Chapter 1 MANAGEMENT and ENTREPRENEURSHIP

Chapter 1: Management and Entrepreneurship 1

Chapter 1—MANAGEMENT AND ENTREPRENEURSHIP

TRUE/FALSE (Concepts)

1.A manager is responsible for achieving organizational objectives through efficient and effective utilization of personal ability.

ANS:FPTS:1DIF:ModerateREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

2.A manager is responsible for achieving organizational objectives through efficient and effective utilization of resources.

ANS:TPTS:1DIF:EasyREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

3.The manager’s resources are human, financial, and physical.

ANS:FPTS:1DIF:ModerateREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

4.The level of organizational performance is unrelated to how effectively and efficiently managers utilize resources to achieve objectives.

ANS:FPTS:1DIF:EasyREF:p. 6

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

5.In a Wall Street Journal Gallup survey, top executives identified leadership ability as the most important trait for successful managers.

ANS:FPTS:1DIF:ModerateREF:p. 7

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

6.A manager needs technical, interpersonal, and decision-making skills.

ANS:TPTS:1DIF:ModerateREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

7.The three skills that managers need are technical, interpersonal, and analytical skills.

ANS:FPTS:1DIF:HardREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

8.Technical skills involve the ability to use methods and techniques to perform a task.

ANS:TPTS:1DIF:ModerateREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

9.Interpersonal skills involve the ability to understand, communicate, and work well with individuals and groups through developing effective relationships.

ANS:TPTS:1DIF:ModerateREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

10.Interpersonal skills are based on strong conceptual skills.

ANS:FPTS:1DIF:EasyREF:p. 9

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

11.Decision-making skills are based on the ability to conceptualize situations and select alternatives to solve problems and take advantage of opportunities.

ANS:TPTS:1DIF:EasyREF:p. 9

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

12.The four management functions are planning, organizing, leading, and controlling.

ANS:TPTS:1DIF:EasyREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

13.There are three basic management functions.

ANS:FPTS:1DIF:EasyREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

14.Planning is typically the second step in the management process.

ANS:FPTS:1DIF:EasyREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

15.Organizing is the process of delegating and coordinating tasks and allocating resources to achieve objectives.

ANS:TPTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

16.Leading is the process of ordering employees to perform particular tasks.

ANS:FPTS:1DIF:HardREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

17.Controlling is the process of establishing and implementing mechanisms to ensure that objectives are achieved.

ANS:TPTS:1DIF:EasyREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

18.The three management role categories are interpersonal, informational, and decisional roles.

ANS:TPTS:1DIF:ModerateREF:p. 12

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

19.The three levels of management are top managers, middle managers, and nonmanagement operative employees.

ANS:FPTS:1DIF:EasyREF:p. 15

OBJ:1-5 CNAT:AACSB Reflective Thinking | Management Leadership Principles

20.There are basically four levels of management.

ANS:FPTS:1DIF:EasyREF:p. 15

OBJ:1-5 CNAT:AACSB Reflective Thinking | Management Leadership Principles

21.General, functional, and project managers perform basically the same tasks.

ANS:FPTS:1DIF:EasyREF:p. 16

OBJ:1-6 CNAT:AACSB Reflective Thinking | Management Leadership Principles

22.All three levels of management use all three management skills to some degree.

ANS:TPTS:1DIF:ModerateREF:p. 17

OBJ:1-7 CNAT:AACSB Reflective Thinking | Management Leadership Principles

23.Different functions, skills, and roles can be expected when managing in a for-profit organization versus managing in a not-for-profit organization.

ANS:FPTS:1DIF:HardREF:p. 18

OBJ:1-7 CNAT:AACSB Reflective Thinking | Management Leadership Principles

24.One difference between a manager’s job in for-profit organizations versus not-for-profit organizations is that the primary measure of performance in for-profit organizations is bottom-line profit.

ANS:TPTS:1DIF:ModerateREF:p. 19

OBJ:1-7 CNAT:AACSB Reflective Thinking | Management Leadership Principles

25.Learning organizations have everyone engaged in identifying and solving problems, enabling change, and continuous improvement.

ANS:TPTS:1DIF:ModerateREF:p. 19

OBJ:1-7 CNAT:AACSB Reflective Thinking | Management Leadership Principles

26.Knowledge management involves everyone in an organization in sharing knowledge and applying it to continuously improve products and processes.

ANS:TPTS:1DIF:EasyREF:p. 19

OBJ:1-7 CNAT:AACSB Reflective Thinking | Management Leadership Principles

27.Intrapreneurs commonly start a new small business venture, while entrepreneurs commonly start a new line of business within a large organization.

ANS:FPTS:1DIF:HardREF:p. 21

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

28.A small business is defined as a company that is publicly owned and operated, with a small number of employees and relatively low volume of sales.

ANS:FPTS:1DIF:ModerateREF:p. 21

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

29.Intrapreneurs commonly have more risk than entrepreneurs.

ANS:FPTS:1DIF:HardREF:p. 21

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

30.Much of the creativity and innovation in society comes from entrepreneurs.

ANS:TPTS:1DIF:EasyREF:p. 22

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

31.Large businesses commonly acquire small businesses to gain innovations.

ANS:TPTS:1DIF:ModerateREF:p. 22

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

32.Small businesses are the primary suppliers and distributors of products for large businesses.

ANS:TPTS:1DIF:EasyREF:p. 22

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

33.The first step to entrepreneurship is to select the new venture or the industry in which the business will compete.

ANS:TPTS:1DIF:EasyREF:p. 23

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

34.Nearly half of new venture ideas stem from previous work experience.

ANS:TPTS:1DIF:HardREF:p. 23

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

35.A competitive advantage specifies how an organization offers unique customer value.

ANS:TPTS:1DIF:EasyREF:p. 23

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

36.A first-mover advantage specifies how an organization offers unique customer value.

ANS:FPTS:1DIF:EasyREF:p. 23

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

37.A first-mover advantage refers to offering a unique customer value before competitors do so.

ANS:TPTS:1DIF:EasyREF:p. 23

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

38.When a company offers a unique customer value before competitors do so, it’s referred to as a first-mover advantage.

ANS:TPTS:1DIF:HardREF:p. 23

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

39.A business plan is a written description of a new venture—its objectives and the steps for achieving them.

ANS:TPTS:1DIF:EasyREF:p. 23

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

40.There are very few Web sites dedicated to providing information related to developing a business plan.

ANS:FPTS:1DIF:EasyREF:p. 25

OBJ:1-8 CNAT:AACSB Reflective Thinking | Management Creation of Value

MULTIPLE CHOICE (Concepts)

1.A manager is responsible for achieving:

a. / his or her objectives for the organization.
b. / the objectives established by governmental leaders.
c. / the organization’s objectives.
d. / the objectives which are common to the manager’s industry.

ANS:CPTS:1DIF:EasyREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

2.A manager is responsible for achieving organizational objectives through:

a. / controlling the process.
b. / efficient and effective utilization of resources.
c. / planning and controlling.
d. / personal effort.

ANS:BPTS:1DIF:ModerateREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

3.A manager is responsible for:

a. / setting organizational objectives.
b. / determining organizational needs.
c. / achieving organizational objectives.
d. / administering discipline in the workplace.

ANS:CPTS:1DIF:EasyREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

4.Which of the following is the best example of being efficient?

a. / doing more than others
b. / doing more than in the past
c. / doing things right
d. / doing the right thing

ANS:CPTS:1DIF:ModerateREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

5.Which of the following is the best example of being effective?

a. / doing more than others
b. / doing more than in the past
c. / doing things right
d. / doing the right thing

ANS:DPTS:1DIF:ModerateREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

6.All of the following are manager’s resources EXCEPT:

a. / human resources.
b. / financial resources.
c. / physical resources.
d. / technical resources.

ANS:DPTS:1DIF:EasyREF:p. 4

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

7.The level of organizational performance is based on:

a. / how effectively and efficiently managers utilize resources to achieve objectives.
b. / how well efforts are coordinated.
c. / the innate ability of employees.
d. / how well a manager stays within the budget.

ANS:APTS:1DIF:ModerateREF:p. 6

OBJ:1-1 CNAT:AACSB Reflective Thinking | Management Leadership Principles

8.Which of the following are requisite management skills?

a. / technical skills
b. / interpersonal skills
c. / decision-making skills
d. / all of these

ANS:DPTS:1DIF:EasyREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

9.All the following are management skills EXCEPT:

a. / technical skills.
b. / interpersonal skills.
c. / psychological skills.
d. / decision-making skills.

ANS:CPTS:1DIF:ModerateREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

10.______skills involve the ability to use methods and techniques to perform a task.

a. / Decision-making
b. / Interpersonal
c. / Technical
d. / Communication

ANS:CPTS:1DIF:ModerateREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

11.Which of the following statements is TRUE regarding technical skills?

a. / Managers need only skills regarding people; subordinates do all the technical work.
b. / Most employees are promoted to their first management position primarily because of their technical skills.
c. / Technical skills are used mostly by top management.
d. / Technical skills are used mostly by middle management.

ANS:BPTS:1DIF:HardREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

12.______skills involve the ability to understand, communicate, and work well with individuals and groups through developing effective relationships.

a. / Interpersonal
b. / Decision-making
c. / Technical
d. / Team-building

ANS:APTS:1DIF:EasyREF:p. 8

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

13.The ability to conceptualize situations and select alternatives to solve problems and take advantage of opportunities is:

a. / technical skills.
b. / interpersonal skills.
c. / decision-making skills.
d. / the classical decision-making model.

ANS:CPTS:1DIF:ModerateREF:p. 9

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

14.According to Ghiselli, the number-one trait that contributes to successful management is:

a. / intelligence.
b. / self-assurance.
c. / decisiveness.
d. / supervisory ability.

ANS:DPTS:1DIF:ModerateREF:p. 10

OBJ:1-2 CNAT:AACSB Reflective Thinking | Management Leadership Principles

15.The four management functions are:

a. / planning, organizing, supervising, and controlling.
b. / planning, organizing, leading, and feedback.
c. / planning, directing, leading, and controlling.
d. / planning, organizing, leading, and controlling.

ANS:DPTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

16.______is the process of setting objectives and determining in advance exactly how the objectives will be met.

a. / Organizing
b. / Leading
c. / Controlling
d. / Planning

ANS:DPTS:1DIF:HardREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

17.______is the process of delegating and coordinating tasks and allocating resources to achieve objectives.

a. / Organizing
b. / Planning
c. / Controlling
d. / Leading

ANS:APTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

18.The management function of ______involves delegating and coordinating tasks and allocating resources to achieve objectives.

a. / controlling
b. / organizing
c. / leading
d. / planning

ANS:BPTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

19.An important part of ______is staffing.

a. / planning
b. / controlling
c. / leading
d. / organizing

ANS:DPTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

20.______is the process of influencing employees to work toward achieving objectives.

a. / Organizing
b. / Controlling
c. / Planning
d. / Leading

ANS:DPTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

21.The management function of ______involves influencing employees to work toward achieving objectives.

a. / planning
b. / organizing
c. / leading
d. / controlling

ANS:CPTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

22.______is the process of establishing and implementing mechanisms to ensure that objectives are achieved.

a. / Leading
b. / Planning
c. / Controlling
d. / Organizing

ANS:CPTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

23.The management function of ______involves establishing and implementing mechanisms to ensure that objectives are achieved.

a. / controlling
b. / leading
c. / organizing
d. / planning

ANS:APTS:1DIF:ModerateREF:p. 11

OBJ:1-3 CNAT:AACSB Reflective Thinking | Management Leadership Principles

24.A management role is:

a. / based on the manager’s supervisor ability.
b. / a set of expectations of how one will behave in a given situation.
c. / performed by top management only.
d. / performed by middle management only.

ANS:BPTS:1DIF:HardREF:p. 12

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

25.All of the following are management role categories EXCEPT:

a. / interpersonal roles.
b. / informational roles.
c. / decisional roles.
d. / technical roles.

ANS:DPTS:1DIF:ModerateREF:p. 12

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

26.The three management role categories are:

a. / interpersonal roles, informational roles, and decisional roles.
b. / interpersonal roles, operational roles, and decisional roles.
c. / interpersonal roles, informational roles, and operational roles.
d. / external roles, informational roles, and decisional roles.

ANS:APTS:1DIF:ModerateREF:p. 12

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

27.Which of the following is an example of a managerial interpersonal role?

a. / figurehead
b. / disseminator
c. / disturbance handler
d. / negotiator

ANS:APTS:1DIF:HardREF:p. 12

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

28.In training others, one is performing a ______role.

a. / leader
b. / liaison
c. / figurehead
d. / spokesperson

ANS:APTS:1DIF:HardREF:p. 12

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

29.Which of the following is an example of a managerial informational role?

a. / leader
b. / liaison
c. / monitor
d. / negotiator

ANS:CPTS:1DIF:HardREF:p. 13

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

30.Which of the following is an example of a managerial decisional role?

a. / leader
b. / spokesperson
c. / monitor
d. / negotiator

ANS:DPTS:1DIF:HardREF:p. 13

OBJ:1-4 CNAT:AACSB Reflective Thinking | Management Leadership Principles

31.There are ______levels of management.

a. / two
b. / three
c. / four
d. / five

ANS:BPTS:1DIF:EasyREF:p. 15

OBJ:1-5 CNAT:AACSB Reflective Thinking | Management Leadership Principles

32.The three levels of management are:

a. / top managers, middle managers, and nonmanagement operative employees.
b. / top managers, middle managers, and first-line managers.
c. / executives, middle managers, and nonmanagement operative employees.
d. / executives, middle managers, and first-line managers.

ANS:BPTS:1DIF:ModerateREF:p. 15

OBJ:1-5 CNAT:AACSB Reflective Thinking | Management Leadership Principles

33.The three types of managers are:

a. / general managers, functional managers, and project managers.
b. / general managers, functional managers, and specific managers.
c. / functional managers, project managers, and specific managers.
d. / functional managers, project managers, and staff managers.

ANS:APTS:1DIF:ModerateREF:p. 16

OBJ:1-6 CNAT:AACSB Reflective Thinking | Management Leadership Principles

34.Which of the following is NOTa type of manager?

a. / general manager
b. / functional manager
c. / project manager
d. / conceptual manager

ANS:DPTS:1DIF:ModerateREF:p. 16

OBJ:1-6 CNAT:AACSB Reflective Thinking | Management Leadership Principles

35.A general manager:

a. / coordinates employees and other resources across several functional departments to accomplish a specific task.
b. / supervises the activities of several departments that perform different activities.
c. / supervises activities in areas such as marketing, operations/production, finance/accounting, and human resources/personnel management.
d. / is another name for top management.

ANS:BPTS:1DIF:ModerateREF:p. 16

OBJ:1-6 CNAT:AACSB Reflective Thinking | Management Leadership Principles

36.Middle managers are:

a. / general managers.
b. / functional managers.
c. / project managers.
d. / both general and functional managers.

ANS:DPTS:1DIF:ModerateREF:p. 16

OBJ:1-6 CNAT:AACSB Reflective Thinking | Management Leadership Principles

37.A functional manager:

ANS:CPTS:1DIF:ModerateREF:p. 16

OBJ:1-6 CNAT:AACSB Reflective Thinking | Management Leadership Principles

38.Which of the following statements is TRUE regarding the primary management skills needed by top-level managers?

a. / They have a greater need for technical and decision-making skills.
b. / They have a greater need for technical and interpersonal skills.
c. / They have a greater need for decision-making and interpersonal skills.
d. / They tend to have a balanced need for technical, interpersonal, and decision-making skills.

ANS:CPTS:1DIF:ModerateREF:p. 17

OBJ:1-7 CNAT:AACSB Reflective Thinking | Management Leadership Principles

39.The hierarchy of skills managers need, starting with first-line managers, is:

a. / technical skills, decision-making skills, and interpersonal skills.
b. / interpersonal skills, technical skills, and decision-making skills.
c. / technical skills, interpersonal skills, and decision-making skills.
d. / interpersonal skills, decision-making skills, and technical skills.

ANS:CPTS:1DIF:HardREF:p. 17