Better Business Canadian 2nd Edition Solomon Test Bank

Better Business Canadian 2nd Edition
Solomon Test Bank

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Solomon: Better Business, Second Canadian Edition
Chapter 5: Business Management
1) ___________ is the process of working with people and resources to accomplish the
goals of the organization.
a. Recruitment
Incorrect: Management is the process of working with people and resources to
accomplish the goals of the organization.
b. Production
c. Management
Correct: Management is the process of working with people and resources to accomplish
the goals of the organization.
d. Communication
Answer: c
Diff: 1
Type: MC
Page Reference: 95
Objective: 5.1 Describe the ways managers apply technical, interpersonal, decision-
making, conceptual, and time management skills to business.
2) Which type of skills describes the drafting skills of an architect, programming skills of
a software developer, or the market analysis skills of a marketing manager?
a. conceptual skills
Incorrect: Every job has a set of technical skills that is specific to that particular job.
These skills include abilities and knowledge that enable an employee to carry out the
tasks required of a discipline or department.
b. technical skills
Correct: Every job has a set of technical skills that is specific to that particular job. These
skills include abilities and knowledge that enable an employee to carry out the tasks
required of a discipline or department.
c. interpersonal skills
d. decision-making skills
Answer: b
Diff: 2
Type: MC
Page Reference: 95
Copyright © 2016 Pearson Canada Inc. 1

3) Alfred supervises a group of 20 employees. Every day, he finds the time to have one-
on-one conversations with each of his workers. These conversations can help boost
morale at the office. What type of skills is Alfred demonstrating?
a. decision-making skills
Incorrect: Interpersonal skills allow a manager to interact with others in order to
motivate them.
b. interpersonal skills
Correct: Interpersonal skills allow a manager to interact with others in order to motivate
them.
c. time management skills
motivate them.
d. conceptual skills
motivate them.
Answer: b
Diff: 3
Type: MC
Page Reference: 96
4) Malia was recently complimented on her ability to motivate the employees she
supervises. Outline the skill she is being complimented for.
Incorrect: Interpersonal skills are also known as human relations skills because they
enable managers to interact with others in order to motivate them.
b. leadership skills
c. technical skills
d. interpersonal skills
Correct: Interpersonal skills are also known as human relations skills because they
Answer: d
Diff: 2
Type: MC
Page Reference: 96

5) Jeffrey is the manager of a manufacturing company that has started to lose money.
Explain how Jeffrey can identify the company’s problems.
a. by choosing a plan of action
Incorrect: The first step in a manager’s decision-making process is to identify problems
by analyzing data and searching for trends.
b. by generating alternative solutions
c. by analyzing data and searching for trends
Correct: The first step in a manager’s decision-making process is to identify problems by
analyzing data and searching for trends.
d. by ensuring his decisions are carried out immediately
Answer: c
Diff: 3
Type: MC
Page Reference: 96
6) Madison is a top manager who is able to communicate with the board of directors,
investors, and other leaders in the business community. Shirley is a middle manager who
often communicates with all levels of management and acts as a liaison among groups.
Determine the skills both managers possess.
a. time management skills
Correct: Interpersonal skills are also known as human relations skills because they
c. decision-making skills
d. technical skills
Answer: b
Diff: 3
Type: MC
Page Reference: 96

7) Which step should a manager carry out first when he or she is making a decision?
a. Choose the best plan of action.
Incorrect: When making an important decision, managers go through a formal decision-
making process: identify the problem, generate alternative solutions, evaluate the
alternatives, choose the best plan of action, and evaluate the decision.
b. Generate alternative solutions.
c. Evaluate the alternatives.
d. Identify the problem.
Correct: When making an important decision, managers go through a formal decision-
Answer: d
Diff: 2
Type: MC
Page Reference: 96
8) Daniel is part of upper management and is charged with making difficult decisions for
the company. During his decision-making process, he must evaluate alternatives based on
______________.
a. cost and time
Correct: The decision-making process includes analyzing a problem, examining the
alternatives, choosing and implementing the best plan of action, and evaluating the
results.
b. excitement and action needed
Incorrect: The decision-making process includes analyzing a problem, examining the
results.
c. market competition and share
results.
d. proximity and employees’ approval
results.
Answer: a

Diff: 3
Type: MC
Page Reference: 96
9) Carlos is a manager at a bottle distribution company. Though he is only responsible for

the marketing department, he can also picture the organization as a whole and
understands his department’s relationship to the overall company and the rest of the
business community. These facts demonstrate that Carlos has acquired ____________.
a. technical skills
Incorrect: Conceptual skills give the manager the ability to think abstractly and see the
company and its relationship to the greater community. A person with these skills also
has an understanding about the individual components of an organization.
c. conceptual skills
Correct: Conceptual skills give the manager the ability to think abstractly and see the
d. time management skills
Answer: c
Diff: 3
Type: MC
Page Reference: 96
10) A manager may go through the decision-making process and find out that business
goals are not being met. When this happens, propose what the manager should do.
a. Identify a new problem.
Incorrect: If the goals are not being met, the decision-making process may possibly
become cyclical, beginning again with identifying problems.
b. Understand that the problem cannot be solved.
c. Repeat the process.
Correct: If the goals are not being met, the decision-making process may possibly become
cyclical, beginning again with identifying problems.
d. Combine the business goals into one.

Answer: c
Diff: 2
Type: MC
Page Reference: 96
11) When the final choice has been made during the decision-making process, the next
step is to _____________.
a. identify the problem
Incorrect: When the final choice has been made, plans are put in place to implement the
plan of action.
b. evaluate the alternatives
plan of action.
c. implement the plan of action
Correct: When the final choice has been made, plans are put in place to implement the
plan of action.
d. generate an alternative solution
plan of action.
Answer: c
Diff: 1
Type: MC
Page Reference: 96
12) Jonathan is a manager who is known to have technical skills, while Michelle is good
at time management. George relies on his conceptual skills, and Anna has great
interpersonal skills. If a new market opportunity or potential threat arises, evaluate the
manager that would be able to best analyze the impending outcomes of his or her
decision.
a. Jonathan
Incorrect: George’s conceptual skills would allow him to think abstractly in order to
picture the organization as a whole and to understand its relationship to the rest of the
business community.
b. Michelle
business community.
c. George

Correct: George’s conceptual skills would allow him to think abstractly in order to
business community.
d. Anna
business community.
Answer: c
Diff: 3
Type: MC
Page Reference: 96
13) If Aaron has the ability to identify and analyze a problem, examine the alternatives,
choose and implement the best plan of action, and evaluate the results, he has
_____________.
results.
results.
c. decision-making skills
Correct: The decision-making process includes analyzing a problem, examining the
results.
results.
Answer: c
Diff: 2
Type: MC
Page Reference: 96
14) Identify the last step in the decision-making process.

a. Evaluate the decision.

Correct: Decision-making skills refer to the ability to identify and analyze a problem,
examine the alternatives, choose and implement the best plan of action, and evaluate the
results.
b. Implement the plan of action.
Incorrect: Decision-making skills refer to the ability to identify and analyze a problem,
results.
c. Generate alternative solutions.
results.
d. Choose the best plan of action.
results.
Answer: a
Diff: 1
Type: MC
Page Reference: 96
15) When Robert’s superior gives him a task with a tight deadline, Robert does it as
efficiently as possible. This shows that Robert has developed good _____________.
a. technical skills
Incorrect: Managers with good time management skills have the ability to achieve the
maximum amount of productivity in a set amount of time.
b. conceptual skills
c. interpersonal skills
Correct: Managers with good time management skills have the ability to achieve the
Answer: d
Diff: 3
Type: MC
Page Reference: 97

16) Dylan is a manager who has vision, knowledge, and interpersonal skills; however, he
usually spends the whole day talking with his employees. Select one of the following
skills he needs to become a more effective manager.
a. time management skills
Correct: Time management requires that managers have the ability to recognize ways in
which they can make every task as productive as possible. Efficiency is necessary in
order to successfully manage a business.
b. decision-making skills
Incorrect: Time management requires that managers have the ability to recognize ways in
c. conceptual skills
d. technical skills
Answer: a
Diff: 3
Type: MC
Page Reference: 97
17) A(n) ________ helps everyone stay on task and end the meeting on time.
a. e-mail
Incorrect: Time can be easily wasted if a meeting agenda is not clear and goals are not
set. Effective managers distribute an agenda to all attendees before a meeting that
specifies the goals the meeting must achieve.
b. agenda
Correct: Time can be easily wasted if a meeting agenda is not clear and goals are not set.
Effective managers distribute an agenda to all attendees before a meeting that specifies
the goals the meeting must achieve.
c. binder
d. deadline
Answer: b
Diff: 1

Type: MC
Page Reference: 97
18) Keeping a(n) ________ and crossing off each task when completed are important
time management skills.
a. e-mail
Incorrect: Managers must therefore separate paperwork according to due dates and
clearly label each pile. Keeping a schedule—either electronically or on a calendar—and
crossing off each task when completed are important time management skills.
b. agenda
c. schedule
Correct: Managers must therefore separate paperwork according to due dates and
d. binder
Answer: c
Diff: 1
Type: MC
Page Reference: 97
19) Determine which function of management includes establishing goals, developing

strategies, and determining resources to meet those goals.
a. planning
Correct: Planning is the process of establishing goals and objectives and determining the
best ways to accomplish them.
b. organizing
Incorrect: Planning is the process of establishing goals and objectives and determining
the best ways to accomplish them.
c. controlling
d. leading

Answer: a
Diff: 2
Type: MC
Page Reference: 98
Objective: 5.2
Explain how corporate vision and a mission statement help to keep the company focused
on achieving its goals and objectives.
20) Broad, long-term accomplishments that an organization wants to achieve are called
_____________.
a. mission statements
Incorrect: Goals are broad, long-term accomplishments an organization wants to achieve
within a certain period—in most companies, this is about five years.
b. goals
Correct: Goals are broad, long-term accomplishments an organization wants to achieve
c. objectives
d. strategic targets
Answer: b
Diff: 1
Type: MC
Page Reference: 98
Objective: 5.2 Explain how corporate vision and mission statements help to keep the
company focused on achieving its goals and objectives.
21) ________ are short-term targets that are designed to help companies achieve goals.
a. Mission statements
Incorrect: Objectives are the short-term targets designed to help achieve these goals.
b. Objectives
Correct: Objectives are the short-term targets designed to help achieve these goals.
c. Outcomes
d. Vision statements
Answer: b
Diff: 1
Type: MC
Page Reference: 98

22) When does management establish goals and objectives?

a. during a SWOT analysis
Incorrect: Goals and objectives help keep you on task. By establishing them at the
beginning of strategic planning, a manager will be able to have long-term and short-term
accomplishments to target.
b. in the last step of tactical planning
c. in the first step of strategic planning
Correct: Goals and objectives help keep you on task. By establishing them at the
d. while identifying external opportunities
Answer: c
Diff: 2
Type: MC
Page Reference: 98
23) Which of the following statements accurately describes both goals and objectives?
a. Both are achievable in about a five-year time frame.
Incorrect: Both goals and objectives should be specific, measurable, acceptable, realistic,
timely, extending, and rewarding.
b. Both are best set with deadlines and quantifiable measures.
Correct: Both goals and objectives should be specific, measurable, acceptable, realistic,
c. Both refer to broad and long-term accomplishments.
d. Both refer to short-term targets and outcomes.
Answer: b
Diff: 2
Type: MC
Page Reference: 98

24) Identify the acronym managers should keep in mind when designing and wording
goals and objectives.
a. SMART
b. SMARTER
Correct: Both goals and objectives should be specific, measurable, acceptable, realistic,
c. SMARTEST
d. SMARTS
Answer: b
Diff: 2
Type: MC
Page Reference: 102, Figure 5.5
25) What is a strategic plan in business planning?

a. a vision statement developed by middle management
Incorrect: Top-level managers develop a strategic plan in order to set the approach for
achieving the long-term goals and objectives of the organization. A strategic plan serves
as a framework for decisions and assists in setting corporate benchmarks.
b. a way of developing time management skills
c. a goal created by an individual employee
d. a course of action created by top-level managers
Correct: Top-level managers develop a strategic plan in order to set the approach for
Answer: d
Diff: 2
Type: MC
Page Reference: 98

26) Which of the following is the first step in strategic planning?

a. establishing the corporate purpose
Correct: Strategic planning process includes establishing corporate purpose, performing
SWOT analysis, formulating strategy, and implementing strategy.
b. operational planning
Incorrect: Strategic planning process includes establishing corporate purpose,
performing SWOT analysis, formulating strategy, and implementing strategy.
c. performing a SWOT analysis
d. tactical planning
Answer: a
Diff: 1
Type: MC
27) In a business organization, determine where planning happens.

a. at all levels
Correct: Planning happens at all levels of an organization.
b. within the board of directors
Incorrect: Planning happens at all levels of an organization.
c. in middle management
d. in top management
Answer: a
Diff: 1
Type: MC
Page Reference: 98
28) Explain which of the following sets the approach for achieving the long-term goals
and objectives of an organization.
a. developmental plan
b. marketing plan

c. promotional plan
d. strategic plan
Correct: Top-level managers develop a strategic plan in order to set the approach for
Answer: d
Diff: 2
Type: MC
Page Reference: 98
29) A strategic plan should _____________.

a. be spontaneous
Incorrect: A strategic plan is realistic and obtainable and looks at the big picture.
b. look at the big picture
Correct: A strategic plan is realistic and obtainable and looks at the big picture.
c. include several companies
d. be intuitive
Answer: b
Diff: 1
Type: MC
Page Reference: 98
30) Identify the BEST description of a strategic plan.

a. It gears advertising toward the right investors and consumers.
Incorrect: A strategic plan points the organization to where it wants to be in the future
and identifies how it’s going to get there.
b. It points the organization to where it wants to be in the future.
Correct: A strategic plan points the organization to where it wants to be in the future and
identifies how it’s going to get there.
c. It describes criteria for promoting employees of a company.

d. It provides specific guidelines for hiring new employees.

Answer: b
Diff: 2
Type: MC
Page Reference: 98
31) Select one of the following questions that managers need to answer when coming up
with a strategic plan.
a. What do we want to focus on?
Correct: A strategic plan points the organization to the following questions: “Where are
we going?” “What do we want to focus on?” and “What is the best means to get there?”
b. What are the competitors saying about us?
Incorrect: A strategic plan points the organization to the following questions: “Where
are we going?” “What do we want to focus on?” and “What is the best means to get
there?”
c. What do we purchase?
Incorrect: A strategic plan points the organization to the following questions: “Where are
d. Who is watching us?
Incorrect: A strategic plan points the organization to the following questions: “Where are
Answer: a
Diff: 2
Type: MC
Page Reference: 98
32) Which of the following is a characteristic of a strategic plan?

a. broad
b. complex
c. realistic
Correct: A strategic plan is realistic and obtainable and looks at the big picture.
d. comprehensive
Answer: c
Diff: 1
Type: MC

Page Reference: 98
33) Which of the following is an aspect that business people must pay attention to when
making a strategic plan?
a. shortcomings of the organization
Incorrect: The overall strategic plan is focused on the entire organization, or an entire
department. Those making strategic plans must pay attention to capabilities, resources,
and changes in the environment.
b. weather forecast in the world
c. personal profile of managers
d. resources of the organization
Correct: The overall strategic plan is focused on the entire organization, or an entire
Answer: d
Diff: 2
Type: MC
Page Reference: 98-99
34) A company’s ________ describes why the company is in business and what the
business will look like in the future.
a. strategic plan
Incorrect: A vision identifies what the business wants to be in the future.
b. company profile
c. corporate objective
d. corporate vision
Correct: A vision identifies what the business wants to be in the future.
Answer: d
Diff: 1
Type: MC
Page Reference: 99

35) How does a company establish its corporate purpose?

a. through a code of ethics
Incorrect: The mission statement is a more current description of the organization’s
purpose, basic goals, and philosophies.
b. through a company profile
c. through a mission statement
Correct: The mission statement is a more current description of the organization’s
d. through a company logo
Answer: c
Diff: 2
Type: MC
Page Reference: 99
36) Which of the following refers to the organization’s purpose, basic goals, and
philosophies?
a. code of ethics
b. corporate profile
c. mission statement
Correct: The mission statement is a more current description of the organization’s
d. strategic plan
Answer: c
Diff: 2
Type: MC
Page Reference: 99

37) Which part of the strategic planning process focuses on the internal strengths and
weaknesses of a company?
a. establishing the corporate purpose
Incorrect: A SWOT analysis helps management to assess the company’s own strengths
and weaknesses as well.
c. performing a SWOT analysis
Correct: A SWOT analysis helps management to assess the company’s own strengths and
weaknesses as well.
Answer: c
Diff: 1
Type: MC
Page Reference: 101
38) When conducting a SWOT analysis, identify an internal element that management
must consider.
a. the company’s competitors
Incorrect: In evaluating the company’s strengths and weaknesses, management must
analyze the company’s internal resources, including finances, human resources,
marketing, operations, and technological resources.
b. the company’s employees
Correct: In evaluating the company’s strengths and weaknesses, management must
c. the growth of the industry
d. the stock market
Answer: b
Diff: 2
Type: MC
Page Reference: 101

39) Define the term SWOT as it applies to management’s tool for situational analysis.
a. strengths, weaknesses, opportunities, and threats
Correct: This situational analysis of strengths, weaknesses, and anticipated changes is
called a SWOT analysis.
b. strengths, weaknesses, outcomes, and threats
Incorrect: This situational analysis of strengths, weaknesses, and anticipated changes is
c. successes, weaknesses, obligations, and threats
d. successes, weaknesses, opportunities, and threats
Answer: a
Diff: 1
Type: MC
Page Reference: 101
40) Which of the following is considered to be one of the internal resources of a

company?
a. demographics
b. mineral resources
c. marketing
Correct: In evaluating the company’s strengths and weaknesses, management must
d. outsourcing
Answer: c
Diff: 2
Type: MC
Page Reference: 101

41) When performing a SWOT analysis, one of the following must be analyzed.
a. company’s values
Incorrect: Once the company’s vision and mission statement have been articulated,
management must assess the company’s own strengths and weaknesses as well as its
position among its competitors.
b. mission statement
c. company’s vision
d. company’s strengths and weaknesses
Correct: Once the company’s vision and mission statement have been articulated,
Answer: d
Diff: 2
Type: MC
Page Reference: 101
42) Which of these statements is TRUE about tactical planning?

a. Tactical planning is only done occasionally.
Incorrect: Tactical plans are generated to carry out the specific goals determined by the
strategic plan.
b. Tactical planning focuses on specific goals.
Correct: Tactical plans are generated to carry out the specific goals determined by the
strategic plan.
c. Tactical planning has a long-term horizon.
strategic plan.
d. Tactical planning is done only by executive officers.
strategic plan.
Answer: b
Diff: 1
Type: MC
Page Reference: 102

Objective: 5.3 Describe the implications of tactical plans, operational plans, and
contingency plans within the context of management.
43) What is the usual time period allotted for implementing tactical plans?
a. 1 to 3 years
Correct: Whereas strategic plans have a long-term focus, tactical plans are made with a
one- to three-year horizon in mind.
b. 4 to 6 years
Incorrect: Whereas strategic plans have a long-term focus, tactical plans are made with a
c. 5 to 10 years
d. 10 to 20 years
Answer: a
Diff: 1
Type: MC
Page Reference: 102
44) Which level of management is in charge of tactical planning?

a. board of directors
Incorrect: Middle management generates tactical plans to carry out the goals determined
by the strategic plan.
b. executive officers
c. middle managers
Correct: Middle management generates tactical plans to carry out the goals determined
d. first-line managers
Answer: c
Diff: 1
Type: MC
Page Reference: 102

45) Which of the following sections of a company portfolio is usually drawn during
tactical planning?
a. mission-vision
Incorrect: Determining the company’s annual budget, for example, is one function of a
tactical plan.
b. long-term goals
tactical plan.
c. philosophy
tactical plan.
d. annual budget
Correct: Determining the company’s annual budget, for example, is one function of a
tactical plan.
Answer: d
Diff: 2
Type: MC
Page Reference: 102
46) Operational plans ________ about how the company will carry out its tactical plans.
a. plan the objectives
Incorrect: Operational plans determine the process by which tactical plans can be
achieved.
b. consider the goals
achieved.
c. are the specific details
Correct: Operational plans determine the process by which tactical plans can be
achieved.
d. motivate employees
achieved.
Answer: c
Diff: 1
Type: MC
Page Reference: 102
47) Identify which of these statements accurately describes the role of operational
planning.
a. Operational planning puts the company’s specific goals into action.

Correct: Operational plans are derived in order for a company to carry out its tactical
plans.
b. Operational planning draws up specific goals for the company’s first year.
Incorrect: Operational plans are derived in order for a company to carry out its tactical
plans.
c. Operational planning helps employees develop time management skills.
plans.
d. Operational planning develops a vision for the company.
plans.
Answer: a
Diff: 2
Type: MC
Page Reference: 102
48) Which level of management is in charge of operational planning?

a. board of directors
Incorrect: First-line managers carry out operational planning.
b. executive officers
c. mid-level executives
Correct: First-line managers carry out operational planning.
Answer: d
Diff: 1
Type: MC
Page Reference: 102
49) After completing a SWOT analysis, a company should _____________.

a. analyze the strengths and weaknesses of the company
Incorrect: Tactical and operational planning are two methods that companies use to
carry out plans, assuming there are no external factors affecting the business.
b. form tactical and operational plans
Correct: Tactical and operational planning are two methods that companies use to carry
out plans, assuming there are no external factors affecting the business.
c. change from a vertical to a horizontal organizational structure

d. implement its operational plans

Answer: b
Diff: 1
Type: MC
Page Reference: 102
50) Which of the following aspects of running the business would be thoroughly
discussed during operational planning?
a. annual budget
Incorrect: Operational plans depend on daily or weekly schedules and focus on specific
departments or employees.
b. code of ethics
c. weekly output
Correct: Operational plans depend on daily or weekly schedules and focus on specific
d. year-end reports
Answer: c
Diff: 2
Type: MC
Page Reference: 102
51) Which of the following falls directly under the responsibility of first-line managers?
a. annual budget allocation
Incorrect: In an operational plan, first-line managers precisely determine the process by
which tactical plans can be achieved.
b. yearly plan of activities
c. annual quota results
d. weekly departmental budget
Correct: In an operational plan, first-line managers precisely determine the process by

Answer: d
Diff: 2
Type: MC
Page Reference: 102
52) __________ is(are) considered in detail in operational planning but not in tactical
planning.
a. The weekly product quota
Correct: Operational plans depend on daily or weekly schedules and focus on specific
b. The annual department budget
c. The wages of employees
d. Shipping and storage expenses
Answer: a
Diff: 3
Type: MC
Page Reference: 102
53) Operational planning focuses on _____________.

a. objectives independent of tactical objectives
Incorrect: The specifics of carrying out tactical plans are operational plans.
b. implementing tactical plans
Correct: The specifics of carrying out tactical plans are operational plans.
c. helping a company reach long-term goals
d. what to do in the event of an emergency
Answer: b
Diff: 1
Type: MC
Page Reference: 102

54) Calicow, a milk bottle manufacturing company, has recently received complaints
about chipped milk bottles and sour milk from the latest batch of its products. Deeply
concerned, the management has called the floor managers and quality assurance
supervisors from the affected departments for an important planning session. Describe the
type of management planning that would BEST fit this situation.
a. strategic planning
Incorrect: The company has to study its operations for the latest batch of product; hence,
it should conduct operational planning.
b. tactical planning
c. operational planning
Correct: The company has to study its operations for the latest batch of product; hence, it
should conduct operational planning.
d. contingency planning
Answer: c
Diff: 3
Type: MC
Page Reference: 102
55) Identify the type of planning that considers unique situations that may disrupt the
company’s work structure.
Incorrect: Contingency planning is a set of plans that ensures that the organization will
run as smoothly as possible during an unexpected disruption.
b. contingency planning
Correct: Contingency planning is a set of plans that ensures that the organization will run
as smoothly as possible during an unexpected disruption.
Answer: b
Diff: 2
Type: MC
Page Reference: 102

56) Jacqueline and Ned are brainstorming ideas about how the company would react if a
virus shut down their computer networks. Identify the type of planning for this scenario.
a. strategic
b. tactical
c. contingency
d. operational
Answer: c
Diff: 3
Type: MC
Page Reference: 102
57) Identify when a company should use a contingency plan.

a. when a competitor threatens a takeover
Correct: Contingency planning involves determining what departments within the
company are vital to the immediate needs of the organization when an unexpected crisis
occurs.
b. when executive officers use all their sick leave
Incorrect: Contingency planning involves determining what departments within the
occurs.
c. when several departments meet their quotas
occurs.
d. when employees ask for overtime pay
occurs.
Answer: a
Diff: 2
Type: MC

Page Reference: 102

58) Identify the situation that requires contingency planning from the following cases.
a. A hurricane destroys expensive company equipment and facilities.
b. The company chief executive officer goes on annual vacation.
c. The human resource department prepares for the company’s anniversary.
d. Some people in the company are asking for a promotion.
Answer: a
Diff: 3
Type: MC
Page Reference: 102
59) Select one option among the following that is directly involved in tests or drills of
contingency plans.
a. competing firms
Incorrect: Like fire drills in school, companies should periodically review and rehearse
their plans. A company could conduct mock disaster drills together with municipal,
provincial, and federal authorities.
b. families of employees
c. investors Group
d. municipal, provincial, and federal authorities
Correct: Like fire drills in school, companies should periodically review and rehearse
Answer: d
Diff: 2
Type: MC

Page Reference: 102

60) Describe how a company’s contingency plan should handle external communications
during a crisis.
a. The company should set up a system of information dissemination to address all
concerned parties.
Correct: Externally, an organization must have a plan in place to deal with requests for
information either from employees, the families of employees, or even the media.
b. Top-level executives should give information on a need-to-know basis upon their
discretion.
Incorrect: Externally, an organization must have a plan in place to deal with requests for
c. The local authorities and media should disseminate all information.
d. The company should rely on individual employees to notify their own friends and
relatives.
Answer: a
Diff: 3
Type: MC
Page Reference: 103
61) Camel Clothiers is a small clothing manufacturer. Its best-selling product, camel felt
boots, has recently gained the attention of animal rights activists. As a result, its monthly
sales revenue has dropped by 50 percent. Several years ago, the chief executive officer
and top-level executives developed a plan about what they would do if this situation
would occur. Identify the type of plan the company developed.
a. a strategic plan
Incorrect: The bulk of revenue comes from the best-selling product, camel felt boots, so
the whole company would face a crisis if this product were withdrawn from the market.
Therefore, the company made a contingency plan to deal with this situation.
b. a tactical plan
c. an operational plan

d. a contingency plan
Correct: The bulk of revenue comes from the best-selling product, camel felt boots, so the
whole company would face a crisis if this product were withdrawn from the market.
Answer: d
Diff: 3
Type: MC
62) Green Grocers used to deliver vegetables from farms that use pesticide sprays. Some
managers, however, want to steer the company in a new direction: they want the
company to distribute only organically grown vegetables. Top management has gathered
to discuss this issue and create a plan for the company’s future. Determine the type of
plan they will create.
a. a strategic plan
Correct: The company has to overhaul its mission-vision and restructure itself. It also has
to amend its long-term goals to accommodate the new direction it wishes to take. These
are all part of strategic planning.
b. a tactical plan
Incorrect: The company has to overhaul its mission-vision and restructure itself. It also
has to amend its long-term goals to accommodate the new direction it wishes to take.
These are all part of strategic planning.
c. an operational plan
d. a contingency plan
Answer: a
Diff: 3
Type: MC
Page Reference: 162
63) Off-the-Rack is a small retail clothing company that has a small but loyal customer
base. The management is looking at several options to expand its market range to attract
more customers. It has called its top-level and mid-level executives for an important
planning session. Describe the type of management planning that would BEST fit this
situation.

Incorrect: Middle managers or department heads are the people to call for this kind of
situation where the company’s budget is involved and a major (but specific) endeavour is
being suggested. Tactical planning involves forming specific goals to address the
company’s long-term objectives. Successful advertising is one such specific goal.
Correct: Middle managers or department heads are the people to call for this kind of
Answer: b
Diff: 3
Type: MC
Page Reference: 98
64) Just Knot It! is a start-up company that manufactures boating equipment. Because
hurricanes often hit the bay where the company’s boats dock, the owner of the company
has called his employees to an important planning session to discuss what would be done
if the company’s boats were destroyed in a hurricane. Identify the type of management
planning that would BEST describe this situation.
Incorrect: In case of an unexpected crisis such as a hurricane, business develops a
contingency plan to address the issue before it is realized. In this case, the company will
create a contingency to deal with the possibility of a destructive hurricane.

Correct: In case of an unexpected crisis such as a hurricane, business develops a

Answer: d
Diff: 3
Type: MC
Page Reference: 102
65) Once goals have been finalized and plans have been made, what is the next step in the
management process?.
a. Conduct a SWOT analysis
Incorrect: Once goals have been finalized and plans have been made, the next step in the
management process is to put those plans into action.
b. Put the plans into action.
Correct: Once goals have been finalized and plans have been made, the next step in the
c. Establish a purpose.
d. Create a contingency plan.
Answer: b
Diff: 1
Type: MC
Page Reference: 103
Objective: 5.4 Explain the significance of organizing and how most organizations are
organized.
66) The hierarchical structure of management can be illustrated as a(n) _____________.

a. organizational chart
Incorrect: The hierarchical structure of management is shown as a traditional vertically
structured managerial pyramid.
b. managerial ladder
c. managerial pyramid
Correct: The hierarchical structure of management is shown as a traditional vertically
d. organizational graph

Answer: c
Diff: 1
Type: MC
organized.
67) On the managerial pyramid, one of the following positions is an example of middle
managers.
a. supervisor
Incorrect: Middle managers are responsible for the tactical planning and creating more
specific plans that coordinate with the strategic vision set by the top managers.
b. department head
c. executive vice-president
d. marketing manager
Correct: Middle managers are responsible for the tactical planning and creating more
Answer: d
Diff: 2
Type: MC
Page Reference: 104
organized.
68) Supervisors and department heads are both examples of _____________.

a. top managers
Incorrect: First-line managers carry out operational planning activities and fill a
supervisory role such as supervisor and department head. They have control over those
employees who carry out the day-to-day operations of the company.
b. chief executive managers
c. middle managers

Correct: First-line managers carry out operational planning activities and fill a
Answer: d
Diff: 1
Type: MC
Page Reference: 104
organized.
69) ________ report to top managers.

a. Junior managers
Incorrect: Middle-level managers can be thought of as top managers for only one division
or a part of an organization; they report to top managers.
b. First-line managers
c. Middle-level managers
Correct: Middle-level managers can be thought of as top managers for only one division
d. Second-line managers
Answer: c
Diff: 1
Type: MC
Page Reference: 104
organized.
70) Lance is a first-line manager at a telemarketing company. He allocates resources,

creates an organizational structure, and recruits and places employees. Identify one of the
following functions of management that BEST describes what Lance does.
a. planning
Incorrect: Organizing is the process of structuring the capital, personnel, raw materials,
and other resources to carry out the plans in a way that best matches the nature of the
work.
b. organizing
Correct: Organizing is the process of structuring the capital, personnel, raw materials,
work.
c. controlling

work.
d. leading
work.
Answer: b
Diff: 3
Type: MC
Page Reference: 103
organized.
71) Middle managers are responsible for _____________.

Incorrect: Middle managers are responsible for tactical planning and creating more
c. long-term planning
Correct: Middle managers are responsible for tactical planning and creating more
Answer: d
Diff: 2
Type: MC
Page Reference: 104
organized.
72) Sam supervises the employees who carry out the day-to-day operations of a leather
company. He is MOST likely a _____________.
a. top manager
Incorrect: First-line managers fill a supervisory role over those employees who carry out
the day-to-day operations of the company.
b. resource manager
c. first-line manager

Correct: First-line managers fill a supervisory role over those employees who carry out
d. middle manager
Answer: c
Diff: 3
Type: MC
Page Reference: 104
organized.
73) An organizational chart shows how groups of ________ fit into the larger
organizational structure.
a. investors
Incorrect: An organizational chart shows how groups of employees fit into the larger
b. employees
Correct: An organizational chart shows how groups of employees fit into the larger
c. clients
d. suppliers
Answer: b
Diff: 1
Type: MC
organized.
74) What does an organizational chart show?

a. the work schedule of each employee
Incorrect: To accomplish many tasks at the same time, organizations must have some
division of labour and allocate work into smaller tasks. An organizational chart shows
how groups of employees fit into the larger organizational structure.
b. the complete history of the business
c. the division of labour within a company

Correct: To accomplish many tasks at the same time, organizations must have some
d. the promotions and reshuffling of employees
Answer: c
Diff: 1
Type: MC
organized.
75) A vertical organization is also called a(n) _____________.

a. flat organization
Incorrect: In a vertical organization (or tall organization), the company is organized by
specific function, such as marketing, finance, purchasing, information technology, and
human resources.
b. tall organization
Correct: In a vertical organization (or tall organization), the company is organized by
human resources.
c. upright institution
human resources.
d. high institution
human resources.
Answer: b
Diff: 1
Type: MC
Page Reference: 105
Objective: 5.5 Distinguish among vertical organizations, horizontal organizations, and
network organizations.
76) What makes it difficult for a vertical organization to respond quickly to changes in
the market?
a. the differences in opinion among managers
Incorrect: Vertical organization usually calls for long lines of communication and
“reporting up.” This makes it difficult for a company to respond quickly to changes in a
market or to provide new innovation because keeping each division updated means
spending time doing so.

b. the complex organizational structure

c. the long lines of communication and “reporting up”
Correct: Vertical organization usually calls for long lines of communication and
d. the absence of specific marketing guidelines
Answer: c
Diff: 2
Type: MC
Page Reference: 105
77) The organizational structure of most businesses is _____________.

a. vertical
Correct: Vertical organization has been the primary structure of business since the
Industrial Revolution.
b. flat
Incorrect: Vertical organization has been the primary structure of business since the
c. horizontal
d. network
Answer: a
Diff: 1
Type: MC
Page Reference: 105
78) The benefit of a horizontal organization is that _____________.

a. the teams all contain high levels of management

Incorrect: The benefit of a horizontal organization is that each team has more
responsibility for the outcome of its work. There are fewer layers of management, so
fewer reporting issues arise.
b. the teams work together
c. each team has less responsibility
d. each team has more responsibility
Correct: The benefit of a horizontal organization is that each team has more
Answer: d
Diff: 3
Type: MC
Page Reference: 105
79) When companies grow, they often restructure from ________ organizations to
________ ones.
a. vertical; horizontal
Correct: Occasionally, when companies have grown so large that the variety of product
lines, geographic regions, or manufacturing processes can be difficult to manage, they
restructure from a vertical organization to a horizontal one.
b. horizontal; vertical
Incorrect: Occasionally, when companies have grown so large that the variety of product
c. vertical; network
d. horizontal; network
Answer: a
Diff: 1
Type: MC
Page Reference: 105


80) A democratic style of leadership often requires _____________.

a. employees
Incorrect: Because democratic leaders delegate authority and involve employees in
decision making, this style of leadership requires more time and advanced planning.
b. creative ideas
c. advanced planning
Correct: Because democratic leaders delegate authority and involve employees in
d. capital
Answer: c
Diff: 2
Type: MC
Page Reference: 108
Objective: 5.6 Describe what makes a good leader and the various styles of leadership.
81) Which of the following types of leaders is advisory in style, encouraging employees
to contribute ideas and is best used in teams?
a. democratic
Incorrect: Affiliative (or laissez-faire) leaders are more advisory in style, encouraging
employees to contribute ideas rather than specifically directing their tasks. This style of
leadership is often best used with groups and teams.
b. affliliative
Correct: Affiliative (or laissez-faire) leaders are more advisory in style, encouraging
c. contingency
d. visionary
Answer: b
Diff: 1
Type: MC
Page Reference: 109

82) Businesses that use contingency leadership do so because they recognize the
importance of being _____________.
a. influential
Incorrect: No one style of leadership will work in every situation. In reality, managers
recognize that they need to be flexible and use whatever style works best for the
particular situation.
b. democratic
c. flexible
Correct: No one style of leadership will work in every situation. In reality, managers
d. communicative
Answer: c
Diff: 1
Type: MC
Page Reference: 110
83) When managers make sure that people are performing their tasks appropriately, they
are engaging in which management function?
a. planning
Incorrect: Controlling is the process that ensures that the plans and strategies set in place
by management are properly carried out. Controlling helps to identify and correct
weaknesses and errors in the system.
b. controlling
Correct: Controlling is the process that ensures that the plans and strategies set in place
c. checking
d. evaluating

Answer: b
Diff: 2
Type: MC
Page Reference: 111
Objective: 5.7 Explain the importance of control within a business.
84) ________ is the process that ensures that the plans and strategies set in place by
management are properly carried out.
a. Controlling
Correct: Controlling is the process that ensures that the plans and strategies set in place
b. Directing
c. Organizing
d. Planning
Answer: a
Diff: 1
Type: MC
Page Reference: 111
85) Which of the following types of leaders is are able to inspire others, believe in their
own vision, and move people toward a shared dream?
a. democratic
Incorrect: Visionary leaders are able to inspire others,believe in their own vision, and
move people toward a shared dream.
b. affliliative
move people toward a shared dream.c. contingency
d. visionary
Correct: Visionary leaders are able to inspire others,believe in their own vision, and
Answer: d
Diff: 1

Type: MC
Page Reference: 109
86) Which of the following styles of leadership maintains the highest degree of control
and studiously monitors employees?
a. Laissez-faire
Incorrect: Autocratic leaders have a “Do as I say” approach, maintain tight controls and
monitors employees studiously.
b. Affiliative
c. Autocratic
Correct: Autocratic leaders have a “Do as I say” approach, maintain tight controls and
d. Democratic
Answer: c
Diff: 2
Type: MC
Page Reference: 109
87) Which famed management researcher and author noted that “management is doing
things right; leadership is doing the right things”?
a. Abraham Maslow
Incorrect: Famed management researcher and author Peter Drucker once noted that
“management is doing things right; leadership is doing the right things.”
b. Steven Covey
c. Peter Drucker
Correct: Famed management researcher and author Peter Drucker once noted that
d. James Belbin
Answer: c
Diff: 1
Type: MC
Page Reference: 107

88) Which of the following leadership styles is characterized by empathy and the ability
to solve conflicts?
a. democratic
Incorrect: Features of affiliative leadership include the ability to promote harmony, be
emphatic, boost morale, and solve conflicts.
b. visionary
c. commanding
d. affiliative
Correct: Features of affiliative leadership include the ability to promote harmony, be
Answer: d
Diff: 1
Type: MC
Page Reference: 109
89) Affiliative leaders create harmony by connecting workers to ___________.

a. the company’s goals
Incorrect: The style of affiliative leaders is to create harmony by connecting workers to
one another.
b. one another
Correct: The style of affiliative leaders is to create harmony by connecting workers to one
another.
c. their wants
one another.
d. specific tasks
one another.
Answer: b
Diff: 1
Type: MC
Page Reference: 109
90) It is BEST to use the ________ leadership style to heal rifts in a team.
a. affiliative
Correct: Affiliative leadership concentrates on having employees create personal
relationships within the workplace. So, if there were any arguments or distance between
employees, an affiliative leader would promote harmony and understanding in the group.

b. autocratic
Incorrect: Affiliative leadership concentrates on having employees create personal
c. visionary
d. democratic
Answer: a
Diff: 2
Type: MC
Page Reference: 109
91) ) To build buy-in or consensus, or to get valuable input from employees, it is BEST
to use the ________ leadership style.
a. visionary
Incorrect: The democratic leadership style concentrates on getting a general consensus
on policy so that everyone’s opinion is taken into account when issues come up. So, a
democratic leader would want his or her team’s valuable input when making decisions.
b. affiliative
c. laissez-faire
d. democratic
Correct: The democratic leadership style concentrates on getting a general consensus on
policy so that everyone’s opinion is taken into account when issues come up. So, a
Answer: d
Diff: 2
Type: MC
Page Reference: 109

92) ________ is an integrated approach to measuring the quality of products or services

from the beginning phase of the production process to the end.
a. Quality control
Incorrect: Total quality management is an integrated approach focusing on quality from
the beginning of the production process up through managerial involvement to detect and
correct problems.
b. Total quality management
Correct: Total quality management is an integrated approach focusing on quality from
correct problems.
c. Six Sigma
correct problems.
d. Damage minimization
correct problems.
Answer: b
Diff: 1
Type: MC
Page Reference: 111
93) Identify the goal of total quality management (TQM).

a. to produce goods in the cheapest, fastest way
Incorrect: In addition to meeting financial, production, and sales measures, another
measure of performance is quality so that the products or services the company provides
meet or exceed customer requirements.
b. to produce goods or services that are innovative and unique
c. to produce goods that meet or exceed customer requirements
Correct: In addition to meeting financial, production, and sales measures, another
d. to produce goods that will earn the company the most money
Answer: c
Diff: 1
Type: MC

Page Reference: 111

94) To achieve Six Sigma, a business must not allow more than:
a. 3.4 defects per thousand opportunities.
Incorrect: Six Sigma is a statistically based, proactive, long-term process designed to
look at the overall business process to prevent problems. To achieve the Six Sigma
standard, a business must not allow more than 3.4 defects per million opportunities.
b. 3.4 defects per million opportunities.
Correct: Six Sigma is a statistically based, proactive, long-term process designed to look
at the overall business process to prevent problems. To achieve the Six Sigma standard, a
business must not allow more than 3.4 defects per million opportunities.
c. 0.1 percent defects per thousand opportunities.
d. 0.5 percent defects per million opportunities.
Answer: b
Diff: 3
Type: MC
Page Reference: 111
95) Mac-Wan is a family restaurant business that has recently decided to advertise in the
local paper to pull in more customers. The owners anticipate that the ads will increase
their revenue by 10 percent. After they put their ad in the paper, recommend what they
should do next.
a. measure the company’s previous performance levels
Incorrect: Re-evaluating performance standards is part of a control system cycle that
companies use to measure performance. It allows the company to measure the plans it
has set to carry out the goals of the organization.
b. re-evaluate performance standards of the restaurant
Correct: Re-evaluating performance standards is part of a control system cycle that
c. set new performance standards for the company
d. make adjustments to current performance standards


Answer: b
Diff: 3
Type: MC
Page Reference: 111
96) Managers achieve goals by working with people both inside and outside the
organization.
a. True
Correct: Managers achieve goals working with people both inside and outside the
organization, so it’s important that they possess good interpersonal or human relations
skills.
b. False
Incorrect: Managers achieve goals working with people both inside and outside the
organization, so it’s important that they possess good interpersonal or human relations
skills.
Answer: a
Diff: 1
Type: TF
Page Reference: 96
97) Although managerial tasks are varied, a successful manager only needs to become
skilled at time management.
a. True
Incorrect: A successful manager needs to possess a variety of skills because managerial
tasks are so varied. They must also assess the skills that are required in any given
situation.
b. False
Correct: A successful manager needs to possess a variety of skills because managerial
tasks are so varied. They must also assess the skills that are required in any given
situation.
Answer: b
Diff: 2
Type: TF
Page Reference: 96

98) Conceptual skills refer to the ability to think abstractly, picture the organization as a
whole, and understand its relationship to the rest of the business community.
a. True
Correct: Such skills also include understanding the relationships between the parts of the
organization itself.
b. False
Incorrect: Such skills also include understanding the relationships between the parts of
the organization itself.
Answer: a
Diff: 2
Type: TF
Page Reference: 96
99) A manager does not need to possess decision-making skills, but they will allow him
to relate better to his employees.
a. True
Incorrect: The ability to make decisions is one of the most critical skills required of a
manager. This skill allows a manager to identify problems, examine alternatives, choose
the best plan of action, and evaluate results.
b. False
Correct: The ability to make decisions is one of the most critical skills required of a
manager. This skill allows a manager to identify problems, examine alternatives, choose
the best plan of action, and evaluate results.
Answer: b
Diff: 2
Type: TF
Page Reference: 96
100) Many times the best routes to fix a problem are missed because management has not
taken the time to explore all alternatives thoroughly.
a. True
Correct: Once a manager has generated alternatives to fix a problem, he or she must
evaluate all of these alternatives before implementing a plan of action. This process can
be long and tedious, but a thorough examination is required in order to achieve the best
results.
b. False
Incorrect: Once a manager has generated alternatives to fix a problem, he or she must
evaluate all of these alternatives before implementing a plan of action. This process can
be long and tedious, but a thorough examination is required in order to achieve the best
results.

Answer: a
Diff: 2
Type: TF
Page Reference: 96
101) Having technical, conceptual, decision-making, and interpersonal skills is enough to

manage a successful business.
a. True
Incorrect: A manager may possess all the skills—technical, conceptual, decision-making,
and interpersonal skills—but that may not be enough to manage a successful business.
b. False
Correct: A manager may possess all the skills—technical, conceptual, decision-making,
and interpersonal skills—but that may not be enough to manage a successful business.
Answer: b
Diff: 1
Type: TF
Page Reference: 97
102) Conceptual skills require that managers be able to recognize specific ways in which
they can make every task or situation productive.
a. True
Incorrect: Time management skills require that managers have the ability to recognize
specific ways in which they can make every task or situation productive.
b. False
Correct: Time management skills require that managers have the ability to recognize
specific ways in which they can make every task or situation productive.
Answer: b
Diff: 1
Type: TF
Page Reference: 97
103) Creating folders to store e-mails usually shows good time-management skills.
a. True
Correct: To manage e-mail effectively, managers should filter spam to a specific folder
and create other folders based on subject.
b. False

Incorrect: To manage e-mail effectively, managers should filter spam to a specific folder
and create other folders based on subject.
Answer: a
Diff: 2
Type: TF
Page Reference: 97
104) Managers should separate paperwork according to due date and clearly label each
pile.
a. True
Correct: Time management skills refer to the ability to achieve the maximum amount of
productivity in a set amount of time.
b. False
Incorrect: Time management skills refer to the ability to achieve the maximum amount of
productivity in a set amount of time.
Answer: a
Diff: 2
Type: TF
Page Reference: 97
105) Planning is the process of establishing goals and objectives and determining the best
ways to accomplish them.
a. True
Correct: In today’s busy world, it’s easy to get distracted. Goals and plans help to keep
you on task. Planning helps to establish goals and objectives, and also assists with best
options to accomplish them.
b. False
Incorrect: In today’s busy world, it’s easy to get distracted. Goals and plans help to keep
you on task. Planning helps to establish goals and objectives, and also assists with best
options to accomplish them.
Answer: a
Diff: 1
Type: TF
Page Reference: 98

106) Goals are broad, long-term accomplishments that an organization wants to achieve
in about a five-year time frame.
a. True
Correct: In today’s busy world, it’s easy to get distracted. Goals and plans help to keep
you on task. Goals are broad, long-term accomplishments an organization wants to
achieve within a certain period—in most companies, this is about five years.
b. False
Incorrect: In today’s busy world, it’s easy to get distracted. Goals and plans help to keep
you on task. Goals are broad, long-term accomplishments an organization wants to
achieve within a certain period—in most companies, this is about five years.
Answer: a
Diff: 1
Type: TF
Page Reference: 98
107) It is important that both goals and objectives are set with deadlines.
a. True
Correct: Both goals and objectives are best set with deadlines and quantifiable measures.
b. False
Incorrect: Both goals and objectives are best set with deadlines and quantifiable
measures.
Answer: a
Diff: 2
Type: TF
Page Reference: 98
108) The overall strategic plan is focused on the entire organization or an entire
department.
a. True
Correct: A strategic plan is the main course of action created by top-level managers that
sets the approach for achieving the long-term goals and objectives of the entire
organization.
b. False
Incorrect: A strategic plan is the main course of action created by top-level managers
that sets the approach for achieving the long-term goals and objectives of the entire
organization.
Answer: a
Diff: 2
Type: TF

Page Reference: 98
109) A corporate vision is a current description of an organization’s purpose, basic goals,

and philosophies.
a. True
Incorrect: A vision identifies what the business wants to be in the future. The vision
should be made clear to all employees and people investing in the company.
b. False
Correct: A vision identifies what the business wants to be in the future. The vision should
be made clear to all employees and people investing in the company.
Answer: b
Diff: 2
Type: TF
Page Reference: 99
110) After defining a mission and vision statement, companies often define core values
or principles.
a. True
Correct: Core values are the fundamental beliefs about what is important and
appropriate when conducting company activities that affect a company’s overall
planning processes and operations.
b. False
Incorrect: Core values are the fundamental beliefs about what is important and
appropriate when conducting company activities that affect a company’s overall
planning processes and operations.
Answer: a
Diff: 2
Type: TF
Page Reference: 100
111) An economic recession merits a contingency plan, especially for small businesses.
a. True
occurs. The particulars of each plan differ depending on the size and function of the
company and the magnitude of crisis for which the plan is needed.
b. False


Answer: a
Diff: 2
Type: TF
Page Reference: 102
112) Unexpected disruptions in operations are rare in major corporations, making

contingency planning unnecessary.
a. True
b. False
Answer: b
Diff: 2
Type: TF
Page Reference: 102
113) Contingency planning involves determining what departments within a company are
vital to the immediate needs of the organization when an unexpected crisis occurs.
a. True
Correct: The particulars of each plan differ depending on the size and function of a
company and the magnitude of the crisis the plan is needed for.
b. False
Incorrect: The particulars of each plan differ depending on the size and function of a
company and the magnitude of the crisis the plan is needed for.
Answer: a
Diff: 1
Type: TF
Page Reference: 103

114) Contingency plans are only put into action during unexpected natural disasters like
bad weather, fire, earthquake, or death.
a. True
run as smoothly as possible during any unexpected disruption.
b. False
as smoothly as possible during any unexpected disruption.
Answer: b
Diff: 2
Type: TF
115) Managing is the process of structuring the capital, personnel, raw materials, and
other resources to carry out the plans in a way that best matches the nature of the work.
a. True
Incorrect: Organizing is the process of structuring all of the resources needed to carry
out the plans in a way that best matches the nature of the work.
b. False
Correct: Organizing is the process of structuring all of the resources needed to carry out
the plans in a way that best matches the nature of the work.
Answer: b
Diff: 2
Type: TF
Page Reference: 103
organized.
116) Organizational structure depends on a variety of factors, such as the number of

employees in the organization, the speed at which decisions need to be made, the
subjectivity of the business to rapid change, and the collaborative nature of the work.
a. True
Correct: Establishing an organizational structure is part of the function of organizing.
b. False
Incorrect: Establishing an organizational structure is part of the function of organizing.
Answer: a
Diff: 3
Type: TF

Page Reference: 103

organized.
117) An organizational chart shows how groups of consumers fit together in a company’s
marketing goals.
a. True
b. False
Correct: An organizational chart shows how groups of employees fit into the larger
Answer: b
Diff: 1
Type: TF
Page Reference: 104
organized.
118) Most companies have a horizontal structure of management.

a. True
Industrial Revolution. Vertical structures have been criticized as being overspecialized,
fragmented, and inflexible.
b. False
Correct: Vertical organization has been the primary structure of business since the
Industrial Revolution. Vertical structures have been criticized as being overspecialized,
fragmented, and inflexible.
Answer: b
Diff: 1
Type: TF
Page Reference: 105
119) Horizontal organization usually calls for long lines of communication and
“reporting up.”
a. True
“reporting up.”
b. False
Correct: Vertical organization usually calls for long lines of communication and
“reporting up.”

Answer: b
Diff: 1
Type: TF
Page Reference: 105
120) Because it is difficult to integrate between a company’s functions and its divisions,
vertical organizational structures have been criticized.
a. True
Correct: Although vertical organization has been the primary business structure since the
Industrial Revolution, in the early 1990s, these structures were criticized as being
overspecialized, fragmented, and inflexible.
b. False
Incorrect: Although vertical organization has been the primary business structure since
the Industrial Revolution, in the early 1990s, these structures were criticized as being
overspecialized, fragmented, and inflexible.
Answer: a
Diff: 2
Type: TF
Page Reference: 105
121) Network organizations are multi-function firms that collaborate on a product or

service
a. True
Incorrect: Network organizations are collections of independent, mostly single-function
firms that collaborate on a product or service.
b. False
Correct: Network organizations are collections of independent, mostly single-function
firms that collaborate on a product or service.
Answer: b
Diff: 2
Type: TF
Page Reference: 106
122) A democratic leader takes a more “hands-off” approach to managing employees.

a. True
Incorrect: Laissez-faire leaders (or free-reign leaders) are more advisory in style.
b. False
Correct: Laissez-faire leaders (or free-reign leaders) are more advisory in style.

Answer: b
Diff: 2
Type: TF
Page Reference: 109
123) Laissez-faire leaders act more as consultants rather than as participants.

a. True
Correct: Laissez-faire leaders are more advisory in style, encouraging employees to
contribute ideas rather than specifically directing their tasks.
b. False
Incorrect: Laissez-faire leaders are more advisory in style, encouraging employees to
contribute ideas rather than specifically directing their tasks.
Answer: a
Diff: 1
Type: TF
124) Leaders have the confidence to overcome inevitable obstacles and to make tough
decisions despite uncertainty.
a. True
Correct: A leader’s confidence promotes calm in stressful situations.
b. False
Incorrect: A leader’s confidence promotes calm in stressful situations.
Answer: a
Diff: 1
Type: TF
Page Reference: 108
125) Measuring performance is vital to running even a small business.

a. True
Correct: To manage any business and ensure that the goals are being met, managers
measure performance in a variety of ways.
b. False
Incorrect: To manage any business and ensure that the goals are being met, managers
measure performance in a variety of ways.
Answer: a
Diff: 2
Type: TF
Page Reference: 111

126) Elizabeth worked in a data encoding company for several years before becoming a
supervisor in a general transcription firm. From her own experience, she knows that
transcriptionists are often stressed by deadlines and the poor quality of audio files.
Therefore, she closely monitors her employees’ work but understands when they have to
decline a bad file. Describe the managerial skills that are shown in this situation.
Answer:
Both technical and interpersonal skills are shown in this situation. Elizabeth has first-
hand knowledge of the process involved in transcription, so she realizes the need to
motivate the workers and to recognize the limitation of both the files and the employees.
Feedback: Technical skills include abilities and knowledge that enables an employee to
carry out the specific tasks required of the discipline or department. Interpersonal skills
involve good human relations. Motivating employees to carry out their work is an
important aspect of interpersonal skills.
Diff: 2
Type: ES
Page Reference: 96
127) George constantly evaluates how his manufacturing company can better address the
environmental concerns of the community in which the factory is based. Explain how he
is showing that he possesses conceptual skills.
Answer:
A manager demonstrates conceptual skills when he or she is able to picture the
organization as a whole and understand its relationship to the rest of the community.
George is clearly aware of the company’s responsibility to the community because he
understands the community’s concerns about the environment.
Feedback: Conceptual skills involve understanding an organization’s internal

relationships—between parts of the organization—as well as its external relationships
with the community.
Diff: 2
Type: ES
Page Reference: 96
128) When John sets up a meeting, it usually either finishes early because the staff
forgets to discuss some important issues, or it ends late because staff is debating issues

that suddenly arise during the meeting. Propose what John should do to avoid wasting
time and to ensure that important matters are discussed during staff meetings.
Answer:
To better manage time, John should inform every staff member of the meeting’s agenda
before it begins. This way, everyone is prepared and focused on the matters to be
discussed. Other trivial matters are eliminated, so the meeting ends on time.
Feedback: Part of effective time management is identifying clear agendas for meetings.
With a clear agenda, the people involved are conscious of the goals to be achieved
during the meeting.
Diff: 3
Type: ES
Page Reference: 97
129) In order to increase sales, Natural Juice plans to promote its products in parks by
distributing free samples to potential customers. What type of planning is this? Explain
your answer.
Answer:
This is a tactical plan on the part of management. Part of a tactical plan is to determine
what to do to carry out the strategic plan, which in this case is probably to increase sales.
Feedback: A tactical plan determines resources and actions necessary to implement a

strategic plan. It applies to a short time frame, usually 1 to 3 years.
Diff: 2
Type: ES
Page Reference: 102
130) In order to increase sales, Natural Juice plans to promote its products in parks by
distributing free samples to potential customers. If you were a first-line manager of
Natural Juice, outline the details you would include in your operational plan.
Answer:
I would include strategic areas for distribution, volume of free juice samples, and
schedules of distribution.
Feedback: An operational plan determines the process required to execute the tactical
plans.

Diff: 3
Type: ES
Page Reference: 102
131) Vicky wants to open a small travel agency with two of her friends. List the factors
she and her friends should consider as they organize their company.
Answer:
They should consider the number of people they will employ, the division of labour, and
accountability in terms of decision-making.
Feedback: Organizational structure depends on several factors, including number of

employees, speed at which decisions need to be made, the subjectivity of the business to
rapid change, and the collaborative nature of the work.
Diff: 2
Type: ES
Page Reference: 103
organized.
132) As the manager of the sales division, Robert regularly reports to the chief executive
officer and vice president to update them on the status of tactical plans. Indicate the layer
of the managerial pyramid Robert would be in. Why?
Answer:
In the managerial pyramid, Robert is a middle manager because he is accountable to the
top managers of his company (the chief executive officer and the vice president). Also,
middle managers are usually responsible for tactical planning.
Feedback: Middle managers are heads of a division who answer to the top managers of
the company. They are responsible for tactical planning, which leads to more specific
plans that help the company achieve the strategic plans set by the top managers.
Diff: 2
Type: ES
Page Reference: 104
organized.

133) A good leader is a person of action and inspiration. Discuss the five qualities of
effective leadership.
Answer:
Good leaders are persons of action because whenever appropriate they challenge the
conventional beliefs and practices of the organization. They also model the best way of
doing things. Good leaders are sources of inspiration because they inspire a shared vision
and encourage the people around them. They also enable their subordinates to act by
giving them access to information that is necessary to perform their tasks.
Feedback: The best leaders are those who challenge the process, model the way, inspire a
shared vision, encourage the heart, and enable others to act.
Diff: 2
Type: ES
Page Reference: 107
134) Jane works in a big organization with several departments that have special
functions. She works in the human resource department and is in charge of hiring new
personnel. Under her are several individuals who report to her, and she in turn reports to
the head of the human resource department. Classify Jane’s organization as vertical or
horizontal. Explain your classification.
Answer:
Jane’s organization has a vertical structure because it has several layers. The employees
who report to Jane are at least three steps removed from the top managers, and they all
fulfill related functions.
Feedback: Organizations with vertical or tall organizational structures are organized by

specific functions and levels of expertise. Vertical organizations also have longer lines of
communication.
Diff: 2
Type: ES
Page Reference: 105
135) Let’s suppose you start a small company with fewer than 10 employees. As your
company grows, you employ more workers and need to expand beyond your current
location. Determine some changes that will most likely take place in your organizational
structure.
Answer:
As more workers are employed, there might be a need to create positions for supervisors,
department heads, or other team managers with specialties.

Feedback: Smaller start-up companies often have simpler organizational structures.

However, as a company grows, additional employees, refined division of labour, and
specialization will most likely be necessary. This would call for changes in the company’s
Diff: 3
Type: ES
Page Reference: 105
organized.
136) As the owner of a spa facility, Katya hired a manager to oversee the daily operations
of the spa and delegated the financial management of the business to a trusted employee.
She keeps herself instantly available to her staff through mobile communication. Explain
Katya’s type of leadership.
Answer:
Katya’s leadership style is laissez-faire because she acts more as a consultant rather than
as an active participant.
Feedback: Laissez-faire is a leadership style in which leaders do not take a hands-on

approach. It is also called free-reign leadership because employees or team members are
given wider responsibilities and room for experimentation.
Diff: 2
Type: ES
Page Reference: 109
137) Discuss when it is appropriate to use am affiliative leadership style.
Answer:
The affiliative leadership style is appropriate when there are conflicts in a team and
certain rifts need to be healed. It is also appropriate to use this style to motivate
employees during stressful times and to strengthen connections within the team.
Feedback: Table 5.1 on page 109 summarizes the four basic leadership styles.
Diff: 2
Type: ES
Page Reference: 109, Table 5.1

138) Describe the leadership characteristics of an autocratic leader.

Answer:
• Commands—”Do it because I say so”
• Threatens
• Has tight control
• Monitors studiously
• Creates dissonance
• Contaminates everyone’s mood
• Drives away talent
Feedback: Feedback: Table 5.1 on page 109 summarizes the four basic leadership styles.
Diff: 2
Type: ES
Page Reference: 109, Table 5.1
139) To increase public awareness and generate support, companies often use the media
and the Internet to share their vision or mission statement. Cite an example of how a
nonprofit organization used a vision or mission statement to keep the organization on
task.
Answer:
The Canadian Cancer Society’s mission statement states “The Canadian Cancer Society
is a national, community-based organization of volunteers whose mission is the
eradication of cancer and the enhancement of the quality of life of people with cancer.”
This statement reflects the organization’s commitment to serving the community.
Both the vision and mission statement are usually posted on an organization’s website.
However, because the mission statement is directed toward customers—unlike the vision,
which is directed toward employees—it is often used alone on advertising materials or on
the actual product.
Feedback: The mission statement states the organization’s purpose, basic goals, and
philosophies.
Diff: 3
Type: ES
Page Reference: 100
140) A trend in business nowadays is business process outsourcing. Business process

outsourcing is the process of hiring another company to perform functions that are
traditionally part of a company’s business operation. Compare outsourcing with network
organizations.

Answer:
Major companies outsource their business process by hiring other companies to process
their financial administration, human resources requirements, and customer service. In
this setup, the organizations involved are the company in need of outside service and the
service provider. The service provider collaborates with the original company in
providing a service. Network organizations are collections of independent firms that
collaborate on a product or service. Therefore, business process outsourcing is an
example of network organization.
Feedback: Outsourcing occurs when a company contracts with an outside firm to handle
a specific part of its business activities, while network organizations are collections of
independent, mostly single-function firms that collaborate on a product or service.
Diff: 3
Type: ES
Page Reference: 106
141) You are a top manager of a traditional vertical organization whose main business
concern is quick delivery of services. You have observed that your competitors are
shifting from the vertical setup to the more responsive horizontal setup. Describe how
you would convince your peers in top management that it is time for you to make the
same shift as well.
Answer:
I would tell them that our competitors are gaining an edge because they have reorganized
to deliver a faster, more reliable service to their demanding market. A traditional vertical
organization has several layers, which means longer lines of communication. This could
mean waiting for a longer period before critical decisions are made. By the time we have
made a decision, our competitors have already served their customers satisfactorily and
are already busy laying the grounds for another branch. A horizontal setup with fewer
layers will facilitate the decision-making process and faster delivery of services.
Feedback: In a horizontal organization (or flat organization), the traditional managerial

pyramid is flattened and the management layers are collapsed. The benefit of a
horizontal organization is that each team has more responsibility for the outcome of its
work.
Diff: 3
Type: ES
Page Reference: 105

142) In addition to the five traits of effective leadership, describe any other trait you think
is necessary when a leader is faced with adversity. Why?
Answer:
All of the five leadership traits are crucial and, when taken together, can prove to be
helpful to a leader’s success. But in the face of adversity, determination can push a leader
to achieve a breakthrough. Leaders who are determined don’t give up easily and are even
more driven to look for solutions to persistent problems. A determined leader will not be
stopped by obstacles. Instead, obstacles will give him or her more energy to succeed.
Feedback: In addition to the five traits of effective leadership, most leadership analysts
agree that good leaders share several other traits. Some other traits include
determination, inspiration, flexibility and empathy, innovativeness, honesty, self-
confidence, knowledge, and competence.
Diff: 3
Type: ES
143) Successful managers possess a variety of skills. Briefly outline these skills.
Answer:
Successful managers are equipped with the following skills such as technical,
interpersonal, conceptual, decision-making, and time management skills.
Feedback: Managers often have these skills, but there is no master of all skills. Therefore,
managers need to be willing to acquire any skills they are weak at through training and
education.
Diff: 2
Type: ES
144) Describe the five steps involved in the decision-making process.
Answer:
These following steps are often necessary when making important decisions in business:
1. Identify problems.
2. Generate alternative solutions.
3. Evaluate the alternatives.
4. Choose and implement a plan of action.
5. Evaluate the decision.

Feedback: It is critical that a manager has good problem-solving and decision-making

skills—the ability to identify and analyze a problem, examine the alternatives, choose and
implement the best plan of action, and evaluate the results.
Diff: 2
Type: ES
145) Your friend has just been recently promoted to the top management team. He
confided in you that he has problem dealing with his multiple commitments and family
life. Make up a set of steps for him to manage his time more efficiently.
Answer:
This new manager needs to follow the following steps in his daily activities:
1. Determine the level of urgency of paperwork.
2. Create folders for e-mail.
3. Designate a time for telephone calls.
4. Identify clear agendas for meetings.
Feedback: If a manager could follow the above steps, he will find out that his productivity
levels will increase. He will also have more time freed for completing other tasks
required of the job and enhance his family life.
Diff: 2
Type: ES
Page Reference: 97
146) Discuss the four primary functions of management.
Answer:
Management functions are categorized into these four areas—planning, organizing,
leading, and controlling.
o Planning refers to the process of establishing goals and objectives, and
determining ways to accomplish them.
o Organizing refers to process of allocating resources, creating an organizational
structure, and recruiting and placing employees in the organization.
o Leading has to do with guiding and motivating employees, achieving results,
reaching milestones, and maintaining the organization’s visions or goals.
o Controlling refers to the process of measuring results against goals, monitoring
performance, correcting when necessary, and rewarding.

Feedback: All these functions are important for the growth of any organizations. The four
primary functions integrate all of the company’s resources, including human, financial,
and technological.
Diff: 2
Type: ES
147) A local company in your hometown is taking stock of its businesses over the past
five years. You have been hired as an intern to help the management determine if the
company has the means to fulfill its mission. Explain what you would do and provide
reasons for your actions as an intern working on this task.
Answer:
I would start by examining the company’s vision and mission statement. The next step is
to assess the company’s strengths and weaknesses as well as its position among its
competitors using SWOT analysis.
SWOT analysis would help management determine the strategic fit between an
organization’s internal, distinctive capabilities, and external possibilities relative to the
business and economic environments.
Feedback: It is essential that SWOT analysis be performed to evaluate the company’s

strengths and weaknesses. Management needs to analyze the company’s internal
resources, including finances, human resources, marketing, operations, and
technological resources.
Diff: 2
Type: ES
Page Reference: 101
organized.
148) Distinguish between a leader and a manager based on their portfolios.
Answer:
A leader is someone who has the ability to influence, motivate, and enable others to
contribute to the success and effectiveness of the organization by achieving its goals.
Managers are task-oriented and focus on process and control, whereas leaders realize the
importance of guiding and inspiring others to help accomplish a task.
Feedback: Managers and leaders are not the same, though it is important for a manager
to strive to be both a leader and a manager. All managers are not necessarily good
leaders.

Diff: 2
Type: ES
Page Reference: 107
149) What are the traits of a good leader?
Answer:
A good leader possesses some of these traits:
1. Determination
2. Inspiration
3. Flexibility and empathy
4. Innovativeness
5. Honesty
6. Self-confidence
7. Knowledge and competence
Feedback: For effective leadership, a leader needs to display most of these traits, not
necessarily all of them.
Diff: 2
Type: ES
Page Reference: 108
150) Classify the different leadership styles.
Answer:
The leadership styles are categorized into four as follows:
1. Democratic
2. Autocratic
3. Laissez-faire or free-reign
4. Contingency
Feedback: Leadership styles often depend on forces in today’s business environment, and
management may need to respond to different situations in different ways. For example,
Apple has autocratic leadership and Google has laissez-faire or free-reign leadership.
Diff: 2
Type: ES
Page Reference: 108

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Copyright © 2016 Pearson Canada Inc. 1

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Copyright © 2016 Pearson Canada Inc. 4

9) Carlos is a manager at a bottle distribution company. Though he is only responsible for

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14) Identify the last step in the decision-making process.

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19) Determine which function of management includes establishing goals, developing

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22) When does management establish goals and objectives?

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25) What is a strategic plan in business planning?

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26) Which of the following is the first step in strategic planning?

27) In a business organization, determine where planning happens.

Copyright © 2016 Pearson Canada Inc. 14

29) A strategic plan should _____________.

30) Identify the BEST description of a strategic plan.

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d. It provides specific guidelines for hiring new employees.

32) Which of the following is a characteristic of a strategic plan?

Copyright © 2016 Pearson Canada Inc. 16

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35) How does a company establish its corporate purpose?

Copyright © 2016 Pearson Canada Inc. 18

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40) Which of the following is considered to be one of the internal resources of a

Copyright © 2016 Pearson Canada Inc. 20

42) Which of these statements is TRUE about tactical planning?

Copyright © 2016 Pearson Canada Inc. 21

44) Which level of management is in charge of tactical planning?

Copyright © 2016 Pearson Canada Inc. 22

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48) Which level of management is in charge of operational planning?

49) After completing a SWOT analysis, a company should _____________.

Copyright © 2016 Pearson Canada Inc. 24

d. implement its operational plans

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53) Operational planning focuses on _____________.

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57) Identify when a company should use a contingency plan.

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Page Reference: 102

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Correct: In case of an unexpected crisis such as a hurricane, business develops a

66) The hierarchical structure of management can be illustrated as a(n) _____________.

Copyright © 2016 Pearson Canada Inc. 33

68) Supervisors and department heads are both examples of _____________.

Copyright © 2016 Pearson Canada Inc. 34

69) ________ report to top managers.

70) Lance is a first-line manager at a telemarketing company. He allocates resources,

Copyright © 2016 Pearson Canada Inc. 35