Fundamentals of

Management Final
Revision

1
 Chapter 01

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 3 Chapter 01
True / False

 There is No difference between efficiency and effectiveness

 Efficiency
A measure of how well or how productively resources
are used to achieve a goal
 Effectiveness
A measure of the appropriateness of the goals an
organization is pursuing and the degree to which they
are achieved.
 4 Chapter 01
MCQ
 The measure of how well (or how productively) an organization uses
its resources to achieve a goal is known as:
A) effectiveness.
B) role.
C) efficiency.
D) strategy.
E) organizing.
 McDonald's developed a fat fryer machine that reduced the amount
of oil used to cook French fries by 30 percent over its current
cookers. This is an example of an attempt to improve the
organization's:
A) effectiveness.
B) efficiency.
C) planning.
D) organizing.
E) low-cost strategy.
 Chapter 07

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 6 Chapter 07
True / False

 Thereis No difference between Organizational Learning and

learning Organization

 Organizational Learning
Managers seek to improve a employee’s desire and ability to
understand and manage the organization and its task
environment so as to raise effectiveness.
 Learning Organization
Managers try to maximize the people’s ability to behave
creatively to maximize organizational learning.
 7 Chapter 07
True / False
 Nonprogrammed decision-making is required for routine
decisions.
1. Programmed Decision
 Routine, virtually automatic process
 Decisions have been made so many times in the past that
managers have developed rules or guidelines to be applied
when certain situations inevitably occur.
2. Non-Programmed Decisions
 Non-routine decision made in response to unusual or novel
opportunities and threats.
 The are no rules to follow since the decision is new.
 8 Chapter 07
True / False

 The first step in the decision making process is to generate

alternative

Step 1. Recognize Need for a Decision

Step 2. Generate Alternatives
Step 3. Evaluate Alternatives
Step 4. Choose Among Alternatives
Step 5. Implement Chosen Alternative
Step 6. Learn From Feedback
 9 Chapter 07
MCQ
 The process by which managers respond to opportunities and
threats facing their organization by analyzing options and
taking actions is known as:
A) brainstorming
B) intuition
C) decision making
D) bounded rationality
E) heuristics
 Decisions that have been made many times in the past and for
which managers have rules and guidelines as to how to make
similar decisions in the future are known as:
A) nonprogrammed decisions B) heuristic decisions
C) programmed decisions D) intuitive decisions
E) creative decisions
 10 Chapter 07
MCQ
 When a manager schedules a meeting with a subordinate
because the subordinate’s performance has dropped below a
certain level, what type of decision does this represent?
A) Intuition
B) Groupthink
C) Programmed
D) Nonprogrammed
E) Satisficing
 An organization is trying to decide whether or not to launch
nationally a new product that this organization has never sold
previously. This represents which type of decision for the
organization?
A) Programmed B) Intuition
C) Groupthink D) Nonprogrammed
E) Satisficing
 11 Chapter 07
MCQ
 ABC Company is attempting to decide whether or not to launch a
new $10 million advertising campaign for a product whose sales
have been lagging well below the projected sales for this product.
This represents which type of decision for the organization?
A) Groupthink
B) Intuition
C) Programmed
D) Nonprogrammed
E) Satisficing
 Based on March and Simon's Administrative Model, the last step in
the managerial decision-making process is to:
A) generate alternatives.
B) learn from feedback.
C) recognize the need for a decision.
D) implement the chosen alternative.
E) choose among alternatives.
 12 Chapter 07
MCQ
The process through which managers attempt to improve the ability of
subordinates to understand and to manage the organization is known as:
A) dialectical inquiry.
B) devil's advocacy.
C) groupthink.
D) organizational learning.
E) intuition.

 In managerial decision-making, the ability of a manager to discover

novel ideas as possible alternative courses of action for the
organization to use in solving a particular problem is known as:
A) groupthink.
B) dialectical inquiry.
C) intuition.
D) creativity.
E) the illusion of control.
 Chapter 08

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 14 Chapter 08
True / False

 There is No difference between Planning and Strategy

 Planning
Identifying and selecting appropriate goals and courses of action
for an organization.
The organizational plan that results from the planning process details
the goals and specifies how managers will attain those goals.
 Strategy
The cluster of related managerial decisions and actions that
managers take to help an organization reach its goals
 Chapter 08
True / False
 Henri Fayol..decided that effective plans should have five
qualities:
 Unity
At any one time only one central, guiding plan is put into
operation
 Continuity
Planning is an ongoing process in which managers build and
refine previous plans and continually modify plans at all levels
 Accuracy
Managers need to make every attempt to collect and utilize all
available information at their disposal
 Flexibility
Plans can be altered and changed if the situation changes
 16 Chapter 08
True / False
 There is only one type of plans which is standing plans
A. Standing Plans
Are used in situations in which programmed decision-making is
appropriate.
Standing Plans Include:
 Policies - general guides to action
 Rules - formal written specific guides to action
 Standard operating procedures (SOP) - specify an exact series of actions
to follow
B. Single-Use Plans
Developed to handle non-programmed decision-making in one-of-a-
kind situations
Single use plans include:
 Programs: integrated plans achieving certain goals.
 Project: specific action plans to complete programs.
 17 Chapter 08
MCQ
 The cluster of decisions that managers make to assist the
organization to achieve its goals is known as:
A) strategy.
B) scenario planning.
C) SWOT analysis.
D) diversification.
E) related diversification
 A broad statement of the organization's purpose, products, and
customer base that differentiate the organization from its
competitors is known as:
A) a functional-level plan.
B) a mission statement.
C) a SWOT analysis.
D) a focused low-cost strategy.
E) a focused differentiation strategy
 18 Chapter 08
MCQ
 Which plan of the organization contains top management's
decisions about the organization's mission, goals, strategy, and
structure?
A) Corporate-level plan
B) Divisional-level plan
C) Functional-level plan
D) Business-level plan
E) Departmental-level plan
 General Electric Company sets a goal that every product line
of the company should be either first or second in its industry in
market share. What type of goal does this represent?
A) Corporate-level B) Divisional-level
C) Functional-level D) Business-level
E) Multidomestic-level
 19 Chapter 08
MCQ
 Another name for the business level of the organization is the
__________ level of the organization.
A) functional
B) departmental
C) corporate
D) divisional
E) first-line
 A functional-level plan spells out the goals of the __________
that are intended to assist the organization to achieve its
__________ goals.
A) division; corporate
B) department; corporate
C) business; divisional
D) division; business
E) none of the above
 20 Chapter 08
MCQ
 The length of the plan, in terms of the number of months or years that
are included in the organization's plan, is known as the __________
of the plan.
A) rolling level
B) time horizon
C) mission
D) function
E) synergy

 IBM has a written set of guidelines for its managers in terms of

behavior that IBM considers to be either ethical or unethical. This set
of written guidelines is called:
A) a policy.
B) rules.
C) a standard operating procedure.
D) a single-use plan.
E) a mission statement.
 Chapter 10

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 22 Chapter 10
True / False

 Organizing and organization structure could be used

interchangeably

 Organizing
The process by which managers establish working relationships among
employees to achieve goals efficiently and effectively.
 Organizational Structure
Formal system of task and reporting relationships showing how
workers use resources to achieve goals.
 Chapter 10
True / False
 Increasing the number of different tasks in a job by changing
the division of labor of the job is known as job enrichment.
A. Job Enlargement
Increasing the number of different tasks in a given job by changing
the division of labor
B. Job Enrichment
Increasing the degree of responsibility a worker has over a job By:
1.Empowering workers to experiment to find new or better ways of
doing the job
2.Encouraging workers to develop new skills
3.Allowing workers to decide how to do the work
4.Allowing workers to monitor and measure their own performance
 24 Chapter 10
True / False
 When managers organize divisions according to the type of
product that they produce, this is known as a market structure.

Product Structure
Managers place each distinct product line or business in its own
self-contained division
Divisional managers have the responsibility for devising an
appropriate business-level strategy to allow the division to
compete effectively in its industry
Market Structure
Groups divisions according to the particular kinds of customers
they serve
Allows managers to be responsive to the needs of their customers
and act flexibly in making decisions in response to customers’
changing needs
 25 Chapter 10
MCQ
 If the external environment of an organization is stable and if
uncertainty is low, then __________ coordination among workers is
needed to obtain resources and managers can bring __________
formality to the design of the organizational structure.
A) More; more
B) Less; more
C) Less; more
D) Less; less
 In general, the more complicated the technology, the
__________ the need for a flexible organizational structure
and the __________ routine the technology, the __________
appropriate is the use of a formal organizational structure.
A) Greater; more; less B) Less; more; less
C) Greater; more; more D) Greater; less; less
E) None of the above
 26 Chapter 10
MCQ
 __________ technologies are characterized by __________
task variety and __________ task analyzability.
A) Routine; low; high
B) Routine; high; low
C) Nonroutine; high; high
D) Nonroutine; low; low
E) None of the above
 The process by which managers decide how to organize the
tasks that workers need to do into the jobs that are needed to
produce the organization's goods or services is known as:
A) Job design.
B) Continuous-process technology.
C) Small-batch technology.
D) Mass-production technology.
E) Job enrichment.
 27 Chapter 10
MCQ
 A manager increases the number of tasks that a subordinate has to
perform in order to attempt to make the job more interesting for the
subordinate. This is called:
A) Job simplification.
B) Job enlargement.
C) Job enrichment.
D) A matrix structure.
E) A functional job structure
 A manager can enrich the job of a subordinate by:
A) Empowering the subordinate to re-design his or her job.
B) Encouraging the subordinate to develop new job skills.
C) Giving the subordinate the responsibility to decide what to do
in an unexpected situation.
D) Allowing the subordinate to monitor his or her own job
performance.
E) All of the above
 28 Chapter 10
MCQ
 The idea behind the concept of "job enrichment" is that __________
a worker's responsibility will __________ the worker's involvement in
his or her job and __________ the worker's interest in the quality of
the goods the worker produces.
A) Increasing; decrease; decrease
B) Decreasing; increase; increase
C) Increasing; increase; decrease
D) Increasing; increase; increase
E) None of the above
 The relationship between the business units of the organization
is known as what type of structure of the organization?
A) Market structure
B) Product structure
C) Geographic structure
D) Functional structure
E) Divisional structure
 Chapter 11

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 30 Chapter 11
True / False
 Top-down change take place when top managers consult with
middle and first line managers, and then over time, managers
at all levels work to develop a detailed plan for change

This is the case of Bottom-up change while top-down change take

place when top managers identify the need for change, decide
what to do, and then move quickly to implement the changes
throughout the organization.
 31 Chapter 11
True / False

 The first step in the control process is to evaluate the results in

terms of the performance standards

Step 1: Establish the standard of performance, goals, or targets

against which performance is to be evaluated.
Step 2: Measure actual performance.
Step 3: Compare actual performance against chosen standards
of performance.
Step 4: Evaluate the result and initiate corrective action if the
standard is not being achieved.
 32 Chapter 11
True / False
 Control systems are only developed to measure performance at
the conversion process.

 At the input stage, managers use feedforward control to

anticipate problems before they arise so that problems do
not occur later, during the conversion process.
 At the conversion stage, concurrent control gives managers
immediate feedback on how efficiently inputs are being
transformed into outputs.
 At the output stage, managers use feedback control to
provide information about customers’ reactions to goods and
services so that corrective action can be taken if necessary.
 33 Chapter 11
MCQ
 Which type of control do managers typically use in the input stage
of the process of transforming raw materials into finished goods?
A) Feedforward control
B) Concurrent control
C) Feedback control
D) Bureaucratic control
E) MBO control
 At the __________ stage of the process of transforming raw
materials into finished goods, managers typically use __________
control procedures to anticipate problems before they occur.
A) Input; concurrent
B) Conversion; feedforward
C) Output; concurrent
D) Input; feedforward
E) Conversion; feedback
 34 Chapter 11
MCQ
 Managers set up a stringent job interview process by which
applicants are carefully screened at different levels of the
organization before they are hired, in an attempt to reduce the
chance that newly hired managers will not have the knowledge and
skills necessary for them to be successful within the organization. This
is an example of:
A) Concurrent control. B) Feedforward control.
C) Feedback control. D) Bureaucratic control.
E) MBO control.
 Which type of control do managers typically use at the conversion
stage of transforming raw materials into finished goods?
A) Feedforward control
B) Bureaucratic control
C) Concurrent control
D) Feedback control
E) MBO control
 35 Chapter 11
MCQ
 At the __________ stage of transforming raw materials into finished
goods, managers typically use __________ control methods to
determine customers' reactions to the organization's goods and
services.
A) Output; feedforward
B) Input; feedback
C) Conversion; feedforward
D) Output; feedback
E) Conversion; feedback

 The final step in the control process is to:

A) Initiate corrective action.
B) Measure actual performance.
C) Establish the standards of performance.
D) Compare actual performance to the standards.
E) None of the above.
 36 Chapter 11
MCQ
 The manager of a 7-Eleven convenience store keeps track of the
average sale amount for each customer as a way of deciding on the
product mix to be carried in the store. This is an example of:
A) Bureaucratic control.
B) Feedforward control.
C) Output control.
D) Input control.
E) MBO control.

 ____________ is incompatible with the use of extensive

bureaucratic control.
A) Quality
B) Innovation
C) Efficiency
D) Customer service
E) Stability
 Chapter 12

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 38 Chapter 12
True / False
 When managers look outside their organization and attempt
to hire new employees who have not previously worked for
their organization, this is known as internal recruiting.

This is known as external recruiting.

While internal recruiting happens when managers turn to existing
employees to fill open positions.
Those internal employees are seeking either a lateral move, which
is a job change that entails major changes in responsibility or
authority levels, or a promotion.
 39 Chapter 12
True / False
 The activities in which managers engage in order to create a
pool of qualified candidates for a position are known
collectively as the selection process.

 Recruitment
Activities that managers engage in to develop a pool of
candidates for open positions.

 Selection
The process that managers use to determine the relative
qualifications of job applicants and their potential for
performing well in a particular job.
 40 Chapter 12
True / False
 When managers look outside their organization and attempt to
hire new employees who have not previously worked for their
organization, this is known as internal recruiting.

 External Recruiting
Looking outside the organization for people who have not
worked at the firm previously.
Newspapers advertisements, open houses, on-campus
recruiting, employee referrals, and through the Internet.
 Internal Recruiting
Managers turn to existing employees to fill open positions
 41 Chapter 12
MCQ
 When Microsoft Corporation interviews dozens of highly qualified
programmers before deciding on which ones to hire, this is an
example of which component of the HRM process?
A) Training
B) Development
C) Recruitment and selection
D) Performance appraisal
E) Performance feedback
 When newly-hired programmers at Microsoft Corporation join small
work teams so that experienced workers can serve as mentors to
them while they are adjusting to their new job, this is an example of
which component of the HRM process?
A) Recruitment B) Selection
C) Performance appraisal D) Performance feedback
E) Training and development
 42 Chapter 12
MCQ
 When managers attempt to estimate both the qualifications of
workers and the number of workers that their organization will
need in the future, this is known as:
A) Supply forecasting.
B) Recruitment.
C) Selection.
D) Demand forecasting.
E) Development.
 When a large publishing company contracts with a freelance
writer for the task of copyediting a new manuscript instead of
hiring a full-time copyeditor, this is an example of:
A) A lateral movement. B) AN RJP.
C) Outsourcing. D) On-the-job training.
E) A 360-degree appraisal
 43 Chapter 12
MCQ
 A written summary of the knowledge, skills, and abilities that
are needed to perform a specific job is known as:
A) Selection.
B) Performance appraisal.
C) Feedback.
D) The job specifications.
E) Development.

 Recruiting outside of an organization to find workers who have

not worked for the organization previously is known as:
A) Internal recruiting.
B) Walk-in recruiting.
C) External recruiting.
D) Selection.
E) Development.
 44 Chapter 12
MCQ
 When a manager studies the resume of a job applicant to
determine the work history and education of the applicant, this
is known as the process of:
A) Interviewing.
B) Selection.
C) Gathering background information.
D) Situational interviewing.
E) Reference-checking.
 A job applicant to an organization is asked to supply written
letters from former supervisors about the quality of his or her
work performance. This is known as:
A) Structured interviewing. B) Unstructured interviewing.
C) Personality testing. D) Ability testing.
E) Reference-checking
 45 Chapter 12
Essay
 Internal AND external recruiting for management positions has
both advantages and disadvantages for the organization.
List both the advantages and the disadvantages of both type of
recruiting activity.
Advantages Disadvantages
Internal 1. Internal applicants are 1. A pool of candidates
Recruiting already familiar with the may be limited,
organization 2. A tendency among those
2. Managers already know candidates to be “set” in
candidates the organization’s ways,
3. Can help boost levels of 3. A lack of suitable
employee motivation and internal candidates.
morale
 46
Advantages
External 1. Having access to a
Recruiting potentially large applicant
pool
2. Being able to attract
people who have the skills,
knowledge, and abilities an
organization needs
3. Bringing in newcomers
who may have a fresh
approach to problems and
be up to date on the latest
technology
Chapter 12
Disadvantages
1. Relatively high costs
2. Candidates may lack
knowledge about the inner
workings of the
organization
3. May need to receive
more training
4. Uncertainty concerning
whether they will actually
be good performers
 Chapter 09

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 48 Chapter 09
True / False
 First step in TQM philosophy is Find ways to measure quality

 Steps to Successful TQM Implementation

1. Build organizational commitment to quality
2. Focus on the customer
3. Find ways to measure quality
4. Set goals and create incentives
5. Solicit input from employees
6. Identify defects and trace to source.
7. Introduce just-in-time (JIT) inventory systems.
8. Work closely with suppliers.
9. Design for ease of production.
10. Break down barriers between functions.
 49 Chapter 09
True / False
 Focus on the customer refers to technique that uses IT to
develop an ongoing relationship with customers to maximize
the value an organization can deliver to them over time

Customer relationship management is technique that uses IT

to develop an ongoing relationship with customers to maximize
the value an organization can deliver to them over time
While
Focus on the customer
1. Identify what customers want from the good or service
that the company provides
2. Identify what the company actually provides to customers
3. Identify the gap that exists between what the customers
want and what they get (quality gap)
4. Formulate a plan for closing the quality gap
 50 Chapter 09
True / False
 First step in TQM philosophy is Find ways to measure quality

 Steps to Successful TQM Implementation

1. Build organizational commitment to quality
2. Focus on the customer
3. Find ways to measure quality
4. Set goals and create incentives
5. Solicit input from employees
6. Identify defects and trace to source.
7. Introduce just-in-time (JIT) inventory systems.
8. Work closely with suppliers.
9. Design for ease of production.
10. Break down barriers between functions.
 51 Chapter 09
MCQ
 Wal-Mart, the US retailing giant, has created the most efficient
________________ function in the retail industry by tightly
controlling the flow of goods from its suppliers through its stores into
the hands of customers.
A) Production
B) Materials management
C) Service
D) Marketing
E) Information systems
 When managers focus on being ___________ to their customers,
and not just on producing or providing a product, they see new ways
to reduce costs and increase quality.
A) Honest
B) Efficient
C) Ethical
D) Responsive
E) friendly
 52 Chapter 09
MCQ
 __________ means producing goods and services with
superior design, features, reliability, and after-sales support.
A) Efficiency
B) Quality
C) Innovation
D) Flexibility
E) Responsiveness
 Which of the following is NOT a reason to try to boost product
quality?
A) To increase efficiency
B) To provide a higher quality product, for the same price, as the
competition
C) To become more responsive to customers
D) To charge a higher price
E) All of these are reasons
 53 Chapter 09
MCQ
 The first step in a TQM control system is to:
A) Build organizational commitment to quality
B) Find ways to measure quality
C) Solicit input from employees
D) Introduce just-in-time inventory systems
E) Design for ease of production

 Which of the following is NOT a challenge when focusing on

the customer?
A) To identify what customers want from the good or service
B) To identify what the company actually provides
C) To identify the gap between what customers want and what
they actually get
D) To formulate a plan for closing the quality gap
E) All of these are valid challenges