Chapter 6 3 The control process starts with establishing standards

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

Chapter 6—Managing the Business Enterprise

13. The control process starts with establishing standards, then measuring performance, and then

analyzing the differences to see if the standards or performance need to be changed.

a. True

b. False

Difficulty: 2 Page-Reference: 184

Question ID: 06-2-153 Skill: Knowledge

Objective: 6.1

14. The first step in the control process is to measure current performance levels.

a. True

b. False

Difficulty: 2 Page-Reference: 184

Question ID: 06-2-154 Skill: Knowledge

Objective: 6.1

15. Larry McCain is the CEO of XLR Enterprises. Last Saturday, he attended the wedding of his

personal assistant. In doing this, McCain was playing the liaison role that was identified by Mintzberg.

a. True

b. False

Difficulty: 2 Page-Reference: 185

Question ID: 06-2-155 Skill: Comprehension

Objective: 6.1

16. Sung is a middle manager who is trying to decide how much authority one of his subordinates

should have. Sung is playing the role of negotiator when making this decision.

a. True

b. False

Difficulty: 2 Page-Reference: 186

Question ID: 06-2-156 Skill: Comprehension

Objective: 6.1

17. Common titles for top managers include president, vice president, treasurer, chief executive

officer, and chief financial officer.

a. True

b. False

Difficulty: 2 Page-Reference: 187

Question ID: 06-2-157 Skill: Knowledge

Objective: 6.2

18. In terms of the areas of management, human resource managers are probably the most important

because they deal with all the human resources in a company.

a. True

b. False

Difficulty: 2 Page-Reference: 188

Question ID: 06-2-158 Skill: Comprehension

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

Chapter 6—Managing the Business Enterprise

Objective: 6.2

19. Operations managers are responsible for the firm’s financial operations, including its investments

and accounting functions.

a. True

b. False

Difficulty: 1 Page-Reference: 188

Question ID: 06-2-159 Skill: Knowledge

Objective: 6.2

20. Marketing managers’ responsibilities are confined to pricing and promotion decisions for a firm’s

products.

a. True

b. False

Difficulty: 2 Page-Reference: 188

Question ID: 06-2-160 Skill: Knowledge

Objective: 6.2

21. Information managers are responsible for the firm’s financial operations, including its investments

and accounting functions.

a. True

b. False

Difficulty: 1 Page-Reference: 188

Question ID: 06-2-161 Skill: Knowledge

Objective: 6.2

22. All managers need an equal balance of technical, human relations, and conceptual skills in order

to be effective.

a. True

b. False

Difficulty: 2 Page-Reference: 188

Question ID: 06-2-162 Skill: Comprehension

Objective: 6.3

23. The most important skills for a first-line supervisor to have are technical and conceptual skills.

a. True

b. False

Difficulty: 2 Page-Reference: 189

Question ID: 06-2-163 Skill: Comprehension

Objective: 6.3

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

Chapter 6—Managing the Business Enterprise

24. Top managers depend on conceptual skills the most, while first-line supervisors depend on these

skills the least.

a. True

b. False

Difficulty: 2 Page-Reference: 190

Question ID: 06-2-164 Skill: Knowledge

Objective: 6.3

25. To manage time more effectively, managers must address the four leading causes of wasted

time: the telephone, e-mail, meetings, and the internet.

a. True

b. False

Difficulty: 3 Page-Reference: 190

Question ID: 06-2-165 Skill: Knowledge

Objective: 6.3

26. Human relations skills are needed at all levels of management.

a. True

b. False

Difficulty: 1 Page-Reference: 189

Question ID: 06-2-166 Skill: Knowledge

Objective: 6.3

27. A study by Google found that technical expertise ranked last among a list of eight “Habits of

Highly Effective Google Managers.”

a. True

b. False

Difficulty: 1 Page-Reference: 189

Question ID: 06-2-167 Skill: Knowledge

Objective: 6.3

28. To improve their insights into employee needs and company operations, some managers work

alongside lower-level employees on a temporary basis.

a. True

b. False

Difficulty: 1 Page-Reference: 189-190

Question ID: 06-2-168 Skill: Knowledge

Objective: 6.3

29. The ability to think in the abstract, to diagnose and analyze different situations, and to see beyond

the present are managerial skills that are crucial for top managers.

a. True

b. False

Difficulty: 2 Page-Reference: 190

Question ID: 06-2-169 Skill: Knowledge

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

Chapter 6—Managing the Business Enterprise

Objective: 6.3

30. At least some level of conceptual skill is needed at every level of management.

a. True

b. False

Difficulty: 2 Page-Reference: 190

Question ID: 06-2-170 Skill: Knowledge

Objective: 6.3

31. Effective time management is not as important for top managers as it is for first-line supervisors

because first-line supervisors are faced with constant short-term deadlines, while top managers focus

their attention on longer-term issues where they have more time to reflect about what they should do.

a. True

b. False

Difficulty: 2 Page-Reference: 190

Question ID: 06-2-171 Skill: Comprehension

Objective: 6.3

32. The relationship between management functions and management skills is this: Management

skills are needed to perform the management functions.

a. True

b. False

Difficulty: 2 Page-Reference: 188

Question ID: 06-2-172 Skill: Comprehension

Objective: 6.3

33. The first step in basic decision making is to look for a problem to solve.

a. True

b. False

Difficulty: 1 Page-Reference: 191

Question ID: 06-2-173 Skill: Knowledge

Objective: 6.3

34. The growth of international air travel motivated Boeing and Airbus to see an opportunity to

increase the capacity of their planes. This is an example of the first step in the rational decision making

process: recognizing and defining the decision situation.

a. True

b. False

Difficulty: 3 Page-Reference: 191

Question ID: 06-2-174 Skill: Comprehension

Objective: 6.3

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

Chapter 6—Managing the Business Enterprise

35. Employees generally are enthusiastic about change because they assume that they will benefit

from the change.

a. True

b. False

Difficulty: 1 Page-Reference: 192-193

Question ID: 06-2-175 Skill: Comprehension

Objective: 6.3

36. Organizational politics refers to the support by business firms of political candidates that agree

with the firm’s position on economic issues.

a. True

b. False

Difficulty: 1 Page-Reference: 193

Question ID: 06-2-176 Skill: Knowledge

Objective: 6.3

37. When managers make a decision because it “feels right,” they are using intuition, which generally

results in better decisions than a rational process.

a. True

b. False

Difficulty: 1 Page-Reference: 193

Question ID: 06-2-177 Skill: Knowledge

Objective: 6.3

38. Managers with a high risk propensity are more likely than their conservative counterparts to

achieve big successes with their decisions, but they are also more likely to incur greater losses.

a. True

b. False

Difficulty: 1 Page-Reference: 194

Question ID: 06-2-178 Skill: Comprehension

Objective: 6.3

39. Escalation of commitment means investing more money in a project, but only after it is clear that

the project is worthwhile.

a. True

b. False

Difficulty: 1 Page-Reference: 193

Question ID: 06-2-179 Skill: Comprehension

Objective: 6.3

40. Goal setting helps firms allocate resources.

a. True

b. False

Difficulty: 1 Page-Reference: 194

Question ID: 06-2-180 Skill: Knowledge

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

Chapter 6—Managing the Business Enterprise

Objective: 6.4

41. 3M allocates more resources to new projects with large sales potential than it allocates to mature

products with low growth potential. This illustrates the principle that “goal setting helps managers assess

performance.”

a. True

b. False

Difficulty: 1 Page-Reference: 194-195

Question ID: 06-2-181 Skill: Comprehension

Objective: 6.4

42. General Electric’s goal is to have each of its divisions be #1 or #2 in its industry. This illustrates

the principle that “goal setting helps to define corporate culture.”

a. True

b. False

Difficulty: 1 Page-Reference: 195

Question ID: 06-2-182 Skill: Comprehension

Objective: 6.4

43. Not every business needs specific goals.

a. True

b. False

Difficulty: 2 Page-Reference: 196

Question ID: 06-2-183 Skill: Comprehension

Objective: 6.4

44. The mission statement is the documentation of a corporation’s reason for being.

a. True

b. False

Difficulty: 1 Page-Reference: 195

Question ID: 06-2-184 Skill: Knowledge

Objective: 6.4

45. Two companies may have the same purpose but very different mission statements.

a. True

b. False

Difficulty: 1 Page-Reference: 195

Question ID: 06-2-185 Skill: Knowledge

Objective: 6.4

46. The three major kinds of goals that a firm sets are long-term, intermediate, and short-term.

a. True

b. False

Difficulty: 1 Page-Reference: 196-197

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

Chapter 6—Managing the Business Enterprise

Question ID: 06-2-186 Skill: Knowledge

Objective: 6.4

47. Short-term goals usually cover a range of one to five years.

a. True

b. False

Difficulty: 1 Page-Reference: 197

Question ID: 06-2-187 Skill: Knowledge

Objective: 6.4

48. The first step in strategy formulation is the setting of strategic goals.

a. True

b. False

Difficulty: 1 Page-Reference: 197

Question ID: 06-2-188 Skill: Knowledge

Objective: 6.4

49. In a SWOT analysis, strengths, weaknesses, opportunities, and threats are factors external to the

firm.

a. True

b. False

Difficulty: 1 Page-Reference: 198

Question ID: 06-2-189 Skill: Comprehension

Objective: 6.4

50. An environmental analysis involves scanning the business environment for strengths and

weaknesses.

a. True

b. False

Difficulty: 1 Page-Reference: 198

Question ID: 06-2-190 Skill: Knowledge

Objective: 6.4

51. The final step in the strategic formulation process is to match the environmental analysis with the

organization analysis in an attempt to identify specific strategies.

a. True

b. False

Difficulty: 1 Page-Reference: 199

Question ID: 06-2-191 Skill: Knowledge

Objective: 6.4

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

Chapter 6—Managing the Business Enterprise

52. Strategic goals are derived directly from the firm’s mission statement.

a. True

b. False

Difficulty: 1 Page-Reference: 198

Question ID: 06-2-192 Skill: Comprehension

Objective: 6.4

53. Talon Corp. has adopted a strategy of boosting the sales of its existing products by more

aggressive selling in the firm’s current markets. Talon is pursuing a product development strategy.

a. True

b. False

Difficulty: 2 Page-Reference: 200

Question ID: 06-2-193 Skill: Comprehension

Objective: 6.4

54. CN’s diversification into trucking is an example of related diversification.

a. True

b. False

Difficulty: 2 Page-Reference: 200

Question ID: 06-2-194 Skill: Comprehension

Objective: 6.4

55. Target acquired many Zellers stores as it prepared to enter the Canadian market. This is an

example of horizontal integration.

a. True

b. False

Difficulty: 2 Page-Reference: 200

Question ID: 06-2-195 Skill: Comprehension

Objective: 6.4

56. Volvo’s strategy of stressing safety is an example of a differentiation strategy.

a. True

b. False

Difficulty: 2 Page-Reference: 200

Question ID: 06-2-196 Skill: Comprehension

Objective: 6.4

57. A corporate-level strategy is developed to identify the various businesses that a company will be

in.

a. True

b. False

Difficulty: 1 Page-Reference: 199

Question ID: 06-2-197 Skill: Knowledge

Objective: 6.4

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

Chapter 6—Managing the Business Enterprise

58. When Maple Leaf Gardens Ltd. acquired the Toronto Raptors, this was an example of related

diversification because Maple Leaf already owned the Toronto Maple Leafs.

a. True

b. False

Difficulty: 2 Page-Reference: 200

Question ID: 06-2-198 Skill: Comprehension

Objective: 6.4

59. Gildan Activewear is pursuing a cost leadership business-level strategy.

a. True

b. False

Difficulty: 2 Page-Reference: 202

Question ID: 06-2-199 Skill: Knowledge

Objective: 6.4

60. Contingency planning is an organization’s method for dealing with emergencies.

a. True

b. False

Difficulty: 1 Page-Reference: 202-203

Question ID: 06-2-200 Skill: Comprehension

Objective: 6.5

61. Contingency planning and crisis management are different only in terms of the magnitude of the

problem the company faces (i.e., crisis management deals with problems of larger magnitude).

a. True

b. False

Difficulty: 2 Page-Reference: 202-203

Question ID: 06-2-201 Skill: Comprehension

Objective: 6.5

62. When the Disney Wonder cruise ship was being planned, the company allowed for an extra two

weeks between when the ship was supposed to be ready for sailing and its first scheduled cruise. This is

an example of contingency planning.

a. True

b. False

Difficulty: 2 Page-Reference: 202-203

Question ID: 06-2-202 Skill: Comprehension

Objective: 6.5

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

Chapter 6—Managing the Business Enterprise

63. When Maple Leaf Foods had to deal with the problem of listeria contamination at one of its plants,

this was an example of crisis management.

a. True

b. False

Difficulty: 2 Page-Reference: 203

Question ID: 06-2-203 Skill: Comprehension

Objective: 6.5

64. The shared experiences, stories, beliefs, and norms that characterize an organization are referred

to as organizational structure.

a. True

b. False

Difficulty: 1 Page-Reference: 204

Question ID: 06-2-204 Skill: Knowledge

Objective: 6.6

65. Corporate culture influences management philosophy, style, and behaviour.

a. True

b. False

Difficulty: 2 Page-Reference: 204-205

Question ID: 06-2-205 Skill: Knowledge

Objective: 6.6

66. Just as every individual has a unique personality, every company has a unique corporate culture.

a. True

b. False

Difficulty: 1 Page-Reference: 204

Question ID: 06-2-206 Skill: Knowledge

Objective: 6.6

67. Corporate culture has a big influence on top managers, but does not influence workers at the

bottom of the organizational hierarchy nearly as much.

a. True

b. False

Difficulty: 1 Page-Reference: 204-205

Question ID: 06-2-207 Skill: Comprehension

Objective: 6.6

68. Changing a corporation’s culture usually proceeds in three steps, with the first step being

characterized by conflict and resistance to change.

a. True

b. False

Difficulty: 2 Page-Reference: 206

Question ID: 06-2-208 Skill: Knowledge

Objective: 6.6

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

Chapter 6—Managing the Business Enterprise

1. What are the four management functions that all managers must perform?

Difficulty: 1 Page-Reference: 182

Question ID: 06-3-209 Skill: Knowledge

Objective: 6.1

2. List the three basic levels of management.

Difficulty: 2 Page-Reference: 186-187

Question ID: 06-3-210 Skill: Knowledge

Objective: 6.2

3. Explain the three types of managers and what skills are necessary for their job.

Difficulty: 2 Page-Reference: 186-187

Question ID: 06-3-211 Skill: Knowledge

Objective: 6.2

4. At which level of management are technical skills most important?

Difficulty: 1 Page-Reference: 187

Question ID: 06-3-212 Skill: Comprehension

Objective: 6.3

5. At which level of management are human relations skills most important?

Difficulty: 1 Page-Reference: 187-188

Question ID: 06-3-213 Skill: Comprehension

Objective: 6.3

6. At which level of management are conceptual skills most important?

Difficulty: 1 Page-Reference: 190

Question ID: 06-3-214 Skill: Comprehension

Objective: 6.3

7. Identify the four leading causes of wasted time in the workplace.

Difficulty: 1 Page-Reference: 190

Question ID: 06-3-215 Skill: Knowledge

Objective: 6.3

8. What are the steps in the rational decision-making process?

Difficulty: 1 Page-Reference: 191

Question ID: 06-3-216 Skill: Knowledge

Objective: 6.3

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

Chapter 6—Managing the Business Enterprise

9. What is organizational politics?

Difficulty: 1 Page-Reference: 193

Question ID: 06-3-217 Skill: Knowledge

Objective: 6.3

10. What is intuition?

Difficulty: 1 Page-Reference: 193

Question ID: 06-3-218 Skill: Knowledge

Objective: 6.3

11. What is escalation of commitment?

Difficulty: 1 Page-Reference: 193

Question ID: 06-3-219 Skill: Knowledge

Objective: 6.3

12. List the five basic management skills.

Difficulty: 2 Page-Reference: 188

Question ID: 06-3-220 Skill: Knowledge

Objective: 6.3

13. List the three types of strategy.

Difficulty: 2 Page-Reference: 199

Question ID: 06-3-221 Skill: Knowledge

Objective: 6.4

14. What is a mission statement?

Difficulty: 2 Page-Reference: 195

Question ID: 06-3-222 Skill: Knowledge

Objective: 6.4

15. What is environmental analysis?

Difficulty: 2 Page-Reference: 198

Question ID: 06-3-223 Skill: Knowledge

Objective: 6.4

16. What is organizational analysis?

Difficulty: 2 Page-Reference: 198

Question ID: 06-3-224 Skill: Knowledge

Objective: 6.4

17. What are the three levels of plans?

Difficulty: 2 Page-Reference: 183

Question ID: 06-3-225 Skill: Knowledge

Objective: 6.4

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

Chapter 6—Managing the Business Enterprise

18. What is contingency planning?

Difficulty: 2 Page-Reference: 202

Question ID: 06-3-226 Skill: Knowledge

Objective: 6.5

19. What is crisis management?

Difficulty: 2 Page-Reference: 203

Question ID: 06-3-227 Skill: Knowledge

Objective: 6.5

20. Define the term corporate culture.

Difficulty: 2 Page-Reference: 204

Question ID: 06-3-228 Skill: Knowledge

Objective: 6.6

1. What is management?

Difficulty: 2 Page-Reference: 182

Question ID: 06-4-229 Skill: Knowledge

Objective: 6.1

2. Is management universal? Explain.

Difficulty: 2 Page-Reference: 182

Question ID: 06-4-230 Skill: Comprehension

Objective: 6.1

3. List and describe the four management functions.

Difficulty: 3 Page-Reference: 183-185

Question ID: 06-4-231 Skill: Knowledge

Objective: 6.1

4. Why is planning important?

Difficulty: 2 Page-Reference: 183

Question ID: 06-4-232 Skill: Comprehension

Objective: 6.1

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

Chapter 6—Managing the Business Enterprise

5. Are management functions just as applicable in not-for-profit organizations as they are for profit–

seeking corporations?

Difficulty: 2 Page-Reference: 182

Question ID: 06-4-233 Skill: Comprehension

Objective: 6.1

6. Explain the three types of managers and what skills are necessary for their job.

Difficulty: 2 Page-Reference: 186-187

Question ID: 06-4-234 Skill: Knowledge

Objective: 6.2

7. The textbook describes five different key functional areas which managers work in. Identify and

briefly describe each of the five.

Difficulty: 1 Page-Reference: 188

Question ID: 06-4-235 Skill: Knowledge

Objective: 6.2

8. What is the difference in the need for technical skills at first-line management levels and the need at

top management levels, and what accounts for any difference?

Difficulty: 2 Page-Reference: 189-190

Question ID: 06-4-236 Skill: Comprehension

Objective: 6.3

9. What is the difference in the need for conceptual skills at first-line management levels and the need

at top management levels, and what accounts for any difference?

Difficulty: 2 Page-Reference: 189-190

Question ID: 06-4-237 Skill: Comprehension

Objective: 6.3

10. Explain the term “time management skills” and discuss the four leading causes of wasted time.

Provide solutions to these problems and also include an example of a time where you had to use such

skills.

Difficulty: 2 Page-Reference: 190

Question ID: 06-4-238 Skill: Comprehension

Objective: 6.3

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

Chapter 6—Managing the Business Enterprise

11. What are the basic steps in decision making?

Difficulty: 2 Page-Reference: 191

Question ID: 06-4-239 Skill: Knowledge

Objective: 6.3

12. What is escalation of commitment, and how can managers avoid it?

Difficulty: 2 Page-Reference: 193

Question ID: 06-4-240 Skill: Comprehension

Objective: 6.3

13. What are the characteristics of a good goal?

Difficulty: 2 Page-Reference: 197

Question ID: 06-4-241 Skill: Knowledge

Objective: 6.4

14. Describe the three steps in strategy formulation.

Difficulty: 2 Page-Reference: 197-199

Question ID: 06-4-242 Skill: Knowledge

Objective: 6.4

15. Briefly describe the general planning process. Indicate the kinds of things that can go wrong at

each step in the process.

Difficulty: 3 Page-Reference: 183

Question ID: 06-4-243 Skill: Comprehension

Objective: 6.4

16. Explain how plans differ at the strategic, tactical, and operational levels.

Difficulty: 2 Page-Reference: 183

Question ID: 06-4-244 Skill: Comprehension

Objective: 6.4

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

Chapter 6—Managing the Business Enterprise

17. Describe five of the different corporate-level strategies that a company might pursue.

Difficulty: 2 Page-Reference: 199-202

Question ID: 06-4-245 Skill: Knowledge

Objective: 6.4

18. Identify and describe the three competitive strategies identified by Michael Porter.

Difficulty: 2 Page-Reference: 202

Question ID: 06-4-246 Skill: Knowledge

Objective: 6.4

19. Define the three types of goals, indicating the approximate time frame for each.

Difficulty: 1 Page-Reference: 196-197

Question ID: 06-4-247 Skill: Knowledge

Objective: 6.4

20. What are the purposes of goal setting?

Difficulty: 1 Page-Reference: 194-195

Question ID: 06-4-248 Skill: Knowledge

Objective: 6.4

21. Describe the three steps in strategy formulation.

Difficulty: 1 Page-Reference: 197

Question ID: 06-4-249 Skill: Knowledge

Objective: 6.4

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

Chapter 6—Managing the Business Enterprise

22. Distinguish between contingency planning and crisis management.

Difficulty: 2 Page-Reference: 202-203

Question ID: 06-4-250 Skill: Comprehension

Objective: 6.5

23. What are the purposes of having a strong corporate culture?

Difficulty: 3 Page-Reference: 204-205

Question ID: 06-4-251 Skill: Knowledge

Objective: 6.6

24. Where does an organization’s culture come from?

Difficulty: 3 Page-Reference: 204-205

Question ID: 06-4-252 Skill: Comprehension

Objective: 6.6