze
233. Ricardo works as a department head at Barnes 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:
A. technical skills.
B. conceptual skills.
C. orientation skills.
D. human relations skills.
Feedback: Human relations skills include the ability to train, coach, and motivate employees
so that they become more productive.
Answer: D
Bloom’s: Apply
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234. 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.
B. verbal skills.
C. qualitative skills.
D. conceptual skills.
Feedback: Technical skills are the skills that provide a manager proficiency in a particular
area, such as accounting, finance, or marketing.
Answer: A
Bloom’s: Apply
235. _____________ 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
Answer: D
Bloom’s: Remember
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236. 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.
Answer: A
Bloom’s: Remember
237. The __________ style of leadership is characterized by making managerial decisions

without consulting others.
A. autocratic
B. bureaucratic
C. free rein
D. democratic
Answer: A
Bloom’s: Remember
238. 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
Answer: C
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Bloom’s: Remember
239. 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
Answer: A
Bloom’s: Remember
240. 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.
Answer: B
Bloom’s: Remember
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241. __________ 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
Answer: D
Bloom’s: Remember
242. _____________ means giving employees the authority and responsibility to respond
quickly to customer requests.
A. Restructuring
B. Delineating
C. Empowerment
D. Intrapreneuring
Answer: C
Bloom’s: Remember
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243. 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
Answer: A
Bloom’s: Remember
244. ____________ 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
Answer: C
Bloom’s: Remember
245. The first step in developing a knowledge management system is to:
A. empower employees to make their own decisions and accept the 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.
Answer: D
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Bloom’s: Remember
246. One difference between managers and leaders is that:
A. managers are found in businesses while leaders operate in nonprofit organizations.
B. managers 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.
Feedback: Business literature often notes that leaders and managers do not always share the
same traits. For example, although managers typically strive for order and stability, leaders
frequently embrace change.
Answer: B
247. 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.
Feedback: No single style of leadership always works best. The style that is most effective
depends on the situation and the people who are being led.
Answer: B
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248. Autocratic leadership is likely to be effective when:
A. subordinates are highly trained 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.
Feedback: Autocratic leadership consists of making decisions without consulting others,

issuing orders, and expecting subordinates to follow orders without question. This style of
leadership may be effective, and even necessary, when an organization faces a crisis in which
someone must take charge and make decisions quickly.
Answer: B
249. 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.
Feedback: Since the most effective leadership style depends on who is being led and the
situation, managers may find that they need to use different styles when they deal with
different employees, or when conditions change.
Answer: C
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250. 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.
Feedback: Empowerment means giving workers the authority and responsibility to respond
quickly to customer requests. For empowerment to work, employees must be given the
knowledge, tools, and freedom to make decisions without waiting for approval from their
manager. Thus, a manager in an organization that relies on empowerment must be more like a
coach and counselor than a boss or director who tells the workers exactly what to do.
Answer: D
251. The Adapting to Change box reflects upon the use of Twitter and other social media
sources to measure customer satisfaction. GM employees scanned various social media
sites to stay current with customer perceptions and complaints. It is important that
customers perceive that products and services are meeting or exceeding the standards that
companies set. The _____________ of management involves the monitoring of product
and service performance.
A. leadership process
B. control process
C. organizing process
D. planning process
Feedback: The control process begins with clear performance standards. The process then
involves monitoring and recording the performance of products and services, and comparing
these results to the standards previously set. If necessary, corrective action is taken to bring
negatively performing products and services to the level originally set.
Answer: B
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252. When we think of successful music entertainment groups of the past 60 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
Feedback: Progressive leaders today give employees the authority and responsibility to make
decisions on their own. This is the essence of empowerment. The management coaches and
advises employees, rather than directing their work.
Answer: C
Bloom’s: Apply
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253. Which of the following best summarizes the 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.
Feedback: Leaders provide vision. In the future, they will also be called upon to provide the
organization with its moral compass by stressing corporate values and corporate ethics.
Answer: A
Bloom’s: Analyze
254. 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.
Feedback: The CEO of QuickDrive uses a participative management style, one that consists
of managers and employees working together to make decisions. At meetings employees
discuss management issues and resolve those issues together in a democratic manner, another
attribute of the participative leadership style.
Answer: C
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Bloom’s: Analyze
255. Well-known retired basketball coach Bob Knight was known for his emotional antics
at Indiana University 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
Feedback: Autocratic leaders make decisions without consulting others.
Answer: D
Bloom’s: Apply
256. 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. participative
D. open shop
Feedback: Participative, or democratic, managers seek out the opinions and ideas of their
subordinates and allow them to participate in decision making.
Answer: C
Bloom’s: Apply
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257. 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
Feedback: Free-rein leadership consists of managers setting objectives, and then giving
subordinates a significant degree of freedom to do what it takes to accomplish those
objectives.
Answer: A
Bloom’s: Apply
258. Recently, a senior software engineer complained that his boss was always in the
command and control mode: “He doesn’t trust us to make the right decision!” The boss
rarely took the advice of his employees. There were occasions when productivity was
hampered because he chose to do things only his way. Referring to leadership styles, this
would best be described as:
A. free reign.
B. democratic.
C. alternative.
D. autocratic.
Feedback: Autocratic leadership means making managerial decisions without consulting

others. This style is effective in emergencies, or with new, rather unskilled employees.
Answer: D
Bloom’s: Apply
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259. Andrew Bryant of the New York Times interviewed the CEO of Aruba Networks, who
said he valued a mentor he had at Hewlett Packard several years earlier. In reference to
his former mentor, the CEO recalled: “Basically, he would push you and give you as much
as you could handle until you started failing. He would encourage you to not be afraid of
failing—because when you start failing, that’s when you know where your limit is, and
then you can improve around that. So he actually sometimes would reward failure
because that means that you have pushed yourself.” The CEO was describing a former
mentor who _______ his employees.
A. practiced core competency management with
B. breached
C. empowered
D. benchmarked
Feedback: Progressive leaders today give employees the authority and responsibility to make
decisions on their own. This is the essence of empowerment. The management coaches and
advises employees, rather than directing their work.
Answer: C
AACSB: Knowledge Appliction
Bloom’s: Apply
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260. Last year, Idle Time Gaming, Inc., experienced one of the most successful
introductions of one of its new action videos since the company’s inception. The CEO
announced that sales and profits had exceeded company projections. He attributed the
success to a flexible plan, which included good design, accurate product testing, and
innovative marketing and sales tactics. In order to have good recall of the procedures that
were put in place for this successful introduction, he has charged a team of managers to
develop a(n) __________________ system, so the company can avoid “reinventing the
wheel.” For future introductions, he wants to be able to recall what worked and what
didn’t work.
A. information technology
B. human relations management
C. enablement management
D. knowledge management
Feedback: Knowledge management is a system of finding the right information, keeping the
information in a readily accessible place, and making the information available to all
employees.
Answer: D
Bloom’s: Apply
261. 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.
Answer: B
Bloom’s: Remember
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262. 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 in the mission statement.
D. attainable.
Answer: D
Bloom’s: Remember
263. 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
Answer: A
Bloom’s: Remember
264. __________ 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
Answer: B
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Bloom’s: Remember
265. __________ 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
D. Distribution centers
Answer: B
Bloom’s: Remember
266. 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
Feedback: The controlling function of management involves checking to see whether the firm
is making progress toward meeting its goals and objectives, and taking corrective action if
necessary.
Answer: D
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267. 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% in the next
month. Pam has set a(n):
A. procedural policy.
B. functional objective.
C. policy guide.
D. performance standard.
Feedback: In order to determine whether a firm is making progress toward its goals and
objectives, managers must establish specific, attainable, and measurable standards. This is
what Pam has done.
Answer: D
268. 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.
Feedback: A good standard must be specific, measurable, and attainable. The terms
"significant improvement" and "more efficient" are too vague and a complete elimination of
all complaints in one month is unlikely to be an attainable standard.
Answer: B
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269. Two years ago, Travis started his own restaurant supply company, serving the greater
Chicago 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.
Feedback: The first step in the controlling process is to set clear performance standards.
Answer: C
Bloom’s: Analyze
270. Idle Time Gaming, Inc., has established clear standards of performance for its latest
video game that will involve physical challenges such as hand-eye coordination and the
player’s ability to react quickly. After a significant amount of testing, the results are
compared to the previously established development standards. If necessary, the
engineering team will correct deficiencies before customers test the game. These
activities are part of the _____________ of management.
A. organizing function
B. control function
C. leading function
D. planning function
Feedback: The control function of management measures performance relative to the planned
objectives and standards. The process includes establishing clear standards, as well as
comparing results against standards.
Answer: B
Bloom’s: Apply
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271. 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.
Feedback: After comparing results to standards, the next step in the control process is to
communicate results and deviations to the employees involved.
Answer: C
Bloom’s: Apply
272. 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:
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 on it than on the satisfaction of a
stockholder, since she is an external customer.
D. consider Harper's satisfaction only if she has worked in the same job for at least two years.
Feedback: The criterion for measuring success in a customer-oriented firm is customer

satisfaction. However, customers are now defined broadly to include internal customers
(people within the organization that receive services from others within the organization) as
well as external (dealers and end users). Harper would be an example of an internal customer.
Answer: B
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Bloom’s: Analyze
273. Customers who shop on Amazon find it helpful to read the customer reviews
associated with products that others have purchased. After making a purchase, the
customer can go to Amazon’s website and post his/her opinion of the product recently
purchased. This strategy not only assists other customers with their decision making, it
helps Amazon react more quickly to the performance of the products it sells. Which of the
following statements attests to the value of this service?
A. This action provides for complete transparency of company financial performance.
B. This action supports a key criterion of the control function: the measurement of customer
satisfaction.
C. This action provides for better tactical planning, particularly the budgeting process.
D. This action supports the premise of recruiting, hiring, and motivating the employees who
believe in social media and other ways to reach customers.
Feedback: Companies measure their performance in a number of areas, including their

financial performance, their areas of operation, their ability to perform learning for their
employees, and customer satisfaction. The use of social media and interactive online
communication provides the company with current customer perception of products and
services.
Answer: B
Bloom’s: Analyze
274. When establishing criteria to measure the success of a customer-oriented 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 nonfinancial concerns.
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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.
Feedback: Financial measures of success, such as profit and return on investment, are
important and should not be ignored. In fact, these measures have traditionally been the
measures most frequently used to judge success. Today, however, the purpose of a customer-
oriented firm is to please all of its stakeholders. Thus, nonfinancial criteria also play an
important role in measuring the success of a firm.
Answer: D
Bloom’s: Analyze
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Essay Questions
275. Identify and define the four key functions of management.
Answer: The four functions of management are planning, organizing, leading, and controlling.
Planning includes anticipating future trends and determining the best strategies and tactics to
achieve organizational goals and objectives.
Organizing includes designing the structure of the organization and creating conditions and
systems in which everyone and everything work together to achieve the organization's goals
and objectives.
Leading is the function concerned with creating a vision for the organization and
communicating, guiding, training, coaching, and motivating others to achieve the goals and
objectives of the organization. Leading today often involves empowering workers and giving
them the freedom to become self-directed and self-motivated.
Controlling refers to establishing clear standards to determine whether 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 goals.

Bloom’s: Apply
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276. Explain the differences between strategic, tactical, operational, and contingency
planning.
Answer: Strategic planning is long-range planning that determines major goals of the
organization. It provides the foundation for the policies, procedures, and strategies for
obtaining and using resources to achieve those goals. Strategic planning deals with such
fundamental questions as which customers to serve, what products and services to sell, and
the geographic areas in which the firm will compete. Students may note that top managers are
very involved in strategic planning.
Tactical planning is short-range planning that involves the process of developing detailed,
short-term statements about what is to be done, who is to do it, and how it is to be done.
Tactical planning involves setting annual budgets and deciding on other details which
contribute to reaching strategic objectives. Students may point out that lower-level managers
are more heavily involved in tactical planning.
Operational planning involves setting the work standards and schedules necessary to
implement the company's tactical objectives. Whereas strategic planning looks at the
organization as a whole, operational planning focuses on specific supervisors, department
managers, and individual employees.
Contingency planning is the preparation of alternative courses of action that may be used if
the primary plans do not achieve the objectives of the organization. Due to rapid changes that
can occur in economic and competitive environments, it is wise to have alternative plans
ready to be implemented. Crisis planning is a part of contingency planning that involves
reacting to sudden changes in the environment.

Bloom’s: Apply
7-96
277. What is the purpose of the SWOT analysis? What types of information does this
analysis provide?
Answer: SWOT analysis is an analysis of an organization's strengths, weaknesses,

opportunities, and threats. It is used to help managers answer several fundamental questions
related to the planning function. These questions include:
 What is the current situation facing the organization?
 What is the state of the business environment?
 What opportunities currently exist for meeting people's needs?
 What products and customers are most profitable?
 Why do people buy (or not buy) our products?
 Who are our major competitors, and what threats do they pose for our business?
SWOT begins with an analysis of the general business environment. It then identifies the
strengths and weaknesses of the firm. This part of SWOT involves internal analysis, which
can normally be done fairly easily. Then the analysis attempts to identify opportunities and
competitive and environmental threats. Since these are based on factors that are external to the
firm, they are more difficult to assess.
Figure 7.2 lists several issues that SWOT analysis may examine.

Bloom’s: Apply
7-97
278. What is empowerment? How has the movement toward empowerment changed the
role of the manager?
Answer: Empowerment means giving employees the authority and responsibility to respond
quickly to consumer requests.
In the past, managers often were bosses who issued orders and expected workers to carry
them out. With the trend toward empowered workers, the manager's role is changing. The role
of managers of empowered workers will be less that of boss and more that of coach, assistant,
counselor and team member. They will work to enable workers to perform their tasks by
giving them the education, training, and resources they need to assume their self-directed
responsibilities.

Bloom’s: Apply
Topic: Empowering Workers
279. Describe the three basic types of management skills, and relate these skills to the tasks
performed by different levels of management.
Answer: The three basic types of management skills are technical skills, human relations
skills, and conceptual skills.
Technical skills are the skills needed to perform tasks in a specific discipline (such as selling a
product or developing software) or department (such as marketing or information systems).
Human relations skills involve communication and motivation; they enable managers to work
through and with people. Such skills also include those associated with leadership, coaching,
morale building, delegating, training and development, and help and supportiveness.
Conceptual skills refer to the ability to picture the organization as a whole and the
relationships among its various parts. Conceptual skills are needed in planning, organizing,
controlling, systems development, problem analysis, decision making, coordinating, and
delegating.
First-line managers, who often must explain procedures and specific techniques to employees,
and evaluate the performance of those employees, make extensive use of technical skills.
First-line managers seldom perform tasks requiring conceptual skills. At higher levels of
management, managers tend to rely more on conceptual skills to carry out their controlling
and planning functions but seldom need technical skills. Managers at all levels make use of
human relations skills.

Bloom’s: Apply
7-98
280. Describe three different leadership styles and give an example of a situation in which
each style could be most used effectively.
Answer: Students should identify the following leadership styles:
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. Autocratic leadership is also effective sometimes with new, relatively
unskilled workers who need clear direction and guidance.
Democratic (or participative) leadership encourages managers and employees to work

together to make decisions. Research has found that employee participation in decisions may
not always increase effectiveness, but it usually increases job satisfaction. Many progressive
organizations are highly successful at using a democratic style of leadership that values traits
such as flexibility, good listening skills, and empathy. Companies such as IBM, Cisco, and
AT&T have used this style successfully.
Free-rein leadership involves setting objectives and giving employees a significant amount of
freedom to do whatever it takes to accomplish those objectives. Doctors often have this
flexibility in hospitals, as do other professionals such as engineers and lawyers, who often
work on special projects or cases. The traits needed by managers in such organizations
include warmth, friendliness, and understanding.

Bloom’s: Apply
7-99
Multiple Choice Questions
Mini-Case
Lauzy Fare left his position as senior vice president at Blue Skies Electronics a few weeks ago
to become the new CEO of Idle Time Gaming. Before joining the new company, Lauzy spent
time studying Idle Time's competitive position and talking to employees in all divisions and at
all levels of the organization. Based on his findings, Lauzy believes that Idle Time has
potential, but also faces some serious challenges if it expects to grow.
Lauzy found that when confronted by him, most of Idle Time's professional employees
seemed almost afraid to express their opinions. He learned that Otto Craddick, the previous
CEO and founder of the company, viewed himself as the boss, and, as such, micromanaged
every aspect of the business. This discouraged employees from using their own initiative and
ideas to solve problems. For example, Otto required sales and service representatives to get
his approval before they made any major commitments to customers. Otto's policy prevented
the organization from responding quickly to customer requests, so sales were lost. Unlike his
predecessor, Lauzy believes it is important for sales and service personnel to be able to deal
with many types of customer requests without needing approval from top management. He is
confident that giving employees the authority and flexibility to deal with customers, and
providing them with the training and resources to help them do so, will improve morale
within the company, create customer satisfaction, and grow revenues.
Lauzy also wants to make workers throughout the organization feel more appreciated. He
plans to continue meeting with them on a regular basis to seek their advice. He hopes his
work colleagues will eventually respond to his leadership style. He has already encouraged
middle managers to get employees more involved in decision making, and has suggested
some problem-solving techniques the managers could try.
Although he thought that changing the rigidity of the company culture would be his first
challenge at the new firm, Lauzy quickly realized that there were no standards in place to
measure the progress of changes in internal morale, customer satisfaction, and profitability.
He has asked managers in those departments to spend more time setting performance
standards and then monitoring actual performance. Lauzy is confident that in a relatively short
period of time internal changes will lead to good company performance. As a member of top
management, Lauzy performs a variety of important tasks.
7-100
281. Otto, the previous CEO at Idle Time Gaming, relied on a(n) ___________ style of
management.
A. autocratic
B. iconoclastic
C. democratic
D. free-rein
Feedback: Otto made decisions without consulting others, and expected subordinates to
follow orders without question. These are characteristics of the autocratic style of
management.
Answer: A
Bloom’s: Analyze
282. Lauzy seems to prefer a(n) __________ style of leadership.
A. autocratic
B. democratic (or participative)
C. PMI
D. altruistic
Feedback: Lauzy likes to listen to the opinions and ideas of subordinates and get them
involved in decision making. This indicates a democratic, or participative, style of leadership.
Answer: B
Bloom’s: Analyze
7-101
283. Lauzy favors problem-solving techniques that allow teams of workers to freely
identify and discuss possible solutions to a problem without having their ideas censored.
Which of the following is a problem-solving technique that Lauzy is likely to suggest to
his managers?
A. SWOT analysis
B. PERT analysis
C. brainstorming
D. controlling
Feedback: Brainstorming is a problem-solving technique that encourages workers to come up

with as many potential solutions to the problem as possible in a short time period without
censoring the ideas.
Answer: C
Bloom’s: Analyze
284. Lauzy's decision to establish well-defined standards for monitoring performance

means that he expects management to seriously engage in the _________ function of
management.
A. research and development
B. verbalizing
C. organizing
D. controlling
Feedback: Controlling is the process of measuring performance relative to objectives and

standards and taking corrective action when necessary.
Answer: D
Bloom’s: Analyze
7-102
285. Which of the following statements best describes the relative importance of the
various types of skills Lauzy will use to perform these tasks? The tasks Lauzy performs
will require:
A. only technical skills.
B. mainly conceptual skills and human relations skills.
C. only human relations skills.
D. mainly technical skills and human relations skills.
Feedback: As a top manager, Lauzy may have good technical skills, but will more often use
conceptual and human relations skills in day-to-day activities. The strategic planning,
leadership, and other activities required of a CEO, however, will require him to use
conceptual and human relations skills extensively.
Answer: B
Bloom’s: Analyze
7-103

Test Planning Table For Chapter 7: Learning Objective Knows Basic Understands Applies Principles

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Chapter 07 - Management and Leadership

TEST PLANNING TABLE FOR CHAPTER 7

LL:1 LL:2 LL:3

1. Describe the 1,2,3,4,5,6,7,8, 9,10,11, 12,13,

2. Describe the four 14,15,16,17,18,19,20,21, 24,25, 26,27,28,29,

3. Relate the planning 30,31,32,33,34,35,36,37, 64,65,66,67,68,69, 70,71,72,

4. Describe the 73,74,75,76,77,78,79,80, 93,94,95,96,97,98~, 99,100,101,102,103,

5. Explain the 104,105,106,107,108,109, 130,131~, 132,133,134,135,136,

6. Summarize the five 140,141,142,143,144,145, 152, 153,154,155,

Total number of test items: 285

True/false questions are in plain text.

True / False Questions

4. Managers must earn the trust of their employees.

7. Managers in progressive organizations tend to emphasize teamwork and cooperation

15. Financing is one of the four key functions of management.

Feedback: Controlling is the function concerned with determining whether or not an

29. Rita is a manager of a medium-sized service company. She is currently involved in

31. Progressive managers consider planning to be of little importance in today's rapidly

37. A mission statement outlines the fundamental purposes of an organization.

38. Today, a mission statement should also address social responsibility.

39. Goals are broad, long-term accomplishments an organization wants to achieve.

40. While goals are measurable, objectives are not.

44. Planning is a continuous process.

49. Strategic planning determines the major goals of the organization.

57. Decision making occurs in all management functions.

60. One step in the rational decision-making model is to develop alternatives.

Feedback: A mission statement is an outline of the organization's fundamental purposes, not a

Feedback: Brainstorming is a problem-solving technique that encourages a group of people to

Feedback: Operationally, organizing means allocating resources, assigning tasks, and

105. Leadership is the management function of checking to determine whether or not an

107. Management carries out of the vision created by leadership.

110. Managers must lead by doing, not just by saying.

133. Brett heads a department in a major manufacturing corporation. He strives to maintain

Feedback: A free-rein leader gives subordinates a great deal of freedom to do whatever it

145. Without clear standards, the control process is impossible to implement.

150. A customer-oriented firm should focus exclusively on satisfying its internal

Multiple Choice Questions

156. Management is more progressive today. There is more emphasis on:

A. individual work that can be successfully measured.

C. striving to eliminate the control function of management.

D. placing greater reliance on the government for financing.

B. find ways to encourage conformity instead of diversity.

C. work with a more educated workforce.

158. Today's progressive managers:

A. prefer to use the autocratic style of leadership.

C. face fewer challenges and problems than 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.

162. __________ is the art of utilizing organizational resources to accomplish goals at

One of the four primary functions of management is:

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.

A. Assigning a particular worker to do a specific task

B. Looking at market forecasts to identify future business opportunities and challenges

D. Conducting a job interview with a potential new employee

Feedback: Planning involves anticipating trends, identifying opportunities and challenges,

A. Going over a spreadsheet to analyze some financial data

B. Teaching a new employee how to use a piece of office equipment

Feedback: Leading involves communicating, guiding, training, coaching, and motivating