wiley_ciaexam_p4 all q & a

Question: V4C3-0001 Which of the following is the psychological process giving human behavior a purpose and direction?

Answers

A: Needs.

B: Expectations.

C: Goals.

D: Motivation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Motivational factors include needs, satisfaction, expectations, and goals.

Question: V4C3-0002 Job performance is best defined as follows:

Answers

A: Job performance = Motivation x Ability.

B: Job performance = Needs x Skills.

C: Job performance = Satisfaction x Job experience.

D: Job performance = Goals x Training.

Answer Explanations

Answer (a) is the correct answer. Job performance is motivation multiplied by ability. The reason for the multiplication sign in the equation is because motivation cannot compensate for lack of ability. In addition to ability, skill, experience, and training are needed. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

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Question: V4C3-0003 According to Maslow’s needs hierarchy, which of the following ranks at the top?

Answers

A: Physiological.

B: Esteem.

C: Self-actualization.

D: Safety.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The need for self-actualization is at the top of the Maslow’s needs hierarchy. The ranking of needs, from top to bottom, is self-actualization, esteem, love, safety, and physiological. A lesson learned form the Maslow’s theory is that fulfilled needs do not motivate employees. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0004 According to Maslow’s needs hierarchy, which of the following ranks at the bottom?

Answers

A: Physiological.

B: Esteem.

C: Self-actualization.

D: Safety.

Answer Explanations

Answer (a) is the correct answer. Physiological need is at the bottom of the Maslow’s need hierarchy. The ranking of needs, from top to bottom, is self-actualization, esteem, love, safety, and physiological. A lesson learned form the Maslow’s theory is that fulfilled needs do not motivate employees. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0005 According to Herzberg’s two-factor theory of motivation, which of the following motivates employees?

Answers

A: Money.

B: The work itself.

C: Supportive supervisor.

D: Supportive coworkers.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. The work itself—not pay (money), supervision, or some other environmental factor such as coworkers—was the key to employee satisfaction and motivation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0006 According to Herzberg’s two-factor theory of motivation, which of the following is an example of a hygiene fac-tor?

Answers

A: Achievement.

B: Recognition.

C: Pay.

D: Responsibility

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Answer (c) is the correct answer. Hygiene factors involve the presence or absence of job dissatisfiers, such as working conditions, pay, company policies, and interpersonal relationships. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0007 According to Herzberg’s two-factor theory of motivation, which of the following are high-level needs and include achievement, recognition, responsibility, and opportunity for growth?

Answers

A: Hygiene factors.

B: Extrinsic factors.

C: Motivators.

D: Dissatisfiers.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Motivators are high-level needs and include achievement, recognition, responsibility, and opportunity for growth. Herzberg believed that when motivators are absent, workers are neutral toward work, but when motivators are present, workers are highly motivated and satisfied. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0008 According to Herzberg’s two-factor theory of motivation, which of the following has the greatest impact on job satisfaction?

Answers

A: Hygiene factors.

B: Extrinsic factors.

C: Motivators.

D: Dissatisfiers.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Motivators influence level of satisfaction, while hygiene factors influence level of dissatisfaction. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0009 Which of the following is an example of the process theory of motivation?

Answers

A: Need hierarchy theory.

B: Equity theory.

C: Two-factor theory.

D: Reinforcement theory.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Process theories are a group of theories that explain how employees select behaviors with which to meet their needs and determine whether their choices were successful. There are two basic process theories: equity theory and expectancy theory. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0010 Which of the following is not a common method for reducing a perceived inequity?

Answers

A: Change inputs.

B: Change outcomes.

C: Change the job.



D: Change equity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. The most common methods for reducing a perceived inequity include change inputs, change outcomes, distort perceptions, and leave the job.

Question: V4C3-0011 Which of the following is based on the relationship between effort, performance, and outcomes?

Answers

A: Expectancy theory.

B: Equity theory.

C: Two-factor theory.

D: Reinforcement theory.

Answer Explanations

Answer (a) is the correct answer. Expectancy theory suggests that motivation depend on individuals’ expectations about their ability to perform tasks and receive desired rewards. For the expectancy to be high, the individual must have the ability, previous experience, and necessary equipment, tools, and opportunity to perform. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0012 According to Herzberg’s two-factor theory of motivation, which of the following is a satisfier?

Answers

A: Responsibility.

B: Working conditions.

C: Company policy.



D: Job status.

Answer Explanations

Answer (a) is the correct answer. Responsibility is an example of satisfiers. Other examples of satisfiers include achievement, recognition, the work itself, advancement, and growth. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0013 According to Herzberg’s two-factor theory of motivation, which of the following is a dissatisfier?

Answers

A: Responsibility.

B: Growth.

C: Advancement.

D: Job status.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Job status or security is an example of a dissatisfier. Other examples of dissatisfiers include company policy, supervision, working condition, personal life, salary, and relationships with peers, supervisors, or subordinates.

Question: V4C3-0014 According to Herzberg’s two-factor theory of motivation, which of the following is a dissatisfier?

Answers

A: Responsibility.

B: Growth.

C: Personal life.



D: Recognition.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Personal life is an example of a dissatisfier. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0015 According to the expectancy theory of motivation model, which of the following plays a central role?

Answers

A: Needs.

B: Perception.

C: Skills.

D: Abilities.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Perception plays a vital role in the expectancy of motivation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0016 According to Herzberg’s two-factor theory of motivation, employee motivation is equated with which of the fol-lowing?

Answers

A: Satisfaction.

B: Growth.

C: Salary.



D: Recognition.

Answer Explanations

Answer (a) is the correct answer. Satisfaction is equated with motivation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0017 In the expectancy theory of motivation model, rewards influence motivational strength through

Answers

A: Intrinsic rewards.

B: Extrinsic rewards.

C: Perceived value.

D: Timing of rewards.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Employees tend to work harder when they believe they have a good chance of getting personally meaningful rewards. These rewards influence motivational strength through perceived value. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0018 Which of the following is an extrinsic reward?

Answers

A: Self-actualization.

B: Self-esteem.

C: Praise from a senior manager.



D: A sense of accomplishment.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Extrinsic rewards are payoffs granted to the individual by other people. Examples of extrinsic rewards include money, employee benefits, promotion, recognition, status symbols, and praise from a senior manager. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0019 Which of the following is an intrinsic reward?

Answers

A: Money.

B: Employee benefits.

C: Recognition.

D: Self-esteem.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Intrinsic rewards are self-granted and internally experienced payoffs. Examples of intrinsic rewards include a sense of accomplishment, self-esteem, and self-actualization.

Question: V4C3-0020 Which of the following ratios relate to the perception of reward equity?

Answers

A: Task-reward.

B: Effort-reward.



C: Effort-results.

D: Performance-reward.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Employees must believe that their efforts will lead to rewards. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0021 The two scales used in the equity of rewards include

Answers

A: Personal and social.

B: Technical and economical.

C: Intrinsic and extrinsic.

D: Short-term and long-term.

Answer Explanations

Answer (a) is the correct answer. The two scales used in the equity of rewards include personal and social. The personal scale tests the relationships between effort expended and rewards received. The social scale compares a person’s effort-reward ratio with others in the same situation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0022 According to the expectancy theory of motivation model, employees tend to work harder when they believe they have a good chance of

Answers

A: Being punished.



B: Getting personally meaningful rewards.

C: Being threatened.

D: Getting team-based awards.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. An employee will not strive for an attractive and meaningful reward unless it is perceived as being attainable. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0023 Which of the following enhance goal effectiveness?

Answers

A: Policies and employee participation.

B: Procedures and employee participation.

C: Flexibility and employee participation.

D: Status and employee participation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Employee participation is the key to creating a sense of personal ownership of goals and to their effectiveness. A proper balance between work and leisure should be maintained with flexibility in mind. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0024 In the goal-setting model of motivation, what is required if corrective action is to be taken?

Answers



A: Salary increase.

B: Job feedback.

C: Job rotation.

D: Job promotion.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Job feedback is required if corrective action is to be taken. Goal setting is the process of improving individual or group job performance with formally stated objectives, deadlines, or quality standards. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0025 Which of the following involves creating task responsibilities based upon strategy, technology, and structure?

Answers

A: Job structure.

B: Job design.

C: Job enrichment.

D: Job enlargement.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Job design creates task responsibilities based upon strategy, technology, and structure. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0026 Which of the following involves telling potential employees about both good and bad aspects of a



particular job?

Answers

A: Realistic job previews.

B: Cafeteria compensation.

C: Job enrichment.

D: Job enlargement.

Answer Explanations

Answer (a) is the correct answer. Realistic job previews are honest explanations of what a job actually entails. Cafeteria compensation means an employee can select his own unique combination of health benefits from his employer. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0027 Combining two or more specialized tasks to increase motivation is called

Answers

A: Job specialization.

B: Job variety.

C: Job enrichment.

D: Job enlargement.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Combining two or more specialized tasks to increase motivation is called job enlargement. It is the process of combining two or more specialized tasks into a single job.

Question: V4C3-0028



Job generalization leads to which of the following?

Answers

A: Job rotation.

B: Job variety.

C: Job enrichment.

D: Job enlargement.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Job enrichment is redesigning a job to increase its motivating potential. It reverses the trend toward greater and greater job specialization. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0029 Job enlargement means

Answers

A: Vertical job loading.

B: Horizontal job loading.

C: Parallel job loading.

D: Linear job loading.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Loading a job horizontally is called for in job enlargement. Vertical job loading can be immensely challenging and motivating due to managing an entire project and is called for in job enrichment. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0030 Doing a “whole” piece of work from beginning to end refers to which of the following?

Answers

A: Skill variety.

B: Task identity.

C: Task significance.

D: Job autonomy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Task identity covers the entire range of work from beginning to end. Skill variety covers different activities using different skills and different talented people. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0031 The strategy of fitting people to jobs does not include which of the following?

Answers

A: Realistic job previews.

B: Job rotation.

C: Limited exposure.

D: Job enrichment.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Job enrichment and job enlargement deal with the strategy of fitting jobs to people. This strategy requires changing the job instead of the person in the person-job equation.



Question: V4C3-0032 Which of the following are the most popular strategies in the job design? I. Fitting people to jobs. II. Fitting jobs to people. III. Fitting pay to jobs. IV. Fitting jobs to pay.

Answers

A: I and II.

B: I and III.

C: II and IV.

D: III and IV.

Answer Explanations

Answer (a) is the correct answer. Concern about uneven productivity growth, poor quality of products and services, and declining employee satisfaction has persuaded managers to consider the two most popular job design strategies—fitting people to jobs and fitting jobs to people. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0033 Job design does not consider which of the following?

Answers

A: Pay.

B: Strategy.

C: Technology.

D: Structure.

Answer Explanations

Answer (a) is the correct answer. Job design is creating task responsibilities based upon strategy, technology, and structure. Pay matters come after the job is designed, not before.



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0034 Contingent time off and job rotation are appropriate for which type of work?

Answers

A: Technical work.

B: Complex work.

C: Routine work.

D: Managerial work.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Routine work is appropriate for contingent time off and job rotation methods. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0035 Which of the following will apply to future compensation plans?

Answers

A: Time-based.

B: Flexible and varied.

C: Skill-based.

D: Uniform-based.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Since there is no single best plan suitable for all employees, future



compensation plans must be flexible and varied to accommodate diverse workforce. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0036 Which of the following was not found by researchers to be a success factor for employee participation programs?

Answers

A: Flexible work schedules.

B: Gain-sharing plans.

C: Profit-sharing plans.

D: Job security plans.

Answer Explanations

Answer (a) is the correct answer. Flexible work schedules means employees arrive and depart within specified time limits. Gain-sharing, profit-sharing, and job security plans are success factors for employee participation programs. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0037 One of the keys to successfully redesigning jobs is

Answers

A: Creating autonomous work teams.

B: Enlarging jobs by adding more tasks similar to those being performed.

C: Rotating workers to different jobs to provide them with variety.

D: Changing the content of jobs so that they fit workers' need for growth.

Answer Explanations



Answer (a) is incorrect. Autonomous work teams are only one type of job enrichment and are not applicable in many situations. Answer (b) is incorrect. Adding more similar tasks does not fundamentally redesign jobs and may be de-motivating if existing tasks are difficult or boring. Answer (c) is incorrect. Rotating workers provides only temporary challenge and does not fit many employees who do want additional challenge. Answer (d) is the correct answer. One of the major principles of successful job design and redesign is to take into account employee needs and skills and match them with jobs, or change their jobs to fit those needs and skills.

Question: V4C3-0038 Which of the following refers to the set of values, beliefs, understandings, and norms shared by members of the organization?

Answers

A: Egalitarianism.

B: Corporate culture.

C: Empowerment.

D: Adaptation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Corporate culture is the set of key values, beliefs, understandings, and norms shared by members of the organization. The culture is the foundation of a learning organization. Leaders create an organizational culture that everyone can believe in by directly involving employees in determining what the company’s values should be. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0039 Which of the following is suited to organizations that are concerned with servicing specific customers in the external environment but without the intense need for flexibility and rapid change?

Answers

A: Adaptability culture.

B: Clan culture.



C: Achievement culture.

D: Bureaucratic culture.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The achievement culture is suited to organizations that are concerned with serving specific customers in the external environment but without the intense need for flexibility and rapid change. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0040 The clan culture has which of the following on the involvement and participation of employees to rapidly meet changing needs from the environment?

Answers

A: External focus.

B: Internal focus.

C: Structural focus.

D: Technological focus.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. The clan culture has an internal focus on the involvement and participation of employees to rapidly meet changing needs from the environment. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0041 What is significant about corporate culture?

Answers



A: It is exactly the same for all companies within an industry.

B: It is the same regardless of the organization's environment.

C: It holds the employees of an organization together.

D: It is only important to the top levels of management.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Corporate culture has surfaced as extremely important to developing or sustaining competitive advantages. The internal culture must fit the needs of the external environment and company strategy. When this fit occurs, highly committed employees create a high-performance organization that is tough to beat. Employees are the key element in this fit, and the corporate culture is what holds them together. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0042 One’s personal thoughts are translated into words during which part of the basic communication process?

Answers

A: Encoding.

B: Decoding.

C: Sender.

D: Receiver.

Answer Explanations

Answer (a) is the correct answer. Sender, encoding, medium, decoding, receiver, and feedback are part of the basic communication process. Encoding translates thoughts into words. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0043



The receiver’s willingness to receive a message is a principal prerequisite for successful

Answers

A: Encoding.

B: Decoding.

C: Noise.

D: Medium.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Successful decoding is more likely if the receiver knows the language and terminology used in the message. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0044 Which of the following enables communicators to know if their message has been understood?

Answers

A: Encoding.

B: Decoding.

C: Feedback.

D: Perception.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Either verbal or nonverbal feedback from the receiver to the sender is required to complete the communication process. Without the feedback, senders have no way of knowing whether their ideas or messages have been accurately understood. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0045 Which of the following refers to the unofficial and informal communication system in an organization?

Answers

A: Grapevine.

B: Water fountain talks.

C: Hallway gossiping.

D: Cafeteria chatting.

Answer Explanations

Answer (a) is the correct answer. Water fountain talks, hallway gossiping, and cafeteria chatting are all part of the grapevine. Cluster is the most common grapevine pattern. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0046 Most managers have which one of the following attitudes towards the grapevine?

Answers

A: Positive.

B: Uncertain.

C: Negative.

D: Neutral.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. About 75% of grapevine rumors are accurate and most managers have a negative attitude about the grapevine. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0047 Communication channel richness refers to which of the following?

Answers

A: Number of messages a channel can carry at one time.

B: Speed in which messages can be carried.

C: Amount of information that can be transmitted during a communication episode.

D: Number of channels available at any one time.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Channel richness refers to the amount of information that can be transmitted during a communication episode. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0048 Which of the following is the richest medium for communication?

Answers

A: Telephone conversations.

B: Face-to-face discussion.

C: Electronic media.

D: Written media.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Face-to-face discussion is the richest medium because it permits direct experience, multiple information cues, immediate feedback, and personal focus. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0049 Which of the following has the lowest communication channel richness?

Answers

A: Telephone conversations.

B: Face-to-face discussion.

C: Electronic mail.

D: Bulletins.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Impersonal written media, including flyers, bulletins, and standard computer reports are the lowest in richness. These channels are not focused on a single receiver, use limited information cues, and do not permit feedback.

Question: V4C3-0050 To persuade and influence people, managers connect with others by using

Answers

A: A policy manual.

B: Symbols, metaphors, and stories.

C: Statistical facts and figures.

D: Rules and regulations.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. To persuade and influence, managers connect with others on an emotional level by using symbols, metaphors, and stories to express their messages.




Question: V4C3-0051 Nonverbal communication has the biggest impact when using which of the following?

Answers

A: Video conference.

B: Telephone conversations.

C: Formal letter.

D: Face-to-face discussion.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Nonverbal communication refers to messages sent through human actions and behaviors rather than through words. It has the biggest impact during face-to-face communication.

Question: V4C3-0052 Good listeners exhibit all of the following characteristics except:

Answers

A: Asking questions.

B: Having preconceptions.

C: Tolerating bad habits.

D: Judging content, not delivery errors.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. A good listener is someone who ask questions, tolerates bad habits of the presenter, judges the presenter on the basis of content, and does not focus on the presenter’s delivery errors. Most



listeners concentrate on formulating what they are going to say next rather than on what is being said to them. Listeners should not have preconceptions. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0053 Which of the following acts as a communication channel that flows within the chain of command or task responsibility defined by the organization?

Answers

A: Formal communication.

B: Horizontal communication.

C: Downward communication.

D: Upward communication.

Answer Explanations

Answer (a) is the correct answer. Formal communication channels are those that flow within the chain of command or task responsibility defined by the organization. The three formal channels include downward, upward, and horizontal communication. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0054 The learning organization emphasizes which of the following?

Answers

A: Cross-communication.

B: Horizontal communication.

C: Downward communication.

D: Upward communication.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Horizontal communication is particularly important in learning organizations, where teams of workers are continuously solving problems and searching for new ways of doing things. Upward communication is encouraging employees to share their feelings and ideas with management. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0055 Which of the following refers to a team communication structure in which team members freely communicate with one another and arrive at decisions?

Answers

A: Decentralized network.

B: Centralized network.

C: Linear network.

D: Circular network.

Answer Explanations

Answer (a) is the correct answer. In a decentralized network, individuals can communicate freely with other team members. Members process information equally among themselves until all agree on a decision. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0056 Perhaps the most important individual skill in overcoming communication barriers is which of the following?

Answers

A: Selecting appropriate channel for the message.

B: Managing by wandering around.

C: Practicing active listening.



D: Developing and using formal informational channels.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Perhaps the most important individual skill is active listening. It means asking questions, showing interest, and occasionally paraphrasing what the speaker has said to ensure that one is interpreting accurately. Active listening also means providing feedback to the sender to complete the communication loop. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0057 One of the most important things that managers can do for their organization is to

Answers

A: Talk to their employees.

B: Create a climate of trust and openness.

C: Listen to their employees.

D: Ensure that production remains high.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Perhaps the most the important thing managers can do for their organization is to create a climate of trust and openness. Open communication and dialogue can encourage people to communicate honestly with one another. Subordinates will feel free to transmit negative as well as positive messages without fear or retribution. Efforts to develop interpersonal skills among employees can also foster openness, honesty, and trust. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0058 Which of the following is referred to as body language?

Answers



A: Upward communication.

B: Downward communication.

C: Diagonal communication.

D: Nonverbal communication.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Words often have unintended meanings. Facial expressions and body movements that accompany the words can worsen maters. This nonverbal communication, referred to as body language, is an important part of the communication process.

Question: V4C3-0059 Researchers found a positive correlation between employee suggestions and

Answers

A: Performance.

B: Productivity.

C: Efficiency.

D: Economy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. In a study of the US government employees, researchers found a positive correlation between employee suggestions and productivity. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0060 Which of the following is useful in getting feedback from departing employees?



Answers

A: Suggestion system.

B: Exit interviews.

C: Outplacement services.

D: Hiring opinions.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. An exit interview is a brief structured interview with a departing employee. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0061 What is the major complaint about an open-door policy of management?

Answers

A: It eliminates the need for managers.

B: It ignores the formal chain of command.

C: It supports a chain with identifiable links.

D: It causes union-management conflict.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. The open-door policy of management ignores the formal chain of command, meaning lower-level employees can communicate with higher-level employees without going through the middle-level employees. Answer (c) is the best description of the basic communication process. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0062



In an organic organization, communication tends to be

Answers

A: Lateral.

B: Top-down.

C: Vertical.

D: Bottom-up.

Answer Explanations

Answer (a) is the correct answer. In an organic organization, communication tends to be participative and lateral (between peers). This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0063 In the mechanistic organizations, communication tends to be

Answers

A: Lateral.

B: Top-down.

C: Vertical.

D: Bottom-up.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. In mechanistic organizations, communications tend to be the formal command-and-control type (top-down). This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0064



Which of the following measures how well something is performing relative to existing standards?

Answers

A: Efficiency.

B: Productivity.

C: Effectiveness.

D: Economy.

Answer Explanations

Answer (a) is the correct answer. Efficiency is a performance measurement of the actual output compared to the standard output expected. It is usually expressed as a percentage. Effectiveness is accomplishing goals and objectives. Economy is the thrifty and concise use of material and nonmaterial resources. Economy is employing frugality in expenditures in order to save money. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0065 Which of the following measures output relative to a specific input?

Answers

A: Efficiency.

B: Productivity.

C: Effectiveness.

D: Economy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Productivity measures output relative to a specific input, for example, number of units produced per labor hour. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0066 Throughput is a separate concept from which of the following?

Answers

A: Work center.

B: Output.

C: Production.

D: Machine.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Throughput is the total volume of production through a facility (e.g., machine, work center, department, and plant). Output results from the conversion of inputs (e.g., raw materials, labor, capital, or energy). Output is the product being completed by a process. The output rate is controlled by increasing or decreasing the capacity of a work center. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0067 Which of the following best describes the relationship between inputs and outputs?

Answers

A: Throughput.

B: Productivity.

C: Bottlenecks.

D: Resource utilization.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Productivity is the actual output of production compared to the actual input of resources.




Question: V4C3-0068 Accomplishing the desired objective is called

Answers

A: Productivity.

B: Efficiency.

C: Effectiveness.

D: Economy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Effectiveness deals with accomplishing the desired objective or goal. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0069 Which of the following refers to the number of good units that can be made in a given period of time?

Answers

A: Throughput.

B: Productivity.

C: Efficiency.

D: Economy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Productivity is the number of good units that can be made in a given period of time. Productivity relates outputs (e.g., good units) to inputs (e.g., time).




Question: V4C3-0070 Which of the following is the best definition of throughput?

Answers

A: It interferes with bottlenecks.

B: It relates to manufacturing cycle time.

C: It relates to quantity of production.

D: It increases production economy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Throughput refers to the number of finished goods manufactured from the production process. It is the total volume of production through a facility (machine, work center, department, or plant). Throughput does not deal with input factors or capacity. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0071 Which of the following is not an example of measure of timeliness?

Answers

A: Customer response time.

B: Order receipt time.

C: Number of on-time deliveries.

D: Order wait-time.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Order wait time is the time between when the order is ready for setup and when the setup is complete. Customer response time is the time it takes to deliver a product or service after an order is placed. Order receipt time is the time between when an order is placed and when the order is ready for setup.

Question: V4C3-0072 Which of the following does not represent a measure of productivity?

Answers

A: Number of dollars spent.

B: Number of cars serviced per hour.

C: Number of customers served per hour.

D: Number of goods produced per hour.

Answer Explanations

Answer (a) is the correct answer. Productivity relates inputs to outputs. “Number of dollars spent” is input and does not show the corresponding output. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0073 Which of the following are measures of efficiency and timeliness?

I. Velocity. II. Manufacturing cycle time. III. Throughput.

Answers

A: I only.

B: II only.

C: III only.

D: I, II, and III.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Velocity, manufacturing cycle time, and throughput are measures of efficiency and timeliness. Velocity is the speed at which a process is measured and it relates to time. Manufacturing cycle time is the amount of time it takes to produce a good unit of product from the time raw material is received until the product is ready to be delivered to customers. Throughput is the number of good units that can be made in a given period of time.

Question: V4C3-0074 Which of the following refers to a cost advantage spread over a wide variety of products or functions?

Answers

A: Economies of scale.

B: Economies of scope.

C: Economies of cost.

D: Economies of technology.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Economies of scope refer to a cost advantage spread over a wide variety of products or functions. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0075 Which of the following gives a specified percentage of productivity improvements and/or cost savings to employees?

Answers

A: Profit sharing plans.

B: Gain sharing plans.



C: Cafeteria plans.

D: Stock option plans.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Gain sharing is a part of an employee’s compensation plan. It is a distribution of specified percentage of productivity improvements and/or cost savings. It encourages employees to work harder and smarter and its calculations can get cumbersome. A profit sharing plan is a distribution of specified percentage of net income. Cafeteria plans (also called life-cycle benefits) allow each employee to determine the composition of his benefits package. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0076 Which of the following is more important in modern organizations?

Answers

A: Experience-curve effects.

B: Learning-curve effects.

C: Operating characteristic-curve effects.

D: Opportunity-curve effects.

Answer Explanations

Answer (a) is the correct answer. In modern organizations, experience-curve effects, which are related to indirect labor, are more important than the learning-curve effects, which are based on direct labor. Only 15% of the total product costs are due to direct labor costs. Operating characteristic-curve effects are seen in quality control with sampling plans. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0077 Much of the downsizing of middle management seen in industry today is an attempt to combine economic gains from improved technologies and which of the following?



Answers

A: Experience-curve effects.

B: Learning-curve effects.

C: Operating characteristic-curve effects.

D: Opportunity-curve effects.

Answer Explanations

Answer (a) is the correct answer. Much of the downsizing of middle management seen in industry today is an attempt to combine experience-curve effects with economic gains from improved technologies (especially computer systems) to achieve a higher level of organizational productivity, efficiency, performance, and effectiveness with fewer employees. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0078 Most companies use the performance measurement system for which of the following reasons?

Answers

A: Controlling budgets.

B: Managing the delivery speed.

C: Ensuring the delivery dependability.

D: Increasing the product flexibility.

Answer Explanations

Answer (a) is the correct answer. Few companies use their performance measurement systems to identify internal and external opportunities for overall performance improvements. Most companies use these systems to control budgets and progress toward annual goals. Although company management and employees talk about speed, reliability of delivery, product flexibility, and cycle time, the performance measurement system usually does not include explicit measures for these variables. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0079 In the performance measurement system, quality does not influence which of the following competitive capabilities?

Answers

A: Cost.

B: Delivery speed.

C: Delivery dependability.

D: Product flexibility.

Answer Explanations

Answer (a) is the correct answer. In the performance measurement system, quality is proposed to influence delivery speed, delivery dependability, and product flexibility, but not cost. Improvements in quality or flexibility can lead to cost reduction, but reductions in cost alone will not produce quality or flexibility improvements. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0080 In a performance measurement system, which of the following is not an example of production flexibility?

Answers

A: The ability to introduce new products.

B: The ability to shorten lead times.

C: The ability to manage product mix in a manufacturing plant.

D: The ability to cross-train employees to manufacture a wide range of products.

Answer Explanations

Answer (a) is the correct answer. Flexibility is of two types: production flexibility and design flexibility. The ability to understand the current and future needs of customers, to develop innovative products, and to make modifications to current products are examples of design flexibility. Production flexibility is achieved when a company can offer short lead times, when the product mix within a plant is managed properly, and when employees are cross-trained to manufacture a wider range of products.




Question: V4C3-0081 Which of the following is the best measure of productivity to use to evaluate several departments in a large retail store?

Answers

A: Number of customers served per employee per day.

B: Revenue per square foot.

C: Number of units sold per department per day.

D: Average number of units stocked per month per department.

Answer Explanations

Answer (a) is incorrect. It is not the best measure to use. For example, a department that sells books may serve a lot of customers or sell many units, but that does not mean that it is more productive than a department that sells furniture. Answer (b) is the correct answer. A critical output of interest is revenue per square foot. The floor space in the store is a limited resource whose productivity should be analyzed. Answer (c) is incorrect. It is not the best measure to use. For example, a department that sells books may serve a lot of customers or sell many units, but that does not mean that it is more productive than a department that sells furniture. Answer (d) is incorrect. The number of items stocked in a given department says nothing about productivity.

Question: V4C3-0082 Which of the following is an example of an efficiency measure?

Answers

A: The rate of absenteeism.

B: The goal of becoming a leading manufacturer.

C: The number of insurance claims processed per day.

D: The rate of customer complaints.



Answer Explanations

Answer (a) is incorrect. This is not an efficiency measure because there is not any comparison of input to output. Answer (b) is incorrect. This is an example of effectiveness, not efficiency. Answer (c) is the correct answer. Efficiency is the ratio of effective output to the input required to achieve it. Insurance claims processed per day measures the output (claims processed) to the input (a day’s work). Answer (d) is incorrect. This is not an efficiency measure because there is not any comparison of input to output.

Question: V4C3-0083 Which of the following have a flat organizational structure compared to others?

Answers

A: Organization A with eleven hierarchical levels.

B: Organization B with three hierarchical levels.

C: Organization C with eight hierarchical levels.

D: Organization D with six hierarchical levels.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. A flat structure has a wide span, is horizontally dispersed, and has fewer hierarchical levels. Relative to a flat structure, a tall structure has a narrow span of management and more hierarchical levels. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0084 Change and uncertainty in the environment are usually associated with which of the following?

Answers

A: Work specialization.

B: Decentralization.

C: Centralization.

D: Tight vertical control.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Greater change and uncertainty in the environment are usually associated with decentralization. Today, most companies feel greater uncertainty because of intense global competition; hence, many have decentralized businesses. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0085 Which of the following is not an approach to structural design that reflects different uses of the chain of command?

Answers

A: Matrix approach.

B: Team-based approach.

C: Process approach.

D: Divisional approach.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The process approach is a variation of the functional structure in which departments are formed on the basis of production processes. The process approach does not use the chain of command in the way that other approaches use it. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0086 Which of the following is the trend in recent years for organizations?

Answers

A: Greater work specialization.

B: Less delegation.



C: Wider spans of management.

D: Narrower spans of management.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The trend in recent yeas has been toward wider spans of control and management as a way to facilitate delegation and speed up decision making and communication. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0087 Which of the following is not an advantage of a functional structure?

Answers

A: Economies of scale.

B: Excellent coordination between functions.

C: Well-defined career progress.

D: Job skill specialization and development.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Excellent coordination within functions is there but not in between functions. Other advantages include efficient use of resources and economies of scale, in-depth skill specialization and development, career progress within functional departments, top management direction and control, and high-quality technical problem solving skills. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0088 Global companies often use which of the following organizational structures to achieve simultaneous coordination of products across countries?

Answers



A: Functional.

B: Divisional.

C: Matrix.

D: Product-based.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The matrix approach combines aspects of both functional and divisional structures simultaneously in the same part of the organization, whether it is domestic or foreign. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0089 The matrix structure violates which of the following principles of management?

Answers

A: Unity of direction.

B: Unity of command.

C: Work specialization.

D: Division of labor.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. The major problem with a matrix structure is the confusion and frustration caused by the dual chain of command. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0090 All of the following are major disadvantages of the matrix structure except:



Answers

A: It generates a large amount of conflict.

B: Managers spend much time resolving conflict.

C: It causes confusion due to the dual chain of command.

D: It causes enlarged tasks for employees.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. “Enlarged tasks for employees” is an advantage of the matrix structure. Disadvantages include frustration and confusion from the dual chain of command, high conflict between two sides of the matrix, many meetings, the need for human relations training, and power dominance by one side of the matrix.

Question: V4C3-0091 All of the following are advantages of the matrix structure except:

Answers

A: It increases employee participation.

B: It makes efficient use of human resources.

C: It works well in a changing environment.

D: It requires too many meetings.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Requiring too many meetings is a disadvantage of the matrix structure. Advantages include more efficient use of resources than single hierarchy, flexibility and adaptability to a changing environment, development of both general and specialist management skills, interdisciplinary cooperation, and enlarged tasks for employees.



Question: V4C3-0092 An advantage of the divisional organizational structure is which of the following?

Answers

A: Concern for customers' needs is high.

B: There is little duplication of services across divisions.

C: There is good coordination across divisions.

D: Top management retains tight control of the organization.

Answer Explanations

Answer (a) is the correct answer. In a divisional structure, there is fast response, flexibility in an unstable environment, concern for customers’ needs, excellent coordination across functional departments, clear identification of responsibility for product problems, emphasis on overall product and division goals, and development of general management skills. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0093 Which of the following divides the major functions of an organization into separate companies?

Answers

A: The divisional structure.

B: The team structure.

C: The network structure.

D: The matrix structure.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The network structure means that the firm subcontracts many of its major functions to separate companies and coordinates their activities by a small staff in the headquarters organization.




Question: V4C3-0094 Disadvantages of the network structure does not include which of the following?

Answers

A: A lack of hands-on control.

B: The possibility of losing an important part of the organization.

C: Weakened employee loyalty.

D: Planned decentralization.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. Disadvantages of the network structure include dual loyalties and conflict, time and resources spent on meetings, and unplanned decentralization increasing compromise.

Question: V4C3-0095 All of the following are characteristics of vertical organizations except:

Answers

A: Specialized tasks.

B: Decentralized decision making.

C: Few teams, task forces, or project managers.

D: Rigid culture.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. In the traditional organization, the vertical structure predominates with few task forces, teams, or project managers for horizontal coordination. Information is formally communicated up and down the organizational hierarchy and is widely shared. In addition, jobs are broken down into narrow,



specialized tasks, and employees generally have little say over how they do their work. The culture is rigid and does not encourage risk taking and changing, and decision-making is centralized. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0096 The learning organization is characterized by all of the following except:

Answers

A: Horizontal team-based structure.

B: Open book management.

C: Centralized decision making.

D: Empowered employees.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. A learning organization is an organization in which everyone is engaged in identifying and solving problems, and enabling the organization to continuously experiment, improve, and increase its capability. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0097 A pure functional structure is most appropriate for achieving which of the following?

Answers

A: Innovation.

B: Differentiation.

C: Internal efficiency goals.

D: Flexibility.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The pure functional structure is appropriate for achieving internal efficiency goals. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0098 Which of the following is most consistent with a strategy of stability?

Answers

A: Team-based structure.

B: Organic structure.

C: Matrix structure.

D: Functional structure.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is the correct answer. A functional structure helps achieve strategic goals of cost leadership, efficiency, and stability. A divisional structure helps achieve strategic goals of differentiation, innovation, and flexibility.

Question: V4C3-0099 Which of the following structures works best in an uncertain organizational environment?

Answers

A: A tight structure.

B: A mechanistic structure.

C: A horizontal structure.

D: A functional structure.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. The flexible, horizontal structure enables organizations to differentiate themselves and respond quickly to the demands of a shifting environment but at the expense of efficient resource use. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0100 Which of the following structures works best in a stable organizational environment?

Answers

A: A loose structure.

B: A vertical structure.

C: An organic structure.

D: A horizontal structure.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. A functional (vertical) structure helps achieve strategic goals of cost leadership, efficiency, and stability. The culture is rigid and does not encourage risk taking and change, and decision-making is centralized. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0101 Which of the following is the most difficult to coordinate?

Answers

A: Reciprocal interdependence.

B: Sequential interdependence.



C: Pooled interdependence.

D: Horizontal interdependence.

Answer Explanations

Answer (a) is the correct answer. Reciprocal interdependence means that the output of operation A is the input to operation B, and the output of operation B is the input back again to operation A. This is the highest level of interdependence and also the most difficult to coordinate. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0102 Which of the following describes where each department is relatively independent because work does not flow between functional units?

Answers





Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Pooled interdependence means that each department is part of the organization and contributes to the common good, but each department is relatively independent because work does not flow between functional units. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0103 Which of the following is a greater interdependence because departments exchange resources and depend on others to perform well?

Answers







Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Sequential interdependence means that parts or outputs of one department become inputs to another department in serial fashion. The first department must perform correctly so that the second department can perform correctly. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0104 In well-managed organizations, the relationship between structure and strategy is that

Answers

A: Structure follows strategy.

B: Structure impacts technology.

C: Structure dictates strategy.

D: Structure fits job strategy.

Answer Explanations

Answer (a) is the correct answer. First, strategy must be put in place. Strategy is an integrated and externally oriented perception of how to achieve the organization’s mission. After strategy, structure, plans, policies, and procedures must be developed. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0105 What type of organization is associated with the modern open-system view?



Answers

A: More flexible.

B: More rigid.

C: More stable.

D: More unstable.

Answer Explanations

Answer (a) is the correct answer. Open-system thinking fosters a more realistic view of the interaction between an organization and its environment. The open-system view supports dynamic and flexible models. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0106 Which of the following approaches permit the custom tailoring of organizations to meet unique situational de-mands?

Answers

A: Traditional.

B: Contingency.

C: Organic.

D: Mechanistic.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Contingency design is the process of determining the degree of environmental uncertainty and adapting the organization and its subunits to the situation. The design is based on the assumption that there is no single best way to structure an organization. It asks what structural combination is situationally appropriate. The manager should ask how uncertain the environment is. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0107 Which of the following organization structures tends to be rigid in design and have strong bureaucratic qualities?

Answers

A: Mechanistic.

B: Cluster.

C: Organic.

D: Virtual.

Answer Explanations

Answer (a) is the correct answer. Mechanistic organizations have a tendency to be strongly bureaucratic and rigid in design. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0108 Which of the following organization structures tends to be quite flexible and adaptive to change?

Answers

A: Mechanistic.

B: Cluster.

C: Organic.

D: Virtual.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Organic organizations are labeled as flexible in structure and adaptive to change. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C3-0109 Which of the following organizational integration techniques permit coordination to be handled in the least costly manner?

Answers

A: Functional design.

B: Departmentalization.

C: Matrix design.

D: Operational.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Departmentalization is an organizational integration technique that permits coordination to be handled in the least costly manner. Geographic location, workflow process, functional, product-service, and customer classification are the five basic types of departmentalization. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0110 Which of the following have an inward focus?

Answers

A: Geographic location.

B: Functional departments.

C: Workflow process.

D: Product-service.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Functional departments have an inward focus within the company and do not focus on customers or suppliers.




Question: V4C3-0111 The most popular type of departmentalization is which of the following?

Answers


B: Functional.

C: Customer classification.

D: Product-service.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Functional type of departmentalization is most popular because roles, duties, and responsibilities are well defined within the marketing, operations, and finance departments. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0112 Horizontal organizations have which of the following departments?

Answers


B: Workflow process.

C: Customer classification.

D: Product-service.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Organizations with workflow process departments are called horizontal



organization because emphasis is on the smooth and speedy horizontal flow of work to satisfy the customer. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0113 Which of the following have an outward focus?

Answers


B: Functional.

C: Workflow process.

D: Product-service.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. Workflow process departments have an outward focus. Their goal is to satisfy the customer. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0114 Which type of organization is fostered by which type of span of control?

Answers

A: Tall; moderate.

B: Tall; narrow.

C: Flat; narrow.

D: Flat; moderate.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Tall organizations are fostered by narrow span of control. Few layers of management are a clear structural trend in modern organizations. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0115 Which of the following organizational structures retain decision-making authority by top management?

Answers

A: Decentralization.

B: Distributed.

C: Centralization.

D: Departmentalization.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. In a centralized organizational structure, top management retains the decision-making authority. Centralization and decentralization are opposite sides of the same continuum. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0116 Which of the following involves the granting of decision-making authority to lower-level employees?

Answers

A: Decentralization.

B: Distributed.

C: Centralization.

D: Departmentalization.

Answer Explanations



Answer (a) is the correct answer. In a decentralized organizational structure, decision-making authority is granted to lower-level and local management. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0117 Which of the following is the strongest argument against decentralization?

Answers

A: Lack of power.

B: Lack of control.

C: Lack of speed.

D: Lack of flexibility.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Lack of control is the strongest argument against decentralization. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0118 Which of the following acts like an independent business?

Answers

A: Strategic business unit.

B: Tactical business unit.

C: Operational business unit.

D: Functional business unit.

Answer Explanations



Answer (a) is the correct answer. Strategic business unit (SBU) must be a profit center, must serve a specific market outside the parent organization, should be in a position of controlling its own destiny, and must face outside competitors. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0119 What is the overriding advantage of matrix design?

Answers

A: Greater unity of command.

B: Increased coordination.

C: Lower cost.

D: Higher quality communication.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. Increased coordination is the overriding advantage of the matrix design. In addition, the matrix design tends to increase quantity and decrease quality of communication. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0120 What is a distinctive characteristic of the new hourglass organization?

Answers

A: No managers.

B: Pinched middle layer.

C: Top is broader than bottom.

D: No top management.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is the correct answer. An hourglass organization consists of three layers, with the middle layer distinctly pinched. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0121 Which of the following new organizational configurations is based on teams?

Answers

A: Virtual.

B: Matrix.

C: Cluster.

D: Hourglass.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is the correct answer. A cluster organization has a collaborative structure in which teams are the primary units. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0122 Which of the following organizations are Internet-linked networks of value-adding subcontractors?

Answers

A: Virtual.

B: Matrix.

C: Cluster.



D: Hourglass.

Answer Explanations

Answer (a) is the correct answer. Virtual organizations are flexible networks of value-adding subcontractors, linked by the Internet, electronic mail, facsimile machines, and telephones. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0123 In organizations where new product groups are often created, a structure that combines functional and product departmentalization and creates dual lines of authority would be optimal. The best structure for this organization would be

Answers

A: Professional bureaucracy.

B: Mechanistic.

C: Matrix.

D: Machine bureaucracy.

Answer Explanations

Answer (a) is incorrect. A professional bureaucracy is a structure with high complexity and low formalization in which professionals are required to follow rules and procedures. Answer (b) is incorrect. A mechanistic structure is one that is highly formalized and standardized and which has no dual authority structure. It is not the optimal structure. Answer (c) is the correct answer. A matrix organizational structure combines functional and product departmentalization, creates a dual reporting structure, and is optimal where product groups are necessary. Answer (d) is incorrect. In a machine bureaucratic structure, rules and regulations permeate the entire structure and tasks are highly routine.

Question: V4C3-0124 Goal setting is an important component of motivating employees. The goal “we need to do much better than be-fore” would not be appropriate because it

Answers

A: Does not take into consideration employee needs.



B: Does not specify clear, measurable, and achievable objectives.

C: Does not describe the process by which the goal will be achieved.

D: Is more a strategy than a goal.

Answer Explanations

Answer (a) is incorrect because employee needs are not an essential component of goal setting. Answer (b) is the correct answer. A good goal should be clear, measurable, and achievable. Answer (c) is incorrect because the process of goal implementation is not one of the components of the goal itself. A goal may be appropriate and still poorly implemented. Answer (d) is incorrect because strategies are general statements of the direction of a department or an organization. The statement is not a strategy.

Question: V4C3-0125 A manager who is concerned with achieving the goals of the organization without much concern for use of re-sources is

Answers

A: Incompetent.

B: Focusing on effectiveness.

C: Focusing on efficiency.

D: Using a goal-setting approach to management.

Answer Explanations

Answer (a) is incorrect. Although sole focus on either effectiveness or efficiency could lead to mismanagement, it does not necessarily mean that the manager is incompetent. Answer (b) is the correct answer. The question is aimed at distinguishing between the concepts of effectiveness and efficiency as measures of organizational performance. Focus on goals is the key to effectiveness. Answer (c) is incorrect. Focusing on efficiency means being concerned with proper use of resources. Answer (d) is incorrect. The second part of the question—lack of concern for resources—makes it not applicable to goal setting concepts.

Question: V4C3-0126 Organizational productivity can be defined as the ratio of an organization’s total output to its total input, adjusted for inflation, for a specified period of time. For a number of years, Japan’s productivity has been held out as an example to emulate. Japan’s higher productivity has been mostly attributed to

Answers



A: Abundant raw materials and excellent human and financial resources.

B: Better management and the ability to do more with less.

C: Constant refurbishing of the country's infrastructure.

D: A superior educational system that emphasizes creativity.

Answer Explanations

Answer (a) is incorrect. Japan has limited materials, although it has a large population and, as a result of its success, gained access to tremendous financial resources. Answer (b) is the correct answer. Most of the credit for Japanese success has been given to their management systems and their ability to be efficient with the limited resources that the country has. Although the reindustrialization after WWII has been cited as a potential cause for the success of Japan, it is by no means the strongest factor. Answer (c) is incorrect. Japanese people are efficient. Answer (d) is incorrect. The Japanese educational system has been found to be high quality; however, the empha-sis is not creativity and education has not been found to be the major factor in the country’s success.

Question: V4C3-0127 Which of the following directives would be most useful to a sales department manager in controlling and evalu-ating the performance of the manager’s customer-service group?

Answers

A: The customer is always right.

B: Customer complaints should be processed promptly.

C: Employees should maintain a positive attitude when dealing with customers.

D: All customer inquiries should be answered within seven days of receipt.

Answer Explanations

Answer (a) is incorrect because no standard has been set in which to measure employee perfection. Answer (b) is incorrect because an inadequate measure has been specified to the employee. Answer (c) is incorrect because no measure of positive attitude has been specified for the employee. Answer (d) is the correct answer. Performance has been measured against the standard seven days to see if the objective is being met.

Question: V4C3-0128 In order to meet a deadline, a manager assigned a task to a supervisor. The task, which normally would have been performed by an absent clerk, was completed on schedule and in the same amount of time as if the clerk had done



it. This scenario is an example of

Answers

A: Sacrificing efficiency for effectiveness.

B: Sacrificing effectiveness for efficiency.

C: A balanced emphasis on effectiveness and efficiency.

D: A situation that is neither efficient nor effective.

Answer Explanations

Answer (a) is the correct answer. Since the task was completed on schedule and in the allotted time, it would be considered to be an effective use of resources. However, using a supervisor to complete a task that could have been done by a clerk would not be considered an efficient use of resources, assuming supervisors are more expensive resources than clerks are. Answer (b) is incorrect because this would not be an efficient use of resources. Answer (c) is incorrect because a balanced emphasis on effectiveness and efficiency means the job gets done us-ing a minimum amount of resources. Answer (d) is incorrect because the task was performed effectively but not efficiently.

Question: V4C3-0129 Which of the following can reflect the effectiveness of a firm’s personnel department?

Answers

A: The ratio of total hiring costs to the total number of hires.

B: The ratio of employees hired at entry level in 1992 and still with the firm in 1994 to total employees hired at entry level in 1992.

C: A comparison over time of the average number of days from the date the approved vacant position requisition is received until the date the new hire starts work.

D: The ratio of the number of job offers accepted to the number of job offers extended.

Answer Explanations

Answer (a) is incorrect because this choice measures efficiency (inputs used to achieve a given level of output). Answer (b) is the correct answer. Effectiveness measures the degree to which a predetermined objective is met. Answer (c) is incorrect because this choice measures efficiency (inputs used to achieve a given level of output). Answer (d) is incorrect because this choice measures efficiency (inputs used to achieve a given level of output).

Question: V4C3-0130



Which of the following is not related to labor productivity measurement?

Answers

A: Work measurement.

B: Time study.

C: Work sampling.

D: Work groups.

Answer Explanations

Answer (a) is incorrect because work measurement is used to estimate the amount of worker time required to generate one unit of work. Answer (b) is incorrect because in a time study, analysts use stopwatches to time operations being performed by workers. Answer (c) is incorrect because work sampling is a work measurement technique, which randomly samples the work of one or more workers at periodic intervals to determine the proportion of the total operation, which is ac-counted for in one particular activity. Answer (d) is the correct answer. Work groups are a collection of people working together; they are not a labor productivity measurement.

Question: V4C3-0131 An example of an efficiency measure in a company would be

Answers

A: The profit per dollar of sales.

B: The number of contacts a broker makes per day.

C: The percentage of raw materials placed in storage within 24 hours of receipt.

D: New insurance policies written by an insurance agent as a percentage of total new and renewed policies.

Answer Explanations

Answer (a) is the correct answer. A measure of cost control by stating the profit as a percentage of sales. Answer (b) is incorrect because the number of contacts a broker makes per day would be a measure of effectiveness. Answer (c) is incorrect because the percentage of raw materials placed in storage without damage would be a measure of effectiveness. Answer (d) is incorrect because the percentage of new insurance policies written by an insurance agent would be a measure of effectiveness.



Question: V4C3-0132 Of the following factors that affect efficiency, which is a group-level factor?

Answers

A: Values and attitudes.

B: Abilities.

C: Motivation.

D: Leadership.

Answer Explanations

Answer (a) is incorrect because it is an individual level factor that impacts efficiency. Answer (b) is incorrect because it is an individual level factor that impacts efficiency. Answer (c) is incorrect because it is an individual level factor that impacts efficiency. Answer (d) is the correct answer. A group-level factor that impacts efficiency.

Question: V4C3-0133 Successful organizations are able to balance efficiency and effectiveness. Which of the following scenarios illustrates an organization out of balance by focusing too much on efficiency?

Answers

A: The job does not get done and limited resources are wasted.

B: The job gets done but limited resources are wasted.

C: The job does not get done but available resources are not wasted.

D: The job gets done and limited resources are not wasted.

Answer Explanations

Answer (a) is incorrect because this scenario illustrates an organization out of balance by having no focus on either effectiveness or efficiency. Answer (b) is incorrect because this scenario illustrates an organization out of balance by focusing too much on effectiveness. Answer (c) is the correct answer. This scenario illustrates an organization out of balance by focusing too much on efficiency. Answer (d) is incorrect because this scenario illustrates an organization perfectly balancing efficiency and effectiveness.



Question: V4C3-0134 Productivity is defined as the ratio of outputs of a production process to the inputs that are used. Consider a pro-cess that currently produces 2,000 units of output with 500 hours of labor per day. This process can be redesigned to produce 2,520 units of output requiring 600 labor hours per day. The percentage change in productivity from redesigning the process is

Answers

A: 5%

B: 10%

C: 16%

D: 22%

Answer Explanations

Answer (a) is the correct answer. Productivity = output/input. Before redesign, productivity = 2,000 units/500 hours = 4 units per hour. After redesign, productivity = 2,520/600 hours = 4.2 units per hour. Percentage change in productivity = [(4.2 – 4.0)/4.00] x 100 = 5%. By definition, choices (b), (c), and (d) will be incorrect. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C3-0135 Traditionally, large manufacturers have believed that economies of scale gained through large production runs of like, or similar, products are the best way to keep production costs down and remain competitive. Select the most appropriate response to whether this theory is still valid.

Answers

A: Yes, larger economies of scale continue to accrue from ever-larger production runs.

B: Yes, lower per-unit costs for standard products continue to guarantee a competitive advantage.

C: No, economies of scale can no longer be gained from long production runs.

D: No, production flexibility and diversity of products are needed to remain competitive.

Answer Explanations

Answer (a) is incorrect because economies of scale cannot continue to be achieved if the products are not salable. Answer (b) is incorrect because if the item being produced is not the item that is desired, low cost is not an issue.



Answer (c) is incorrect because economies of scale can still be achieved from long production runs if the goods are salable. Answer (d) is the correct answer. Global competition and more rapidly changing consumer tastes are lessening the need for long production runs and are increasing the need for diversity of products and flexibility of production.

Question: V4C5-0001 Negotiation is a

Answers

A: Decision-making process.

B: Constructive-destructive process.

C: Conflict-avoidance process.

D: Communication-compromise process.

Answer Explanations

Answer (a) is correct. Negotiation is a decision-making process where problems are solved among interdependent parties with different preferences. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0002 The basic attitude that is needed for an effective negotiation is

Answers

A: Win-win.

B: Win-lose.

C: Lose-lose.

D: Give-and-take.

Answer Explanations

Answer (a) is correct. A win-win attitude is needed for an effective negotiation. A win-lose attitude is a



culturally based attitude and is similar to the give-and-take approach. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0004 Individuals involved in a cycle of competitive conflict have which of the following?

Answers

A: Lose-lose attitude.

B: Win-lose attitude.

C: Win-win attitude.

D: Gain-at-all costs attitude.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Individuals involved in a cycle of competitive conflict have a win-lose attitude. The cycle of competitive conflict includes opposing goals, mistrust and disbelief, win-lose attitude, and going separate ways. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0005 Which of the following is not part of the cycle of cooperative conflict?

Answers

A: Mistrust.

B: Win-win.

C: Trust.

D: Goals.



Answer Explanations

Answer (a) is correct. The cycle of cooperative conflict includes cooperative goals, trust and reliance, discuss and win-win, and move forward together. Mistrust is a part of competitive conflict. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0003 What are the two dimensions of conflict?

Answers

A: Static and dynamic.

B: Competitive and cooperative.

C: Personal and social.

D: Short-term and long-term.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Competitive and cooperative are the two dimensions of conflict. Competitive conflict is destructive while the cooperative conflict is constructive in nature. The latter is based on win-win negotiating attitude while the former is based on win-lose attitude. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0006 Which of the following conflict resolution techniques involves a time-consuming search for causes?

Answers

A: Problem solving.

B: Forcing.

C: Compromise.



D: Smoothing.

Answer Explanations

Answer (a) is correct. Problem solving is based on facts not on personalities. However, it is a time-consuming process to search for causes. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0007 Which of the following conflict resolution styles is best when maintaining harmony is important in teamwork organizations?

Answers

A: Competing style.

B: Collaborating style.

C: Accommodating style.

D: Avoiding style.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The accommodating style reflects a high degree of cooperativeness that works best when people realize that they are wrong, when an issue is more important to others than to oneself, when building social credits for use in later discussion, and when maintaining harmony is important. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0008 Which of the following conflict resolution techniques relies on formal authority and power?

Answers

A: Problem solving.



B: Forcing.

C: Compromise.

D: Smoothing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Forcing is used when time is important or a safety issue is involved. It uses power and authority. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0009 Which of the following conflict resolution techniques remove(s) the actual sources of conflict? I. Problem solving II. Forcing III. Compromise IV. Smoothing

Answers

A: I only.

B: II only.

C: I and III.

D: II and IV.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Problem solving (item I) and skillfully negotiated compromises (item III) are the only approaches that remove the actual sources of conflict. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0010



Which of the following conflict resolution techniques are short-run measures?

I. Problem solving II. Forcing III. Compromise IV. Smoothing

Answers

A: I only.

B: II only.

C: I and III.

D: II and IV.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Forcing (item II), smoothing (item IV), and superordinate goals are short-term, stopgap measures. Problem solving (item I) and compromise (item III) are long-term measures.

Question: V4C5-0011 Which of the following conflict resolution techniques is not appropriate for time-bound managers?

Answers

A: Superordinate goals.

B: Forcing.

C: Problem solving.

D: Smoothing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Since the problem-solving technique takes time, time-bound managers can fall back on superordinate goals, forcing, or smoothing, whichever seems most suitable.




Question: V4C5-0012 Which of the following conflict resolution techniques is highly valued and unattainable by any one group alone?

Answers

A: Superordinate goals.

B: Forcing.

C: Problem solving.

D: Smoothing.

Answer Explanations

Answer (a) is correct. Superordinate goals are highly valued, unattainable by any one group or individual alone, and commonly sought after. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0013 Regarding effective negotiations the question, “What is your bottom line” refers to which of the following?

Answers

A: BARS.

B: BATNA.

C: B2B.

D: B2C.

Answer Explanations




Answer (b) is correct. The best alternative to a negotiated agreement (BATNA) is the standard against which any proposed agreement should be measured. BATNA protects a person from accepting terms that are too unfavorable and from rejecting terms that are too favorable. This is referred to as, “what is your bottom line?” A seller’s BATNA becomes the standard for accepting or rejecting an offer by the buyer. BARS is behaviorally anchored rating scale and is used in an employee’s performance appraisal process. Both business to business (B2B) and business to consumer (B2C) are used in electronic commerce. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0014 A realistic BATNA does not protect against which of the following?

Answers

A: Group-aided decision making.

B: Framing error.

C: Escalation of commitment.

D: Overconfidence.

Answer Explanations

Answer (a) is correct. In group-aided decision making, the group does not make the final decision. The group recommends a solution to the actual decision-maker. Framing error, escalation of commitment, and overconfidence are examples of decision-making traps, which can be avoided through awareness by the decision makers. A realistic BATNA protects against these decision-making traps by knowing the “bottom line” and the “bargaining zone.”

The bargaining zone is the gap between two parties’ BATNAs, that is, the area of overlapping interests where agreement is possible. Since negotiators keep their BATNAs secret, each party needs to estimate the other’s BATNA when identifying the likely bargaining zone. To negotiate without a BATNA is similar to working in the dark. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0015 Which of the following is the first step in the added-value negotiating process?



Answers

A: Clarifying interests.

B: Identifying choices.

C: Selecting a deal.

D: Perfecting the deal.

Answer Explanations

Answer (a) is correct. The five steps involved in the added-value negotiating (AVN) process include clarifying interests, identifying options, designing alternative deal packages, selecting a deal, and perfecting the deal (in that order). This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C5-0016 Relationships are strengthened in which of the following steps of the added-value negotiating process?

Answers

A: Clarifying interests.

B: Identifying choices.

C: Selecting a deal.

D: Perfecting the deal.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Relationships are strengthened in the last step of the added-value negotiating (AVN) process because unresolved details are hammered out and agreements are put in writing. It sets the foundation for future negotiations.

Question: V4C5-0017



The added-value negotiating process is different from the traditional negotiating process due to its focus on which of the following?

Answers

A: Single outcome.

B: Taking something.

C: Multiple deals.

D: Win-lose approach.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The added-value negotiating (AVN) process involves the development of multiple deals that add value to the negotiating process. The AVN bridges the gap between win-win theory and practice. The traditional negotiating process focuses on “single outcome” involving “taking something” from the other party, and it uses a win-lose approach. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0001 Which type of organization uses a very high degree of local decision-making, evaluation, and control?

Answers

A: Polycentric.

B: Geocentric.

C: Ethnocentric.

D: Polychronic.

Answer Explanations

Answer (a) is correct. A polycentric attitude leads to a loose confederation of comparatively independent subsidiaries, rather than to a highly integrated structure. It uses a high degree of local decision-making, evaluation, and control. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C2-0002 Authority and decision-making are headquarters-centered in which of the following organizations?

Answers

A: Polycentric.

B: Geocentric.

C: Ethnocentric.

D: Polychronic.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Ethnocentric companies place emphasis on their home countries. An ethnocentric attitude assumes that the home country’s personnel and ways of doing things are best. Authority and decision-making are centered in headquarters. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0003 Companies characterized by little communication flow to and from headquarters and between subsidiaries are called

Answers

A: Polycentric.

B: Geocentric.

C: Ethnocentric.

D: Polychronic.

Answer Explanations

Answer (a) is correct. A polycentric attitude is host-country oriented and assumes that local managers know what is best for their operations. Subsidiaries are independent, measured in terms of ends, and bonded by tradition, cultures, and success.




Question: V4C2-0004 Which of the following attitude makes managers world-oriented?

Answers

A: Polycentric.

B: Geocentric.

C: Ethnocentric.

D: Polychronic.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A geocentric attitude is necessary in today’s competitive global marketplace. Geocentric companies are truly world-oriented and favor no specific country. Both local and worldwide objectives are balanced in all aspects of operations. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0005 People’s behavior is highly impacted by

Answers

A: Language.

B: Culture.

C: Skills.

D: Government.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Culture has a powerful impact on people’s behavior, and it is a taken-for-granted assumption. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0006 Which of the following is vital to communication in high-context culture?

Answers

A: Being on time.

B: Nonverbal and situational cues.

C: Being polite.

D: Written contacts.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. In high-context culture, people tend to emphasize nonverbal messages when communicating. The other person’s official status, place in society, and reputation say a great deal about the person’s rights, obligations, and trustworthiness. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0007 In which of the following cultures is communication used primarily to exchange facts and information?

Answers

A: High-context culture.

B: Low-context culture.

C: Medium-context culture.

D: No-context culture.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Context impacts communications. A low-context culture uses low-context communications; that is, most information is contained in explicit codes such as words. People in low-context culture use communication primarily to exchange facts and information; meaning is derived from words. North American cultures engage in low-context communications, whether in Canada or the United States, and English is a low-context language. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0008 When communicating, people in low-context culture tend to emphasize

Answers

A: Organizational position.

B: Spoken and written words.

C: Body language.

D: Wealth and power.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. People from low-context cultures convey messages and meanings primarily with spoken and written words. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0009 Which of the following is a high-context culture?

Answers

A: Germany.

B: Canada.



C: United States.

D: Japan.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. High-context culture countries include Japan, Saudi Arabia, China, and Korea.

Question: V4C2-0010 Which of the following is a low-context culture?

Answers

A: Switzerland.

B: China.

C: Korea.

D: Saudi Arabia.

Answer Explanations

Answer (a) is correct. Low-context culture countries/regions include Germany, Switzerland, United States, Canada, Scandinavia, and Great Britain. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0011 What kind of culture prevails in the United States?

Answers

A: Variable-context and collectivist.

B: Low-context and individualistic.

C: High-context and collectivist.



D: Fixed-context and individualistic.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The United States and Canada are highly low-context and highly individualistic cultures. People in Egypt, Mexico, India, and Japan, have collectivist cultures. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0012 What is the major requirement for low-context managers doing business in high-context cultures?

Answers

A: Formality.

B: Flexibility.

C: Patience.

D: Promptness.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Patience is a prime virtue for low-context managers (e.g., USA) doing business in high-context cultures (e.g., Japan). This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0013 In which of the following cultures is self-interest ranked below duty and loyalty to friends, family, organization, and country?

Answers

A: Collectivist.

B: Individualistic.



C: High-context.

D: Low-context.

Answer Explanations

Answer (a) is correct. People in collectivist cultures place duty and loyalty to family, friends, organizations, and country above self-interests. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0014 Which of the following refers to the study of how organizational behavior and management practices differ across cultures?

Answers

A: Cognitive management.

B: Comparative management.

C: Competitive management.

D: Culture management.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Comparative management is the study of how organizational behavior and management practices differ across cultures. This is a new field where disagreements about theoretical frameworks and research methodologies are taking place. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0015 A cross-cultural study of work goals indicated that job security is much less important to

Answers

A: Israeli employees.



B: American employees.

C: British employees.

D: Japanese employees.

Answer Explanations

Answer (a) is correct. A cross-cultural study of work goals in five countries (U.S, Britain, Germany, Israel, and Japan) indicated that “interesting work” got a consistently high ranking and “opportunity for promotion” and “working conditions” consistently were at or very near the bottom of each country’s rankings. An international contingency approach to motivation says that managers need to adapt their motivational programs to local preferences. For example, pay is relatively less important in Japan than in the other countries; and job security is much less important to Israelis than it is to employees in the other countries. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0016 Which of the following refers to the degree to which people accept inequality among institutions, organizations, and people?

Answers

A: Power distance.

B: Uncertainty avoidance.

C: Individualism.

D: Collectivism.

Answer Explanations

Answer (a) is correct. Power distance is the degree to which people accept inequality in power among institutions, organizations, and people. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0017 A loosely knit social framework in which individuals are expected to take care of themselves is called



Answers

A: Culture.

B: Ethnocentrism.

C: Individualism.

D: Masculinity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Individualism reflects a value for a loosely knit social framework in which individuals are expected to take care of themselves. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0018 A value characterized by people’s intolerance for ambiguity and resulting support for beliefs that promise confor-mity is called

Answers

A: Power distance.

B: Uncertainty avoidance.

C: Certainty avoidance.

D: Conformity seekers.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Uncertainty avoidance is a value characterized by people’s intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity. High uncertainty avoidance means that members of a society feel uncomfortable with uncertainty and ambiguity and thus support beliefs that promise certainty and conformity. Low uncertainty avoidance means that people have a high tolerance for the unstructured, the unclear, and the unpredictable. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C2-0019 Which of the following reflects a cultural preference for cooperation, group decision-making, and quality of life?

Answers

A: Collectivism.

B: Femininity.

C: Individualism.

D: Masculinity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Femininity reflects the values of relationships, cooperation, group decision-making, and quality of life. It is a cultural preference and a part of social values. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0020 A cultural attitude marked by the tendency to regard one’s own culture as superior to others is called

Answers

A: Ethnocentrism.

B: Polycentrism.

C: Geocentrism.

D: Technocentrism.

Answer Explanations

Answer (a) is correct. An attitude called ethnocentrism means that people have a tendency to regard their own culture as superior and to downgrade other cultures. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C2-0021 When managing in a global environment and in relationship-oriented societies, business leaders should do which of the following?

Answers

A: Take a strong personal interest in employees.

B: Feel free to criticize as mush as they feel they need to.

C: Reprimand in public whenever possible.

D: Minimize the emphasis on personal relations.

Answer Explanations

Answer (a) is correct. In relationship-oriented societies, which rank high on collectivism, such as those in Asia, the Arab world, and Latin America, business leaders should use a warm, personalized approach with employees. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0022 Which of the following is not a variable in Hofstede’s international study about various cultures?

Answers

A: Power distance.

B: Political orientation.

C: Individualism-collectivism.

D: Uncertainty avoidance.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The cultural variables in the Hofstede’s international study include power distance, individualism-collectivism, masculinity-femininity, and uncertainty avoidance. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C2-0023 Which of the following employee needs is consistently ranked number one in Hofstede’s international study about various cultures?

Answers

A: Security needs.

B: Self-actualization needs.

C: Varied need rankings.

D: Social needs.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Hofstede’s international study revealed that people’s needs are varied across cultures. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0024 Host-country governments tend to look favorably on a greater degree of

Answers

A: Local-country control.

B: Foreign-country control.

C: Sensitivity training.

D: Diversity training

Answer Explanations

Answer (a) is correct. In terms of international staffing, host-country governments tend to look favorably on a greater degree of local-country control. However, local managers may not have adequate knowledge of home-office goals and procedures. This answer is incorrect. Refer to the correct answer explanation.




Question: V4C2-0025 Which of the following leadership styles is most appropriate for doing international business?

Answers

A: Directive.

B: Supportive.

C: Participative.

D: Achievement-oriented.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. According to the international contingency model of leadership, participative leadership is the most broadly applicable style. It is not necessarily the best style as it is culturally acceptable in many different countries. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0026 Which of the following leadership styles is least appropriate for doing international business?

Answers

A: Directive.

B: Supportive.

C: Participative.

D: Achievement-oriented.

Answer Explanations

Answer (a) is correct. The directive leadership style turned out to be the least appropriate and it is practiced in Brazil, France, China, India, Italy, Japan, and the Philippines.




Question: V4C2-0027 Which of the following is the primary reason for the high failure rate of U.S. managers working on foreign as-signments?

Answers

A: Inability of spouse to adjust.

B: Technical incompetence.

C: Emotional immaturity.

D: Poor language ability.

Answer Explanations

Answer (a) is correct. Family (spouse) and personal adjustment problems head the list of failures, whereas technical incompetence ranks near the bottom. Families too often are at a disadvantage in cross-cultural settings. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0028 Which of the following cross-cultural training techniques is best?

Answers

A: Technical programs and language instructions.

B: Sensitivity training and in-country experience.

C: Hands-on role-playing and field experience.

D: Documentary programs and interpersonal training.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. A combination of documentary programs and interpersonal training is recommended as the best cross-cultural training technique.

Question: V4C2-0029 Which of the following is the best approach to expatriate staffing programs?

Answers

A: Integrated selection-orientation-repatriation process.

B: Integrated staffing-selection-orientation process.

C: Integrated language-culture-food process.

D: Integrated education-experience-skills process.

Answer Explanations

Answer (a) is correct. Cross-cultural training should be part of an integrated selection–orientation–repatriation process focused on a distinct career path. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0030 Companies can reduce the potential loss from host-government expropriation of their foreign subsidiaries by

Answers

A: Financing subsidiaries with local-country capital.

B: Structuring operations so that each subsidiary has value as a stand-alone company.

C: Reducing the cost of capital to reflect political risk when assessing foreign investment opportunities.

D: Selling products in the local country.

Answer Explanations

Answer (a) is correct. To protect their investment, local capital would be preferred. The parent company could



then default on the local creditors in the event that the subsidiary is expropriated from them. The creditors’ claims would have to be satisfied by the expropriating host government. Answer (b) is incorrect. To reduce its exposure, the company should make foreign subsidiaries only valuable as part of the integrated corporate system. Then the subsidiaries will be less attractive targets of expropriation. Answer (c) is incorrect. Risk premiums are added, not subtracted, when obtaining the cost of capital for project evaluation. Answer (d) is incorrect. Selling products in the local country will not reduce the potential loss from expropriation.

Question: V4C2-0031 To enter foreign markets, most firms begin with which of the following strategies?

Answers

A: Exporting.

B: Licensing.

C: Direct foreign investment.

D: Joint ventures.

Answer Explanations

Answer (a) is correct. Exporting is the first stage in the internationalization process where goods produced in one country are sold to customers in foreign countries. Exports amount to a large and growing part of the U.S. economy. Exporting enables a country to market its products in other countries using modest resources and with limited risk. With exporting, the corporation maintains its production facilities within the home country and transfers its products for sales in foreign countries. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0032 Which of the following is the most costly and risky direct investment in foreign countries?

Answers

A: Greenfield venture.

B: Licensing.

C: Franchising.



D: Joint ventures.

Answer Explanations

Answer (a) is correct. The most costly and risky direct investment is called a greenfield venture, which means a company builds a subsidiary from scratch in a foreign country. Joint ventures and greenfield ventures are examples of direct investment. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0033 Which of the following is the last stage of the internationalization process?

Answers

A: Exporting.

B: Licensing.

C: Direct foreign investment.

D: Joint ventures.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A company in one country produces and markets products through wholly owned subsidiaries in foreign countries. Direct foreign investment is the last stage of the internationalization process. Global corporations are expressions of the direct foreign investment stage of the internationalization. Cross-border mergers are an increasingly popular form of direct foreign investment. A cross-border merger occurs when a company in one country buys an entire company in another country. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0034 Which of the following is evolving and represents a futuristic perspective?

Answers

A: National company.



B: Transnational company.

C: Global company.

D: Multinational company.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Transnational companies rely on a blend of global and local strategies. It is a futuristic model of a global network of productive units. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0035 Which of the following best describes a transnational company?

Answers

A: Centralized authority and distinct national identity.

B: Decentralized authority and distinct national identity.

C: Decentralized authority and no distinct national identity.

D: Centralized authority and no distinct national identity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A transnational company has a decentralized authority structure and no distinct national identity. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0036 Managers in which of the following organizations are encouraged to think globally and act locally?

Answers



A: National company.

B: Transnational company.

C: Global company.

D: Multinational company.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Managers of foreign operations in a transnational company are encouraged to interact freely with their colleagues from around the world. Local practices are adopted whenever possible because all customer contacts are local. This is called “think globally and act locally.” This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0037 Which of the following is called a “stateless” company?

Answers

A: Joint venture.

B: Transnational.

C: Global.

D: Multinational.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A transnational company is a “stateless” company due to unresolved political, economic, and taxes implications. A transnational company cannot be bigger or more powerful than the host government in which it operates. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0038



Which of the following companies do business in many countries simultaneously?

Answers

A: Joint venture.

B: Transnational.

C: Global.

D: International.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Global companies do business in many countries simultaneously; they may have a certain percentage of their capital or operations in foreign countries. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0039 The multinational stage of international development involves

Answers

A: The creation of marketing and production facilities throughout the world.

B: The formation of international division(s) and increased reliance on exporting.

C: An emphasis on domestic operation with a limited amount of exporting.

D: An emphasis on domestic operation with a limited amount of importing.

Answer Explanations

Answer (a) is correct. The multinational stage of international development involves the creation of marketing and production facilities throughout the world. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0040



The international stage of international development involves

Answers

A: The creation of marketing and production facilities throughout the world.

B: The formation of international division(s) and increased reliance on exporting.

C: An emphasis on domestic operation with a limited amount of exporting.

D: An emphasis on domestic operation with a limited amount of importing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The international stage of international development involves the formation of international division(s) and increased reliance on exporting. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0041 Which of the following is a stage of international development?

Answers

A: Domestic.

B: Multidomestic.

C: Globalization.

D: Transnational.

Answer Explanations

Answer (a) is correct. Domestic is a stage of international development. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0042



A multidomestic product/market strategy

Answers

A: Involves the production and marketing of one product design throughout the world.

B: Involves custom tailoring of products and services around individual market needs.

C: only appropriate when economic efficiencies are possible.

D: Is almost preferable to global strategies.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A multidomestic product/market strategy involves custom tailoring of products and services around individual market needs. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0043 A global product/market strategy

Answers

A: Involves the production and marketing of one product design throughout the world.

B: Involves custom tailoring of products and services around individual market needs.

C: Is only appropriate when economic efficiencies are possible.

D: Is almost preferable to global strategies.

Answer Explanations

Answer (a) is correct. A global product/market strategy involves the production and marketing of one product design throughout the world. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0044



A product/market strategy that seeks both global efficiency and local responsiveness is called

Answers

A: Franchising.

B: Importing.

C: Transnational.

D: Multidomestic.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A product/market strategy that seeks both global efficiency and local responsiveness is called transnational. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0045 Among the most common strategies for pursuing global opportunities, which of the following typically has the lowest costs?

Answers

A: Franchising.

B: Joint venture.

C: Licensing.

D: Exporting.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Licensing has the lowest costs in pursuing global opportunities. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C2-0046 Among the most common strategies for pursuing global opportunities, which of the following typically has the highest profit potential?

Answers

A: Franchising.

B: Greenfield venture.

C: Licensing.

D: Joint venture.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Greenfield venture provides the highest profit margin when pursuing global opportunities. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0047 Which of the following is NOT a global strategy that can be used to improve a company’s competitive position vis-à-vis cost leadership?

Answers

A: Domestic distribution of elite products purchased from foreign manufacturers.

B: Using low-cost foreign assembly in the manufacture of goods.

C: Purchase of low-cost foreign components or raw materials.

D: Branding finished products that are subcontracted to low-cost foreign manufacturers.

Answer Explanations

Answer (a) is correct. The following strategies are used to improve a company’s competitive position vis-à-vis cost leadership (1) using low-cost foreign assembly in the manufacture of goods, (2) purchase of low-cost foreign components or raw materials, and (3) branding finished products that are subcontracted to low-cost foreign manufacturers. This answer is incorrect. Refer to the correct answer explanation.




Question: V4C2-0048 Which of the following is a global strategy that can be used to improve a company’s competitive position vis-à-vis differentiation?

Answers

A: Domestic distribution of elite products purchased from foreign manufacturers.

B: Using low-cost foreign assembly in the manufacture of goods.

C: Purchase of low-cost foreign components or raw materials.

D: Branding finished products that are subcontracted to low-cost foreign manufacturers.

Answer Explanations

Answer (a) is correct. Domestic distribution of elite products purchased from foreign manufacturers is a global strategy that can be used to improve a company’s competitive position vis-à-vis differentiation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C2-0049 According to Michael Porter, all of the following are conditions that create advantages for firms in certain coun-tries and industries except:

Answers

A: Suppliers to a particular industry are the very best in the world.

B: There is strong industry competition.

C: The firm has the ability to attract the most talented managers.

D: There are shortages of critical raw materials or other supplies.

Answer Explanations




This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. According to Michael Porter, the following are conditions that create advantages for firms in certain countries and industries. These conditions include (1) suppliers to a particular industry are the very best in the world, (2) strong industry competition, (3) ability to attract the most talented managers, and (4) buyers are among the most demanding in the world.

Question: V4C2-0050 According to Michael Porter, conditions that create advantages for firms in certain countries and industries in-clude I. Suppliers to a particular industry are the very best in the world. II. There is strong industry competition. III. The firm has the ability to attract the most talented managers. IV. Buyers are among the most demanding in the world.

Answers

A: I and II.

B: II and III.

C: III and IV.

D: I, II, III, and IV.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. All four conditions create advantages for firms in certain countries and industries.

Question: V4C2-0051 Which of the following is a good description of the markets for resources in developing countries? Developing countries

Answers

A: Suffer from a critical shortage of capital goods.

B: Suffer from a lack of mineral resources.

C: Have high labor productivity but have few employment opportunities for workers.



D: Are too poor to save a significant portion of their national outputs.

Answer Explanations

Answer (a) is correct. A critical shortage of capital goods is a basic characteristic of less developed nations. Answer (b) is incorrect. Less developed countries differ in their resource bases. Some are rich in mineral resources and others are not. Answer (c) is incorrect. Labor productivity is low in less developed countries. Answer (d) is incorrect. The portion of national outputs saved varies. Some less developed countries have higher savings rates than the industrialized nations.

Question: V4C4-0001 How do employees become members of formal groups in the workplace?

Answers

A: Friendship.

B: Assignment.

C: Recommendation.

D: Volunteering.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A formal group is a collection of people created to do productive work. Employees are assigned to formal groups according to their talents and the organization’s needs. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0002 Individual commitment to groups is based on attractiveness and which of the following?

Answers

A: Groupthink.

B: Appearance.

C: Cohesiveness.



D: Conformity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Individual commitment to either an informal or a formal group is based on two factors: attractiveness and cohesiveness. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0003 The outside-looking-in view of groups is called

Answers

A: Groupthink.

B: Attractiveness.

C: Cohesiveness.

D: Conformity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Attractiveness is outside-looking-in view. A new member will want to join a group that is attractive and will not want to join a group that is unattractive. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0004 The inside-looking-out view of groups is called

Answers

A: Groupthink.

B: Attractiveness.



C: Cohesiveness.

D: Conformity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. In a cohesive group, individual members tend to see themselves as “we” rather than “I.” This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0005 The tendency of group members to follow the group and resist outside influences is called

Answers

A: Groupthink.

B: Attractiveness.

C: Cohesiveness.

D: Conformity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Cohesiveness is the tendency of group members to follow the group and resist outside influences. Members stick together. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0006 Which of the following derive power over individuals through ostracism from a group?

Answers

A: Formal groups.

B: Informal groups.



C: Teams.

D: Committees.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Ostracism from a group is figuratively the capital punishment of group dynamics. The informal norms play a major role in on-the-job ethics. A formal group can be a team, committee, or work group. An informal group is a collection of people seeking friendship. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0007 The process of complying with role expectations and norms is called

Answers

A: Groupthink.

B: Attractiveness.

C: Cohesiveness.

D: Conformity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Conformity is the process of complying with role expectations and norms. Conformity enhances predictability.

Question: V4C4-0008 Groupthink does not occur when

Answers

A: Outside experts are used extensively.



B: Excessive optimism is given.

C: There is a strong desire for unanimity.

D: There is a suppression of dissent.

Answer Explanations

Answer (a) is correct. Members have a groupthink mentality when they are very cohesive. For example, a domineering CEO can create a Board of Directors that has a groupthink mentality of his own. Groupthink can be broken when outside experts are used extensively. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0009 Which of the following is recommended to avoid groupthink?

Answers

A: Cooperative conflict.

B: Reverse conflict.

C: Lateral conflict.

D: Competitive conflict.

Answer Explanations

Answer (a) is correct. Cooperative conflict is recommended to avoid groupthink. The following are ways cooperative conflict can be used: (1) listen to all ideas, (2) challenge opposing ideas and positions,( 3) identify strengths in opposing arguments, (4) create alternate solutions, and (5) agree to a solution responsive to several points of view. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0010 Informal organizations are

I. Constructive. II. Destructive.



III. Mostly positive. IV. Mostly negative.

Answers

A: I only.

B: I and II.

C: I and III.

D: II and IV.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Informal organizations are both constructive and destructive, depending on how they are used or misused. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0011 Informal groups tend to satisfy which of the following human needs?

Answers

A: Belonging and esteem.

B: Security and social.

C: Physiological and security.

D: Social and physiological.

Answer Explanations

Answer (a) is correct. Informal groups are not created for doing productive work. Instead, employees join the group to satisfy their belonging and esteem needs. One develops a better self-image when accepted, recognized, and liked by others. Informal groups evolve spontaneously. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0012 A socially determined prescription for behavior in a specific position is called

Answers

A: Norms.

B: Roles.

C: Culture.

D: Ethics.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A role is a socially determined prescription for behavior in a specific position. Roles focus on specific positions and are narrower than norms. When discussing roles, managers need to consider both expectations and actual behavior. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0013 Which of the following describes “degrees of acceptability and unacceptability”?

Answers

A: Norms.

B: Roles.

C: Culture.

D: Ethics.

Answer Explanations

Answer (a) is correct. Norms define the degrees of acceptability and unacceptability. Norms are the general standards of conduct and have a broader influence than roles. Norms affect role expectations by simplifying or clarifying them. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.




Question: V4C4-0014 During which stage of the group development process are attempts made to “break the ice”?

Answers

A: Disillusion.

B: Cohesion.

C: Acceptance.

D: Orientation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. The six-stages of group development process includes orientation, conflict and challenge, cohesion, delusion, disillusion, and acceptance in that order. The ice is broken in the first stage of orientation.

Question: V4C4-0015 Which of the following is the last stage of the group development process?

Answers

A: Disillusion.

B: Cohesion.

C: Acceptance.

D: Orientation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The six-stages of group development process includes orientation, conflict and challenge, cohesion, delusion, disillusion, and acceptance in that order.




Question: V4C4-0016 A “we” feeling becomes apparent during which of the following stages of the group development process?

Answers

A: Disillusion.

B: Cohesion.

C: Acceptance.

D: Orientation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. In the cohesion stage, employees feel that they are together and united, and a “we” feeling emerges. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0017 During the first three stages of the group development process, conflict tends to be over which of the following?

Answers

A: Interpersonal relations.

B: Power and authority.

C: Stock and bonus matters.

D: Job title and perks.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. During the first three stages of the group development process (i.e., orientation, conflict



and challenge, and cohesion), conflict tends to be over power and authority. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0018 During the last three stages of the group development process, conflict tends to be over which of the following?

Answers

A: Interpersonal relations.

B: Power and authority.

C: Stock and bonus matters.

D: Job title and perks.

Answer Explanations

Answer (a) is correct. During the last three stages of the group development process (i.e., delusion, disillusion, and acceptance), conflict tends to be over the interpersonal relations. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0019 Organizational politics are called which of the following?

Answers

A: Issues management.

B: Crisis management.

C: Impression management.

D: Power management.

Answer Explanations




This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Impression management is associated with organizational (office) politics. Employees resort to office politics when they are unwilling to trust their career solely to competence, hard work, or luck. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0020 Which one of the following functional areas appears to be the most political in an organization?

Answers

A: Production.

B: Marketing.

C: Finance.

D: Human resources.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Research results indicate that the marketing department is the most political one in the organization. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0021 The most often cited negative effect of office politics is

Answers

A: Distraction of managers from organizational goals.

B: Misuse of resources by employees.

C: Gaining visibility for ideas.

D: Creating conflict among employees.

Answer Explanations



Answer (a) is correct. The most-often-cited negative effect of office politics is its distraction of managers from achieving organizational goals. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0022 Which of the following is a last-ditch effort in office politics?

Answers

A: Posturing.

B: Creating power.

C: Creating loyalty.

D: Engaging in destructive competition.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. As a last-ditch effort, some people will resort to destructive competition which includes character assassination through suggestive remarks, vindictive gossip, or outright lies. It also includes sabotaging the work of a competitor.

Question: V4C4-0023 Which of the following is an antidote to office politics?

Answers

A: Job rotation.

B: Job design.

C: Job redesign.

D: Job description.

Answer Explanations



Answer (a) is correct. Job rotation provides broader perspectives of several jobs, which gives a better understanding of the problems and issues of others. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0024 “Apple polishing” is done to

Answers

A: Make the supervisor look good.

B: Build an empire.

C: Create cliques.

D: Create destructive competition.

Answer Explanations

Answer (a) is correct. “Apple polishing” is a political strategy prompted by a desire to favorably influence those who control one’s career. Its major purpose is to make the supervisor look good. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0025 Political behavior at the workplace is described as.

Answers

A: Sabotage.

B: Mostly positive.

C: Mostly negative.

D: Both positive and negative.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Political behavior at the workplace is described as both positive and negative. Exchanging favors, forming coalitions, seeking sponsors at higher levels, and touching all possible bases are examples of legitimate aspects of political behavior.

Question: V4C4-0026 Members of mature groups tend to be

Answers

A: Physically mature.

B: Financially mature.

C: Emotionally mature.

D: Culturally mature.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Effectiveness and productivity of people should increase as the group matures. Individuality is strengthened and members tend to be emotionally mature. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0027 According to the team effectiveness model, which of the following is not a criterion for an effective team per-formance in the workplace?

Answers

A: Aligned roles and norms.

B: Goal accomplishment.

C: Adaptability to change.

D: Ideas to innovate.



Answer Explanations

Answer (a) is correct. The criteria for an effective team performance include innovative ideas, goal accomplishment, adaptability to change, high commitment to succeed, and support by upper management. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0028 According to the team effectiveness model, which of the following comprises the determinants of team effective-ness?

Answers

A: Structure, strategy, and plans.

B: Time, jobs, and duties.

C: People, organization, and task.

D: Ideas, awards, and praises.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. People, organization, and task-related factors are the three groups of determinants of team effectiveness. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0029 Which of the following can make or break work teams in business organizations?

Answers

A: Trust.

B: Control.

C: Information.



D: Influence.

Answer Explanations

Answer (a) is correct. Trust affects, and in turn is affected by, other group processes. A manager’s openness and honesty towards people initially encourages trust. Trusting managers talk with their employees rather than talk at them. Managers find that trust begets trust. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0030 All of the following are proper ways to build trust in the workplace except:

Answers

A: Delegating duties.

B: Relying on procedural control.

C: Being dependable.

D: Implementing a role model.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Trust is a fragile thing, and mistrust can erode the long-term effectiveness of work teams and organizations. Reliance on self-control improves trust while procedural control can destroy it. Other ways to build trust include communication, support, respect (delegating), fairness, predictability (dependability), and competence (role model). This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0031 Which of the following is a component of a team?

Answers

A: People in a team do not have to have regular interaction.



B: Four or more people are required to form a team.

C: A performance goal is shared among team members.

D: Teams tend to be small groups, usually with less than ten people.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The definition of a team has three components. First, two or more people are required. Second, people in a team have regular interaction. Third, people in a team share a performance goal. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0032 Which of the following refers to a formal team composed of employees from about the same hierarchical level but from different areas of expertise?

Answers

A: A special-purpose team.

B: A horizontal team.

C: A self-managed team.

D: A vertical team.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A horizontal team is composed of employees from about the same hierarchical level but from different areas of expertise. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0033 A task force is sometimes called which of the following?

Answers



A: Vertical team.

B: Cross-functional team.

C: Command team.

D: Special-purpose team.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A task force is a temporary team or committee designed to solve a short-term problem involving several departments, that is, cross-functional. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0034 Self-directed teams are

Answers

A: Temporary teams.

B: Permanent teams.

C: Ad-hoc teams.

D: Task force teams.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A self-directed team is a permanent team consisting of five to twenty multiskilled workers who rotate jobs to produce an entire product or service, often supervised by an elected member. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0035 Which of the following statements is true about self-managed teams?



Answers

A: Self-managed teams are empowered with decision-making authority.

B: Self-managed teams still rely heavily on their manager.

C: Self-managed teams have little access to resources.

D: Self-managed teams will eventually develop into problem-solving teams.

Answer Explanations

Answer (a) is correct. The most effective self-managed or self-directed teams are those that are fully empowered. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0036 Which of the following uses computer technology and groupware so that geographically distant members can col-laborate on projects and reach common goals?

Answers

A: Functional team.

B: Command team.

C: Virtual team.

D: Long-distance team.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A virtual team is a team that uses advanced information and telecommunications technologies so geographically distant members can collaborate on a project and reach common goals. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0037 A cross-functional team can be best described as



Answers

A: No more than four members in total.

B: A group of employees and outside consultants.

C: A mix of specialists within the company.

D: Both managers and nonmanagers from the same department.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A cross-functional team is a task group staffed with a mix of specialists focused on a common objective or goal. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0038 How do cross-functional teams differ from quality control circles?

Answers

A: Much smaller in size.

B: Much larger in size.

C: Members are assigned.

D: Members are managers only.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Management assigns cross-functional team members while members in quality control circles are voluntary. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0039



Cross-functional teams have which of the following advantages over traditional functional departments?

Answers

A: Less conflict and more integration.

B: More relaxed roles and norms.

C: More centralized decision making.

D: Better integration and coordination.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Traditional, functional departments have a problem of integration and coordination with other departments. This is an advantage of the cross-functional teams.

Question: V4C4-0040 Physically dispersed employees that are linked electronically are called which of the following?

Answers

A: Virtual reality.

B: Virtual team.

C: Current reality tree.

D: Transition tree.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A virtual team is a task group that is physically dispersed and electronically linked. Virtual teams are created by developing a team charter; identifying team’s sponsors, stakeholders, and champions; developing a team process; and conducting a team-oriented session. Virtual reality is a three-dimensional view of things supported by information technology. The current reality tree and the transition tree are concepts of the theory of constraints. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0041 Quality control circles rely on which of the following?

Answers

A: Mandatory participation.

B: Voluntary participation.

C: Inactive participation.

D: Limited participation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Quality control circles rely on voluntary participation of employees. They solve a specific problem or issue in the production plant or office. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0042 Which of the following is involved in self-managed teams?

Answers

A: Only managers.

B: Mostly managers.

C: Vertically loaded jobs.

D: Horizontally loaded jobs.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Vertically loaded jobs are involved in self-managed (self-directed) teams where non-managerial team members assume duties traditionally performed by managers such as work scheduling, dealing with customers, and training. Approximately between five and twenty multiskilled employees are assigned to self-managed teams, often supervised by an elected member. Members are rotated to produce an entire product or



service. Enriched jobs are said to be vertically loaded whereas enlarged jobs are said to be horizontally loaded. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0043 A self-managed team does not foster which of the following?

Answers

A: Creativity.

B: Hiring and firing.

C: Motivation.

D: Productivity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. A self-managed team is the best management practice because it taps an employee’s full potential. It fosters creativity, motivation, and productivity. Since employees are assigned to self-managed teams, the team cannot hire and fire employees. Hiring and firing is still planned and controlled by the functional department manager and human resource manager. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0044 Which of the following is the major barrier to self-managed teams?

Answers

A: Part-time employees.

B: Full-time employees.

C: Managerial resistance.

D: Employee resistance.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Managerial resistance is the major barrier to self-managed teams. Traditional supervisors or managers view self-managed teams as a threat to their authority and job security. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0045 New facilities built around the concept of self-managed teams are called which of the following?

Answers

A: Greenfield sites.

B: Greenfield ventures.

C: Green belts.

D: Green-circled employees.

Answer Explanations

Answer (a) is correct. Greenfield sites, which are new facilities built around the concept of self-managed teams, tend to do a better job than reworked (redesigned) existing facilities or operations. Greenfield ventures are the most risky type of direct investment in a foreign country. Green belts are a group of employees implementing the six-sigma methodologies to improve quality of products and services. Green-circled employees are paid below the range set for their jobs. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0046 Which of the following involves sharing key financial data and profits with employees?

Answers

A: Open-book management.

B: Participative management.

C: Functional management.



D: Self-managed teams.

Answer Explanations

Answer (a) is correct. Open-book management involves sharing key financial data and profits with employees who are trained and empowered. Participative management is empowering employees and includes open-book management, quality control circles, and self-managed teams. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0047 Which of the following is common between self-managed teams and quality control circles?

Answers

A: Profit sharing.

B: Gain sharing.

C: Employee participation.

D: Management participation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Employee participation is common between self-managed teams and quality control circles. Management does not participate in quality control circles. In self-managed teams, managers act as facilitators rather than order givers. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0048 In team development, which of the following characterizes the forming stage?

Answers

A: Cohesion.

B: Cooperation.



C: Problem solving.

D: Orientation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. The forming stage of team development is a period of orientation and getting acquainted with the team members and the management.

Question: V4C4-0049 Which of the following stages of team development is associated with conflict and disagreement?

Answers

A: Performing.

B: Norming.

C: Storming.

D: Forming.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. During the storming stage, individual personalities emerge. People become more assertive in clarifying their roles and what is expected of them. Conflict and disagreement mark this stage. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0050 During which of the following stages of team development does team unity emerge?

Answers

A: Performing.

B: Norming.



C: Storming.

D: Forming.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. During the norming stage, conflict is resolved, and team harmony and unity emerge. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0051 During which of the following stages of team development is the major emphasis on task accomplishment?

Answers

A: Performing.

B: Norming.

C: Storming.

D: Forming.

Answer Explanations

Answer (a) is correct. During the performing stage, the major emphasis is on problem solving and accomplishing the assigned task. Members are committed to the team’s mission. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0052 During which of the following stages of team development is task performance no longer the top priority?

Answers

A: Performing.

B: Norming.



C: Storming.

D: Adjourning.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. The adjourning stage occurs in committees, task forces, and teams that have a limited task to perform and are disbanded afterward. During this stage, the emphasis is on wrapping up and gearing down. Task performance is no longer a top priority.

Question: V4C4-0053 The extent to which team members are attracted to the team and motivated to remain in it is called which of the following?

Answers

A: Norming.

B: Commitment.

C: Cohesiveness.

D: Caring.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Team cohesiveness refers to the extent to which team members are attracted to the team and motivated to remain in it. The greater the contact among team members and the more time spent together, the more cohesive the team. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0054 All of the following variables increase team cohesiveness except:

Answers



A: Pay.

B: External competition.

C: Shared goals.

D: Team success.

Answer Explanations

Answer (a) is correct. The presence of competition, team success, shared goals, and the favorable evaluation of the team by outsiders adds to the team cohesiveness. Salary and wages (pay) by themselves cannot increase the team cohesiveness— there should be something else that can hold the team members together. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0055 Which of the following statements is true about teamwork in organizations?

Answers

A: Morale is higher in cohesive teams.

B: Productivity is higher in cohesive teams.

C: Productivity differences among team members are great in cohesive teams.

D: Morale always suffers in cohesive teams.

Answer Explanations

Answer (a) is correct. As a general rule, morale is higher in cohesive teams because of increased communication among team members, a friendly team climate, maintenance of membership because of commitment to the team, loyalty, and member participation in team decisions and activities. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0056 All of the following guidelines can help facilitate communication and keep teams away from interpersonal con-flicts except:



Answers

A: Keep team discussion focused on personalities.

B: Develop multiple alternatives.

C: Maintain a balance of power.

D: Never force a consensus.

Answer Explanations

Answer (a) is correct. Four guidelines can help facilitate communication and keep teams focused on substantive issues rather than interpersonal conflicts: focus on facts, develop multiple alternatives, maintain a balance of power, and never force a consensus. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0057 Work teams in business organizations

Answers

A: Can increase an organization's flexibility.

B: Actually decrease the satisfaction of team members.

C: Reduce the amount of skills needed to succeed in an organization.

D: Reduce the overall level of effort in an organization.

Answer Explanations

Answer (a) is correct. Work teams come closest to achieving their full potential when they enhance individual productivity through increased member effort an increased organizational flexibility. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0058 Which of the following is a potential disadvantage of work teams in business organizations?



Answers

A: Coordination costs increase.

B: Satisfaction of team members can decrease.

C: The organization loses the ability to respond quickly to the environment.

D: There is a decline in productivity.

Answer Explanations

Answer (a) is correct. When managers decide whether to use teams, they must assess certain costs or liabilities associated with teamwork. When teams do not work very well, the major reasons usually are power realignment, free riding, coordination costs, or system revisions. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0059 Which of the following describes the process of inspiring, influencing, and guiding employees to participate in accomplishing common goals and objectives?

Answers

A: Management.

B: Leadership.

C: Empowerment.

D: Open-book management.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Leadership is the process of inspiring, influencing, and guiding employees to participate in accomplishing common goals and objectives in an organization. Management is different from leadership. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0060



When a person is attempting to change the behavior of others, such as subordinates, peers, and supervisors, it is called

Answers

A: Power.

B: Authority.

C: Influence.

D: Empowerment.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Influence refers to a person when he or she is attempting to change the behavior of others such as subordinates, peers, and supervisors. Influence is not inherently good or bad. There are several types of influence tactics practiced such as consultation, rational persuasion, inspirational appeals, ingratiating tactics, coalition tactics, pressure tactics, upward appeals, and exchange tactics. Power is the ability while authority is the right to direct others. Empowerment occurs when employees are properly trained, provided with the relevant information and the tools needed, fully involved in major decisions, and fairly rewarded for the expected results. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0061 All of the following are essential parts of any definition of leadership except:

Answers

A: Influence.

B: People.

C: Goals.

D: Coercive power.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Influence, people, and goals are some of the essential parts of a leader. Coercive power



refers to the authority to punish or recommend punishment.

Question: V4C4-0062 The distinguishing personal characteristics of a leader are known as which of the following?

Answers

A: Traits.

B: Sources of power.

C: Leadership styles.

D: Leadership behaviors.

Answer Explanations

Answer (a) is correct. Traits are the distinguishing personal characteristics of a leader, such as intelligence, values, and appearance. Research has found a weak relationship between personal traits and leader success. The effectiveness and appropriateness of a set of leader traits depends on the organization, the subordinate, and the leader. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0063 The early research on leadership traits was referred to as the

Answers

A: Contingency theory of leadership.

B: Path-goal theory of leadership.

C: Great man approach.

D: Situational theory of leadership.

Answer Explanations




Answer (c) is correct. The early research focused on leaders who had achieved a level of greatness and hence was referred to as the great man approach. The idea was relatively simple: find out what made these people great, and select future leaders who already exhibited the same traits or could be trained to develop them. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0064 Commitment falls under which of the following types of power?

Answers

A: Reward power.

B: Coercive power.

C: Expert power.

D: Referent power.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Referent power comes from a leader’s personality characteristics that command subordinates’ identification, respect, and admiration. The referent power is commitment.

Question: V4C4-0065 Which of the following bases of power emphasizes threatening or actual punishment?

Answers

A: Reward power.

B: Coercive power.

C: Legitimate power.

D: Referent power.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Coercive power is gaining compliance through threats or punishment. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0066 Which of the following bases of power is based on charisma?

Answers

A: Reward power.

B: Coercive power.


D: Referent power.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Referent power is based on charisma or personal identification with the leader.

Question: V4C4-0067 Which of the following bases of power closely parallels formal authority?

Answers

A: Reward power.

B: Coercive power.


D: Referent power.

Answer Explanations




This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Legitimate power is based on one’s formal position in the organization (job title). This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0068 Which of the following bases of power refers to a person possessing and dispersing valuable information to others who need such information?

Answers

A: Reward power.

B: Expert power.


D: Referent power.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Expert power is based on the ability to dispense valued information. An example of expert power is when a financial planner manages and advises an investment portfolio for his client. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0069 Which of the following involves influencing others to pursue objectives that may or may not serve the organiza-tion’s best interests?

Answers

A: Formal leadership.

B: Informal leadership.

C: Centralized leadership.

D: Decentralized leadership.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Informal leadership is the process of influencing others to pursue unofficial objectives. It may or may not serve the organization’s best interests. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0070 Which of the following is the newest approach in the evolution of leadership theory?

Answers

A: Trait theory of leadership.

B: Transformational leadership theory.

C: Situational theory of leadership.

D: Behavioral-styles theory of leadership.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Transformational leaders are visionaries who challenge employees to do exceptional things. Transformational leaders have the charisma, inspiration, intellectual stimulation, and individualized consideration, and rely heavily on their referent power. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0071 In which of the following leadership styles does the leader delegate a great deal of authority while retaining ul-timate responsibility?

Answers

A: Authoritarian.

B: Democratic

C: Laissez-faire.



D: Situational.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Democratic leaders delegate a great deal of authority while retaining ultimate responsibility. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0072 Which of the following is a model of leadership that describes the relationship between leadership styles and spe-cific organizational situations?

Answers

A: Contingency approach.

B: Behavioral approach.

C: Trait approach.

D: Organizational approach.

Answer Explanations

Answer (a) is correct. The contingency approach is a model of leadership that describes the relationship between leadership styles and specific organizational situations. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0073 According to path-goal theory of leadership, employee effort is not increased when the leader

Answers

A: Clarifies how employees can receive rewards.

B: Changes the rewards available to the employee.



C: Behavior fits the situation at hand.

D: Punishes employees.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Another contingency approach to leadership is called the path-goal theory. The leader’s responsibility is to increase subordinates’ motivation to attain personal and organizational goals. Motivation is increased through rewards and recognition, not by punishment. Coercive power punishes employees.

Question: V4C4-0074 Which of the following types of leaders clarify the role and task requirements of subordinates?

Answers

A: Transactional.

B: Charismatic.

C: Transformational.

D: Supportive.

Answer Explanations

Answer (a) is correct. Transactional leaders clarify the role and task requirements of subordinates, initiate structure, provide appropriate rewards, and try to be considerate to and meet the social needs of subordinates. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0075 Which of the following describes a leader who has the ability to motivate subordinates to transcend their expected performance?

Answers

A: Transactional.



B: Charismatic.

C: Directive.

D: Supportive.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The charismatic leader has the ability to inspire and motivate employees to do more than they would normally do, despite obstacles and personal sacrifice; in other words, this leader has the ability to motivate subordinates to transcend their expected performance. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0076 Charismatic leaders are often described as which of the following?

Answers

A: Less emotional than transactional leaders.

B: More predictable than transactional leaders.

C: Less predictable than transactional leaders.

D: More directive than transactional leaders.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Charismatic leaders tend to be less predictable than transactional leaders. They create an atmosphere of change, and they may be obsessed by visionary ideas that excite, stimulate, and drive other people to work hard. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0077 Which of the following is distinguished by his ability to bring about organizational change?



Answers

A: Transactional leader.

B: Participative leader.

C: Directive leader.

D: Transformational leader.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Transformational leaders are similar to charismatic leaders but are distinguished by their special ability to bring about innovation and change by recognizing followers’ needs and concerns, helping them look at old problems in new ways, and encouraging them to question the status quo. Transformational leaders create significant change in both followers and the organization.

Question: V4C4-0078 Which of the following works to fulfill subordinates’ needs and goals as well as to achieve the organization’s lar-ger mission?

Answers


B: Servant leader.

C: Charismatic leader.

D: Transformational leader.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Servant leaders operate on two levels: (1) for the fulfillment of their subordinates’ needs and goals and (2) for the realization of the larger purpose or mission of their organization. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0079 Which of the following leaders practice management by exception?

Answers

A: Transactional.

B: Transformational.

C: Trait.

D: Classic.

Answer Explanations

Answer (a) is correct. Transactional leaders monitor employees so they do the expected, that is, according to the plans, objectives, and goals. Transactional leaders operate on contingency reward, management by exception, and laissez-faire. Transformational leaders inspire employees to do the unexpected, above and beyond the plans. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0080 Which of the following leaders practice status quo?

Answers

A: Transactional.


C: Trait.

D: Classic.

Answer Explanations

Answer (a) is correct. Transactional leaders maintain the status quo (no change). This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0081 Which of the following leaders fosters creativity and growth?

Answers

A: Transactional.


C: Trait.

D: Classic.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Transformational leaders foster creativity and productive growth. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0082 Which of the following is an example of a leadership integrative model that ties everything together?

Answers


B: Transformational leader.

C: Servant leader.

D: Democratic leader.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The servant leader is an ethical person who puts others in the foreground. He or she is an instructive person and acts as an inspiring springboard. This leader brings all the leadership styles together. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0083 According to the basic leadership styles from the Ohio State model, a leader who devotes primary attention to get-ting the job done and secondary attention to personal concerns has the following dimensions:

Answers

A: High structure, low consideration.

B: Low structure, high consideration.

C: High structure, high consideration.

D: Low structure, low consideration.

Answer Explanations

Answer (a) is correct. There are two dimensions in the Ohio State model. One dimension is initiating structure, which is a leader’s effort to get things organized and get the job done. The second dimension is consideration (trust), which is the degree of trust, friendship, respect, and warmth that the leader extends to subordinates. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0084 Which of the following is consistent with initiating structure for leaders?

Answers

A: Task-oriented behavior.

B: Open communications.

C: Teamwork-oriented behavior.

D: People-oriented behavior.

Answer Explanations

Answer (a) is correct. Initiating structure is the extent to which the leader is task oriented and directs subordinate work activities toward goal attainment. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0085 The Michigan researchers used which of the following terms for leaders who established high performance goals and displayed supportive behavior toward subordinates?

Answers

A: Job-centered leaders.

B: Employee-centered leaders.

C: Initiating structure.

D: Consideration.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The Michigan researchers used the term employee-centered leaders for those who established high-performance goals and displayed supportive behavior toward subordinates. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0086 Which of the following are the two main dimensions of the Blake and Mouton’s leadership grid?

Answers

A: Concern for power and concern for authority.

B: Concern for structure and concern for strategy.

C: Concern for people and concern for production.

D: Concern for efforts and concern for rewards.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Blake and Mouton’s leadership grid contains two dimensions such as concern for people



and concern for production. Concern for people involves promoting friendship, helping coworkers get the job done, and attending to things that matter to people, like pay and working conditions. Concern for production involves a desire to achieve greater output, cost-effectiveness, and profits. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0087 According to the Blake and Mouton’s leadership grid, which of the following styles represents primary concern for people and secondary concern for production?

Answers

A: 1,9

B: 9,1

C: 9,9

D: 1,1

Answer Explanations

Answer (a) is correct. With 1,9 style, the primary concern is for people and the secondary concern is for production. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0088 The recommended management style from the Blake and Mouton’s Leadership Grid is which of the following?

Answers

A: 1,9

B: 9,1

C: 9,9

D: 1,1

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Team management (9,9) often is considered the most effective leadership style and is recommended for managers because organization members work together to accomplish common goals. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0089 According to the Blake and Mouton’s Leadership Grid, which of the following is a 1,9 management style?

Answers

A: Team management.

B: Country club management.

C: Middle of the road management.

D: Impoverished management.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Country club management (1,9) occurs when primary emphasis is given to people rather than to work outputs. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0090 According to the Blake and Mouton’s Leadership Grid, which of the following reflects a moderate amount of con-cern for both people and production?

Answers

A: Team management.



D: Impoverished management.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Middle of the road management (5,5) reflects a moderate amount of concern for both people and production. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0091 According to the Blake and Mouton’s Leadership Grid, which of the following occurs when efficiency in operations is the dominant orientation?

Answers

A: Team management.



D: Authority-compliance management.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Authority-compliance management (9,1) occurs when efficiency in operations is the dominant orientation.

Question: V4C4-0092 In managing the consequences of job performance, an employee’s behavior modification works only when there is a(n)

Answers

A: Relationship management.

B: Contingent relationship.

C: Direct extinction.



D: Immediate punishment.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Behavior modification works only when there is a contingent (if-then) relationship between a specific behavior and a given consequence. Positive and negative reinforcement, extinction, and punishment, which are the four types of managing consequences, entail the manipulation of the immediate or direct consequences of desired or undesired behavior. Relationship management deals with customer service. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0093 Which of the following employee performance reinforcement schedules is appropriate for new behavior?

Answers

A: Continuous.

B: Intermittent.

C: Positive.

D: Negative.

Answer Explanations

Answer (a) is correct. Continuous reinforcement occurs at every instance of a behavior that is rewarded. Intermittent reinforcement means rewarding some, but not all, instances of a behavior. Positive reinforcement encourages a specific behavior by immediately following it with a consequence the individual finds pleasing. Negative reinforcement encourages a specific behavior by immediately withdrawing something a particular person finds displeasing. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0094 Which of the following approaches would be good in improving corporate life for minority employees?

Answers



A: Mentoring.

B: Continuous reinforcement.

C: Affirmative action.

D: Emotional intelligence.

Answer Explanations

Answer (a) is correct. Mentoring is the ability to develop another person through tutoring, coaching, and guidance. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0095 Which of the following parallels the concept of a mentor?

Answers

A: Trainer.

B: Coach.

C: Master.

D: Servant.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Coaching is a career function of mentors. Mentor relationships average about five years. Career coaching and psychosocial counseling are two important functions fulfilled by mentors. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0096 A project is defined as a

Answers



A: Temporary endeavor.

B: Continuous endeavor.

C: Expensive endeavor.

D: Endless endeavor.

Answer Explanations

Answer (a) is correct. A project is defined as a temporary endeavor undertaken to achieve a particular objective, aim, or goal. Each project has a beginning date and an end date. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0097 The most important skill for setting priorities and managing time is

Answers

A: Learning to say no.

B: Establishing ABC priority system.

C: Following the 80/20 principle.

D: Performing the Pareto analysis.

Answer Explanations

Answer (a) is correct. Managers have competing demands placed on them. Establishing priorities and managing time are not easy. Managers should develop the skill of learning to say no to others who are adding more demands on them. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0098 Which of the following is the first stage of the project life cycle?

Answers



A: Termination.

B: Conceptualization.

C: Planning.

D: Execution.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The project life cycle has four stages of conceptualization, planning, execution, and termination. In the conceptualization stage, ideas are presented, discussed, and finalized. Project goals, budgets, and schedules are prepared. The project is just beginning to proceed. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0099 Budget demands are the highest in which of the following stages of the project life cycle?

Answers

A: Termination.

B: Conceptualization.

C: Planning.

D: Execution.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. In the execution stage of the project life cycle, budget demands are the highest because the project is being implemented. Pressure is put on the project team to complete the project on time and within the budget.

Question: V4C4-0100 Project-based organizations are becoming common today due to



Answers

A: Lack of middle management layer.

B: Need for quick response to customers.

C: Vertical organization structure.

D: Profitability goals.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Project-organizations are common today due to a need for quick response demanded by the customers. Decisions are made quickly leading to faster implementations. Cross-functional teams of people with different technical skills are brought together on a temporary basis to complete a specific project. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0101 Eliminating wasted activities, tasks, and steps is called

Answers

A: Job elimination.

B: Work simplification.

C: Job specification.

D: Work measurement.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Work simplification means reducing complexity, discontinuing unnecessary and burdensome procedures, and eliminating wasted activities, tasks, and work steps. Work measurement uses time and motion studies to estimate the time it takes to complete a task, step, or an activity. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0102 Which of the following is the least desirable skill of a project manager?

Answers

A: Leadership skill.

B: Technical skill.

C: Conflict resolution skill.

D: Negotiation skill.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Project managers should have extensive “people management skills,” which include leadership, communication, motivation, conflict resolution, and negotiation skills. Technical skills (hard skills such as engineering, science, and technology skills) are least important when compared to interpersonal skills (soft skills such as people management skills). This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0103 Establishing project priorities remains a(n)

Answers

A: Subjective process.

B: Objective process.

C: Centralized process.

D: Decentralized process.

Answer Explanations

Answer (a) is correct. Establishing project priorities remains a subjective process affected by organizational politics and value conflicts. The subjective process uses qualitative techniques while the objective process uses quantitative techniques. This answer is incorrect. Refer to the correct answer explanation.




Question: V4C4-0104 In the ABC priority system used in project time management, the “B” system deals with which of the following?

Answers

A: "Must do" objectives.

B: "Should do" objectives.

C: "Nice to do" objectives.

D: "Could do" objectives.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. In the ABC priority system used in project time management, the “A” system deals with “must do” objectives, which are critical to successful performance. The “B” system deals with “should do” objectives, which are necessary for improved performance. The “C” system deals with “nice to do” objectives, which are desirable for improved performance. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0105 In which of the following project organizational structures does each group or component concentrate on per-forming its own activities in support of the company’s business mission?

Answers

A: Matrix.

B: Functional.

C: Progressive.

D: Project.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. In the functional project organizational structure, groups consist of individuals who perform the same function, such as engineering or manufacturing, or have the same expertise or skills, such as electronic engineering or testing. Each functional group or component concentrates on performing its own activities in support of the company’s business mission. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0106 In which of the following project organizational structures does the project manager not have complete authority over the project team?

Answers

A: Matrix.

B: Functional.

C: Functional and matrix.

D: Project.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. In a functional project structure, the project manager does not have complete authority over the project team since the team members administratively work for their respective functional managers. In a matrix project structure, the project manager is responsible for achieving the project results while the functional manager is responsible for providing the resources needed to achieve the results. Under the matrix structure, the project manager is the intermediary between the company and the customer. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0107 In which of the following project organizational structures is the project manager responsible for the project re-sults while functional managers are responsible for providing the resources needed to achieve the results?

Answers

A: Matrix.



B: Functional.

C: Mixed-mode.

D: Project.

Answer Explanations

Answer (a) is correct. In a matrix-type project organizational structure, the project manager is responsible for the project results, while the functional managers are responsible for providing the resources needed to achieve the results. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0108 All of the work that must be done in order to satisfy the customer that the deliverables meet the requirements or acceptable criteria agreed upon at the onset of the project is called

Answers

A: Scope.

B: Plan.

C: Schedule.

D: Objective.

Answer Explanations

Answer (a) is correct. The scope of a project—also known as the project scope or the work scope—is all the work that must be done in order to satisfy the customer that the deliverables (the tangible product or items to be provided) meet the requirements or acceptance criteria agreed upon at the onset of the project. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0109 Ultimately, the responsibility of the project manager is to

Answers



A: Finish the project as quickly as possible.

B: Finish the project as cheaply as possible.

C: Make sure the customer is satisfied.

D: Make independent decisions.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Ultimately, the responsibility of the project manager is to make sure the customer is satisfied. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0110 Which of the following describes a hierarchical tree of network elements or end items that will be accomplished or produced by the project team during the project?

Answers

A: Work load structure.

B: Project breakdown diagram.

C: Work breakdown structure.

D: Project task distribution list.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A work breakdown structure is a hierarchical tree of work elements or items accomplished or produced by the project team during the project. The work breakdown structure usually identifies the organization or individual responsible for each work package. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0111



Which of the following measures actual progress of a project and compares it to planned progress on a timely and regular basis and taking corrective action immediately?

Answers

A: Project planning.

B: Work breakdown.

C: Project control.

D: Quality control.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The key to effective project control is measuring actual progress and comparing it to planned progress on a timely and regular basis and taking corrective action immediately. The project control process involves regularly gathering data on project performance, comparing actual performance to planned performance, and taking corrective actions if actual performance is behind planned performance. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0112 The project control process starts with establishing which of the following?

Answers

A: A baseline plan.

B: A work order form.

C: A schedule assignment.

D: A time-cost trade-off.

Answer Explanations

Answer (a) is correct. A baseline plan provides a roadmap showing how the project scope will be accomplished. When changes are agreed upon, a new baseline should be established and used as the benchmark against which actual project performance will be compared. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C4-0113 When modifying a project schedule, which of the following activities usually presents the opportunity for larger time reductions?

Answers

A: Shorter duration.

B: Longer duration.

C: Near term.

D: Future.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Corrective actions that will eliminate the negative slack from the project schedule must be identified. Activities that have longer duration estimates present the biggest opportunity for larger time reductions. In most cases, eliminating negative slack by reducing duration of activities will involve a trade-off in the form of an increase in costs or a reduction in scope. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0114 Which of the following trade-offs is used to incrementally reduce the project duration with the smallest increase in cost?

Answers

A: Schedule-quality.

B: Cost-production time.

C: Time-quality.

D: Time-cost.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. In the time–cost trade-off methodology, the project time can be reduced with an increase in cost.

Question: V4C4-0115 In project management, the two basic types of contracts include which of the following?

Answers

A: Flat price and cost analysis.

B: Fixed price and incremental cost.

C: Flat price and cost reimbursement.

D: Fixed price and cost reimbursement.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. There are basically two types of contracts: fixed-price and cost-reimbursement. The contract must state the terms by which the customer will make payments to the contractor.

Question: V4C4-0116 Which of the following contracts is most appropriate for projects that involve risk?

Answers

A: Fixed price.

B: Flat price.

C: Time and profit.

D: Cost reimbursement.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Cost reimbursement contracts are most appropriate for projects that involve risk. The customer agrees to pay the contractor for all actual costs incurred, regardless of the amount, plus some agreed-upon profit. This type of contract is high risk for the customer due to cost uncertainty.

Question: V4C4-0117 For a given project, the objective is usually defined in terms of scope, cost, and which of the following?

Answers

A: Plan.

B: Schedule.

C: Controls.

D: Tasks.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. For a project, the objective is usually defined in terms of scope, schedule, and cost. Schedule requires completing the work within budget by a certain time. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0118 In project management, each activity has two pairs of durations called

Answers

A: Normal and crash time.

B: Normal and budget time.

C: Actual and crash time.

D: Quantity and quality time.

Answer Explanations



Answer (a) is correct. In project management, each activity has two pairs of duration: normal time and crash time. The normal time is the estimated length of time required to perform an activity, according to the plan. The crash time is the shortest estimated length of time in which the activity can be completed. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0119 In project management, which of the following measures the cost efficiency with which the project is being per-formed?

Answers

A: Cost efficiency index.

B: Cost quality index.

C: Cost production index.

D: Cost performance index.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. The cost performance index is a measure of the cost efficiency with which the project is being performed. The formula for determining the index is cumulative earned value divided by cumulative actual cost.

Question: V4C4-0120 In project management, which of the following computes the difference between the cumulative earned value of the work performed and the cumulative actual cost?

Answers

A: Cost performance index.

B: Cost variance.

C: Budgeted costs.



D: Cost quality index.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The cost variance is the difference between the cumulative earned value of the work performed and the cumulative actual cost. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0121 In project management, the cost performance analysis should include identifying those work packages that have a negative cost variance or a cost performance index of less than which of the following?

Answers

A: 1.0

B: 1.5

C: 2.0

D: 2.5

Answer Explanations

Answer (a) is correct. A negative cost variance means that the work performed is not in keeping with the actual cost. It also means that there is a gap between the value of the work performed and the actual costs incurred. A cost performance index of less than 1.0 means that for every dollar actually expended, less than one dollar of earned value was received. When the index goes below 1.0 or gradually gets smaller, corrective action should be taken. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0122 Which of the following determines a project’s duration based on technological and resource contention constraints?

Answers



A: Critical parameters.

B: Critical chain.

C: Critical ratio.

D: Critical success factors.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. In the theory of constraints, critical chain is the longest route through a project network. It considers both technological and resource contention constraints in completing the project. When no resource contention exists, the critical chain would be the same as the critical path. The critical ratio is a job dispatching rule that calculates a priority index number by dividing the time to due date remaining by the expected elapsed time to finish the job. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0123 In project management, which of the following includes the total value, including overhead, of approved esti-mates for completed activities?

Answers

A: Earned value.

B: Critical value.

C: Planned value

D: Noncritical value.

Answer Explanations

Answer (a) is correct. Earned value is the total value, including overhead, of approved estimates for completed activities in a project. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C4-0124



Which of the following would be a long-range rather than a short-range planning topic?

Answers

A: Production scheduling.

B: Inventory policy.

C: Product quality.

D: Advertising budget.

Answer Explanations

Answer (a) is incorrect. This would seldom be a long-range topic. Answer (b) is incorrect. This would rarely be a long-range concern. Answer (c) is correct. This would be a long-range planning topic because it affects market positioning. Answer (d) is incorrect. This is certainly a concern, but not for long-range planning.

Question: V4C4-0125 The process of adding resources to shorten selected activity times on the critical path in project scheduling is called

Answers

A: Crashing.

B: The Delphi technique.

C: ABC analysis.

D: A branch-and-bound solution.

Answer Explanations

Answer (a) is correct. Crashing is the process of adding resources to shorten activity times on the critical path in project scheduling. Answer (b) is incorrect. The Delphi technique is a qualitative forecasting approach. Answer (c) is incorrect. ABC analysis is an inventory model. Answer (d) is incorrect. The branch-and-bound solution is an integer programming solution.

Question: V4C1-0001 Which of the following typically includes a search for strengths, weaknesses, opportunities, and threats (SWOT) that affect organizational performance?



Answers

A: Situational analysis.

B: Sensitivity analysis.

C: "What if" analysis.

D: External environmental analysis.

Answer Explanations

Answer (a) is correct. Situational analysis typically includes a search for strengths, weaknesses, opportunities, and threats (SWOT) that affect organizational performance. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0002 Where does the information about opportunities and threats come from for a company?

Answers

A: An analysis of the organization's internal environment.

B: A department by department study of the organization.

C: A scan of the external environments.

D: An analysis of employee grievances.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. While information about strengths and weaknesses of organization come from internal sources, information about opportunities and threats will come from external sources. The external sources can include competition, government, economy, and political, legal, demographic, and cultural changes. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C1-0003 Which of the following is not an element of stakeholder analysis?

Answers

A: Identifying stakeholders.

B: Prioritizing stakeholders.

C: Motivating stakeholders financially.

D: Assessing stakeholder needs.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Since stakeholders are already motivated financially, a company does not need to focus on them. After identifying, prioritizing, and assessing the needs of stakeholders, the company needs to integrate knowledge about stakeholders into the strategic management process. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0004 A corporate-level strategy is concerned with which of the following questions?

Answers

A: What business are we in?

B: How do we compete?

C: How do we support our chosen strategy?

D: Where do we market our products?

Answer Explanations

Answer (a) is correct. Corporate-level strategy pertains to the organization as a whole and the combination of business units and product lines that make up the corporate entity. It asks the question, what business are we in? This answer is incorrect. Refer to the correct answer explanation.




Question: V4C1-0005 A business-level strategy is concerned with which of the following questions?

Answers




D: Where do we market our products?

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Business-level strategy pertains to each business unit or product line. It focuses on how the business unit competes within its industry for customers. It asks the question how do we compete? This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0006 A functional-level strategy is concerned with which of the following questions?

Answers




D: What business do we buy?

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The question, how do we support our chosen strategy? concerns functional-level strategy. It pertains to the major functional departments within the business unit. It asks the question “how do we compete? This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0007 Which of the following strategies is used to implement the growth and competitive strategies of the firm?

Answers

A: Focus strategy.

B: Functional strategy.

C: Corporate strategy.

D: Generic strategy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Functional strategy includes marketing strategy, operations strategy, human resource strategy, information systems strategy, finance strategy, and research and development strategy. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0008 If a firm is decentralized and has a web of independent offices in each region with little or no formal hierarchy, which business-level structure is it likely to have?

Answers

A: Functional.

B: Project matrix.

C: Network.



D: Product/market.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The network is a “spider’s web” structure. It is very decentralized and organized around customer groups or geographical regions. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0009 Which business-level structure is based on inputs and outputs and works in a dynamic environment with strong internal technical and external market pressures?

Answers

A: Functional.

B: Project matrix.

C: Network.

D: Divisional.

Answer Explanations

Answer (a) is correct. A functional structure is organized around the inputs or activities that are required to produce products and services. It includes operations, marketing, finance, and others. It is oriented toward internal efficiency and exploits economies of scale and learning curve effects from focused activities. The structure is a centralized and specialized environment. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0010 What type of centralization is typically found in the project matrix structure?

Answers

A: Decentralized.



B: Very decentralized.

C: Very centralized.

D: Decentralized with sharing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. The project matrix structure is a hybrid structure that combines both elements of functional and product/market forms. It is most common in uncertain competitive environments. It is decentralized with sharing of information and resources.

Question: V4C1-0011 Which type of growth strategy is typically associated with firms that have a functional structure?

Answers

A: Market development.

B: Existing product development.

C: Market penetration.

D: New product development.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The functional structure can be effective in pursuing a market penetration strategy because the number of products and markets are limited and because the stakeholder requirements are stable over time. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0012 Which of the following is a disadvantage of the multidivisional structure?



Answers

A: Competition for corporate resources may create coordination difficulties.

B: Corporate-level management is freed from day-to-day issues.

C: Each business focuses its efforts on the needs of its particular stakeholders.

D: No duplication in organizational support functions such as accounting.

Answer Explanations

Answer (a) is correct. If an organization has a few businesses in its portfolio, management may choose a line-of-business or multidivisional structure, with each business existing as an autonomous unit. A disadvantage of multidivisional structure is that the structure makes resource sharing and cooperation difficult. Another disadvantage is that competition for corporate resources may create coordination difficulties among divisions. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0013 If an organization expects high operational synergies among a few highly related businesses and needs a great deal of coordination; the organization will probably choose which of the following structures?

Answers

A: Network.

B: Linked.

C: Corporate matrix.

D: Strategic business unit.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The corporate matrix structure is a way to achieve a high degree of coordination among several related businesses. This structure is used when (1) individual business units need to take advantage of resources, information, and technology sharing and/or (2) a balance is needed between pressure to decentralize business units closer to market trends and pressure to maintain centralized control to bring about economies of scope and shared learning.




Question: V4C1-0014 An organization that is broadly diversified, with a moderate need for coordination and groups of related businesses within each major unit, should most likely choose which of the following structures?

Answers

A: Network.

B: Multidivisional.

C: Transactional.

D: Strategic business unit.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Management may choose to form a strategic business unit (SBU) with each SBU incorporating a few closely related businesses. The SBU structure makes it possible for top management to keep track of many businesses at one time. It allows decentralization that is meaningful to local management so that the complexity will not overload the top management.

Question: V4C1-0015 Which of the following is the major disadvantage of a corporate matrix structure?

Answers

A: Flexibility.

B: Sharing of information.

C: Complexity.

D: Shared marketing.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The corporate matrix structure requires coordination among different internal stakeholders by forcing managers within related businesses to maintain close contact with each other. This adds complexity, which may interfere with its purpose. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0016 Which of the following is a strength of a concentration strategy?

Answers

A: Executives can develop in-depth knowledge of the business.

B: Industry maturity will rarely affect the firm.

C: Firms pursuing this strategy are rarely acquired by another firm.

D: Product obsolescence will not affect the firm.

Answer Explanations

Answer (a) is correct. The concentration strategy begins with a single or small group of products and services and a single market. A single business approach allows an organization to master one business and industry environment. This specialization allows top executives to obtain in-depth knowledge of the business and industry, which should reduce strategic mistakes. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0017 Which of the following is a weakness of a concentration strategy?

Answers

A: The organization cannot develop a distinctive competence.

B: The strategy is risky when the environment is unstable.

C: There is high ambiguity regarding strategic direction.



D: Organizational resources are severely strained.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Concentration strategies entail several risks, especially when the environment is unstable. Since the organization is dependent on one product or business area to sustain itself, change can dramatically reduce organizational performance. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0018 A competitive edge that cannot be easily or quickly copied by competitors in the short run is called a

Answers

A: Competitive parity.

B: Differentiated advantage.

C: Comparative advantage.

D: Sustainable competitive advantage.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. A sustainable competitive advantage is an advantage that is difficult to imitate by competitors in the short run and thus leads to higher-than-average organizational performance over a long time period.

Question: V4C1-0019 Primary activities of the value chain include which of the following?

Answers

A: Procurement.



B: Research and development.

C: Sales and marketing.

D: Human resource management.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The value chain divides organizational processes into distinct activities that create value for the customer. The primary activities include operations, sales and marketing, logistics (inbound and outbound), and service. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0020 Which of the following is not a primary activity of the value chain?

Answers

A: Procurement.

B: Operations.

C: Sales and marketing.

D: Service and inbound logistics.

Answer Explanations

Answer (a) is correct. Procurement is not a primary activity of the value chain. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0021 Support activities of the value chain include which of the following?

Answers



A: Warehousing.

B: Transportation.

C: Sales and installation.

D: Administration.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Support activities of the value chain include administration, human resource management, technology, and procurement.

Question: V4C1-0022 Support activities of the value chain include which of the following?

Answers

A: Logistics.

B: Procurement.

C: Operations.

D: Service.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Procurement of raw materials and parts are support activities of the value chain. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0023 All of the following are possible ways to develop a competitive advantage with value chain except:

Answers



A: Through activities that create value for the organization.

B: In the way internal activities are linked to the external environment.

C: In the way primary and support activities are combined.

D: In any of the primary and support activities.

Answer Explanations

Answer (a) is correct. Organizational activities should create value for the customer, not for the organization. An organization can develop a competitive advantage (1) in any of the primary or support activities, (2) in the way the primary and secondary activities are combined, or (3) in the way internal activities are linked to the external environment. The cumulative effect of these activities will determine organization’s strengths, weaknesses, and performance related to competitors. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0024 Which of the following can be defined as the combination of benefits received and costs paid by the customer?

Answers

A: Customer benefits.

B: Delivering value.

C: Cost-benefit trade-off.

D: Synergy and structure trade-off.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Delivering value to the customer should be at the heart of strategy. Value can be defined as the combination of benefits received and costs paid by the customer. Managers can help their companies create value by devising strategies that exploit core competencies and attain synergy. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C1-0025 If a firm sells business units that are not consistent with the strategic direction of the organization, it is involved in

Answers

A: Reorganization.

B: Downscoping.

C: Telescoping.

D: Refocusing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Downscoping involves reducing diversification through selling off nonessential businesses that are not related to the organization’s core competencies and capabilities. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0026 Which of the following restructuring actions is most likely to involve the divestiture of a business unit?

Answers

A: Leveraged buyout.

B: Downscoping.

C: Retrenchment.

D: Reorganization.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Downscoping involves refocusing corporate assets on distinctive core competencies.




Question: V4C1-0027 The acquisition of business units that are related to current product lines or that take the corporation into new business areas is referred to as

Answers

A: Retrenchment.

B: Diversification.

C: Liquidation.

D: Reorganization.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. External growth involves diversification, which means the acquisition of business units that are related to current product lines or that take the company into new business areas. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0028 When the organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businesses, it is called

Answers

A: Retrenchment.

B: Growth.

C: Outsourcing.

D: Leveraged buyout.

Answer Explanations



Answer (a) is correct. Retrenchment means that the organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businesses. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0029 Which of the following involves the selling of businesses that no longer seem central to the corporation?

Answers

A: Diversification.

B: Growth.

C: Synergy.

D: Divestiture.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Divestiture involves the selling off of businesses that no longer seem related to the corporation’s business.

Question: V4C1-0030 Business units that should be strongly considered for divestiture during restructuring include those with

Answers

A: High capital intensity.

B: Low operational fit.

C: Low to medium risk.

D: High research and development expenses.

Answer Explanations



This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Business units with low operational relatedness (fit) should be placed on the divestiture list. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0031 The best definition of a divestiture is that it is a

Answers

A: Sell-off.

B: Spin-off.

C: Reverse acquisition.

D: Refocusing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. In essence, a divestiture is a reverse acquisition. In a sell-off, a business unit is sold to another firm or, in the case of a leveraged buyout, to the business unit’s managers. With a spin-off, current shareholders are issued a proportional number of shares in the spun-off business. Refocusing may involve new acquisitions or new ventures to round out a corporate portfolio or add more strength in an area essential to corporate competencies. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0032 Which of the following is not part of Michael Porter’s Forces Model of industry competition?

Answers

A: Competitors.

B: Suppliers.

C: Unions.



D: Customers.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Industries refer to a group of organizations that compete directly with each other to win orders or sales in the marketplace. Michael Porter’s Forces Model of industry competition includes suppliers, customers, and industry competitors (existing, potential, and indirect). This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0033 Customers tend to exhibit a powerful force on competition in the industry if

Answers

A: There are a large number of customers that buy the product.

B: The customers are earning high profits or making a large income.

C: The sellers' products are highly differentiated.

D: Purchases customers make from the industry are large relative to the amount spent for items from other industries.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. According to Porter, customers tend to exhibit a powerful force on competition in an industry if the purchases customers make from the industry are large relative to the amount expended for items from other industries. Here customers will expend considerable effort to shop for the best price.

Question: V4C1-0034 Suppliers tend to exhibit greater power in the industry if

Answers

A: There are few suppliers of the raw materials, products, or services.



B: There are many substitutes for the product or service that suppliers sell.

C: Suppliers cannot integrate forward because there are so many.

D: The suppliers' products are undifferentiated and plentiful.

Answer Explanations

Answer (a) is correct. According to Porter, supplier power is greater when there are only a few suppliers available to supply the raw materials, products, or services. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0035 High levels of competition may be caused by

Answers

A: Rapid industry growth.

B: Low exit barriers.

C: A small number of competitors.

D: A lack of product differentiation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. According to Porter, overall profitability is most susceptible to negative pressure from competitive rivalry in industries when there is a lack of product differentiation. This puts a lot of pressure on prices and often leads to price-cutting strategies.

Question: V4C1-0036 Which of the following may lead a firm to conclude that an industry is attractive to enter?

Answers



A: Strong supplier power.

B: Strong customer power.

C: No close substitutes.

D: Many strong competitors.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. If organizations provide goods or services that are really substitutes for the goods and services provided by an industry, these organizations become indirect competitors. On the other hand, an industry is attractive to enter when there are no close substitutes for the goods and services. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0037 Any limit on asset redeployment from one line of business or industry to another is called a

Answers

A: Barrier to mobility.

B: Barrier to entry.

C: Barriers to exit.

D: Barrier to capacity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A barrier to exit is any restriction on the ability of incumbents to re-deploy assets from one industry or line of business to another. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0038 Barriers to entry are related to which of the following competitive forces?



Answers

A: Rivalry among competitors.

B: Potential new entrants.

C: Threat of substitute products.

D: Bargaining power of buyers.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Capital requirements and economies of scale are examples of two potential barriers to entry that can keep out new competitors. This relates to the competitive force of potential new entrants. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0039 Prospector firms

Answers

A: Pursue an offensive strategy.

B: Focus on preserving market share.

C: React to environmental situations.

D: Engage in no new product or market development.

Answer Explanations

Answer (a) is correct. Prospector organizations have a reputation for aggressively making things happen rather than waiting for them to happen. They pursue an offensive strategy. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0040



Defender firms

Answers

A: Pursue an offensive strategy.

B: Attempt to increase market share.

C: React to environmental situations.

D: Engage in no new product or market development.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Defender firms are expert at producing and marketing a few products in a narrowly defined market and do not engage in new product or market development.

Question: V4C1-0041 Which of the following firms pay attention to efficiency of current operations?

Answers

A: Defenders.

B: Prospectors.

C: Analyzers.

D: Reactors.

Answer Explanations

Answer (a) is correct. Defender firms pay attention to efficiency of current operations. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0042 Which of the following firms pay attention to searching for new market opportunities?



Answers

A: Defenders.

B: Prospectors.

C: Analyzers.

D: Reactors.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Prospector firms pay attention to searching for new market opportunities. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0043 A competitive advantage is sustainable when it is based on

Answers

A: Strong financial resources.

B: Physical assets.

C: A capability that is hard to imitate by competitors.

D: A product or service quality.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A sustainable competitive advantage is any advantage (capability) that is difficult to imitate by competitors in the short run, leading to higher-than-average organizational performance over a long time period. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0044



A core competency is not based on which of the following capabilities?

Answers

A: It is hard to imitate.

B: It is unique.

C: It can be applied to one business area.

D: It is valuable and sustainable.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A core competency or distinctive competence is one that is hard to imitate by a competitor; that is valuable, unique, and sustainable; and that can be applied in more than one business area. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0045 Which of the following is a business activity that an organization does especially well relative to its competition?

Answers

A: Strategy.

B: Synergy.

C: Cash cow.

D: Core competence.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. A company’s core competence is something the organization does especially well in comparison to its competitors. A core competence represents a competitive advantage because the company acquires expertise that competitors do not have.



Question: V4C1-0046 What is the primary reason that an organization should monitor the broad environment?

Answers

A: To anticipate concerns and trends.

B: To determine the firm's internal strengths.

C: To determine the firm's internal weaknesses.

D: To identify key employees or resources within the firm.

Answer Explanations

Answer (a) is correct. A single organization cannot influence major occurrences and patterns in the broad environment. All it can do is to anticipate concerns and trends. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0047 Which of the following is part of the broad environment?

Answers

A: Competitors.

B: Suppliers.

C: Technological trends.

D: Unions.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The broad environment consists of technological trends, political and legal forces, economic conditions, and sociocultural factors This answer is incorrect. Refer to the correct answer explanation.



Question: V4C1-0048 All of the following are true about environmental uncertainty except:

Answers

A: It makes managerial decision making more difficult.

B: Organizations derive most of their influence directly from the broad environment.

C: Political power influences the organization.

D: Economic power influences the organization.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Environmental uncertainty reduces a firm’s ability to predict with confidence the future state of its environment, such as demand, competitor actions, new regulation, the cost of supplies, or the availability of labor. Organizations derive most of their influence from external (broad) and internal environments This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0049 What should organizations do with stakeholders that have a large influence on environmental uncertainty?

Answers

A: Ignore them.

B: Partner with them.

C: Monitor them.

D: Fight them.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Stakeholders who are a high priority for partnerships are those that have a strong influence on the outcomes of the organization. They have too much to lose or gain.




Question: V4C1-0050 According to the theory of transaction cost economics, a market is likely to fail if

Answers

A: There are a large number of suppliers.

B: The future is highly uncertain.

C: All parties to the transaction have the same level of knowledge.

D: The firm's assets are used to develop products and services.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Transaction cost economics, which is the study of economic exchanges and their costs, provides a cost perspective on vertical integration that helps explain when vertical integration may be appropriate. A market failure occurs when transaction costs are high enough to encourage an organization to produce a good or service in-house instead of buying it from the open market. The market is likely to “fail” when the future is highly uncertain. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0051 Which of the following best describes the typical evolution of corporate-level strategy for a company?

Answers

A: Concentration, vertical integration, diversification, restructuring.

B: Restructuring, diversification, vertical integration, concentration.

C: Concentration, diversification, restructuring, vertical integration.

D: Horizontal integration, diversification, vertical integration, restructuring.

Answer Explanations



Answer (a) is correct. The four broad approaches to corporate strategy or its evolution are concentration, vertical integration, diversification, and restructuring. Horizontal integration involves the acquisition of an organization in the same line of business. It involves acquisition of capabilities, market segments, or product lines from outside rather than development of them internally. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0052 The set of decisions and actions used to formulate and implement strategies is known as

Answers

A: Strategy formulation.

B: Strategic planning.

C: Strategic management.

D: Strategy implementation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Strategic management is the set of decisions and actions used to formulate and implement strategies that will provide a completely superior fit between the organization and its environment so as to achieve organizational goals. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0053 Which of the following uses managerial tools to direct resources toward the achievement of strategic goals?

Answers


B: Strategy coordination.

C: Strategy implementation.



D: Strategic control.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Strategy implementation is the use of managerial and organizational tools to direct resources toward accomplishing strategic results. Strategy implementation is the administration, coordination, and execution of the strategic plan. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0054 The planning and decision making that lead to the establishment of the organization’s goals and of a specific strategic plan is known as

Answers


B: Strategy coordination.

C: Strategy implementation.

D: Strategic control.

Answer Explanations

Answer (a) is correct. Strategy formulation includes the planning and decision-making that lead to the establishment of the firm’s goals and the development of a specific strategic plan. Strategy formulation may include assessing the external environment and internal problems and integrating the results into goals and strategy. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0055 Which of the following are the action steps by which an organization intends to attain its overall goals?

Answers

A: Tactical goals.



B: Operational goals.

C: Tactical plans.

D: Strategic plans.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Strategic plans define the action steps by which a company intends to attain strategic goals. Broad statements describing where the organization wants to be in the future are called strategic goals. The strategic plan is the blueprint that defines the organizational activities and resource allocations required for meeting these targets. Its purpose is to turn organizational goals into realities within the prescribed time periods.

Question: V4C1-0056 Goals that define the outcomes that major divisions and departments must achieve in order for the organization to reach its overall goals are called

Answers

A: Tactical goals.

B: Operational goals.

C: Divisional goals.

D: Strategic goals.

Answer Explanations

Answer (a) is correct. The results that major divisions and departments within an organization intended to achieve are defined as tactical goals. These goals apply to middle management and describe what major subunits must do in order for the organization to achieve its overall goals. The specific results expected from departments, work groups, and individuals are the operational goals. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0057 Which of the following is the correct sequence of organizational goals from bottom-up viewpoint?



Answers

A: Operational, strategic, tactical goals.

B: Tactical, operational, strategic goals.

C: Strategic, tactical, operational goals.

D: Operational, tactical, strategic goals.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Operational goals lead to the achievement of tactical goals, which in turn lead to the attainment of strategic goals. Strategic goals are traditionally considered the responsibility of higher-level management, tactical goals that of middle management, and operational goals that of the lower-level management (first-line supervisors and workers).

Question: V4C1-0058 Lower-level goals of an organization should lead to the achievement of higher-level goals. This is called

Answers

A: A linking pin theory.

B: A value-added chain.

C: A means-end chain.

D: An end-means chain.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Effectively designed organizational goals fit into a hierarchy; that is, the achievement of goals at low levels permits the attainment of high-level goals. This is called a means-end chain because low-level goals lead to the accomplishment of high-level goals. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C1-0059 All of the following are characteristics of effective goal setting in an organization except:

Answers

A: Goals should be challenging but realistic.

B: Goals should be set for every aspect of employee behavior.

C: Goals should be specific and measurable.

D: Goals should cover key result areas.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. It is neither necessary nor practical to set goals for every aspect of employee behavior. Goals should be specific and measurable, cover key result areas, be challenging but realistic, have a defined time period, and be linked to rewards. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0060 At which of the following stages of vertical integration does product branding become very important?

Answers

A: Raw material extraction.

B: Primary manufacturing.

C: Final manufacturing.

D: Wholesaling and/or retailing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The five stages of industry supply chain for manufacturing firms include raw material extraction, primary manufacturing, final manufacturing, wholesaling, and retailing. At the final manufacturing stage, product branding becomes very important since consumers associate brand names with quality, service, and



reliability. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0061 Some products bypass which of the following stages of vertical integration?

Answers

A: Raw material extraction.

B: Primary manufacturing.

C: Final manufacturing.

D: Wholesaling and/or retailing.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Some products bypass the wholesaling and/or retailing stages due to direct sales by the manufacturer to customers.

Question: V4C1-0062 What is the major intention of vertical integration strategy?

Answers

A: Total control of a product from concept to customers.

B: Increased control over the quality of suppliers.

C: Greater opportunity for product differentiation.

D: Increased control over the way a product is marketed.

Answer Explanations

Answer (a) is correct. Vertical integration is the extent to which a firm is involved in several stages of the industry supply chain. Although the other three choices are the possible reasons for vertical integration, total control of a product from concept to customers is the major intention.




Question: V4C1-0063 Which of the following is a disadvantage of vertical integration?

Answers

A: Administrative costs.

B: Selling costs.

C: Research and development costs.

D: Production costs.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Research revealed that vertical integration may be associated with reduced administrative, selling, and research and development costs, but higher production costs. The reason for the higher production costs may be that internal suppliers have a guaranteed customer and that they have no incentive to keep their costs down and be competitive.

Question: V4C1-0064 A firm that can master one stage of the industry supply chain will not necessarily excel at other stages. For this reason, many firms avoid which of the following strategies?

Answers

A: Vertical integration.

B: Diversification.

C: Restructuring.

D: Horizontal integration.

Answer Explanations



Answer (a) is correct. Vertical integration often requires substantially different skills than those currently possessed by the firm. For this reason, many firms avoid vertical integration and move directly into some of form of diversification. Horizontal integration involves the acquisition of an organization in the same line of business. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0065 Which of the following diversification strategies places significant demands on corporate-level executives?

Answers

A: Related diversification.

B: Unrelated diversification.

C: Tangible-relatedness diversification.

D: Intangible-relatedness diversification.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Large, unrelated diversified firms are called conglomerates since they are involved in a conglomeration of unrelated businesses. Research has demonstrated that most, but not all, unrelated firms have lower profitability than firm pursuing other corporate-level strategies. There is also some evidence that unrelated diversification is associated with higher levels of risk than other strategies. Unrelated diversification places significant demands on corporate-level executives due to increased complexity and technological changes taking place across industries. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0066 From a cost leadership viewpoint, true economies of scale are often confused with increases in which of the fol-lowing?

Answers

A: Economies of scope.

B: Throughput.



C: Diseconomies of scale.

D: Diseconomies of scope.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Cost advantages lead to economies of scale, which is often confused with increases in the throughput of a manufacturing plant. True economies of scale are cost advantages associated with larger-sized facilities rather than with increased volume (throughput) through an existing facility. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0067 All of the following are factors supporting a low-cost strategy except:

Answers

A: High-capacity utilization.

B: Economies of scope.

C: Technological advances.

D: Learning curve effects.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Firms pursuing a low-cost strategy will typically employ one or more of the following factors to create their low-cost positions. These factors include (1) high-capacity utilization, (2) economies of scale, (3) technological advances, or (4) learning curve or experience curve effects. Economies of scope refer to a cost advantage spread over a wide variety of products or functions This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0068 Strategic fit occurs when I. Two organizations are strong in the same areas of research and development. II. Two organizations are weak in the same areas of marketing.



III. One organization is strong in research and development but weak in marketing. IV. One organization is weak in research and development but strong in marketing.

Answers

A: I only.

B: II and IV.

C: I and III.

D: III and IV.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Two types of fit are required: strategic fit and organizational fit. Strategic fit refers to the effective matching of strategic organizational capabilities. This means, if one organization is weak in one area the other organization must be strong in other area.

Question: V4C1-0069 Which of the following is the best statement about organizational fit?

Answers

A: It facilitates resource sharing.

B: It fosters communication.

C: It transfers knowledge and skills.

D: It makes organizations compatible.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Organizational fit makes organizations compatible, which facilitates resource sharing, communication, and transference of knowledge and skills.



Question: V4C1-0070 When two organizations have similar management processes, cultures, systems, and structures, it is called a(n)

Answers

A: Strategic fit.

B: Organizational fit.

C: Tangible relatedness.

D: Intangible relatedness.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Organizational fit occurs when two organizations have similar management processes, culture, systems, and structures. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0071 Market penetration entails which of the following?

Answers

A: Combining vertical integration with horizontal integration.

B: Increasing market share though advertising, promotions, or increased sales effort.

C: Forming a strategic alliance with a firm in a new business.

D: Acquiring an organization in the same line of business.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. By investing its resources internally, a business can pursue market penetration, market development, or product/service development. Market penetration entails investing in advertising, capacity expansion, and/or the sales force with the intent of increasing market share in the current business. This strategy requires no change in the scope of the organization.




Question: V4C1-0072 Market development entails which of the following?

Answers

A: Seeking new market segments or new applications for existing products.

B: Modifying existing products to create new market segments.

C: Forming a strategic alliance with a firm in a new business.

D: Acquiring an organization in the same line of business.

Answer Explanations

Answer (a) is correct. In market development, the organization seeks new market segments, or product application development, which involves creating new application of its products. Both of these approaches require a broadened definition of the markets or functions served. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0073 A firm pursuing market development would likely increase investments in

Answers

A: New product development.

B: Basic research and development.

C: Product application development.

D: A new sales force.

Answer Explanations




This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. To support market development, firms may need to invest in market research, new marketing approaches, and a new sales force.

Question: V4C1-0074 Which of the following organizations is most likely to actively seek growth?

Answers

A: Defender firms.

B: Reactor firms.

C: Prospector firms.

D: Analyzer firms.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Prospector firms actively seek new market opportunities and are willing to take risks. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0075 Firms often remain in a low-growth industry in which efforts to increase sales cost more than they are worth if the industry has high

Answers

A: Exit barriers.

B: Entry barriers.

C: Built-in barriers.

D: Built-on barriers.

Answer Explanations

Answer (a) is correct. There are many situations in which investing for the objective of growth is ineffective. For example, a firm may find it in a mature, declining, or rigidly segmented market in which efforts to increase sales



would cost more than they are worth. This situation is typical of industries with low profits, no growth, and high exit barriers. These barriers exist when the capital equipment and skills an organization possesses are not applicable to other businesses. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0076 A company that pursues a cost leadership strategy

Answers

A: Always has the lowest price.

B: Typically benefits from economies of scale.

C: Is more interested in quality than quantity.

D: Typically benefits from economies of scope.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Economies of scale results when production costs per unit are less in a large-size facility than in a small-size facility. Here, scale refers to the size of a facility. Economies of scope refer to spreading of costs over a wide variety of products or functions This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0077 Which of the following is an advantage of pursuing cost leadership?

Answers

A: Loss of sales does not reduce economies of scale benefits.

B: Firms invest heavily in differentiating their products.

C: A firm may charge the same price as its competitors but make a higher profit.

D: Sales always increase with increasing amount of output due to lower costs.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. If an organization is able to achieve the lowest cost but charges a price similar to that of competitors, it will still make higher profits. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0078 A best-cost strategy is similar to which of the following generic business strategies?

Answers

A: Differentiation combined with cost leadership.

B: Differentiation focus.

C: Cost leadership.

D: Cost focus.

Answer Explanations

Answer (a) is correct. The best-cost strategy is the middle-ground strategy in that it provides the most reasonable trade-off between low cost and differentiating features This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0079 Which of the following strategies can be profitable for an organization when customers are loyal and willing to pay high prices for its products or services?

Answers

A: Focus.

B: Internal growth.

C: Cost leadership.



D: Differentiation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. The differentiation strategy involves an attempt to distinguish the firm’s products or services from others in the industry. The differentiation strategy can be profitable because customers are loyal and will pay high prices for the products or services.

Question: V4C1-0080 Which of the following strategies involve seeking efficient facilities, cutting costs, and using tight cost controls to be more efficient than competitors?

Answers

A: Focus.

B: Internal growth.

C: Cost leadership.

D: Differentiation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. With a cost leadership strategy, the organization aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls to produce products more efficiently than competitors. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0081 Focus strategies, in general, are based on which of the following?

Answers

A: Focusing on low cost strategy.

B: Meeting the needs of specific customers better than competitors.



C: Charging the highest price possible.

D: Serving a broad market base.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Firms pursuing focus strategies have to be able to identify their target market segment and both assess and meet the needs and desires of buyers in that segment better than any other competitor. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0082 The influence of potential competitors on industry competition is determined primarily by

Answers

A: Buyer power.

B: Supplier power.

C: Strength of entry barriers.

D: Strength of exit barriers.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. New entrants increase competitiveness in an industry, which may drive down prices and profits. Forces that keep new entrants out, providing a level of protection for existing competitors, are called entry barriers. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0083 A strategic control system helps managers to assess the relevance of the organization’s strategy to

Answers



A: Its competitors' strategies

B: Its profitability.

C: Its progress in the accomplishment of its goals.

D: The needs of its employees.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. A strategic control system supports managers in assessing the relevance of the organization’s strategy to its progress in the accomplishment of its goals, and when discrepancies exist, to support areas needing attention and corrective actions. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0084 Strategic management process does not include which of the following?

Answers

A: Production scheduling.

B: Analysis of the environment.

C: Formulation of strategies.

D: Implementation of strategies.

Answer Explanations

Answer (a) is correct. The strategic management process includes analysis of the environment, formulation of strategies, establishment of strategic direction, implementation of strategies, and strategic restructuring. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0085 Strategy formulation involves which of the following?



Answers

A: Corporate-level, business-level, and division-level strategy formulation.

B: Functional-level, employee-level, and customer-level strategy formulation.

C: Corporate-level, business-level, and functional-level strategy formulation.

D: Plant-level, office-level, and warehouse-level strategy formulation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Strategy formulation involves specific strategies at corporate-level, business-level, and functional-level of a company. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0086 Regarding strategy implementation and strategic control

Answers

A: Strategy implementation is more important than strategic control.

B: Strategy implementation refers to the details of strategy execution whereas strategic control refers to ongoing evaluation of and adjustments to strategy.

C: Strategic control is more important than strategy implementation.

D: Strategy implementation refers primarily to domain definition whereas strategic control refers primarily to domain navigation.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Strategy implementation refers to the details of strategy execution whereas strategic control refers to ongoing evaluation of and adjustments to strategy. Strategy implementation is performed through functional-level, business-level, and corporate-level structures. Strategic control systems include feedback, concurrent, and feed forward controls This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C1-0087 What is the most logical relationship between a sustainable competitive advantage and an organizational strength?

Answers

A: A sustainable competitive advantage is a strength that is difficult for competitors to imitate.

B: A strength cannot be easily duplicated while a sustainable competitive advantage can be easily copied.

C: Every strength leads to a sustainable competitive advantage.

D: Every sustainable competitive advantage leads to strength.

Answer Explanations

Answer (a) is correct. Strengths are firm resources and capabilities that can lead to a competitive advantage. Opportunities allow a firm to take advantage of an organization’s strengths. A firm will have a sustainable competitive advantage (1) if a resource that a firm possesses allows the firm to take advantage of opportunities or neutralizes threats, (2) if only a small number of firms possess it, and (3) if it is costly or impossible to imitate. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0088 After three years of steadily decreasing profits in spite of increased sales and a growing economy, which of the following is the preferred course of action for a chief executive officer to take?

Answers

A: Set a turnaround goal of significantly increasing profits within two months.

B: Reduce staff by 10% in every unit.

C: Reduce staff in the non-value-adding functions by 20%.

D: Encourage innovation at all levels and use an early retirement program to reduce staff size.

Answer Explanations

Answer (a) is incorrect. This response illustrates two of the characteristics of organizational decline: increased centralization of decision-making and lack of long-term planning. The exclusive emphasis on short-term results is likely to be counter-productive.



Answer (b) is incorrect. Another characteristic of organizational decline is nonprioritized cuts. Downsizing, by itself, rarely turns a company around. Answer (c) is incorrect. This is too crude a method of prioritizing cuts. Reducing staff disproportionately in control functions could have disastrous consequences. Answer (d) is correct. This is a long-term solution, which contains the elements needed to counter organizational decline.

Question: V4C1-0089 How business units and product lines fit together in a logical way is the essence of

Answers

A: Business-level strategy.

B: Portfolio strategy.

C: Competitive strategy.

D: Financial strategy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Portfolio strategy pertains to the mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage for the corporation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0090 What are the two axes of the Boston Consulting Group Matrix?

Answers

A: Stars and cash cows.

B: Growth rates and market share.

C: Profitability and growth rates.

D: Growth rates and cash flow.



Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. The two axes in the Boston Consulting Group Matrix include growth rates and market share. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0091 In the Boston Consulting Group Matrix, cash cows have

Answers

A: High growth rates and low market share.

B: Low growth rates and high market share.

C: Low growth rates and low market share.

D: High growth rates and high market share.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Cash cows have low growth rates and high market share. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0092 In the Boston Consulting Group Matrix, stars have

Answers







Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Stars have high growth rates and high market share.

Question: V4C1-0093 In the Boston Consulting Group Matrix, the question mark has which of the following?

Answers





Answer Explanations

Answer (a) is correct. The question mark has high growth rates and low market share. It exists in a new, rapidly growing industry but has only a small market share. The question mark is risky; it could become a star, or it could fail. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0094 Which of these is true about the dog division in the Boston Consulting Group Matrix?

Answers







Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The dog division is a poor performer. It has a low market share in a low growth market. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0095 In the Boston Consulting Group Matrix, market share is defined as the ratio of

Answers

A: The smallest business unit's size to the size of its smallest competitor.

B: A firm's growth rate to its industry growth rate.

C: A firm's profits to its industry's average profits.

D: The business unit's size to the size of its largest competitor.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. The market share is calculated as the ratio of the business unit’s size to the size of its largest competitor.

Question: V4C1-0096 The General Electric Business Screen employs which of the following? I. Industry attractiveness II. Competitive strengths III. Vertical integration IV. Horizontal integration

Answers

A: I and II.

B: III only.



C: IV only.

D: III and IV.

Answer Explanations

Answer (a) is correct. The General Electric Business Screen employs measures of industry attractiveness and competitive strengths that are defined by the organization. The model is flexible enough to accommodate a wide variety of indicators of industry attractiveness and competitive strengths. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0097 Which of the following statements is true during the growth stage of the product life cycle?

Answers

A: Sales start a long-term decline as substitute products offer superior sets of benefits.

B: There is rapidly increasing market demand and new competitors are entering the market.

C: A few early adopters try the product, generating sales that are slowly growing.

D: The market is saturated because the vast majority of customers have become regular product purchasers.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. During the growth stage of the product life cycle, there is rapidly increasing market demand and new competitors entering the market This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0098 The mature stage of the product life cycle is characterized by

Answers

A: A saturated market because the vast majority have become regular product purchasers.



B: No market because no one is now purchasing the product.

C: A few early adopters trying the product, generating sales that are slowly growing.

D: Sales that begin a long-term decline as substitute products offer superior sets of benefits.

Answer Explanations

Answer (a) is correct. The mature stage of the product life cycle is characterized by a saturated market because the vast majority of customers have become regular product purchasers. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0099 Which of the following statements is true during the decline stage of the product life cycle?

Answers

A: The market is saturated because the vast majority of customers have become regular product purchasers.

B: There is a constant demand as replacement sales take place.

C: A few early adopters try the product, generating sales that are slowly growing.

D: Sales start a long-term decline as substitute products offer superior sets of benefits.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. During the decline stage of the product life cycle, sales start a long-term decline as substitute products offer superior sets of benefits.

Question: V4C1-0100 Which of the following must be adapted to meet the special opportunities and challenges of each stage of the product life cycle?

Answers



A: The project leader must be appointed.

B: The general management structure must be in place.

C: The marketing strategy and tactics must be in place.

D: The manufacturing strategy must be in place.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. The marketing strategy and tactics must be in place to meet the special opportunities and challenges of each stage of the product life cycle. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0101 Customers in which of the following phases of the product life cycle are called laggards?

Answers

A: Introduction.

B: Growth.

C: Maturity.

D: Decline.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Innovators and early adopters are those customers who are willing to take more risk, buy the product shortly after introduction. During growth phase, product purchase begins to spread to the early majority of the mass market, with full penetration and adoption by the late majority occurring primarily in the maturity phase. Near the product’s decline, only laggards are left purchasing the product.

Question: V4C1-0102 Few competitors exist in which of the following phase of the product life cycle?



Answers

A: Introduction.

B: Growth.

C: Maturity.

D: Decline.

Answer Explanations

Answer (a) is correct. In the introduction phase of the product life cycle, few competitors exist, growing number in the growth phase, many rivals in the maturity phases, and declining number in the decline phase This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0103 Negative cash flows occur in which of the following phases of the product life cycle?

Answers

A: Introduction.

B: Growth.

C: Maturity.

D: Decline.

Answer Explanations

Answer (a) is correct. Negative cash flow occurs in the introduction phase, is moderate in the growth phase, high in the maturity stage, and low in the decline phase. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0104 The strategic focus of improving productivity is practiced in which of the following phases of the product life cy-cle?



Answers

A: Introduction.

B: Growth.

C: Maturity.

D: Decline.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. Tight cost controls and improving productivity and efficiency are important in the decline phase of the product life cycle.

Question: V4C1-0105 Brand loyalty is emphasized in which of the following phases of the product life cycle?

Answers

A: Introduction.

B: Growth.

C: Maturity.

D: Decline.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Brand loyalty is emphasized in the maturity phase, product awareness in the introductory phase, brand preference in the growth phase, and selective emphasis in the decline phase. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0106 A choice between skimming and penetration pricing strategies is most likely to be made in which of the following



stages of the product life cycle?

Answers

A: Mature.

B: Introductory.

C: Growth.

D: Decline.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. In the introductory stage, paying attention to costs is important, and the firm may choose to pursue a skimming or penetration pricing strategy. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0107 Stable, competitive prices, and price wars are both common in which of the following stages of the product life cycle?

Answers

A: Mature.

B: Introductory.

C: Growth.

D: Decline.

Answer Explanations

Answer (a) is correct. During the mature stage, stable, competitive prices, and price wars are common. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0108



Prices are kept as high as possible before harvesting in which of the following stages of the product life cycle?

Answers

A: Mature.

B: Introductory.

C: Growth.

D: Decline.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. In the decline stage, the firm should try to keep prices up if the decision has been made to harvest the brand.

Question: V4C1-0109 Which of the following statements is true during the introduction stage of the product life cycle?

Answers

A: Demand for a product is fairly stable.

B: Firms have an opportunity to create barriers to entry.

C: Producers are generally highly profitable.

D: First mover advantages are unimportant.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. Firms have an opportunity to create barriers to entry during the introduction stage of the product life cycle. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0110



Towards the end of the growth stage of the product life cycle

Answers

A: Demand for a product falls.

B: Entry barriers play little or no role.

C: A competitive stakeout usually occurs.

D: Differentiation is not possible.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (c) is correct. Toward the end of the growth stage of the product life cycle, a competitive stakeout usually occurs. During this stage, demand greatly increases, which often attracts new competitors (competitive stakeout). The company is faced with the opposing forces of growing demand, yet increasing competition. This answer is incorrect. Refer to the correct answer explanation.

Question: V4C1-0111 A competitive shakeout occurs in which of the following stages of the product life cycle?

Answers

A: Growth.

B: Maturity.

C: Decline.

D: Commodity.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. Answer (b) is correct. During the maturity stage of the product life cycle, slowing of growth can lead to a competitive shakeout of weaker producers, resulting in fewer competitors. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



Question: V4C1-0112 Which of the following statements is true during the maturity stage of the product life cycle?

Answers

A: Product differentiation becomes increasingly easier.

B: First mover advantages are commonly available.

C: Firms have an opportunity to create entry barriers.

D: High-volume production tends to dominate manufacturing strategy.

Answer Explanations

This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. Answer (d) is correct. During the maturity stage of the product life cycle, high volume production tends to dominate manufacturing strategy.

Question: V4C1-0113 Which of the following statements is true during the decline stage of the product life cycle?

Answers

A: Tight cost controls leading to efficiency are essential.

B: Products are highly differentiated.

C: New entrants are common.

D: Competition is no longer based on price.

Answer Explanations

Answer (a) is correct. During the decline stage of the product life cycle, tight cost controls and efficiency improvements are needed as part of marketing tactics. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation. This answer is incorrect. Refer to the correct answer explanation.



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