File: hittpostquiz1, Chapter 1: A Strategic Approach to Organizational Behavior
True/False
1. Taking several courses in social science fields such as psychology, sociology and
economics can be more effective in helping students become effective managers than
taking just one strategic organizational behavior course.
Ans: False
Response: see page 10. Strategic OB integrates knowledge from related disciplines so
that one course in strategic OB would better prepare students to become effective
managers than taking a host of separate courses in related disciplines. The integration of
knowledge from these fields is the critical element in learning how to become a more
effective manager.
2. A strategic approach to organizational behavior applies mostly to business
organizations and less so to other types of organizations.
Ans: False
Response: see page 11. A strategic approach to organizational behavior applies to all
types of organizations (e.g., non-profit, public sector). The business organization is just
one type.
3. Organizational culture is an example of an intangible resource.
Ans: True
Response: see page 11. Organizational culture is listed as an example of an intangible
resource.
4. Human capital depreciates in value with its use just as other resources do.
Ans: False
Response: see page 12. The text makes the statement “Human capital does not depreciate
in value as it is used.” As people use their knowledge and skills, they have the potential
to add to their knowledge and sharpen their skill sets. Therefore, these properties do not
depreciate, but rather, become more valuable with effective usage.
5. An organization that offers continuing education to its employees to increase their
knowledge and skill level would be gaining a competitive advantage through the rareness
of their employees.
Ans: False
Response: see page 13. Continuing education or training helps employees to hone their
knowledge and skills. This does not necessarily mean that their knowledge and skills
become rare. It does, however, mean that an organization’s employees become more
valuable if they are more skilled and knowledgeable about how to perform their jobs.
6. The more imitable a resource is the more of a competitive advantage it creates for the
organization.
Ans: False
Response: see page 13. Imitability is the degree to which a resource can be copied by
competitors. The more imitable a resource is, therefore, means the easier it is to copy it. If
competitors can easily copy a resource, then it is not a competitive advantage since
anyone would have access to it.
7. A gifted surgeon in a highly specialized field of medicine would best represent a
competitive advantage because of her rareness.
Ans: True
Response: see page 13. That she is gifted would speak directly to her value, but because
she is a surgeon in a highly specialized field speaks more of her rareness. There may be
other gifted surgeons in the hospital as well who work in common areas of medicine and
they are all valuable to the organization. However, she provides an additional element of
competitive advantage because the field itself is rare.
8. Under high-involvement management, creating a large applicant pool is an important
part of selective hiring.
Ans: True
Response: see page 17. The larger the applicant pool the more selective the organization
can be in selecting high quality candidates.
9. High-involvement management involves decision power which refers to the degree of
appropriate autonomy given to associates.
Ans: True
Response: see page 17. Autonomy refers to power or authority. The characteristic of
decision power refers to how much power associates should be given to do their jobs.
10. A strategic approach to organizational behavior examines power and conflict and
communication as elements of the organizational context.
Ans: False
Response: see page 23. Power and conflict and communication are two elements of the
group or team level of organizational behavior. Organizational culture and organizational
change are the two elements of the organizational context.
Multiple Choice
11. Which of the following is not one of the elements used to define an organization?
a) stable collection of people
b) coordination of specialized activities
c) achievement oriented
d) existence of certain goals
e) existence over some extended period of time
Ans: a
Response: see page 11. An organization is defined as a collection of individuals forming
a coordinated system of specialized activities for the purpose of achieving certain goals
over some extended period of time. However, the text specifically states that the
collection of individuals may change over time. Therefore, the answer is stable collection
of people which takes the opposite stance by describing the collection of individuals as
stable.
12. Intangible and tangible assets are both critical to the success of an organization.
Which of the following assets is most subject to the law of diminishing returns?
a) human capital
b) organizational reputation
c) equipment
d) brand name
e) manager-associate relations
Ans: c
Response: see page 12. The law of diminishing returns means that value declines with
use. Equipment (choice c) is the only tangible asset listed and is subject to the law of
diminishing returns since the more equipment is used the less valuable it is (it depreciates
in value).
13. Which of the following combination of characteristics would describe a resource with
potential to be a sustained competitive advantage?
a) the resource is valuable, not rare and is imitable
b) the resource is not valuable, is rare, but not imitable
c) the resource is valuable, but not rare or imitable
d) the resource is valuable, rare and imitable
e) the resource is valuable, rare but not imitable
Ans: e
Response: see page 14. Value, rareness and imitability are the characteristics related to a
resource’s potential to provide an organization with a competitive advantage. A sustained
competitive advantage must be valuable, rare and non-imitable. The resource is valuable,
rare but not imitable is the only option that possesses all of these elements.
14. Which of the following potential competitive implications describes a resource that is
valuable, but not rare?
a) competitive disadvantage
b) temporary competitive parity
c) competitive parity
d) temporary competitive advantage
e) sustained competitive advantage
Ans: c
Response: see page 14. As outlined in Exhibit 1.2 in the text, competitive parity is
identified as the competitive implication when a human resource is valuable but not rare
(workers are skilled and knowledgeable and effective but they do not possess anything
above and beyond what other companies’ workers possess). Temporary competitive
parity is not one of the competitive implications outlined in the exhibit.
15. Human capital has the potential to provide an organization with a competitive
advantage when associates’ skills and knowledge support the organization’s strategy for
competing in the marketplace. Associates for upscale clothing designers such as J.Crew
or Ralph Lauren provide a potential competitive advantage by supporting the
_________________ strategy that these companies have adopted.
a) low-cost, low quality
b) low-cost, good quality
c) low-cost, high quality
d) higher-cost, good quality
e) higher-cost, special features
Ans: e
Response: see page 13. The two types of strategies are identified as low-cost, good
quality and higher-cost, superior quality or special features. Based on this, low cost, low
quality and low cost, high quality are eliminated. Because the question highlights upscale
clothing designers it is identifying expensive products; expensive products produced by
these companies are marketed as being of superior quality – this rules out higher cost,
good quality (no choice exists for higher-cost, higher quality). The other basis on which
such designers market their more expensive product is special features.
16. Which of the following is the most critical factor in whether or not a human resource
can be a competitive advantage for an organization?
a) its value
b) its rareness
c) its imitability
d) its non-imitability
e) its proper management
Ans: e
Response: see page 15
A human resource can possess all of the elements necessary to make it a competitive
advantage. However, if that resource is not properly managed, it will not afford an
organization a competitive advantage and may, in fact, become a liability.
17. The five key characteristics of high involvement management include all of the
following except:
a) selective hiring
b) incentive compensation
c) decision power
d) information sharing
e) performance evaluation
Ans: e
Response: see page 17. Performance evaluation is the only option not included in the list
of high involvement management key characteristics.
18. Which of the following key characteristics of high involvement management most
closely addresses the importance of empowering associates?
a) decision power
b) information sharing
c) extensive training
d) selective hiring
e) incentive compensation
Ans: a
Response: see page 17. While each of the five key characteristics of high involvement
management deal with the importance of respecting associates’ skills, knowledge and
attributes, decision power most closely addresses the issue of empowerment. Information
sharing is closely related, but decision power more directly describes empowerment.
19. High involvement management is a critical approach to managing human capital.
Which of the following key characteristics most directly addresses the importance of
employee motivation through rewards?
a) selective hiring
b) information sharing
c) incentive compensation
d) extensive training
e) decision power
Ans: c
Response: see page 19. Each of the five key characteristics of high involvement
management addresses employee motivation either directly or indirectly. However,
incentive compensation deals most directly with employee motivation through rewards
such as compensation. Employees may consider power or training opportunities as a
reward, but incentive compensation identifies common reward systems to motivate
employees.
20. A critical element of hiring under the high involvement management approach is
being highly selective. Which of the following scenarios best describes high involvement
management hiring?
a) A manager focuses on a small applicant pool through internal recommendations and
uses multiple interviews and tests. Applicants are selected for their skills.
b) A manager focuses on a small applicant pool through word of mouth and using testing
and single interviewing. Applicants are selected for both their skills and their fit.
c) A manager focuses on a small applicant pool through advertising and word of mouth
and uses objective testing. Applicants are selected for fit.
d) A manager focuses on a large applicant pool through advertising and internal
recommendations and uses multiple interviews. Applicants are selected for their skills.
e) A manager focuses on a large applicant pool through advertising, word of mouth and
internal recommendations and uses a variety of selection tools. Applicants are selected
for both their skills and fit.
Ans: e
Response: see page 17. There should be a large pool of applicants that is built through
various methods – advertising, word of mouth, and internal recommendations. A variety
of selection tools should be used such as multiple interviews and testing. Finally,
applicants should be selected based on their skills as well as their fit.
21. Extensive training, one of the five key characteristics of high involvement
management consists of all of the following elements except:
a) informal, on-the-job training
b) enrollment in yearly training and development workshops
c) job rotation to enhance skills
d) participation in discussions of culture and mission
e) job enlargement to increase autonomy
Ans: e
Response: see page 17. Only job enlargement is not listed as an element of extensive
training. In addition, job enlargement is not a practice that is used necessarily to increase
autonomy (this would be job enrichment).
22. Which of the following pairs describes the outcomes that are positively affected by
empowering associates with decision power?
a) productivity and tenure
b) competitiveness and satisfaction
c) satisfaction and turnover
d) productivity and turnover
e) competitiveness and tenure
Ans: b
Response: see page 19. A study of Fortune 1000 companies discussed in the textbook
identifies productivity, competitiveness and employee satisfaction as three outcomes
positively affected by decision power. Tenure and turnover are not mentioned – tenure
reflects time with the firm and turnover refers to an associate’s voluntary or involuntary
severance from the organization.
23. Decision power, as part of a high involvement management approach, most
accurately describes which of the following scenarios?
a) a manager allows associates to participate in decisions made by lower and middle
managers
b) a manager gives associates power to make any decisions that are specifically important
to their jobs
c) a lower-level manager closely supervises the work of associates to ensure quality
d) a manager retains power to make important decisions
e) a manager gives associates authority to supervise each other
Ans: a
Response: see page 17. Decision power refers to the high involvement management
practice of giving associates authority (autonomy) to make decisions on their own when
associates have the appropriate skills and knowledge to do so. Managers who practice
decision power allow associates to participate in the decision-making process for those
decisions made by lower-level and middle managers. Lower level managers move from
closely supervising an associate’s work to coaching an associate on effective
performance.
24. Which type of incentive compensation best describes a call-center’s practice of
paying associates $5.00 more for each telephone order they process beyond the daily
requirement of 25 calls?
a) bonus rate system
b) skills-based pay system
c) gain sharing program
d) profit sharing program
e) piece-rate system
Ans: e
Response: see page 19. Skills-based pay system, gain sharing program, profit sharing
program and piece-rate system are types of incentive compensation identified in the
textbook. Bonus rate system is not a term used in the field. Only piece-rate system
accurately describes the example highlighted in the question.
25. _______________ is a type of incentive compensation where associates earn a bonus
based on a company’s revenue.
a) Skills-based pay
b) Piece-rate system
c) Profit sharing
d) Gain sharing
e) Knowledge-based pay
Ans: c
Response: see page 19. Skills-based pay and knowledge-based pay are the same thing and
represent incentive compensation based on additional skills and knowledge acquired by
an associate. The piece rate system represents an incentive based on additional quantity
of goods/services made or sold. Gain sharing, is a share in the portion of savings realized
from associate suggestions for improvement. Only profit sharing represents an incentive
earned through the company’s revenue (or profit).