Chapter 07 – Management and Leadership
Pam is a sales manager for Paradise Beauty Products. She has told her sales people that
she expects each of them to increase their customer contacts by at least 5 percent in the
next month. Pam has set a(n):
A. procedural policy.
B. functional objective.
C. policy guide.
D. performance standard.
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.
276. 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. Answer “B” has all
of these characteristics. Answers “A” and “D” are not good standards because “significant
improvement” and “more efficient” are too vague. Answer “C” is not a good standard because
a complete elimination of all complaints in one month is unlikely to be an attainable standard.
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281. Customers who shop on Amazon.com™ 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.
282.
Chapter 07 – Management and Leadership
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 non-financial
concerns.
D. recognize that, while financial measures are important and should be considered, the
purpose of the firm is to satisfy both internal and external customers.
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, non-financial criteria also play an
important role in measuring the success of a firm.
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283. Identify and define the four key functions of management.
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