Chapter 1—Managing Human Resources
MULTIPLE CHOICE
1. Founded in 1998 by Larry Page and Sergey Brin, Google has grown from a two-person company with
no revenue to a company valued at more than $150 billion. Google both created and continues to
transform the world of online search and advertising. As part of their HR management philosophy,
which of the following cultural values does Google hold important?
a.
high on trust
b.
low on politics
c.
sharing of resources and wealth
d.
meaning and significance
e.
all of the above
2. Stakeholders are:
a.
individuals or groups that have interests, rights, or ownership in an organization and its
activities
b.
can benefit from a company’s successes such as a profitable year
c.
harmed by a business’s product failures
d.
interdependent with an organization
e.
are accurately described by all of the above
3. _____ stakeholders are those whose concerns the organization must address in order to ensure its own
survival.
a.
strategic
b.
primary
c.
direct
d.
organizational
e.
corporate
4. Truck drivers would be an example of a(n) ____________ stakeholder group whose concerns an
express package delivery firm must address in order to ensure its own survival.
a.
strategic
b.
primary
c.
direct
d.
organizational
e.
corporate
5. A supplier that is the sole source of a critical product component would be an example of a(n)
____________ stakeholder group whose concerns a manufacturing firm must address in order to
ensure its own survival.
a.
strategic
b.
primary
c.
direct
d.
organizational
e.
corporate
6. Which of the following would be an example of a primary stakeholder group for a manufacturer of
mixes for bread machines?
a.
the newspaper that runs an article on the fat content of such bread mixes
b.
a political action group that sues the manufacturer for not hiring enough
Hispanic-Americans
c.
a local environmentalist who is concerned about how the manufacturer disposes of its
waste products
d.
the customer who purchases the bread mix
e.
all of the above
7. The stakeholders of the organization include all but:
a.
Employees
b.
Society
c.
Local Government
d.
Customers
e.
Owners and Investors
8. Which of the following is NOT a tangible asset for a firm:
a.
Part-time employees
b.
In-process inventory
c.
Plant equipment
d.
Mortgaged real estate
e.
Accounts receivable
9. Which of the following statements about intangible assets is true?
a.
Intangible assets can influence a firm’s profitability.
b.
Intangible assets are comparatively social in nature.
c.
Intangible assets can be just as valuable as tangible assets.
d.
Intangible assets can influence a firm’s ability to innovate and change.
e.
All of these statements are true.
10. Which of the following statements describing how owners and shareholders relate to the organization
is true?
a.
Companies with better HR practices have greater increases in market value/employee.
b.
An investor’s judgment about the value of a company’s intangible assets is based on such
things as reputation rankings.
c.
Most owners and shareholders invest their money in companies for financial reasons.
d.
Intangibles such as how employees feel about their employer can be used by shareholders
to predict financial performance.
e.
All of the above statements about how owners and shareholders relate to the organization
are true.
11. You are an intern in the HR department at a chain of spas in the city where you attend college. The
chain’s HR director has asked you to suggest ways to improve customer satisfaction through HR
activities, so you make recommendations in which of the following areas?
a.
Creating new products
b.
Reducing costs
c.
Improving product quality
d.
Improving service quality
e.
All of the above
12. The relationship between quality of HRM activities and market value:
a.
fluctuates with the economy
b.
has not been proven
c.
indicates firms with better HR practices have greater increases in value per employee
d.
depends upon the relationship among the members of the HR triad
e.
none of the above
13. What are the primary concerns of customers in their role as stakeholders?
a.
legal compliance of the company and how it meets its social responsibility
b.
return on sales, return on assets, and return on investments
c.
quality service and product, innovation, and low cost
d.
concern about safety, health, and fair treatment
e.
whether the company uses collaborative problem-solving
14. When managers at Saks Fifth Avenue addressed employees’ concerns about what the employees
needed to do their jobs, they observed that employee engagement and customer engagement:
a.
exhibited an inverse relationship
b.
failed to maximize long-term shareholder interests
c.
adversely affected the economic needs of the organization
d.
had a significant positive impact on customer satisfaction and sales
e.
affected customer loyalty but did not increase sales
15. In the eyes of average Americans, the best employers:
a.
maximize shareholder profits
b.
maximize long term shareholder interests
c.
make decisions based on economic needs of the organization
d.
seek to have a positive impact on society
e.
simply obey the letter of the law
16. According to Milton Friedman, if managers hire economically disadvantaged youths they:
a.
are simply stealing from the firm’s owners
b.
are not considering the firm’s economic needs and financial well-being
c.
are justified in doing so because it’s the right thing to do for society
d.
will be correct in their actions if the hirings pay off financially for the firm
e.
none of the above
17. Free-market capitalism is the result of:
a.
shareholders’ expectations of profits
b.
an overabundance of skilled labor in the U.S.
c.
the new sellers’ market
d.
decreased emphasis on social responsibility
e.
less use of collaborative problem solving
18. Being socially responsive has many implications for managing human resources, including:
a.
the type of employees a firm chooses to hire
b.
the criteria used to evaluate employee performance
c.
the scheduling and coordinating of activities within work units
d.
the compensation practices associated with paying employees for time spent in the
community
e.
all of these
19. Which of the following statements about corporate spending on social issues and community
involvement are true?
a.
Corporations should spend whatever is needed to maximize society’s well-being.
b.
It is part of a corporation’s contract with society to provide funds for the common good.
c.
Most corporations today operate under the rules of socialism.
d.
Managers of corporations try to show how the company’s commitment to community
involvement and development contribute to the corporate goals.
e.
All of the above statements about corporate spending on social issues and community
involvement are true.
20. How does an organization interact with its society stakeholders?
a.
by obeying local laws and regulations
b.
by being committed to community relations
c.
through employee volunteerism
d.
by acting socially responsible to protect the environment
e.
by doing all or any of the above
21. The Florida Quarry Company wants to reopen a quarry mine in North Georgia. The mine contains an
estimated 76 million tons of granite and would make the company one of the leading granite producers
in the Eastern United States. The local communities fear what such mining will do to their
environment. This example reflects:
a.
a conflict between shareholders and society
b.
a lack of social responsibility by the company
c.
a conflict among all of Florida Quarry’s secondary stakeholders
d.
how the customer stakeholder can influence the organization
e.
a conflict among all of Florida Quarry’s primary stakeholders
22. Which of the following statements describing the stakeholder relationship between employees and
their employers is true?
a.
Corporate restructuring has had minimal effect on U.S. employees.
b.
For most workers whether the employer provides secure and affordable health insurance,
paid sick leave, and assured pension and retirement benefits are more important than their
pay.
c.
The Equal Pay Act is unnecessary today because all employees are paid according to their
performance, not their gender.
d.
Many employees value a good quality of work life while on the job.
e.
All of the above statements accurately describe the stakeholder relationship between
employees and their employers.
23. Organizations offer their employees training and development programs to improve their skills, safe
and healthy work environments, fair and equitable selection and promotion systems, and jobs designed
to increase employee self-esteem in order to:
a.
create stronger commitment from its employees
b.
increase employee satisfaction
c.
increase employee empowerment
d.
improve employee quality of work life
e.
do all of the these
a.
use of an open hiring policy
b.
close monitoring of day-to-day activities
c.
use of human resources to create a competitive advantage
d.
development of a democratic corporate culture
24. Computer Nerds is a company that specializes in quick and efficient computer repairs. The employees
are expected to dress like nerds-pocket protectors, polyester, and ugly glasses. Each employee must
also have an exceptional ability at recognizing computer problems and fixing them. The organization’s
culture is based on the idea that these experts should be only minimally supervised and should be left
alone to do what they do best. Each computer repairperson is given a percentage of the profit he or she
earns for the company. The company has more than tripled in value since it began five years ago
e.
creation of a strategic plan that can be easily copied
25. People referred to as core employees are closest to the essential work of the organization. All of the
following are core employees EXCEPT:
a.
scientists and researchers in pharmaceutical firms
b.
programmers in software development firms
c.
doctors in health care facilities
d.
musicians in orchestras
e.
maintenance personnel in colleges and universities
26. A competitive advantage derived from human resources is sustainable for a company when:
a.
it uses a centralized tactical program of close-supervision
b.
its employees have some rare and specialized skill not easily copied
c.
it has a newly created organizational culture
d.
its product is intangible
e.
its customers remember the product and not the salesperson
27. Which of the following would be an example of how to create an inimitable corporate culture:
a.
Hiring the best employees available
b.
Benchmarking against other successful firms
c.
Develop a complex and integrated system of HR practices over a period of many years
d.
A company-specific training program
e.
All of the above
28. Which of the following would be an example of how Southwest Airlines has created an inimitable
corporate culture:
a.
Hiring the best people available
b.
Having employees who understand the firm’s strategy
c.
Offering a profit-sharing program
d.
Setting goals and performance targets for the firm as a whole
e.
All of the above
29. The most difficult company culture to copy would be one that:
a.
has evolved over time and actually suits the needs of the company
b.
has evolved over the last twelve months
c.
has been used successfully by other companies not in the industry
d.
is based on a tactical pricing and promotion plan
e.
supports a newly developed technically-oriented company
30. All of the people who currently contribute to doing the work of the organization, those who could
potentially contribute in the future, and those who have contributed in the recent past are referred to as:
a.
employees
b.
the HR triad
c.
human resources
d.
HR professionals
e.
customers
31. Which of the following is NOT a part of human resources management activities?
a.
Developing organizational strategy
b.
Compensating employees
c.
Promoting workplace safety and health
d.
Understanding unionization and collective bargaining
e.
Measuring performance and providing feedback
32. The characteristics that tend to shape the way a firm manages its people include:
a.
the leadership of the top management team
b.
the firm’s culture
c.
technology
d.
business strategy
e.
all of the above
33. ABC Company has a strategy of being a low-cost provider of services and thus pays its employees a
low wage rate. Which of the following is an example of an HR practice that would be in alignment
with this strategy?
a.
a heavy investment in training
b.
recruitment at top educational institutions
c.
complex compensation plans such as profit sharing and stock options
d.
career planning sessions with employees
e.
ongoing recruitment activities
34. The human resources triad contains:
a.
top-level, middle-level, and lower level managers
b.
representatives from each primary stakeholder group
c.
suppliers, customers, and resellers
d.
line managers, human resource professionals, and employees
e.
employees, staff managers, and line managers
35. Bill is a line manager at a food packaging plant. His responsibilities in managing the human resources
of his organization include all of the following EXCEPT:
a.
be proactive about learning how leading companies are managing human resources
b.
seek input from HR professionals and line workers to improve own competency
c.
learn about and apply basic principles for managing HR
d.
work closely with HR professionals in the company to develop and implement HR
policies
e.
understand that as line managers they share responsibility for managing human resources
with HR
36. Vijay is one of the leaders in the HR department at his firm. His key roles are:
a.
business partner, consultant, innovator, monitor and change manager
b.
business partner, educator, consultant, monitor and change manager
c.
educator, consultant, business partner, monitor and change manager
d.
change manager, business partner, consultant, educator and innovator
e.
consultant, educator, innovator, monitor and change manager
37. Melissa is an HR professional who works for a natural gas company. She wants to maintain
professional responsibility, so she has decided to:
a.
pursue formal academic opportunities
b.
measure the effectiveness of HR in contributing to organizational goals
c.
use his or her position for personal or financial gain
d.
seek preferential treatment in the HR processes
e.
avoid conflicts of interest
38. Improving on time delivery of results to satisfy customers and reinforce or expand informal networks
to satisfy employees are common reasons for the expanding use of:
a.
assessment centers in selection
b.
work teams
c.
employee stock ownership
d.
synergy
e.
globalization
39. The view of corporate social responsibility (CSR) that was held by the largest percentage of managers
was that CSR:
a.
is a necessary cost of business
b.
provides a distinctive position in the market
c.
is meaningless if it includes things that firms would do anyway
d.
is a waste of time
e.
is only for those firms that can afford it
40. Social media technologies include all of the following EXCEPT:
a.
social networking
b.
blogs
c.
tweets
d.
wikis
e.
the grapevine
41. Complexity is created by:
a.
rapidly evolving competition from around the world
b.
constant innovations in products and services
c.
changing organizational structure and strategies
d.
political and economic dynamics
e.
the continuous introduction of new technologies
f.
all of the above
TRUE/FALSE
1. Investors, creditors, and suppliers are referred to as stockholders; employees, customers, and
distributors are referred to as stakeholders.
2. As stakeholders, customers are most concerned with quality service and products, speed and
responsiveness, low cost, and new products.
3. Several studies have shown that the approaches firms take to manage their human resources can
increase profitability, annual sales per employee (productivity), market value, and earnings-per-share
growth.
4. The average American views socially responsible organizations as preferable for employment over less
socially responsible ones.
5. A commitment to community involvement and development can have major implications for
managing human resources because voluntary labor is frequently a community’s biggest need.
6. A good quality of work life contributes to increased employee satisfaction, commitment, and feelings
of empowerment.
7. A manufacturer of air conditioners has been able to retain its position as a low-cost leader for the past
20 years. This competitive advantage could be described as sustainable because the manufacturer has
maintained it for a long period of time, even though other firms have tried to copy it.
8. Management practices such as using rapid market intelligence and competitive pricing will create a
sustainable competitive advantage, regardless of the human resources used to implement these
strategies.
9. Town Auto Dealer has been in business for more than 60 years, and is the largest chain of car
dealerships in its region. Its corporate culture is difficult to copy because it has evolved over a period
of time and suits its own specific needs.
10. The external environment affects all organizations, but its effects are not the same for all
organizations.
SHORT ANSWER
1. Who are the primary stakeholders in most companies in the United States?
2. Give an example of a competitive advantage that is NOT sustainable.
3. List the members of the human resources (HR) triad.
4. What are five reasons for using work teams in organizations?
ESSAY
1. Describe the relationship between a firm and its stakeholders.
2. Discuss the following statement: “Organizations look to the legal institutions to determine if they are
acting in the best interest of society.”
3. Computer Nerds is a firm that employs individuals who are experts at recognizing and repairing
computer problems. Their slogan is “Call a nerd when you have a nerdy problem.” Describe how such
a firm can create a sustainable competitive advantage.
4. Why would increased diversity in the workplace make managing teams more challenging than in a
non-diverse workplace?
5. Discuss why the U.S. workforce is becoming more culturally diverse.
6. How can HR professions assist managers in doing an effective job of managing complexity?
