Chapter 6 2 Reebok wants to make a profit by manufacturing and selling athletic

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

79. Toyota’s goal to sell 200 000 vehicles in Canada in 2012 illustrates which basic purpose of goal

setting?

a. Goal setting provides direction, guidance, and motivation for managers.

b. Goal setting helps firms allocate resources.

c. Goal setting helps to define corporate culture.

d. Goal setting helps managers assess performance.

e. None of the above.

Difficulty: 1 Page-Reference: 194

Question ID: 06-1-79 Skill: Comprehension

Objective: 6.4

80. Reebok wants to make a profit by manufacturing and selling athletic shoes and related

merchandise. This is their

a. strategic goal.

b. long-term goal.

c. purpose.

d. short-term goal.

e. mission.

Difficulty: 1 Page-Reference: 195

Question ID: 06-1-80 Skill: Knowledge

Objective: 6.4

81. With respect to the concepts of “purpose” and “mission,” which of the following is correct?

a. A purpose is a statement of how an organization will behave with respect to its stakeholders.

b. A mission is only relevant for not-for–profit organizations, while a purpose is relevant only for profit–

making businesses.

c. A purpose is an organization’s reason for being.

d. There is really no difference between a purpose and a mission.

e. A purpose is only relevant for not–for-profit organizations, while a mission is relevant only for profit–

making businesses.

Difficulty: 1 Page-Reference: 195

Question ID: 06-1-81 Skill: Comprehension

Objective: 6.4

82. When Atco says it wants to provide products and services to the energy and resource industries,

that is their

a. corporate strategy.

b. mission.

c. purpose.

d. intuition.

e. goal.

Difficulty: 1 Page-Reference: 195

Question ID: 06-1-82 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

83. Ace Products hopes to increase sales of home heating products in the upcoming year. This is an

example of a(n)

a. implementation step.

b. strategy.

c. escalation of commitment.

d. goal.

e. action.

Difficulty: 2 Page-Reference: 196-197

Question ID: 06-1-83 Skill: Comprehension

Objective: 6.4

84. A ________ is a broad set of organizational plans for implementing the decisions made for

achieving organizational goals.

a. blueprint

b. mission

c. formula

d. strategy

e. function

Difficulty: 1 Page-Reference: 197

Question ID: 06-1-84 Skill: Knowledge

Objective: 6.4

85. Lynne Smith, chief financial officer for Web Industries, is working on a broad set of organizational

plans for implementing the decisions made for achieving organizational goals. Lynne is developing a

________ for Web Industries.

a. formula

b. blueprint

c. function

d. strategy

e. mission

Difficulty: 2 Page-Reference: 197

Question ID: 06-1-85 Skill: Comprehension

Objective: 6.4

86. If a specific product sales group has a goal of increasing sales for the following year by 10

percent, the goal will function to

a. provide direction.

b. define corporate culture.

c. help make decisions.

d. help allocate resources.

e. help assess performance.

Difficulty: 2 Page-Reference: 194

Question ID: 06-1-86 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

87. Mega Computer has targeted the growth of its new line of computers to surpass the current line

within two years. Charles, the marketing manager, is reviewing the advertising budget for the next year

and this goal

a. provides direction.

b. defines corporate culture.

c. helps assess performance.

d. helps allocate resources.

e. helps make decisions.

Difficulty: 2 Page-Reference: 194

Question ID: 06-1-87 Skill: Comprehension

Objective: 6.4

88. The management of Critters Galore, a nation-wide retailer of pet supplies, has decided that its

share of the market is too low and they have a target of increasing their current market share from 25

percent to 40 percent. Everyone is expected to do whatever it takes to achieve this goal. The market is

very competitive and Critters Galore will need to be very aggressive. The goal

a. helps to define corporate culture.

b. helps allocate resources.

c. provides direction.

d. helps make decisions.

e. helps assess performance.

Difficulty: 2 Page-Reference: 195

Question ID: 06-1-88 Skill: Comprehension

Objective: 6.4

89. Rolex sells high-quality, high-priced watches through selected jewellery stores. This is their

a. corporate performance target.

b. long-term goal.

c. strategic goal.

d. purpose.

e. mission.

Difficulty: 1 Page-Reference: 195

Question ID: 06-1-89 Skill: Comprehension

Objective: 6.4

90. Both Rolex and Timex want to sell watches at a profit. They share a common

a. purpose.

b. corporate performance target.

c. mission.

d. long-term goal.

e. strategic goal.

Difficulty: 2 Page-Reference: 195

Question ID: 06-1-90 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

91. What time periods are typically covered by long-term goals?

a. 5-25 years into the future

b. 10-15 years or more into the future

c. 5 years or more into the future

d. Anything longer than three years

e. 1-3 years in the future

Difficulty: 1 Page-Reference: 196

Question ID: 06-1-91 Skill: Knowledge

Objective: 6.4

92. A mission statement is

a. a statement of how an organization will achieve its purpose in the environment in which it

conducts its business.

b. solely for people visiting the company so they understand what the company does.

c. not necessary for smaller businesses.

d. the same as a purpose.

e. a statement developed by the board of directors to guide the business.

Difficulty: 1 Page-Reference: 195

Question ID: 06-1-92 Skill: Comprehension

Objective: 6.4

93. 3M Corp.’s stated goal of earning 30 percent of its profits from sales of products less than four

years old is an example of goals that

a. define corporate culture.

b. help assess performance.

c. help allocate resources.

d. provide direction.

e. help make decisions.

Difficulty: 2 Page-Reference: 194

Question ID: 06-1-93 Skill: Comprehension

Objective: 6.4

94. Mega Computer has decided that within the next five years it wants to become an industry leader

in disk drive technology, a technology that has little existing support inside the company at this time. This

goal will

a. help assess performance.

b. help make decisions.

c. help allocate resources.

d. provide direction.

e. help define corporate culture.

Difficulty: 2 Page-Reference: 194

Question ID: 06-1-94 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

95. By looking at the sales potential for each product, we can use goals to

a. help define corporate culture.

b. help allocate resources.

c. help assess performance.

d. help make decisions.

e. provide direction.

Difficulty: 2 Page-Reference: 194

Question ID: 06-1-95 Skill: Comprehension

Objective: 6.4

96. KWS Corp. wants to increase marketing this coming winter season. This is most likely an

example of

a. intermediate goals.

b. short-term goals.

c. formulating strategy.

d. long-term goals.

e. none of these.

Difficulty: 2 Page-Reference: 197

Question ID: 06-1-96 Skill: Comprehension

Objective: 6.4

97. If Ben and Jerry’s Ice Cream has a goal of investing 2 percent of their after-tax profits in charitable

contributions, that goal

a. helps allocate resources.

b. helps assess performance.

c. provides direction.

d. helps to define corporate culture.

e. helps make decisions.

Difficulty: 2 Page-Reference: 195

Question ID: 06-1-97 Skill: Comprehension

Objective: 6.4

98. Mega Computer has a goal of reducing its manufacturing costs by 15 percent over the next three

years. Each of the manufacturing managers has been given tasks to reach this goal. In this case the goal

a. helps assess performance.

b. provides direction.

c. helps allocate resources.

d. helps make decisions.

e. defines corporate culture.

Difficulty: 2 Page-Reference: 195

Question ID: 06-1-98 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

99. The management of Consumer Products Inc. has set a target of increasing their current market

share from 15 percent to 20 percent. The market is very competitive, and all employees are expected to

do whatever it takes to achieve this goal. The goal

a. helps allocate resources.

b. helps assess performance.

c. defines corporate culture.

d. provides direction.

e. helps make decisions.

Difficulty: 2 Page-Reference: 195

Question ID: 06-1-99 Skill: Comprehension

Objective: 6.4

100. Bob’s Barbecue currently has a 15 percent share of market. Bob has decided that he wants a

20 percent share of market by the end of the year. Bob has set

a. a short-term goal.

b. a long-term goal.

c. a midrange goal.

d. a strategic target.

e. an intermediate goal.

Difficulty: 1 Page-Reference: 197

Question ID: 06-1-100 Skill: Comprehension

Objective: 6.4

101. The purpose of ________ strategy is to determine the businesses the firm will be in and how

these businesses will relate to each other.

a. corporate

b. business

c. mission

d. functional

e. fundamental

Difficulty: 1 Page-Reference: 199

Question ID: 06-1-101 Skill: Knowledge

Objective: 6.4

102. Companies adopting a ________ strategy will increase corporate activities or investment.

a. growth

b. retrenchment

c. functional

d. stability

e. business

Difficulty: 2 Page-Reference: 200

Question ID: 06-1-102 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

103. When MCI shifted from the long-distance telephone business to involvement in local telephone

operations and new wireless digital technology, it was changing its

a. long-term goals.

b. strategy.

c. plans.

d. purpose.

e. mission.

Difficulty: 2 Page-Reference: 197-198

Question ID: 06-1-103 Skill: Comprehension

Objective: 6.4

104. Strategic goals are set by

a. production employees.

b. middle management and first-line supervisors.

c. first-line supervisors.

d. top managers.

e. middle management.

Difficulty: 1 Page-Reference: 187

Question ID: 06-1-104 Skill: Knowledge

Objective: 6.4

105. Strategic formulation involves, in order,

a. (1) creating a mission statement, (2) analyzing the organization and its environment, and (3)

setting strategic goals.

b. (1) creating a mission statement, (2) setting strategic goals, and (3) analyzing the organization and

its environment.

c. (1) setting strategic goals, (2) analyzing the organization and its environment, and (3) matching the

organization and its environment.

d. (1) setting strategic goals, (2) analyzing the organization and its environment, and (3) creating a

mission statement.

e. (1) analyzing the organization and its environment, (2) matching the organization and its

environment, and (3) setting strategic goals.

Difficulty: 3 Page-Reference: 197

Question ID: 06-1-105 Skill: Knowledge

Objective: 6.4

106. The term SWOT analysis stands for the identification of _______, _________, ___________,

and ___________.

a. strengths, weaknesses, organization, and technology

b. standardization, weaknesses, organization, and threats

c. strategy, work-sharing, optimism, and technology

d. structure, wi-fi, opportunities, and technology

e. strengths, weaknesses, opportunities, and threats

Difficulty: 1 Page-Reference: 198

Question ID: 06-1-106 Skill: Knowledge

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

107. Which of the following outlines how an organization intends to meet its mission statement goals

and includes the firm’s responsiveness to new challenges and needs?

a. Goal setting

b. Controlling

c. Strategy

d. Tactics

e. Research and development

Difficulty: 2 Page-Reference: 197

Question ID: 06-1-107 Skill: Knowledge

Objective: 6.4

108. Scanning the environment for threats and opportunities is referred to as

a. organizational analysis.

b. devising strategy.

c. tactical planning.

d. environmental analysis.

e. developing implementation tactics.

Difficulty: 1 Page-Reference: 198

Question ID: 06-1-108 Skill: Knowledge

Objective: 6.4

109. The top management group of Exelon Corp. has already set strategic goals. What is their next

step?

a. Analyzing the company and its environment

b. Segmenting the markets the company wants to penetrate

c. Preparing an organizational plan

d. Matching company strengths with environmental characteristics

e. Developing a mission statement

Difficulty: 2 Page-Reference: 197

Question ID: 06-1-109 Skill: Application

Objective: 6.4

110. The analysis of a firm’s strengths and weaknesses is known as

a. SBU analysis.

b. barrier analysis.

c. organizational analysis.

d. environmental analysis.

e. contingency analysis.

Difficulty: 1 Page-Reference: 198

Question ID: 06-1-110 Skill: Knowledge

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

111. Changing consumer tastes, hostile takeover offers, and new competitors would be classified as

a. strengths.

b. natural responses.

c. threats.

d. opportunities.

e. weaknesses.

Difficulty: 2 Page-Reference: 198

Question ID: 06-1-111 Skill: Comprehension

Objective: 6.4

112. All of the following would usually be considered corporate strengths except

a. a strong economy.

b. a dedicated workforce.

c. technical expertise in the employees.

d. good managerial talent.

e. surplus cash.

Difficulty: 2 Page-Reference: 198

Question ID: 06-1-112 Skill: Comprehension

Objective: 6.4

113. Poor employee morale, ineffective advertising, and products that are not using current

technology are examples of a company’s

a. strengths.

b. threats.

c. weaknesses.

d. strategies.

e. opportunities.

Difficulty: 1 Page-Reference: 198

Question ID: 06-1-113 Skill: Comprehension

Objective: 6.4

114. ________ strategy takes place at the level of the business unit or product line, and focuses on a

firm’s competitive position.

a. Business

b. Fundamental

c. Corporate

d. Mission

e. Functional

Difficulty: 1 Page-Reference: 202

Question ID: 06-1-114 Skill: Knowledge

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

115. When Bell Canada diversified by forming BCE, it acquired interests in businesses like trust

companies, pipelines, and real estate. This is an example of

a. vertical integration.

b. cooperative diversification.

c. concentric diversification.

d. cost leadership.

e. conglomerate diversification.

Difficulty: 2 Page-Reference: 200

Question ID: 06-1-115 Skill: Comprehension

Objective: 6.4

116. What does “retrenchment” mean when discussing business strategy?

a. A change in the mission for the organization

b. Ceasing to do business

c. Cutting back some operations

d. An increase in the market share for two or more products

e. Growth at a modest rate

Difficulty: 2 Page-Reference: 202

Question ID: 06-1-116 Skill: Comprehension

Objective: 6.4

117. When an organization strives to provide goods or services that are distinctive from those of its

competitors, it is pursuing the business-level strategy known as

a. focus.

b. market development.

c. cost leadership.

d. market penetration.

e. differentiation.

Difficulty: 1 Page-Reference: 202

Question ID: 06-1-117 Skill: Knowledge

Objective: 6.4

118. In a SWOT analysis, strengths and weaknesses are factors that are ________ to the firm, while

opportunities and threats are factors that are _________ to the firm.

a. irrelevant; relevant

b. relevant; irrelevant

c. internal; external

d. external; internal

e. central; peripheral

Difficulty: 3 Page-Reference: 198

Question ID: 06-1-118 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

119. An organizational analysis involves looking for ________, while an environmental analysis

involves looking for ___________:

a. threats; opportunities

b. opportunities; threats

c. strengths and weaknesses; threats and opportunities

d. threats and opportunities; strengths and weaknesses

e. strengths and weaknesses; competitors

Difficulty: 2 Page-Reference: 198

Question ID: 06-1-119 Skill: Comprehension

Objective: 6.4

120. The final step in strategy formulation is to

a. develop tactical plans.

b. develop operational plans.

c. conduct an environmental analysis.

d. match the organization and its environment.

e. conduct an organizational analysis.

Difficulty: 1 Page-Reference: 199

Question ID: 06-1-120 Skill: Knowledge

Objective: 6.4

121. Collier Corp. has grown by boosting sales of present products by more aggressive selling in the

firm’s current markets. This is an example of

a. concentration.

b. market penetration.

c. geographic expansion.

d. product development.

e. horizontal integration.

Difficulty: 2 Page-Reference: 200

Question ID: 06-1-121 Skill: Comprehension

Objective: 6.4

122. Brown Corp. has implemented a strategy of acquiring control of competitors in the same or

similar markets. The company is using which strategy?

a. Concentration

b. Market penetration

c. Geographic expansion

d. Product development

e. Horizontal integration

Difficulty: 2 Page-Reference: 200

Question ID: 06-1-122 Skill: Comprehension

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

123. When Maple Leaf Gardens, which already owned the Toronto Maple Leafs, also acquired the

Toronto Raptors basketball team, this was an example of

a. concentration.

b. related diversification.

c. conglomerate diversification.

d. product development.

e. horizontal integration.

Difficulty: 3 Page-Reference: 200

Question ID: 06-1-123 Skill: Comprehension

Objective: 6.4

124. When Hudson’s Bay Company purchased Kmart and Zellers, this was an example of

a. concentration.

b. related diversification.

c. conglomerate diversification.

d. product development.

e. horizontal integration.

Difficulty: 2 Page-Reference: 200

Question ID: 06-1-124 Skill: Comprehension

Objective: 6.4

125. Top managers are to middle and lower-level managers as

a. a strategic plan is to an operational plan.

b. vertical integration is to horizontal integration.

c. a computer is to a server.

d. market penetration is to product development.

e. cost leadership is to differentiation.

Difficulty: 3 Page-Reference: 183, 186-187

Question ID: 06-1-125 Skill: Comprehension

Objective: 6.4

126. Montreal-based Gildan Activewear is pursuing what kind of business-level strategy?

a. Investment reduction

b. Cost leadership

c. Differentiation

d. Focus

e. Horizontal integration

Difficulty: 2 Page-Reference: 202

Question ID: 06-1-126 Skill: Knowledge

Objective: 6.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

127. Contingency planning involves

a. identifying aspects of a business that require changes in organization in three to five years time.

b. developing plans for a business should there be a sudden decrease in revenue or increase in

expenses.

c. an organization’s methods for dealing with emergencies.

d. developing plans for future growth.

e. identifying aspects of a business or its environment that might entail changes in strategy.

Difficulty: 3 Page-Reference: 202

Question ID: 06-1-127 Skill: Comprehension

Objective: 6.5

128. If a company is building a hotel and plans for two grand opening dates, they are most likely

engaged in

a. contingency planning.

b. crisis management.

c. investment reduction.

d. differentiation.

e. none of these.

Difficulty: 2 Page-Reference: 202-203

Question ID: 06-1-128 Skill: Comprehension

Objective: 6.5

129. If a hotel burns down a day before its grand opening, the managers are most likely to be

engaged in

a. crisis management.

b. contingency planning.

c. investment reduction.

d. retrenchment.

e. divestiture.

Difficulty: 2 Page-Reference: 203

Question ID: 06-1-129 Skill: Comprehension

Objective: 6.5

130. If Disney allows for an extra two weeks between when a new cruise ship is supposed to be

finished and its first scheduled cruise, they are engaged in ________, but they would have been engaged

in ________ if the ship suddenly sank as it was launched.

a. crisis management; contingency planning

b. contingency planning; public relations

c. contingency planning; crisis management

d. crisis management; crisis management

e. none of these

Difficulty: 3 Page-Reference: 202-203

Question ID: 06-1-130 Skill: Comprehension

Objective: 6.5

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

131. The listeria problem encountered at Maple Leaf Foods was an example of the need for _______

management.

a. contingency

b. crisis

c. concentration

d. integration

e. none of these were required

Difficulty: 2 Page-Reference: 203

Question ID: 06-1-131 Skill: Comprehension

Objective: 6.5

132. With respect to the concepts of contingency planning and crisis management, which of the

following is (are) correct?

a. Contingency planning deals with events that have a smaller dollar impact than crisis

management.

b. Contingency planning deals with “things,” while crisis management deals with “people.”

c. Contingency management focuses on what might happen, while crisis management focuses on

dealing with what has already happened.

d. Contingency management is largely a “behind–the-scene” activity, while crisis management is

largely a “public relations” activity.

e. All of the above are correct.

Difficulty: 3 Page-Reference: 202-203

Question ID: 06-1-132 Skill: Comprehension

Objective: 6.5

133. What is corporate culture?

a. The shared experiences, stories, and beliefs that characterize a firm

b. The ethnic background of most of the managers in an organization

c. The extent to which the organization is accommodating to those of different races and creeds

d. The ethnic background of most of the employees in an organization

e. The shared experiences, stories, and beliefs of the management of a firm

Difficulty: 1 Page-Reference: 204

Question ID: 06-1-133 Skill: Knowledge

Objective: 6.6

134. Which of the following is (are) correct with respect to the concept of corporate culture?

a. Surveys show that corporate culture does not have much of an impact on the behaviour of

employees.

b. Most companies closely monitor their corporate cultures.

c. Respondents in the Edelman Trust Barometer survey said that trust (being able to count on

businesses to do the right thing) was more important than the quality of products that businesses

produced.

d. Changing a corporation’s culture is relatively easy if the proper incentives to change are provided to

employees.

e. All of the above are correct.

Difficulty: 1 Page-Reference: 204-205

Question ID: 06-1-134 Skill: Comprehension

Objective: 6.6

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

135. Which of the following factors most strongly shapes corporate culture?

a. The values held by the board of directors

b. The values of the founders of the company

c. Strong behavioural norms

d. The profitability of the company

e. It is not possible to say for sure

Difficulty: 2 Page-Reference: 205

Question ID: 06-1-135 Skill: Knowledge

Objective: 6.6

136. Which of the following is not an important element in establishing a unique corporate culture?

a. History of the organization

b. Employees‘ stories of shared work experiences

c. A policy of paying higher-than-average wages

d. Personal values of the top-level managers

e. All of these

Difficulty: 2 Page-Reference: 204-205

Question ID: 06-1-136 Skill: Comprehension

Objective: 6.6

137. Marjorie is thinking about accepting a job offer at Arrow Financial Services, but she is

concerned about the nature of the corporate culture at the firm. She has been told by one of the human

resource managers that the culture is team– and people-oriented, and that everyone is expected to work

hard. Which of the following suggests that Marjorie should be skeptical about the description of the

corporate culture that she has heard?

a. Human resource managers don’t have any idea about what the corporate culture is like at Arrow.

b. Human resource managers are motivated to state the corporate culture in a positive light.

c. Human resource managers have a strong influence on the culture of corporations.

d. The human resource manager’s characterization of Arrow’s culture is contradictory.

e. Marjorie will not be able to find other reliable sources of information regarding the culture at Arrow.

Difficulty: 2 Page-Reference: 204-205

Question ID: 06-1-137 Skill: Analysis

Objective: 6.6

138. Marjorie is thinking about accepting a job offer at Arrow Financial Services, but she is not

knowledgeable about the corporate culture at the firm. Which question could she ask that would most

help her get insights into the attitude toward risk that is evident at Arrow?

a. Have any recent initiatives produced really good results?

b. Are top executives at Arrow paid about the same as top executives at other companies?

c. Did projects fail because of insufficient attention to detail or because people couldn’t work well

together?

d. What system does Arrow use to decide whether or not to go ahead with a proposed initiative?

e. Does Arrow put the well-being of its employees ahead of its goals for financial performance?

Difficulty: 2 Page-Reference: 204-205

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

Question ID: 06-1-138 Skill: Analysis

Objective: 6.6

139. Marjorie is thinking about accepting a job offer at Arrow Financial Services, but she is

wondering about how employees are rewarded. Which of the following would support the argument that

Arrow rewards employees based on the process that led to results and not just on the results

themselves?

a. When employees achieve especially dramatic results, they receive bonuses that are greater than

those called for in the bonus plan.

b. Management does not punish when results fall short due to changes in the external environment

that employees have no control over.

c. Employees are sometimes rewarded even if it can be shown that employees’ efforts didn’t make a

significant contribution to success.

d. Employees are not punished for negative outcomes, but they are rewarded for positive ones.

e. There are no particular rewards for positive outcomes, but there ar punishments for negative

outcomes.

Difficulty: 2 Page-Reference: 204-205

Question ID: 06-1-139 Skill: Analysis

Objective: 6.6

140. Marjorie heard somewhere that companies with strong cultures look favourably on employees

that have knowledge of the organization’s history. She also knows that employees at her firm lack such

knowledge, so she concludes that her firm doesn’t have a strong culture. What is the flaw in her

reasoning?

a. It does not consider the possibility that her company’s long history has inspired its employees.

b. It assumes that companies with strong cultures adopt basically the same culture.

c. It makes the assumption that the strength of a corporate culture has no effect on that company’s

performance.

d. It is based on the belief that if you can find a few exceptions, you can reasonably invalidate a rule

that supposedly applies in most cases.

e. It assumes that employees‘ knowledge of company history is necessary in order to have a strong

corporate culture.

Difficulty: 2 Page-Reference: 204-205

Question ID: 06-1-140 Skill: Analysis

Objective: 6.6

1. The skills that managers bring to small organizations are the same skills needed in large

organizations.

a. True

b. False

Difficulty: 2 Page-Reference: 182

Question ID: 06-2-141 Skill: Comprehension

Objective: 6.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

2. Because of different levels and different areas of responsibility, every manager does not perform all

of the four management processes, i.e., planning, organizing, leading, and controlling.

a. True

b. False

Difficulty: 2 Page-Reference: 182

Question ID: 06-2-142 Skill: Comprehension

Objective: 6.1

3. Managers are more important for profit-pursuing companies than they are for not-for-profit

organizations.

a. True

b. False

Difficulty: 2 Page-Reference: 182

Question ID: 06-2-143 Skill: Comprehension

Objective: 6.1

4. A manager is likely to be engaged in planning, organizing, leading, and controlling during the course

of any given day.

a. True

b. False

Difficulty: 2 Page-Reference: 182

Question ID: 06-2-144 Skill: Knowledge

Objective: 6.1

5. The management functions of planning, organizing, leading, and controlling follow each other in

logical order.

a. True

b. False

Difficulty: 2 Page-Reference: 182

Question ID: 06-2-145 Skill: Knowledge

Objective: 6.1

6. A major difference among strategic plans, tactical plans, and operational plans is the time frame.

a. True

b. False

Difficulty: 2 Page-Reference: 183

Question ID: 06-2-146 Skill: Comprehension

Objective: 6.4

7. The first step in the planning process is to determine whether there is a gap between a company‘s

desired position and its actual position.

a. True

b. False

Difficulty: 1 Page-Reference: 183

Question ID: 06-2-147 Skill: Comprehension

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 6—Managing the Business Enterprise

Objective: 6.1

8. Organizing is that part of a manager’s job concerned with mobilizing the necessary resources to

complete a particular task.

a. True

b. False

Difficulty: 1 Page-Reference: 184

Question ID: 06-2-148 Skill: Knowledge

Objective: 6.1

9. Many not-for-profit organizations are staffed by volunteers. This means that the organizing function

is generally more important than it is in for-profit business firms where people are paid.

a. True

b. False

Difficulty: 1 Page-Reference: 182

Question ID: 06-2-149 Skill: Comprehension

Objective: 6.1

10. Over the years, the PC and printing divisions at Hewlett-Packard have sometimes been combined

and sometimes been separate. These changes illustrate the organizing function of management.

a. True

b. False

Difficulty: 1 Page-Reference: 184

Question ID: 06-2-150 Skill: Comprehension

Objective: 6.1

11. Leading is the management process that involves guiding and motivating employees to achieve

the firm’s objectives.

a. True

b. False

Difficulty: 1 Page-Reference: 184

Question ID: 06-2-151 Skill: Knowledge

Objective: 6.1

12. An essential element in controlling is monitoring the firm’s performance to ensure that it stays on

track towards its goals.

a. True

b. False

Difficulty: 1 Page-Reference: 184

Question ID: 06-2-152 Skill: Knowledge

Objective: 6.1