Robbins FOM10ge C05

Fundamentals of Management, 10e, Global Edition (Robbins)
Chapter 5 Foundations of Planning
1) Which of the following is NOT a function of planning?

A) defining goals
B) identifying a strategy for attaining goals
C) settling disputes between employees
D) coordinating organizational activities
Answer: C
2) Planning is concerned with ________.

A) both ends and means
B) ends only
C) means only
D) neither ends nor means
Answer: A
3) In informal planning, goals are usually ________ shared with others in the organization.
A) written, but little is
B) unwritten, and little is
C) written, and much is
D) unwritten, but much is
Answer: B
4) Informal planning is ________.

A) always performed at the lowest organizational level
B) general and usually lacks continuity
C) performed exclusively by middle managers
D) more specific than formal planning
Answer: B
5) In formal planning, ________.

A) specific goals covering a period of years are defined
B) to maximize flexibility, specific goals are never spelled out
C) very broad general goals are developed
D) goals may be written or unwritten
Answer: A.
6) Which of the following is NOT a reason for managers to plan?

A) to give direction to an organization
B) to deal with change
C) to establish goals
D) to establish responsibility for mistakes
Answer: D
7) Planning gives organizations direction that primarily helps them ________.

A) improve teamwork and coordinate activities
B) improve their image in the business community
C) improve morale of middle managers
D) improve morale of all employees
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Answer: A
8) Planning gives organizations a way to deal with change that ________.

A) eliminates all uncertainty
B) reduces uncertainty
C) reduces certainty
D) increases ambiguity
Answer: B
9) Organizations that don't formally plan may be more likely to have ________.
A) corrupt managers
B) legal problems
C) multiple departments performing the same task
D) a single department carrying out all company functions
Answer: C
10) One effect of planning on managers is that it forces them to ________.

A) fear change
B) anticipate and consider the effect of change
C) work to prevent change
D) ignore any change that doesn't directly affect them
Answer: B
11) Managers who fail to plan may ________.

A) take advantage of change
B) stimulate change
C) be positively affected by change
D) be adversely affected by change
Answer: D
12) Which of the following is a frequently cited criticism of formal planning?

A) Plans lock organizations into rigid goals and timetables.
B) Plans take too long to create.
C) Plans create resentment within different levels of the organization.
D) Formal planning works well only for smaller companies.
Answer: A
13) One criticism of formal planning is that it focuses on how to beat the competition rather than how to
________.
A) have cordial relationships with the competition
B) focus on new opportunities
C) balance the organization's budget
D) cooperate with the competition
Answer: B
14) Failing to discard successful plans from the past is likely to lead to ________.
A) more success because conditions are unlikely to change in the future
B) failure because conditions are likely to change in the future
C) success because of the high quality of the plans
D) failure because of the low quality of the plans
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Answer: B
15) Studies of performance in organizations that plan have reached ________ with respect to the benefits of
formal planning.
A) somewhat negative conclusions
B) no conclusion
C) extremely negative conclusions
D) generally positive conclusions
Answer: D
16) Studies of planning show that the key to successful planning is to make sure that the plans ________.
A) cover every possible detail
B) are high in quality and insight
C) are exceedingly simple to follow
D) are not shared with employees
Answer: B
17) In studies in which formal planning did not lead to higher performance, ________ usually the culprit.
A) unforeseen events in the environment were
B) demanding employees were
C) stubborn ownership was
D) lack of communication was
Answer: A
18) Formal planning typically leads to which of the following?

A) higher profits
B) lower productivity
C) higher sales, but lower profits
D) tension between different management levels
Answer: A
19) All managers plan in some way, either formally or informally.

Answer: TRUE
20) Informal plans are not recognized as true organizational plans and are rarely carried out by managers.
Answer: FALSE
21) At some point, all managers create formal plans.

Answer: FALSE
22) Planning provides direction to managers and nonmanagers alike.

Answer: TRUE
23) A key function of planning is to create goals.

Answer: TRUE
24) Informal planning typically works better in large organizations.

Answer: FALSE
25) The four reasons that organizations plan are to establish coordinated effort, set standards, minimize waste,
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and reduce uncertainty and the impact of change.
Answer: TRUE
26) Planning rarely improves teamwork and cooperation among employees.

Answer: FALSE
27) An organization that fails to plan will find it hard to assess progress.
Answer: TRUE
28) A major argument against formal plans is that they can't replace intuition and creativity.
Answer: TRUE
29) Formal planning can enhance creativity in an organization.

Answer: TRUE
30) A criticism of formal planning is that it focuses too much on groundbreaking visions and deals with ideas
that are too innovative to work.
Answer: FALSE
31) A major strength of formal planning is that it reinforces past successes and incorporates them into the
future.
Answer: FALSE
32) A major strength of formal planning is that it gives an organization rigidity.

Answer: FALSE
33) A major strength of formal planning is that it generally correlates with higher profits.
Answer: TRUE
34) Successful planning depends more on whether managers plan than on the quality of their planning.
Answer: FALSE
35) Research indicates that organizations that don't use formal planning always outperform organizations that
do use formal planning.
Answer: FALSE
39) The first step in the six-step strategic management process is to ________.
A) analyze the organization's strengths and weaknesses
B) identify the organization's mission
C) identify feasible strategies
D) analyze the opportunities the organization has
Answer: B
.
40) The first three steps of the strategic management process involve ________ strategies.
A) planning
B) implementing
C) evaluating
D) identifying
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Answer: A
41) A mission statement includes identification of an organization's ________.

A) strengths and weaknesses
B) purpose and basic philosophy
C) assets and resources
D) resources and strengths
Answer: B
42) A mission statement does NOT include which of the following?

A) the customers of a company
B) major competitors
C) why the company is in business and what it hopes to accomplish
D) the company's basic beliefs
Answer: B
43) An external analysis, the second step of the strategic management process, helps identify ________.
A) the products that a company makes
B) the long-term goals of a company
C) a company's opportunities and threats
D) a company's concern for its employees
Answer: C
44) An internal analysis, the third step of the strategic management process helps identify ________.
A) opportunities and threats
B) resources and capabilities
C) opportunities and possibilities
D) values and philosophy
Answer: B
45) Which term refers to an organization's capital, workers, and patents?

A) resources
B) capabilities
C) abilities
D) core competencies
Answer: A
46) An organization's resources identify ________.

A) how the organization gets things done
B) where the organization operates
C) when the organization operates
D) what the organization has
Answer: D
47) An organization's capabilities identify ________.

A) what the organization knows
B) who the organization is
C) assets that the organization can rely on
D) what the organization can do
Answer: D
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48) Together, an organization's resources and core competencies make up which of the following?
A) core philosophy
B) competitive weapons
C) core assets
D) fundamental beliefs
Answer: B
49) SWOT analysis identifies and analyzes an organization's ________.

A) strengths, weaknesses, opportunities, and threats
B) strategy for competing in the market
C) human resource assets
D) long-term goals
Answer: A
50) SWOT analysis combines ________.

A) a company's mission with its goals
B) external and internal analyses
C) a company's philosophy with its ethics
D) profit with productivity
Answer: B
51) Once SWOT analysis is complete, managers ________ to address the issues that came up during the
analysis.
A) formulate strategies
B) implement strategies
C) evaluate strategies
D) eliminate strategies
Answer: A
52) Which of the following do managers NOT typically use to formulate strategies?
A) finding ways to exploit the organization's strengths
B) finding ways to protect the organization from external threats
C) finding ways to rule out existing organizational opportunities
D) finding ways to correct organizational weaknesses
Answer: C
53) The three different types of strategies that managers implement are ________.
A) corporate, private, functional
B) corporate, competitive, functional
C) long-term, short-term, public
D) competitive, noncompetitive, corporate
Answer: B
54) A corporate strategy focuses primarily on ________.

A) an organization's mission
B) an organization's strengths
C) an organization's weaknesses
D) an organization's people
Answer: A
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55) Which of the following makes up the three main types of corporate strategies?
A) growth, vertical integration, horizontal integration
B) growth, retrenchment, renewal
C) renewal, retrenchment, diversification
D) growth, stability, renewal
Answer: D
56) Growth strategies include ________.

A) diversification, concentration, integration, stabilization
B) vertical integration, horizontal integration, concentration, diversification
C) vertical integration, horizontal integration, lateral integration, horizontal concentration
D) integration, renewal, horizontal diversification, vertical diversification
Answer: B
57) General Mills expanding its line so that it sells several different types of Cheerios is an example of which of
the following?
A) concentration
B) horizontal integration
C) vertical integration
D) diversification
Answer: A
58) A salad dressing company that buys a large olive grove to produce olive oil is practicing which of the
following?
A) concentration
B) forward vertical integration
C) backward vertical integration
D) horizontal integration
Answer: C
59) A sneaker company creating its own stores where it sells only its own brand is an example of which of the
following?
A) forward vertical integration
B) backward horizontal integration
C) forward horizontal integration
D) reverse vertical integration
Answer: A
60) In forward vertical integration, a company becomes its own ________, while in backward vertical
integration, the company is its own ________.
A) supplier; distributor
B) supplier; customer
C) distributor; monitor
D) distributor; supplier
Answer: D
61) Two movie studios combining to form one larger studio is an example of which of the following?
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D) diversification
Answer: B
62) Which of the following functional areas has become an important strategic element for companies such as
Prada?
A) customer servicer
B) cost control and accounting
C) human resources
D) information technology
Answer: D
63) When Google purchased YouTube, a company that featured different, but related products, Google was
engaging in which of the following?
A) concentration
B) forward vertical integration
D) diversification
Answer: D
64) Two companies that both sell fine timepieces combine. What are they doing?
A) diversifying, because they both sell the same products
B) integrating vertically, because they both sell the same products
C) integrating vertically in a backward direction, because they are sharing distribution
D) integrating horizontally, because they both sell similar products
Answer: D
65) A company whose goal is to retain its ideal size and market share is employing which kind of strategy?
A) noncorporate
B) growth
C) renewal
D) stability
Answer: D
66) Troubled companies seek ________ to address serious problems.

A) competitive strategies
B) corporate strategies
C) vertical and horizontal strategies
D) renewal strategies
Answer: D
67) To address limited, short-term problems, a company is most likely to employ a ________ strategy.
A) retrenchment
B) turnaround
C) doomsday
D) self-critical
Answer: A
68) A company that is on the verge of collapse or bankruptcy might employ this strategy.
A) retrenchment
B) incremental improvement
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C) turnaround
D) hunker down
Answer: C
69) Remedies that all renewal strategies employ include which of the following?
A) hiring efficiency experts
B) new ad campaigns
C) emulating competitors
D) cutting costs
Answer: D
70) The ________ strategy occupies the level below the corporate strategy.
A) business unit
B) competitive
C) functional
D) performance
Answer: B
71) A diversified corporation is likely to have ________.

A) multiple competitive strategies
B) a single competitive strategy
C) no more than two competitive strategies
D) thousands of competitive strategies
Answer: A
72) The thing that makes your product special is known as your ________.
A) assets
B) destruction device
C) competitive advantage
D) core device
Answer: C
73) Competitive advantages for a high-prestige, premium coffee franchise like Starbucks are likely to include
all of the following EXCEPT ________.
A) high quality
B) lowest prices
C) well-trained employees
D) pleasant venues
Answer: B
74) A cost leadership competitive strategy focuses on which of the following?

A) efficiency
B) innovation
C) elegant design
D) luxury
Answer: A
75) Which of the following would you expect to find in a clothing store that follows a cost leadership strategy?
A) only the finest, most expensive materials
B) pampered, personalized service
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C) state-of-the-art design
D) basic, no frills, practical items
Answer: D
76) A company with a differentiation strategy focuses on making its products or services ________.
A) unique and special
B) similar to its competitors
C) familiar
D) affordable
Answer: A
77) A differentiation strategy ________.

A) usually focuses on price
B) must focus on price
C) can focus on a brand image
D) can focus on value, but not service
Answer: C
78) A company that looks for a niche in the market is following which strategy?
A) cost leadership
B) differentiation
C) focus
D) turnaround
Answer: C
79) Which of the following describes a company that is following a focus strategy?
A) a software company that makes a wide variety of games and financial products
B) a software company that makes games for a wide audience
C) a software company that makes financial products for accountants, consumers, and businesses
D) a software company that makes financial products for accountants only
Answer: D
80) According to Michael Porter, a company with good products that has no clear competitive advantage is said
to be ________.
A) perfectly positioned
B) stuck in the middle
C) in the wheelhouse
D) outside of the box
Answer: B
81) Most successful companies find that ________ a competitive advantage is almost as difficult as developing
a competitive advantage.
A) assessing
B) sustaining
C) modifying
D) eliminating
Answer: B
82) All of the following are threats to a sustainable, long-term competitive advantage EXCEPT ________.
A) market stability
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B) market instabilities and disturbances
C) evolution of the industry
D) new technology in the industry
Answer: A
83) To gain a sustainable competitive advantage, a pharmaceutical company might ________.

A) market aggressively
B) set high prices for its products
C) secure exclusive rights to produce a drug
D) produce as many generic drugs as possible
Answer: C
84) A company's strategic weapon is any product, service, or other attribute it has that ________.
A) gives it an edge over its competitors
B) identifies problems that the company has
C) identifies the potential of employees
D) helps diversify the company
Answer: A
85) To create a competitive advantage that is sustainable, a company can begin by focusing on quality, then
________.
A) make sure quality doesn't decline at too rapid a pace
B) make incremental improvements to keep quality levels high
C) change its entire product line frequently
D) slowly diminish quality and raise the prices of its products
Answer: B
86) This term describes an electric shaver company that carefully observes its competitor's production line to
look for ways to improve its own manufacturing process.
A) trademarking
B) benchmarking
C) quality engineering
D) reverse marketing
Answer: B
Taco Rocket (Scenario)
Imagine that you are the president of Taco Rocket, a new and successful chain of 8 Mexican fast-food
restaurants. The success you have experienced in the last 5 years has you thinking of what to do with the
business next. Should you expand the business at the current rate? Open new and different restaurants? What?
87) Up to now your success has been based on selling high-quality tacos and burritos at a price that others can't
match. Your business is pursuing which of Porter's strategies?
A) differentiation strategy
B) cost leadership strategy
C) competitive advantage strategy
D) focus strategy
Answer: B
88) You are thinking of buying a tortilla factory in a nearby state. This action would be an example of
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________.
D) forward diversification
Answer: C
89) Recently, Taco Rocket has considered buying a local competitor and the two would combine under the Taco
Rocket name. This is an example of which of the following?
A) stability
B) vertical integration
C) horizontal integration
D) diversification
Answer: C
90) For a limited time, Taco Rocket is thinking of coming out with a new Fifth Degree Burrito that is so hot it
"burns a hole in the plate." Catering to the small segment of the market that likes super-hot food is an example
of a ________.
A) focus strategy
B) cost leader strategy
C) long-term strategy
D) differentiation strategy
Answer: A
91) Strategic management is the act of figuring out how an organization will compete in the marketplace and
attract loyal customers.
Answer: TRUE
92) The first step in the strategic management process is analyzing the external environment.
Answer: FALSE
93) A mission statement for a kayak manufacturer might be as follows: To make the highest-quality kayaks and
sell them at a competitive price.
Answer: TRUE
94) An external analysis will identify the threats to a company's well-being, but not opportunities for success.
Answer: FALSE
95) Core competencies include an organization's major capabilities and its resources.
Answer: FALSE
96) Capabilities are "what" an organization has; resources are "how" it uses what it has.
Answer: FALSE
97) SWOT analysis includes the identification of an organization's strengths, weaknesses, opportunities, and
threats.
Answer: TRUE
98) The final three steps in the strategic management process involve the creation and implementation of
strategies for realizing organizational goals.
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Answer: TRUE
99) A corporate strategy may be a growth strategy, a stability strategy, or a renewal strategy.
Answer: TRUE
100) A diversification strategy focuses on a company becoming its own supplier of inputs.
Answer: FALSE
101) A company with a stability strategy will plan to dramatically increase market share in a highly competitive
market.
Answer: FALSE
102) The most drastic renewal strategy an organization can carry out is a retrenchment strategy.
Answer: FALSE
103) "A distinctive edge" is a way of describing a competitive advantage.

Answer: TRUE
104) Innovation and super-high quality are typically the keys to a cost-leadership strategy.
Answer: FALSE
105) A focus strategy seeks to appeal to a narrow segment of a market.

Answer: TRUE
106) Customer service cannot be considered a strategic weapon for an organization.

Answer: FALSE
107) Xerox Corporation's study of Japanese competitors was the first effort by an American company at
benchmarking.
Answer: TRUE
113) Which of the following best defines plans?

A) documents that identify company problems
B) documents that define goals
C) documents that describe how goals will be met
D) documents that identify how goals from the past were met
Answer: C
114) Which of the following best defines goals?

A) likely outcomes for the future
B) unlikely outcomes for the future
C) desired outcomes for the future
D) short-term targets
Answer: C
115) In reality, all organizations have ________.

A) a single goal
B) multiple goals
C) the same goals
D) the same single goal
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Answer: B
116) In most cases, strategic goals include ________.

A) all financial objectives
B) all objectives that are not financial
C) all objectives, both financial and nonfinancial
D) some financial objectives
Answer: B
117) Which of the following is an example of a strategic goal for a professional baseball team?
A) to increase attendance by 5 percent over the next three years
B) to increase television revenues over the next 5 years
C) to decrease payroll by 20 million over the next 2 years
D) to average over 90 wins a year for the next 5 years
Answer: D
118) An organization's real goals and priorities are best revealed by ________.
A) its official stated goals
B) its actions in the marketplace
C) its statements to the press
D) its mission statement
Answer: B
119) ________ are important because they provide the standards against which all organizational
accomplishments are measured.
A) Goals
B) Guidelines
C) Models
D) Rules
Answer: A
120) In traditional goal setting, these individuals set goals.

A) top managers
B) middle and low-level managers
C) middle managers
D) managers and employees
Answer: A
121) In traditional goal setting, as they work their way from top management to employees, goals are likely to
________.
A) become more clear
B) be more rigorously followed
C) be unchanged
D) become more specific
Answer: D
122) In a means-ends chain, a goal at a lower level ________.

A) is the bridge to a goal at the next higher level
B) is attained only after higher level goals are fulfilled
C) is separate from the goal at the next higher level
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D) is ignored if goals at higher levels are attained
Answer: A
123) In management by objectives (MBO), goals ________.

A) must be easily accomplished
B) are jointly determined by employees and managers
C) are determined by top management
D) are developed by employees
Answer: B
124) In addition to being made by both managers and employees, MBO goals must be ________.
A) nonspecific and open-ended with regard to time
B) specific and open-ended with regard to time
C) specific and include an explicit time limit
D) nonspecific and include no time limit
Answer: C
125) MBO programs usually are successful largely because they ________.
A) give employees a sense of ownership of goals
B) free managers from the responsibility of setting goals
C) give managers a sense of ownership of goals
D) free employees from responsibility if goals are not met
Answer: A
126) Which goal-setting sequence is correct for the following steps?

1. Evaluate resources.
2. Identify goals.
3. Review the mission and job tasks.
4. Communicate goals.
5. Link rewards to goals.
6. Build feedback mechanisms.
A) 1, 2, 4, 6, 3, 5
B) 4, 2, 5, 3, 1, 6
C) 3, 4, 2, 6, 5, 1
D) 3, 1, 2, 4, 6, 5
Answer: D
127) The breadth of a plan refers to ________ concerns.

A) long-term versus short-term
B) strategic versus tactical
C) specific versus directional
D) single use versus standing
Answer: B
128) The specificity of a plan refers to ________ concerns.

A) long-term versus short-term
B) strategic versus tactical
C) specific versus directional
D) single use versus standing
Answer: C
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129) Strategic plans address ________.
A) overall organizational goals
B) goals for a single branch of the organization
C) how overall goals are to be achieved
D) how a single goal is to be achieved
Answer: A
130) Tactical plans are operational plans that identify ________.

A) overall organizational goals
B) how overall goals are to be achieved
C) the mission of an organization
D) specific goals for accomplishing a specific objective
Answer: B
131) A politician whose ultimate goal is to get elected is planning campaign ads for TV. In planning the ads, the
politician is functioning at a ________ level.
A) strategic
B) long-term
C) tactical
D) directional
Answer: C
132) Which of the following defines the time frame of a long-term plan?
A) over seven years
B) over three years
C) under three years
D) over one year
Answer: B
133) Directional plans ________.

A) leave no room for interpretation
B) are flexible general guidelines
C) are difficult to modify
D) must be short-term plans
Answer: B
134) Standing plans typically can be used ________.

A) only once
B) only in conjunction with specific, long-term plans
C) twice at most
D) repeatedly
Answer: D
135) Top managers, for the most part, focus on this type of planning.
A) operational
B) strategic
C) tactical
D) short term
Answer: B
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136) The more uncertain a situation is, the more ________ plans must be.
A) unspecific
B) long term
C) flexible
D) short term
Answer: C
137) The commitment concept states that plans should ________.

A) always stake out a longer time period than is estimated
B) always stake out a shorter time period than is estimated
C) stake out a time period that is neither too long nor too short
D) not include time periods because they are too confining
Answer: C
138) Most managers feel that formal, top-down plans created by corporate planning departments are ________.
A) very useful
B) usually unsatisfactory
C) very detailed
D) excellent
Answer: B
139) Goals are documents that outline how plans are to be carried out.
Answer: FALSE
140) Traditional goal setting requires top managers to set goals that are carried out by the organizational levels
below.
Answer: TRUE
141) The key to MBO, or management by objectives, is that managers and subordinates mutually agree on
goals.
Answer: TRUE
142) Goals typically should be reserved for managers only. Goals should not be shared with subordinates.
Answer: FALSE
143) Long-term plans used to refer to plans that covered a period of over three years, but now it refers to any
time period over one year.
Answer: FALSE
144) A six-month plan qualifies as a short-term plan.

Answer: TRUE
145) Directional plans leave no room for interpretation.

Answer: FALSE
146) In general, upper-level managers focus on tactical or operational planning.

Answer: FALSE
150) In the twenty-first century, managers increasingly need to consider their plans as ________.
A) highly explicit recipes that must be scrupulously followed
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B) a vague philosophy that should not interfere with actions
C) flexible road maps with destinations that may change
D) rigid road maps with a single destination
Answer: C
151) A cell phone company might ask managers to do some environmental scanning of blogs that deal with
electronics as a way to ________.
A) obtain new customers
B) identify emerging trends
C) obtain new advertisers
D) identify potential rivals
Answer: B
152) Which of the following is NOT something that a company would be likely to do as a part of a competitive
intelligence program?
A) buy competitors' products
B) attend trade shows
C) have employees evaluate competing products
D) buy stock in a competitor's company
Answer: D
153) Buying a competitor's product for evaluation is a form of environmental scanning.

Answer: TRUE
Fundamentals of Management, 10e, Global Edition (Robbins)

Chapter 6 Organizational Structure and Design
1) Organizational design requires a manager to ________.
A) decide who leads a group within an organization
B) change the culture of an organization
C) change or develop the structure of an organization
D) change the logo of an organization
Answer: C
2) All of the following are part of the process of organizational design EXCEPT ________.
A) deciding how specialized jobs should be
B) determining rules for employee behavior
C) determining the level at which decisions are made
D) determining goals for the organization
Answer: D
3) Which of the following are NOT basic elements of organizational design?

A) work specialization, span of control
B) chain of command, line authority
C) centralization, decentralization
D) departmentalization, formalization
Answer: B
4) Which of the following is synonymous with work specialization?

A) division of labor
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B) job discrimination
C) chain of command
D) job preference
Answer: A
5) Which statement accurately defines work specialization?

A) It is the degree to which tasks are grouped together.
B) Individual employees specialize in doing part of an activity rather than the entire activity.
C) Jobs are ranked relative only to their worth or value to the businesses.
D) Work specialization clarifies who reports to whom.
Answer: B
6) Early supporters of work specialization saw it as ________.

A) a reliable way to increase productivity
B) a good way to increase employee morale
C) a source of innovation
D) an immoral way to coerce workers into greater productivity
Answer: A
7) Early users of work specialization in the early twentieth century found that the practice ultimately resulted in
________.
A) higher profits and better employee morale
B) bored workers with low morale
C) huge and permanent productivity gains
D) better communication among employees
Answer: B
8) Today, managers favor this approach with regard to work specialization.

A) All tasks are performed by all employees to promote fairness.
B) Partners switch jobs every half hour to overcome boredom.
C) Employees specialize to maintain efficiency.
D) Monotonous tasks are shared by all employees to prevent perceived favoritism.
Answer: C
9) Functional departmentalization groups jobs by ________.

A) tasks they perform
B) territories they serve
C) products or services they manufacture or produce
D) type of customer they serve
Answer: A
10) ________ departmentalization is based on territory or the physical location of employees or customers.
A) Functional
B) Product
C) Geographic
D) Matrix
Answer: C
11) A soap company that features a bath soap department, a laundry detergent department, and a dish soap
department is using which of the following?
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A) process departmentalization
B) functional departmentalization
C) product departmentalization
D) customer departmentalization
Answer: C
12) What kind of departmentalization would be in place in a government agency in which there are separate
departments that provide services for employers, employed workers, unemployed workers, and the disabled?
A) product
B) geographic
C) outcome
D) customer
Answer: D
13) State motor vehicle offices usually use this kind of departmentalization.
A) product
B) functional
C) customer
D) process
Answer: D
14) The line of authority that extends from the upper levels of management to the lowest levels of the
organization is termed the ________.
A) chain of responsibility
B) unity of command
C) staff authority
D) chain of command
Answer: D
15) The chain of command answers this question.

A) Where do I go for help?
B) How do I know when the task is complete?
C) What are the rules?
D) Who reports to whom?
Answer: D
16) Authority gives an individual the right to do this.

A) give orders
B) reprimand employees
C) command respect
D) obey orders
Answer: A
17) In the chain of command, each person above you ________.

A) has special privileges
B) receives higher pay
C) has line authority
D) has no right to give you orders
Answer: C
20
18) Staff managers have authority over ________.
A) special support employees only
B) line managers
C) middle managers
D) the person above them in the chain of command
Answer: A
19) Line authority gives a manager the ability to direct the work of ________.
A) any employee in the firm
B) any subordinate
C) any subordinate, after consulting with the next higher level
D) only subordinates one level down
Answer: B
20) ________ prevents a single employee from getting conflicting orders from two different superiors.
A) Line authority
B) Unity of command
C) Staff authority
D) Chain of command
Answer: B
21) The importance of unity of command has diminished in today's workplace because of its tendency to be
________.
A) inflexible and inefficient
B) ethically questionable
C) chauvinistic and dictatorial
D) too decisive
Answer: A
22) Which of the following statements is true?

A) Power is a right.
B) Authority is one's ability to influence decisions.
C) Authority is a right.
D) Both power and authority are rights.
Answer: C
23) ________ is the obligation or expectation to perform a duty.

A) Responsibility
B) Unity of command
C) Chain of command
D) Span of control
Answer: A
24) The personal secretary of a top manager may have ________.

A) power but not authority
B) authority but not power
C) power and authority
D) line authority but not staff authority
Answer: A
21
25) Which of the following statements is true?
A) Power is a type of authority.
B) Authority and power are identical.
C) Authority is a type of power.
D) Power is determined by horizontal position in an organization.
Answer: C
26) As represented in a power cone, power is based on ________.

A) vertical position only
B) horizontal position only
C) distance from the center only
D) vertical position and distance from the center
Answer: D
27) As represented in a hierarchical organization diagram, authority is based on ________.

A) vertical position only
B) horizontal position only
C) distance from the center only
D) horizontal and vertical position
Answer: A
28) A construction site supervisor who sees an impending thunderstorm and tells workers to go home is
demonstrating ________.
A) line authority
B) staff delegation
C) provisional accountability
D) responsibility
Answer: A
29) ________ is the power that rests on the leader's ability to punish or control.
A) Reward power
B) Coercive power
C) Expert power
D) Referent power
Answer: B
30) A bank manager who passes out bonuses at the end of the year is exercising this.
A) reward power
B) coercive power
C) expert power
D) referent power
Answer: A
31) Your firm's attorney has ________ power when giving legal advice.
A) legitimate
B) status
C) expert
D) coercive
Answer: C
22
32) ________ is the power that arises when a person is close to another person who has great power and
authority.
A) Expert power
B) Referent power
C) Reward power
D) Legitimate power
Answer: B
33) When a top manager decides to hire an individual over the objections of her staff, she is exercising which
kind of power?
A) referent
B) expert
C) coercive
D) legitimate
Answer: D
34) The traditional view holds that managers should directly supervise ________ subordinates.
A) no more than three
B) no more than six
C) around twelve
D) around twenty
Answer: B
35) Modern managers find that they can ________ if their employees are experienced, well-trained, and
motivated.
A) increase their span of control
B) decrease their span of control
C) eliminate their span of control
D) fluctuate their span of control
Answer: A
36) A traditional "top down" organization is ________ organization.

A) a largely centralized
B) a largely decentralized
C) an absolutely decentralized
D) an absolutely centralized
Answer: A
37) ________ reflects the degree to which decision making is distributed throughout the hierarchy rather than
concentrated at the top.
A) Centralization
B) Span of control
C) Concentration
D) Decentralization
Answer: D
38) In recent years, organizations have become more ________ to be responsive to a dynamic business
environment.
A) centralized
B) decentralized
23
C) structured
D) mechanistic
Answer: B
39) In today's decentralized business world, ________ the most important strategic decisions.
A) top managers still primarily make
B) middle managers make
C) lower-level managers make
D) nonmanagerial employees make
Answer: A
40) All of the following are characteristics of a highly formalized organization EXCEPT ________.
A) explicit job descriptions
B) little discretion for employees
C) minimum number of rules
D) a standardized way of doing things
Answer: C
41) Today's managers are moving away from formalization and trying to be this.
A) more rigorous
B) more flexible
C) more strict
D) less permissive
Answer: B
42) Today's managers expect employees to ________.

A) ignore rules for the most part
B) use discretion when it comes to following rules
C) faithfully follow rules even when it may harm the organization
D) make their own rules
Answer: B
Eric the Redd (Scenario)
Eric Redd graduated from college and was hired by a corporation that manufactured parts for the automotive
industry. The employees on the assembly line seemed bored, and their motivation was low. Eric's employer
decided to try to reorganize to increase productivity. During his career, Eric will see his job change from an
engineer to a more complex job assignment.
43) The jobs of assembly-line employees are to be changed to allow more tasks to be done by individual
workers. This is a reduction in ________.
A) work specialization
B) departmentalization
C) chain of command
D) centralization
Answer: A
44) Eric is offered a chance to help direct the efforts of some employees assigned to his work group. This is a
chance for Eric to experience ________.
A) functional structure
24
B) divisional structure
C) responsibility
D) authority
Answer: D
45) Eric sees this new assignment as an increase in ________, or an obligation or expectation for him to
perform at a new level.
A) functional structure
C) responsibility
D) authority
Answer: C
46) Organizational design is the process in which managers change or develop an organization's structure.
Answer: TRUE
47) There are four basic elements in organizational design.

Answer: FALSE
48) The original ideas about organizational design formulated by Fayol and Weber are now largely obsolete.
Answer: FALSE
49) When work specialization originally began to be implemented early in the twentieth century, employee
productivity initially rose.
Answer: TRUE
50) Today, most managers see work specialization as a source of ever-increasing productivity.
Answer: FALSE
51) The advantage of work specialization is that it always results in high employee motivation and high
productivity.
Answer: FALSE
52) Departmentalization is how jobs are grouped.

Answer: TRUE
53) Staff authority is the ability to direct the work of any employee who does not have a higher rank in the
organization.
Answer: FALSE
54) Grouping jobs on the basis of major product areas is termed customer departmentalization.
Answer: FALSE
55) Line authority can be exerted only after a manager checks with his or her superior.
Answer: FALSE
56) Unity of command prevents an employee from trying to follow two conflicting commands at once.
Answer: TRUE
.
25
57) Power is a right that a manager has when he or she has a higher rank in an organization.
Answer: FALSE
58) When decisions tend to be made at lower levels in an organization, the organization is said to be centralized.
Answer: FALSE
59) Traditional organizations are structured in a pyramid, with the power and authority located in the pyramid's
broad base.
Answer: FALSE
62) A(n) ________ organization has a high degree of specialization, formalization, and centralization.
A) organic
B) horizontal
C) learning
D) mechanistic
Answer: D
63) Which of the following would likely be found in mechanistic organizations?

A) wide span of control
B) empowered employees
C) decentralized responsibility
D) standardized jobs
Answer: D
64) A(n) ________ organization is able to change rapidly as needs require.

A) organic
B) hierarchical
C) vertical
D) mechanistic
Answer: A
65) Which term best describes an organic organization?

A) hierarchical
B) pyramid-shaped
C) flexible
D) fixed
Answer: C
66) Which word best characterizes a mechanistic organization?

A) bureaucracy
B) collaborative
C) adaptable
D) informal
Answer: A
67) Strategy, size, technology, and the degree of uncertainty in the environment together make up what are
called ________.
A) contingency variables
B) control factors
C) structure variables
26
D) probable factors
Answer: A
68) Together, contingency variables determine the ________.

A) success of an organization
B) culture of an organization
C) structure of an organization
D) size of an organization
Answer: C
69) A company that is trying to be a leader in innovation within its industry would be most likely to have this
kind of structure.
A) mechanistic
B) organic
C) simple
D) functional
Answer: B
70) Larger organizations tend to have ________ than smaller organizations.

A) more specialization
B) less departmentalization
C) less centralization
D) fewer rules and regulations
Answer: A
71) As an organization grows to a size of over 2,000 employees, it finds it hard to avoid becoming more
________.
A) mechanistic
B) organic
C) informal
D) adaptable
Answer: A
72) Joan Woodward conducted pioneering studies on how this affected the structure of companies.
A) ethics
B) technology
C) values
D) corporate culture
Answer: B
73) Recent studies on Woodward's initial research found that if the technology was nonroutine, this structure
worked best.
A) mechanistic
B) traditional
C) inorganic
D) organic
Answer: D
74) Woodward concluded that the least complex of the technologies was ________.
A) unit production
27
B) mass production
C) process production
D) quality production
Answer: A
75) In Woodward's study, this type of production was the most complex and the most sophisticated.
A) unit production
B) mass production
C) process production
D) technological production
Answer: C
76) The greater the environmental uncertainty, the more an organization needs to become ________.
A) organic
B) mechanistic
C) stable
D) high-tech
Answer: A
Explanation: Increased uncertainty in a business environment requires an organization to be more flexible and
77) The two prevalent organizational structure models in today's world are the organic organization and the
inorganic organization.
Answer: FALSE
78) A mechanistic organization is bureaucratic and hierarchical.

Answer: TRUE.
79) An organic organization tends to be flexible and have few formal rules.
Answer: TRUE
80) Innovators need the efficiency, stability, and tight controls of a mechanistic structure rather than an organic
structure.
Answer: FALSE
81) As organizations become larger, they tend to become more organic.

Answer: FALSE
82) Joan Woodward attempted to view organizational structure from a technological perspective.
Answer: TRUE
83) Woodward and more recent studies have concluded that mass production worked best with an organic
organizational structure.
Answer: FALSE
84) The stability of a mechanistic structure seems to work best in today's dynamic and uncertain business
environment.
Answer: FALSE
85) Traditional organizational designs tend to be more mechanistic and include ________.
A) simple, complex, and divisional structures
28
B) simple, functional, and dysfunctional structures
C) functional, divisional, and vertical structures
D) simple, functional, and divisional structures
Answer: D
86) A simple structure is ________ like a mechanistic organization, but ________ like an organic organization.
A) centralized; informal
B) informal; decentralized
C) decentralized; formal
D) centralized; formal
Answer: A
87) What is a strength of a simple structure?

A) Employees are grouped with others who have similar tasks.
B) Power and authority are widely distributed.
C) Accountability is clear.
D) There are cost-saving advantages from specialization.
Answer: C
88) What is a weakness of a simple structure?

A) Duplication of activities and resources increases costs and reduces efficiency.
B) Functional specialists become insulated and have little understanding of what other units are doing.
C) Pursuit of functional goals can cause managers to lose sight of what is best for the overall organization.
D) Reliance on a single person is risky.
Answer: D
89) This is a key characteristic in an organization with a functional structure.

A) adaptability
B) departmentalization
C) flexibility
D) little specialization
Answer: B
90) This is a weakness of a functional structure.

A) favoring functional goals over organizational goals
B) favoring organizational goals over functional goals
C) failing to attain functional goals
D) overemphasizing organizational goals
Answer: A
91) Avoiding redundancy is a strength of which structure?

A) simple
B) divisional
C) functional
D) corporate
Answer: C
92) In a ________ structure each business unit has complete autonomy to reach its goals.
A) simple
B) functional
29
C) divisional
D) matrix
Answer: C
93) A media company that has separate, autonomous companies for movies, TV, Internet, and print journalism
is most likely a ________ structure.
A) divisional
B) functional
C) simple
D) matrix
Answer: A
94) Having separate payroll departments in each division of a divisional structure is an example of which of the
following?
A) efficiency, because payroll departments compete
B) duplication, because a single payroll department could do the job
C) effectiveness, because separate payroll departments create jobs
D) efficiency, because separate payroll departments can share methods of operation
Answer: B
95) As the number of employees in an organization grows, structure tends to become more ________.
A) bureaucratic
B) informal
C) decentralized
D) relaxed
Answer: A
96) Looking for ways to make their organization more flexible and innovative, today's managers may choose
this kind of structure.
A) simple
B) divisional
C) functional
D) team
Answer: D
97) In a team structure, ________.

A) there is a clear line of managerial authority
B) there is no clear line of managerial authority
C) authority comes from top managers only
D) no one has the authority to make decisions
Answer: B
98) In a team structure, team members ________.

A) are subject to decisions made by their supervisors
B) can influence decisions made by top managers
C) make decisions and are accountable for their decisions
D) make decisions only after first checking with management
Answer: C
99) All of the following are necessary for successful team structure EXCEPT ________.
30
A) well-trained team members
B) team members with cross-functional skills
C) team members with years of management experience
D) a fair and well-run team-based pay plan
Answer: C
100) In a ________, employees are recruited from functional departments to work on a specific project for a
limited time period.
A) team structure
C) product structure
D) matrix structure
Answer: D
101) In a matrix structure, a group member will typically report to ________.

A) a project manager only
B) both a project manager and functional department head
C) a functional department head only
D) Group members are fully autonomous in a matrix structure, so they don't report to anyone.
Answer: B
102) When a group member in a matrix structure finishes a project, he or she ________.
A) returns to his or her functional department
B) stays with the group to take on a new project
C) enters a pool of available employees from the entire organization
D) starts looking for a new job
Answer: A
103) By giving employees two direct superiors, a matrix structure violates this key element of organizational
design.
A) unity of command
B) chain of command
C) span of management
D) decentralization
Answer: A
104) A key difference between a team structure and a matrix structure is that a team structure ________ while a
matrix structure does not.
A) empowers group members
B) works on projects
C) has fairly permanent groups or teams
D) holds group members accountable
Answer: C
105) In a project structure, when employees finish a project they ________.

A) return to their department
B) return to a different division
C) move on to another project
D) return to their regular work
Answer: C
31
106) Which of the following areas has opened up new possibilities for how and where employees work?
A) information technology
B) human resources
C) organizational design
D) global competition
Answer: A
107) Which of the following is the biggest concern when doing work at anytime and anywhere?
A) employee payroll
B) security
C) employee accountability
D) customer satisfaction
Answer: B
108) Boundaryless organizations try to eliminate ________ within their organization.

A) horizontal specialization and vertical hierarchy
B) horizontal specialization only
C) vertical hierarchy only
D) vertical specialization only
Answer: A
109) A virtual organization is essentially ________ who come together for a particular project.
A) a group of employees from a single company
B) a group of free agents
C) a team of employees from different departments of a company
D) a group of top managers and CEOs
Answer: B
110) How does a virtual organization save on costs?

A) by hiring people who specialize in what they do
B) by hiring fewer people than they need and making them work much longer hours
C) by eliminating all administrative duties
D) by keeping only a small permanent staff for administrative purposes only
Answer: D
111) A ________ subcontracts part of a project to outside suppliers.

A) virtual organization
B) boundary organization
C) matrix structure
D) network organization
Answer: D
112) A building contractor follows the network organization model when he does which of the following?
A) does the framing and tiling by himself
B) hires three workers to help with framing
C) gives orders to workers
D) farms out the plumbing to a plumbing firm
Answer: D
32
Eric the Redd (Scenario)
Eric Redd graduated from college and was hired by a corporation that manufactured parts for the automotive
industry. The employees on the assembly line seemed bored, and their motivation was low. Eric's employer
decided to try to reorganize to increase productivity. During his career, Eric will see his job change from an
engineer to a more complex job assignment.
113) Eric, who is trained as an engineer, is now in a group with production workers and marketing specialists
from different departments designing a new product that the company plans to offer. This situation could be
described as a(n) ________.
A) alternative assignment
B) collective assignment
C) advanced assignment
D) project assignment
Answer: D
114) One of the strengths of a simple structure is that it is flexible.

Answer: TRUE
115) A strength of a functional structure is that it avoids duplication of activities.

Answer: TRUE
116) A weakness of the divisional structure is that duplication of activities tends to occur.
Answer: TRUE
117) In a team structure, team members are not held responsible for their decisions.
Answer: FALSE
118) In a team structure, there is a clear line of managerial authority from top to bottom.
Answer: FALSE
119) Employees in an organization with a matrix design can have two bosses for the same job.
Answer: TRUE
120) A significant advantage of the matrix structure is the clear chain of command from top to bottom of the
organization.
Answer: FALSE
121) When employees in a matrix structure finish a project, they go back to their functional department.
Answer: TRUE
122) When employees in a project structure finish a project, they go back to their original department.
Answer: FALSE
123) Vertical boundaries separate employees by their rank in an organization.

Answer: TRUE
124) Internal boundaries separate the organization from its customers, suppliers and stakeholders.
Answer: FALSE
125) A virtual organization relies on free agents who have no permanent status or position in the organization.
33
Answer: TRUE
126) Managers want to eliminate boundaries in organizations primarily to increase stability and reduce
flexibility.
Answer: FALSE
127) Horizontal boundaries separate employees by the specialization of their job.

Answer: TRUE
128) A network organization uses its own employees and outside suppliers to provide manpower for projects.
Answer: TRUE
134) Global competition forces firms to ________.

A) become lean, fast, and flexible
B) build up enormous cash reserves
C) think locally
D) become more hierarchical
Answer: A
135) A learning organization develops the capability to ________.

A) add new training programs to keep employees up to date
B) accept the conventional wisdom of the industry
C) continuously learn, adapt, and change
D) attract new employees who have special knowledge
Answer: C
136) A learning organization requires employees to ________.

A) encode information to prevent competitors from stealing ideas
B) collaborate with competitors
C) make all ideas public
D) share information and collaborate with one another
Answer: D
137) All of the following are characteristic of learning organizations EXCEPT ________.
A) a strong sense of community
B) a collaborative environment
C) managers who serve as facilitators
D) fear of making mistakes
Answer: D
138) Organizational learning can't take place without ________.

A) complete privacy for employees
B) a clear chain of command
C) a shared vision of the future
D) a stable structure or hierarchy
Answer: C
139) In a learning organization, it is important that all employees ________.

A) collaborate
B) study each night
34
C) have a strong sense of leadership
D) share the same vision for the organization
Answer: D
140) All learning organizations share a distinct structure.

Answer: FALSE
141) The biggest issue in workers working at home or off-site involves fairness.
Answer: FALSE
142) A learning organization puts an enormous amount of effort on making sure that all of its employees are
enrolled in some kind of university level class.
Answer: FALSE
143) Organizations that implement flextime programs allow employees to work at home for some of the work
day.
Answer: FALSE
144) Contingent workers may make up to 40 percent of the workforce by the end of the decade.
Answer: TRUE
35

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Fundamentals of Management, 10e, Global Edition (Robbins)

Chapter 5 Foundations of Planning

1) Which of the following is NOT a function of planning?

2) Planning is concerned with ________.

4) Informal planning is ________.

5) In formal planning, ________.

6) Which of the following is NOT a reason for managers to plan?

7) Planning gives organizations direction that primarily helps them ________.

8) Planning gives organizations a way to deal with change that ________.

10) One effect of planning on managers is that it forces them to ________.

11) Managers who fail to plan may ________.

12) Which of the following is a frequently cited criticism of formal planning?

18) Formal planning typically leads to which of the following?

19) All managers plan in some way, either formally or informally.

21) At some point, all managers create formal plans.

22) Planning provides direction to managers and nonmanagers alike.

23) A key function of planning is to create goals.

24) Informal planning typically works better in large organizations.

26) Planning rarely improves teamwork and cooperation among employees.

29) Formal planning can enhance creativity in an organization.

32) A major strength of formal planning is that it gives an organization rigidity.

41) A mission statement includes identification of an organization's ________.

42) A mission statement does NOT include which of the following?

45) Which term refers to an organization's capital, workers, and patents?

46) An organization's resources identify ________.

47) An organization's capabilities identify ________.

49) SWOT analysis identifies and analyzes an organization's ________.

50) SWOT analysis combines ________.

54) A corporate strategy focuses primarily on ________.

56) Growth strategies include ________.

66) Troubled companies seek ________ to address serious problems.

71) A diversified corporation is likely to have ________.

74) A cost leadership competitive strategy focuses on which of the following?

77) A differentiation strategy ________.

83) To gain a sustainable competitive advantage, a pharmaceutical company might ________.

Taco Rocket (Scenario)

103) "A distinctive edge" is a way of describing a competitive advantage.

105) A focus strategy seeks to appeal to a narrow segment of a market.

106) Customer service cannot be considered a strategic weapon for an organization.

113) Which of the following best defines plans?

114) Which of the following best defines goals?

115) In reality, all organizations have ________.

116) In most cases, strategic goals include ________.

120) In traditional goal setting, these individuals set goals.

122) In a means-ends chain, a goal at a lower level ________.

123) In management by objectives (MBO), goals ________.

126) Which goal-setting sequence is correct for the following steps?

127) The breadth of a plan refers to ________ concerns.

128) The specificity of a plan refers to ________ concerns.

130) Tactical plans are operational plans that identify ________.

133) Directional plans ________.

134) Standing plans typically can be used ________.

137) The commitment concept states that plans should ________.

144) A six-month plan qualifies as a short-term plan.

145) Directional plans leave no room for interpretation.

146) In general, upper-level managers focus on tactical or operational planning.

153) Buying a competitor's product for evaluation is a form of environmental scanning.

Fundamentals of Management, 10e, Global Edition (Robbins)

3) Which of the following are NOT basic elements of organizational design?

4) Which of the following is synonymous with work specialization?

5) Which statement accurately defines work specialization?

6) Early supporters of work specialization saw it as ________.

8) Today, managers favor this approach with regard to work specialization.