1. When a local hospital ran into a funding problem when it tried to build a new state-of-the-art
pediatric unit, it asked a group of physicians, hospital volunteers, and administrative staff to
develop and implement a plan to raise the necessary money. This group of people with
complementary skills formed a(n) ____.
a. semi-structured team
b. autonomous unit
c. work team
d. functional department
e. venture team
2. Allen-Edmonds is keeping its shoe manufacturing business in the United States by investing in
new machinery and creating new processes. It's a gamble and the outcome is uncertain. The
president of the company is hoping a million-dollar refitting will save 5 percent on each shoe; he
could save 60 percent tomorrow if he moved his manufacturing to China. Staying here means
average wages of $15 per hour plus benefits, as opposed to $100 per week if the company moved.
To cut costs and improve efficiency, the company's old assembly line is being replaced by a
system of employees working in groups, with each person doing several jobs, and each trained to
do the others' tasks. Allen-Edmonds is using ____.
a. semi-structured teams
b. ad hoc committees
c. work teams
d. functional departments
e. venture teams
3. Which of the following statements describe an advantage teams have over individuals in the
a. Teams can identify problems more efficiently and more quickly.
b. Teams are able to view problems from multiple perspectives.
c. Teams generate more commitment to making the decisions work.
d. Teams generate more alternative solutions.
e. All of these describe advantages teams have over individuals in the decision-making
4. In the autonomy continuum (which shows how five kinds of teams differ in terms of autonomy),
the correct sequence, from low team autonomy to high team autonomy, is ____.
a. employee involvement teams, traditional work groups, semi-autonomous work groups,
self-managing teams, and self-designing teams
b. traditional work groups, employee involvement teams, self-managing teams, semi-
autonomous work groups, and self-designing teams
c. traditional work groups, employee involvement teams, self-designing teams, and self-
d. traditional work groups, employee involvement teams, semi-autonomous work groups,
self-managing teams, and self-designing teams
e. employer-mandated teams, traditional work groups, employee involvement teams, project
teams, and self-managing teams
5. Boeing's operation in Macon, Georgia, was named one of the 10 best manufacturing plants in
North America by IndustryWeek magazine. The company maintains an employee involvement
team to track the plant's goals and performance metrics. This team ____.
a. determines who belongs to the team
b. provides advice to management concerning areas that needed change or improvements
c. has the authority to solve problems related to marketing and manufacturing issues
d. controls all of the major production tasks at Boeing
e. does none of these
6. Which of the following statements about semi-autonomous work groups is true?
a. Semi-autonomous work groups are typically not cross-trained.
b. Semi-autonomous work groups have low team autonomy.
c. Semi-autonomous work groups can control and change the design of the team.
d. Semi-autonomous work groups have the authority to make decisions and solve problems
related to the major tasks of producing a good or service.
e. Semi-autonomous work groups are accurately described by none of these.
7. According to the U.S. Department of Transportation, the construction of tunnels is one the
greatest challenges encountered during road construction. The technique of tunneling has not kept
pace with the development of other technical fields. The USDOT has created a national team of
tunnel experts to develop road tunnel engineering principles and maintenance practices in the
United States through the use of telecommunications and information technology. This group of
tunnel experts will comprise a(n) ____.
a. self-directed team
b. normative team
c. virtual team
d. multifunctional team
e. ad hoc team
8. E-Lab (the "E" stands for experience) has project teams perform field research for its clients.
Project teams at E-Lab have designed a new over-the-counter cold medicine by studying the
process of how people get sick; they have helped create a new station wagon for a major
carmaker; and they have helped backpack maker JanSport to design a completely new way of
displaying its products in sporting goods stores. You can expect E-Lab’s project teams to be
a. composed of employees from different functional areas
b. created to complete specific, one-time projects in a limited time
c. led by a project manager
d. flexible in their ability to move to another project
e. all of these
9. Which of the following statements about the importance of communication is true?
a. Many of the basic management processes cannot be performed without effective
b. Oral communication is the most important skill for college graduates who are entering the
c. Poor communication skill is the single most important reason that people do not advance
in their careers.
d. Communication is especially important for top managers.
e. All of these statements about the importance of communication are true.
10. Marathon runner Mariah Li noticed the San Diego Zoo was prohibiting people in motorized
wheelchairs from viewing the zoo's baby panda and saw nothing wrong with this policy. Tully
Smythe, who is wheelchair-bound, saw the notice and felt he was being discriminated against
because he could not use his wheelchair to access the panda site. This is an example of ____.
a. selective perception
c. faulty closure
d. selective retention
e. defensive biases
11. Which of the following statements about informal communication in organizations is true?
a. Informal communication follows the same channels as formal communication does.
b. Informal communication channels cannot be managed.
c. Information carried through informal communication channels is estimated to be only
about 30 percent accurate.
d. The best management strategy to controlling informal communication is to withhold
information they wish to keep from employees.
e. None of these statements about informal communication in organizations is true.
12. Feedback is more likely to be destructive than constructive when it is ____.
c. influenced by situational contexts
e. focused on specific behaviors
13. The last step of empathetic listening requires managers to ____.
a. ask for clarification
b. summarize what the speaker has said
c. respond with feelings and then facts
d. engage in problem identification
e. paraphrase what has been said
14. An Industry Week survey of 845 line managers from diverse organizations found that only 29
percent of first-level supervisors thought that their organization encouraged employees to express
opinions openly. This means that the overwhelming majority of these supervisors engage in ____.
a. organizational silence
b. organizational filtering
c. negative grapevining
d. lower level filtering
e. arrested communication
JetBlue Airways, which has been in business since February 2000, has had tremendous
success by offering direct flights, low fares, wider leather seats, flat screen TVs with live digital
satellite channels, one-way tickets, no requirement for Saturday night stayovers, and great
customer service. Modeled after Southwest Airlines, JetBlue has the lowest costs in the industry
at 6.4 cents per passenger mile. But as its new planes age, its costs will rise, as will the wages it
pays its pilots, flight attendants, and mechanics. With only two successful new airlines in the last
25 years, the challenge for JetBlue will be to continue its success as it ambitiously grows from 73
planes and 6,500 employees to 290 planes and 25,000 employees over the next five years. Key to
meeting those goals is solid communication.
As companies like JetBlue grow, in addition to being good one-on-one communicators,
managers must also learn how to communicate effectively with a larger number of people
throughout an organization. This is why founder and CEO David Neeleman and President Dave
Barger speak with every new “class” of employees as they come through JetBlue’s structured
orientation process. On the first day of orientation, Barger teaches the new hires about JetBlue’s
brand (direct flights, low fares, wider leather seats, flat screen TVs, etc.), while Neeleman shows
them how JetBlue earns its money and the role each of them plays in that.
Another part of JetBlue’s strategy to communicate and reinforce its organizational culture is a
program called Principles of Leadership (POL). POL is a five-day training program, completely
taught by JetBlue’s managers from all levels of the company, from the very top to the very
bottom. As they teach, JetBlue’s managers share real world stories that illustrate ways in which
company managers and employees have practiced or violated the five principles of JetBlue’s
culture. In general, these stories demonstrate when it is proper and improper to break company
rules to serve customers. For example, a JetBlue pilot once bought several dozen McDonald’s
Happy Meals for the kids on his plane. While this was a violation of company spending
guidelines, buying those Happy Meals adhered to JetBlue’s cultural principle of “Doing the right
thing,” because the plane was stuck on the ground without food, and the kids on board were
Effective leaders, however, don’t just communicate to others; they also make themselves
accessible so that they can hear what others, particularly customers and employees are feeling and
thinking about their organization. At JetBlue, founder and CEO David Neeleman uses frequent
informal meetings and surprise visits to listen to his customers and employees. On an almost daily
basis, Neeleman can be found on a JetBlue flight talking to customers. Neeleman will typically
use the plane’s public address system to introduce himself and say that he wants to hear any
feedback, good or bad, that they have about the airline. Passengers often offer advice on where
JetBlue should offer new routes and service, but they also complain about the food, meaning the
lack of it (just cookies, snacks, and biscotti). To this complaint, Neeleman says, “We found out
most people would rather have a TV than a meal.” But, most importantly, Neeleman listens,
writing thoughts and customer comments on airplane napkins that he stuffs in his pockets to be
turned into organizational to-do’s once the flight is over.
15. Refer to JetBlue. JetBlue’s orientation for new employees would be an example of ____
16. Refer to JetBlue. The JetBlue pilot who bought several dozen McDonald’s Happy Meals engaged
a. involuntary listening
b. active hearing
c. passive listening
d. empathetic listening
e. voluntary hearing
17. When Gregg Steiner became the vice president for Cleveland-based Pinxav, he knew the diaper-
rash product manufacturer's sales were declining. At a trade show Steiner was pitching the
product to some new mothers who had never heard of it. The mothers weren't convinced that they
should part with their money for a new-to-them product. The inspired Steiner said, "If you're not
happy with the product, I will not only give you your money back--I'll buy you our competitors'
product. I'll buy you whatever other brand you want." Suddenly, the women were interested, and
they all plunked down their money. None of the women ever took Steiner up on his offer. So
Steiner decided to make it part of his business practice. This new guarantee was an example of
a. corporate synergy
b. organizational innovation
c. assembly networking
d. organizational networking
e. reverse engineering
18. The development of CDs was a source of ____ to companies in the recording industry just as
audiotapes and 8-track tapes had once been.
a. a sustainable competitive advantage
b. creativity reengineering
c. technological discontinuity
d. planned shrinkage
e. technological replacement
19. An ongoing series of technology cycles will allow an organization to ____.
a. satisfy more customers with fewer resources
b. create a competitive advantage
c. control variable costs
d. eliminate the product-innovation process
e. eliminate problems associated with economies of scale
20. In the typical S-curve pattern of innovation, when significant improvements in performance can
ONLY be gained through radical new designs or new performance-enhancing materials, it is
likely that a company is ____.
a. at its breakeven point
b. at the problem identification stage of the innovation cycle
c. at the end of the innovation cycle
d. at either the beginning or end of the innovation cycle
e. at the end of its maturity stage
21. Kodak is a company name that is associated with photography. The company has recognized that
digital photography is a threat to the future growth of the company. Therefore, the company has
decided to become a market leader in digital imaging while still providing customer support for
people still using film cameras. The existence of both technologies is an example of ____.
a. design substitution
b. modular management
c. design competition
d. hierarchical management
e. a creative flow
22. The auto industry has been perfecting the internal combustion engine (ICE) for some 120 years.
There is plenty of work ongoing at all of the auto companies on alternatives to ICEs. The money
invested by them is measured in the billions of dollars. The Partnership for a New Generation of
Vehicles (PNGV), the cooperative program between the Big Three and the U.S. government to
replace ICEs with electric engines, has been operating since 1993. The internal combustion
engine (ICE) is an example of ____.
a. a dominant design
b. design dichotomy
c. a synergistic design
d. a differential design
e. a dichotomous product
23. Hewlett-Packard is currently exploring new products and markets through the development of
digital imaging products in its plants in India, South Africa, and the United States. To jump-start
this innovative process, Hewlett-Packard can ____.
a. manage flow through the use of Gantt charts
b. concentrate on dominant design and ignore incremental design
c. engage in creative reciprocity
d. establish creative work environments
e. do none of these
24. Multifunctional teams ____.
a. allow organizations to concentrate on their internal environments and ignore the external
environments until they have completed the brainstorming process
b. were primarily used by dot.coms and are no longer popular
c. speed innovation through early identification of new ideas or problems that would
typically not have been generated until much later
d. do not typically use milestones because of group cohesiveness
e. replace organizational structures on a typical organizational chart
25. The objective of the company that manufactures Jägermeister liqueur is to grow its international
business. It determines its success in the international market by comparing its 2005 annual
exporting data with the data gathered in 1998—the first year it had double digit growth in
exports. For this company, the 1998 exporting data provide a(n) ____.
a. autonomous measurement
c. value ratio
d. dependence measurement
e. performance predictor
26. ____ allows a trucking company not only to compare its safety performance with other
companies but to also adopt those practices found to be superior. A trucking company can gather
data on how its competitors deal with total accidents per million miles, numbers of high severity
accidents by type, missed deliveries, spills, driver out-of-service by type, and vehicle out-of-
service by type and use this information to improve its own safety record.
b. Data decentralization
c. Information processing
e. Comparative criterion
27. A chain of specialty fashion stores has interviewed a sample of its female customers and learned
that on average a customer can be expected to visit the store every two weeks looking for new
merchandise. As a result, the chain has new merchandise delivered daily. If items have not been
sold after a month on display at the store, the items are removed from the store to either be sold at
another location or returned to the manufacturer. The chain of stores was able to set this standard
a. evaluating the standard's capacity to enable goal achievement
b. benchmarking competitors
c. listening to customers
e. value communications
28. In October 2004, Caterpillar announced plans to cut its predicted production of construction
equipment for 2005 due to forecasted increases in steel prices and growing concern about a tire
shortage. By discovering the problem with product inputs and letting customers know that its
output will fall short, Caterpillar used ____ controls.
29. Imagine a manufacturer that has a 99 percent error-free production rate and decides it wants 100
percent error-free production. Its management needs to examine ____ to determine if the costs of
increased controls outweigh the benefits of error-free production.
a. cybernetic costs
c. financial ratios
d. regulation costs
e. feedback loops
30. The two types of objective controls managers use are ____.
a. output and input
b. administrative and participative
c. self-control and organizational control
d. autonomous and individualized
e. behavior and output
31. Marriott's top management decided that there was a need for a serious effort to “put democracy
back in the company” and make employees feel “involved in the success of the company.”
Managers adopted the theme “Ladies and Gentlemen serving Ladies and Gentlemen.” This was
the rule its employees were told to use when dealing with customers. Employees asked special
corporate guests to comment on the good and bad issues of their stay, and also to tell what the
competition is doing that is better than Marriott. Then the employees acted accordingly. Marriott
adopted ____ controls.
32. ____ controls should be used when it is necessary to standardize operating procedures and
33. As a class project, Senora is working with other classmates to create a company that would
market NASCAR memorabilia. Her teacher has instructed Senora to use the traditional approach
to create the organization’s structure. What should Senora do?
a. create an organizational structure with vertical and horizontal configurations
b. use an organizational process to create a matrix design
c. create a virtual organization
d. use the organizational structure to control creativity
e. create a matrix structure that will adhere to the unity of command principle
34. As a consequence of the Industrial Revolution and its emphasis on specialization, institutions
providing higher education developed strict departments that contained specialized functions.
This organizational structure was perceived as a way to enhance the accumulation and
dissemination of knowledge. Institutions providing higher education have traditionally used ____.
d. functional empowerment
e. job dissemination
35. Disadvantages of ____ departmentalization include slower decision making, the development of
managers and workers with narrow experience and expertise, and more difficult cross-
36. Commerce Insurance Services has five divisions. They are personal; core commercial; Main
Street business; major commercial; and benefits. The company is also departmentalized along
product lines. Commerce Insurance Services uses ____ departmentalization.
37. Honeywell Inc. reorganized its European operations along customer lines to prepare for a unified
European Union. In doing so, it abandoned matrix departmentalization. Why would Honeywell
engage in such restructuring?
a. to create pools of resources
b. to empower its employees
c. to better adhere to the management philosophy of staff authority
d. to improve its ability to handle complex tasks
e. to end conflict between product managers in different parts of its matrix
38. An international distribution company has a shipping division, a warehouse division, and a
computer hardware and software distribution center as well as a marketing research department, a
human resources department, and an accounting department. A salesperson who works in the
shipping division is told by the accounting department that he must turn in a weekly expense
account. His supervisor in the shipping division wants expense accounts submitted monthly.
Since it takes at least two hours to prepare the expense account form and the salesperson wants to
devote as much time as possible to sales, the salesperson is likely experiencing a problem with
a. line authority
b. delegation of authority
d. chain of command
e. organizational synergy
39. The marketing manager of a company that manufactures church furniture has been given the job
of increasing corporate profits by 5 percent during the upcoming year. The manager decided to
give his assistant the full responsibility and authority for developing a mailing campaign to target
churches on the Mississippi Gulf Coast that were damaged or destroyed by Hurricane Katrina and
make this individual accountable for the campaign's success. In other words, the marketing
manager has ____.
a. implemented feedback controls
b. created a staff position
c. embraced the matrix organizational philosophy
d. delegated the task
e. created a win-win relationship
40. The Ryerson University Library is organized in a hierarchy with six unit heads reporting to a
chief librarian. The units are archives, audiovisual/interlibrary loans, library access services,
reference and information, systems, and technical services. Within these units are fifteen
librarians, and forty-seven full-time library staff. One of the tools used in the organizational
development of the library was to systematically move employees from one job to another to give
them an opportunity to learn and use different skills. The Ryerson University Library used ____.
a. task aggregation
b. job specialization
c. job enlargement
d. employee specialization
e. job rotation
41. ____ is the degree to which a job gives workers the discretion, freedom, and independence to
decide how and when to accomplish their jobs.
a. Task significance
b. Task identity
c. Skill variety
e. Skill feedback
42. Nestlé is a company based in Switzerland with manufacturing plants in Columbia, Australia,
Canada, Egypt, Kenya, and more than 90 other nations. Nestlé is an example of a ____.
a. multidomestic global company
b. multinational corporation
c. ethnocentric organization
d. acculturated corporation
43. The Japanese government has proclaimed that its snow is different from that found in any other
region of the world. To make sure the product is safe for local use, all snow skis marketed in
Japan must be manufactured in Japan. This is an example of a(n) ____.
b. government subsidy
c. voluntary export restraint
d. government import standard
44. A multinational company that acts with ____ has offices, manufacturing plants, and distribution
facilities in different countries, it will run those offices, plants, and facilities based on the same
rules, guidelines, policies, and procedures.
a. policy certainty
b. global consistency
c. global adaptation
d. global certainty
45. Sodima is a French cooperative that owns the name, the trade secrets, and the patents on Yoplait
yogurt. General Mills pays Sodima for the right to sell Yoplait yogurt in the United States. This is
an example of ____.
b. a global joint venture
d. a strategic alliance
e. direct investment
46. Starbucks is expanding its global operations into South America in spite the real probability of
civil wars and terrorist activities in many of the continent’s nations. As Starbucks expands into
South America, it must deal with ____.
a. political uncertainty
b. economic uncertainty
c. infrastructure regulation
d. nationalistic equity
e. strategy risk
47. German chip manufacturer Infineon AG has joined with Motorola Inc. and Agere Systems Inc. to
establish a new company to develop and license chip designs for cellphones. These three
companies have created a ____.
a. license facilitator
b. subsidized corporation
c. global new venture
d. joint venture
e. export merchant
48. A country or region that has an attractive business climate for companies that want to go global
a. easy access to growing markets
b. experienced marketplace metamorphosis
c. eliminated all political risks
d. a limited infrastructure
e. all of these
49. Uganda is one of only two countries in the world that produce a mineral required in the
manufacturing of cellular phones. A company that mines that rare mineral decided to not invest in
the country due to a bloody civil war resulting from a change in rulers. The mining company used
a. avoidance strategy
b. control strategy
c. cooperative strategy
d. elimination strategy
e. self-protection strategy
50. ____ is the set of shared values and beliefs that affects the perceptions, decisions, and behavior of
the people from a particular country.
a. National mindset
b. National culture
c. Cultural nationalization
d. Cultural diversity
e. National diversity