Chapter 06 - The Nature of Management
Chapter 06
The Nature of Management
True / False Questions
1. Managers can run a business with only human and physical resources.
True False
2. Managers engage in planning, organizing, staffing, directing, and controlling.
True False
3. Management takes place only in business settings.
True False
4. Management is a process designed to achieve an organization's objectives by using its
resources effectively and efficiently in a changing environment.
True False
5. The decision to introduce new products in order to reach objectives is often a key
management duty.
True False
6. Employees are one of the most important resources in helping a company obtain its
objectives.
True False
6-1
Chapter 06 - The Nature of Management
Multiple Choice Questions
7. Management is a process designed to achieve an organization's objectives by using its
resources ____________ (accomplishing the objectives with a minimum of resources) and
_________________ (having the intended result).
A. effectively, efficiently
B. efficiently, effectively
C. quickly, competently
D. competently, quickly
E. thoroughly, completely
8. Management is a process
A. that is unanimous.
B. of dissipating resources.
C. of coordinating resources to achieve objectives.
D. that works well.
E. mainly used in for-profit businesses.
9. Managers need adequate ____________ resources to pay for essential activities.
A. Human
B. Management
C. Financial
D. Corporate
E. Information
10. All of the following are typical resources that must be acquired by each organization in
the pursuit of its objectives except
A. people.
B. raw materials and equipment.
C. money.
D. information.
E. laws and regulations.
6-2
Chapter 06 - The Nature of Management
11. If a manager is concerned about doing the work with the least cost and waste, then her
primary managerial concern is
A. effectiveness.
B. accountability.
C. delegation.
D. hiring.
E. efficiency.
12. All of the following are functions of management except
A. directing.
B. staffing.
C. promoting.
D. organizing.
E. controlling.
13. _____ make decisions about the use of an organization's resources and are concerned with
planning, organizing, leading, and controlling the organization's activities.
A. Managers
B. Shareholders
C. Employees
D. Consumers
E. Suppliers
14. When providing benefits, a manager is most closely involved with which of the following
resources?
A. Natural
B. Physical
C. Human
D. Financial
E. Structural
6-3
Chapter 06 - The Nature of Management
15. If a manager is organizing equipment within a factory setting, he is mainly involved in
which of the following resources?
A. Natural
B. Physical
C. Human
D. Financial
E. Structural
16. If a manager is analyzing several methods for obtaining the money needed to expand
operations, she is involved with which of the following resources?
A. Natural
B. Physical
C. Human
D. Financial
E. Structural
Essay Questions
17. What are the resources essential to every organization?
18. What is management?
6-4
Chapter 06 - The Nature of Management
True / False Questions
19. Planning involves forecasting events and determining the best course of action from a set
of options or choices.
True False
20. Crisis management plans are the long-range plans developed by top management.
True False
21. Staffing is the structuring of resources and activities to accomplish goals in an efficient
and effective manner.
True False
22. Directing is motivating and leading employees to achieve organizational objectives.
True False
23. Taking action to correct deviations from standards is part of the controlling function.
True False
24. An important part of good directing is administering awards and recognition.
True False
6-5
Chapter 06 - The Nature of Management
Multiple Choice Questions
25. Determining an organization's objectives and deciding how to accomplish them are part of
the management function known as
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
26. Forecasting is most closely associated with
A. organizing.
B. directing.
C. staffing.
D. planning.
E. controlling.
27. The type of planning conducted on a long-range basis by top managers is usually called
A. incremental.
B. tactical.
C. strategic.
D. crisis.
E. static.
28. Crisis management plans generally cover maintaining business operations during a crisis
and
A. firing those responsible for the crisis.
B. avoiding responsibility for the crisis.
C. communicating with others about the situation and the company's response to it.
D. preventing the situations from occurring.
E. all of the above.
6-6
Chapter 06 - The Nature of Management
29. Dividing work into small units and assigning it to individuals are tasks related to
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
30. Maria and Harold have just finished interviewing four candidates who want to work for
Jackson Office Supply, Inc. They are involved in which of the following management
functions?
A. Planning
B. Analyzing
C. Staffing
D. Controlling
E. Directing
31. Downsizing is an aspect most closely associated with
A. staffing.
B. planning.
C. organizing.
D. controlling.
E. directing.
32. Giving people incentives to achieve objectives relates to the management function of
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
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Chapter 06 - The Nature of Management
33. When Betsy pointed out to her supervisor that the furniture assemblers at their
manufacturing plant were using 20 percent more nails than in the preceding month, she was
involved in
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
34. The first step in the control process is to
A. ask your employees to fix any problems.
B. take corrective actions when necessary.
C. investigate the causes of any deviations.
D. measure the actual performance.
E. identify deviations from the standard.
Essay Questions
35. What are the five activities, in the order delineated in your text, of the control process?
36. Describe the major functions of management.
6-8
Chapter 06 - The Nature of Management
True / False Questions
37. All organizations, regardless of size, have multiple levels of management.
True False
38. A chief executive officer is a middle manager.
True False
39. Top managers focus on strategic decisions to use resources to take advantage of
opportunities.
True False
40. Middle managers are responsible for tactical planning that will implement the general
guidelines established by top management.
True False
41. A department manager is a first-line manager.
True False
42. All managers perform all five management functions but not to the same degree.
True False
6-9
Chapter 06 - The Nature of Management
Multiple Choice Questions
43. Decisions regarding adding new products, acquiring companies, and moving into foreign
markets would most typically be made by
A. first-line management.
B. a sales manager.
C. middle management.
D. a production manager.
E. top management.
44. Top managers spend most of their time performing which of the following management
functions?
A. Directing
B. Controlling
C. Organizing
D. Staffing
E. Planning
45. _____ are responsible for tactical planning that will implement the general guidelines
established by top management.
A. CEOs
B. Middle managers
C. Top managers
D. First-line supervisors
E. Office managers
46. The specific operations of the organization, plant, division, or department would most
typically involve
A. top management.
B. middle management.
C. first-line management.
D. the board of directors.
E. stockholders.
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Chapter 06 - The Nature of Management
47. Positions such as foremen, supervisors, and office managers are examples of
A. top management.
B. first-line management.
C. middle management.
D. executive levels.
E. strategic decision makers.
48. A person who analyzes a firm's income and expenses over a specified period and selects
appropriate ways to invest extra funds is involved in
A. information technology management.
B. marketing management.
C. human resources management.
D. production and operations management.
E. financial management.
49. Production and operations managers are concerned with
A. identifying and efficiently using sources of financing.
B. managing a division.
C. planning, pricing, and promoting products.
D. transforming resources into products.
E. recruiting new employees and developing employee programs.
50. A person in charge of designing production facilities, purchasing supplies, and ensuring
that products meet quality standards is probably a
A. financial manager.
B. production and operations manager.
C. human resources manager.
D. marketing manager.
E. administrative manager.
6-11
Chapter 06 - The Nature of Management
51. The development of a performance-appraisal system is primarily the concern of
A. financial management.
B. human resources management.
C. production and operations management.
D. marketing management.
E. administrative management.
52. Developing and monitoring advertising and promotion efforts of a company would most
likely involve the _______ managers.
A. production
B. operations
C. marketing
D. personnel
E. administrative
Essay Questions
53. Information technology managers are responsible for which duties within organizations?
Give an example of an important task of an IT manager.
54. How do top managers differ from first-line managers?
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Chapter 06 - The Nature of Management
True / False Questions
55. Autocratic leaders involve their employees in decisions.
True False
56. Free-rein leaders allow their employees to work without much interference.
True False
57. Although managers may not actually perform the specific jobs within organizations, they
need the technical expertise required to performed jobs related to their area of management in
order to train employees and answer questions.
True False
58. Conceptual skills are the ability to identify relevant issues and recognize their importance,
understand the relationships between them, and perceive their underlying causes.
True False
59. Human relations skills are highly important for managers.
True False
60. Analytical skills involve the ability to think creatively.
True False
6-13
Chapter 06 - The Nature of Management
Multiple Choice Questions
61. Bob has been put in charge of a group of new employees. He has told them they must
perform their duties in the exact manner and order that he has commanded, with no
exceptions. Bob is using
A. democratic leadership.
B. autocratic leadership.
C. free-rein leadership.
D. creative leadership.
E. good leadership.
62. When Karen allows her employees to do their work with little interference, her leadership
style is
A. democratic.
B. republican.
C. autocratic.
D. free-rein.
E. analytical.
63. Joe met with all of his department heads to listen to their opinions about buying a new
machine. Although they all thought it was a good idea, Joe did not buy the machine because
his employees did not think it necessary. Joe's leadership style is
A. democratic.
B. autocratic.
C. free-rein.
D. bad.
E. good.
64. Which of the following is best used when employees know the organization's standards
and are highly motivated to attain them?
A. Democratic leadership
B. Autocratic leadership
C. Free-rein leadership
D. Exemplary leadership
E. No leadership
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Chapter 06 - The Nature of Management
65. To train employees, answer questions, and provide guidance in doing a task, managers
need
A. technical expertise.
B. conceptual skills.
C. analytical skills.
D. leadership skills.
E. creative skills.
66. Having conceptual skills often means being able to
A. perceive the causes of problems.
B. identify relevant issues and recognize their importance.
C. use a computer.
D. motivate employees.
E. think creatively and in abstract terms.
67. Having analytical skills means that a manager is able to do all of the following except
A. identify relevant issues and their importance.
B. understand the relationships between issues.
C. think logically.
D. analyze the underlying causes of a problem.
E. think in abstract terms.
68. Having good human relations skills means that a manager is able to
A. use a computer.
B. train employees and solve problems.
C. think creatively.
D. work with others.
E. all of the above.
6-15
Chapter 06 - The Nature of Management
69. According to the text, all of the following are skills needed by managers except
A. analytical.
B. clerical.
C. technical.
D. conceptual.
E. human relations.
70. A(n) ________ leadership style is best for stimulating unskilled or unmotivated
employees.
A. bureaucratic
B. democratic
C. free-rein
D. autocratic
E. inclusive
Essay Questions
71. What are the three leadership styles and under what circumstances is each style most
effective?
72. What are some of the skills needed by managers?
6-16
Chapter 06 - The Nature of Management
True / False Questions
73. Situations requiring small-scale decisions generally occur after some warning signs.
True False
74. The first step in good managerial decision-making is developing options.
True False
75. Once a situation has been recognized, management must define it.
True False
76. In the analyzing options stage, managers should consider the practicality and
appropriateness of each option.
True False
77. When making a decision, selecting the best option is an objective procedure.
True False
78. Effective implementation of a major decision does not require any planning.
True False
6-17
Chapter 06 - The Nature of Management
Multiple Choice Questions
79. When selecting the best option among a series of possible decisions,
A. It is always only possible to choose one.
B. Quantitative analysis is almost always helpful.
C. Sometimes all options must be rejected.
D. There may not be a best option.
E. It may be possible to use a combination of several options.
80. When assessing the appropriateness of a decision option, managers should
A. consider its impact on the organization as a whole.
B. only think narrowly about the one department most affected by the decision.
C. ask their friends which option they would choose.
D. choose the option that partially addresses the problem.
E. go with his or her gut regarding which option is best.
81. When implementing a decision, management should be ready to deal with:
A. Irate consumers
B. Employee confusion
C. Unexpected consequences
D. Payroll
E. Nothing—a well-planned decision will always be implemented smoothly
82. Why is monitoring the consequences of decisions important?
A. Without it, the consequences of decisions may not be apparent quickly enough
B. It is the logical step after implementing the decision
C. It provides a financial barometer of how expensive decisions are
D. Shareholders like to see monitoring of decision on annual reports
E. Monitoring is not important and it is expensive
6-18
Chapter 06 - The Nature of Management
83. Effective implementation of a major decision requires
A. perseverance.
B. luck.
C. directing.
D. planning.
E. controlling.
84. After monitoring the consequences of a decision, management determines that the
decision failed to accomplish the desired result. Which of the following is not a possible
reason for this failure?
A. The decision was wrong.
B. The situation changed.
C. The situation was defined incorrectly.
D. The implementation of the decision was flawed.
E. The mathematical management formula was flawed.
85. Selecting the best option in the decision-making process is
A. simply a matter of plugging variables into a formula.
B. often objective.
C. often subjective.
D. easy.
E. all of the above.
86. When analyzing options in the decision-making process, managers must consider the
appropriateness and _______ of each option.
A. utility
B. practicality
C. creativity
D. feasibility
E. relevance
6-19
Chapter 06 - The Nature of Management
87. Managers at Sprocket Inc. have recognized declining sales on their ABC model product
and must make a decision about what to do. Their next step is to
A. define the situation.
B. develop options.
C. analyze options.
D. select the best option.
E. implement the decision.
88. All of the following steps are a part of the decision-making process except
A. defining the situation.
B. developing options.
C. analyzing options.
D. delegating the decision.
E. implementing the decision.
Essay Questions
89. Why is monitoring the consequences of decisions important?
90. What is the systematic six-step approach that leads to more effective decision making?
6-20
Chapter 06 - The Nature of Management
Multiple Choice Questions
Solve the Dilemma Making Infinity Computers Competitive
91. What is Infinity Computers' problem in this case?
A. Infinity's computers are too expensive.
B. The strategies that originally made the company successful are no longer successful
anymore.
C. Infinity has no problem; the company is doing great.
D. The president and CEO is a poor leader.
E. Infinity's products are ahead of their time and there is no market for it.
92. What is a major weakness of the firm?
A. Having a poor quality product
B. Having a difficult leader
C. Having too many employees and excessive reliance on one product
D. Having too few employees
E. Offering too many products
Essay Questions
93. Evaluate Infinity's current situation and analyze its strengths and weaknesses.
6-21
Chapter 06 - The Nature of Management
94. Evaluate the opportunities for Infinity, including using its current strategy, and propose
alternative strategies.
95. Suggest a plan for Infinity to compete successfully over the next 10 years.
6-22
Chapter 06 - The Nature of Management
Chapter 06 The Nature of Management Answer Key
True / False Questions
1. (p. 178-179) Managers can run a business with only human and physical resources.
FALSE
Managers must have physical resources to turn into products to market, human resources to
make and sell the product, and financial resources to purchase additional goods and services,
pay employees, and operate the business.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
2. (p. 178) Managers engage in planning, organizing, staffing, directing, and controlling.
TRUE
All of these activities are necessary for managers to perform in order to coordinate the use of
the organization's resources.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: Management Functions
6-23
Chapter 06 - The Nature of Management
3. (p. 178) Management takes place only in business settings.
FALSE
Management takes place in any organization requiring the coordination of resources.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
4. (p. 178) Management is a process designed to achieve an organization's objectives by using its
resources effectively and efficiently in a changing environment.
TRUE
Managers are the ones who make decisions about the use of an organization's resources and
are concerned with planning, organizing, leading, and controlling the organization's activities
to reach organizational objectives in an effective and efficient manner.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
5. (p. 178) The decision to introduce new products in order to reach objectives is often a key
management duty.
TRUE
Acquiring suppliers is another important part of managing resources along with ensuring that
new products are made available to customers. These are some of the resources managers
must coordinate in order to achieve the organization's objectives.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
6-24
Chapter 06 - The Nature of Management
6. (p. 178) Employees are one of the most important resources in helping a company obtain its
objectives.
TRUE
Employee productivity and loyalty are critical to the creation and/or distribution of goods and
services. Therefore, they are integral to organizational success.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
Multiple Choice Questions
7. (p. 178) Management is a process designed to achieve an organization's objectives by using its
resources ____________ (accomplishing the objectives with a minimum of resources) and
_________________ (having the intended result).
A. effectively, efficiently
B. efficiently, effectively
C. quickly, competently
D. competently, quickly
E. thoroughly, completely
Management is a process designed to achieve an organization's objectives by using its
resources effectively and efficiently in a changing environment. Effectively means having the
intended result; efficiently means accomplishing the objectives with a minimum of resources.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
6-25
Chapter 06 - The Nature of Management
8. (p. 178) Management is a process
A. that is unanimous.
B. of dissipating resources.
C. of coordinating resources to achieve objectives.
D. that works well.
E. mainly used in for-profit businesses.
Management is a process to attain organizational objectives by coordinating the use of
resources efficiently and effectively.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
9. (p. 179) Managers need adequate ____________ resources to pay for essential activities.
A. Human
B. Management
C. Financial
D. Corporate
E. Information
In order to pay for essential business activities, a manager needs adequate financial resources.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: Management Functions
6-26
Chapter 06 - The Nature of Management
10. (p. 178) All of the following are typical resources that must be acquired by each organization
in the pursuit of its objectives except
A. people.
B. raw materials and equipment.
C. money.
D. information.
E. laws and regulations.
Every organization in the pursuit of its organizational objectives must acquire resources in the
form of people, raw materials and equipment, money, and information. Laws are not a typical
resource acquired by an organization.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
11. (p. 178) If a manager is concerned about doing the work with the least cost and waste, then
her primary managerial concern is
A. effectiveness.
B. accountability.
C. delegation.
D. hiring.
E. efficiency.
Managing efficiently means accomplishing the objectives with a minimum of resources.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
6-27
Chapter 06 - The Nature of Management
12. (p. 178) All of the following are functions of management except
A. directing.
B. staffing.
C. promoting.
D. organizing.
E. controlling.
To coordinate the use of resources so that the business can develop, make, and sell products,
managers engage in a series of activities: planning, organizing, staffing, directing, and
controlling.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: Management Functions
13. (p. 178) _____ make decisions about the use of an organization's resources and are
concerned with planning, organizing, leading, and controlling the organization's activities.
A. Managers
B. Shareholders
C. Employees
D. Consumers
E. Suppliers
Managers are the ones who make decisions about the use of an organization's resources and
are concerned with planning, organizing, leading, and controlling the organization's activities.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
6-28
Chapter 06 - The Nature of Management
14. (p. 178) When providing benefits, a manager is most closely involved with which of the
following resources?
A. Natural
B. Physical
C. Human
D. Financial
E. Structural
Employees (human resources) are one of the most important resources in helping a business
attain its objectives. Successful companies such as Starbucks recruit, train, compensate, and
provide benefits (such as shares of stock and health insurance) to foster employee loyalty.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
15. (p. 178) If a manager is organizing equipment within a factory setting, he is mainly involved
in which of the following resources?
A. Natural
B. Physical
C. Human
D. Financial
E. Structural
Managers deal with three resources to run a business: physical resources (raw materials and
equipment), human resources (employees), and financial resources. Equipment and factories
would best fit under physical resources, not human or financial resources.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
6-29
Chapter 06 - The Nature of Management
16. (p. 178-179) If a manager is analyzing several methods for obtaining the money needed to
expand operations, she is involved with which of the following resources?
A. Natural
B. Physical
C. Human
D. Financial
E. Structural
Financial resources are needed to purchase additional goods and services, pay employees, and
generally operate the business.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
Essay Questions
17. (p. 178) What are the resources essential to every organization?
Every organization must acquire resources (people, raw materials and equipment, money, and
information) to effectively pursue its objectives and coordinate their use to turn out a final
good or service. Employees are one of the most important resources in a company. Financial
resources are required to help an organization pay for its essential activities. Suppliers can
also be a key part of managing resources, as suppliers provide raw materials and equipment to
organizations.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
6-30
Chapter 06 - The Nature of Management
18. (p. 178) What is management?
Management is the process of coordinating resources to achieve an organization's objectives
effectively and efficiently. Effectively means having the intended result; efficiently means
accomplishing the objectives with a minimum of resources. Management is universal, which
means it is used in all organizations regardless of organizational objective.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-01 Define management; and explain its role in the achievement of organizational objectives.
Topic: The Importance of Management
True / False Questions
19. (p. 179) Planning involves forecasting events and determining the best course of action from
a set of options or choices.
TRUE
Planning for managers involves forecasting events and then specifying what should be done,
by whom, when, where, and how.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
20. (p. 183) Crisis management plans are the long-range plans developed by top management.
FALSE
Crisis management is an element in planning that deals with potential disasters such as
product tampering, oil spills, fire, earthquake, computer virus, or airplane crash.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-31
Chapter 06 - The Nature of Management
21. (p. 184) Staffing is the structuring of resources and activities to accomplish goals in an
efficient and effective manner.
FALSE
Staffing is the hiring of people to carry out the work of the organization.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
22. (p. 185) Directing is motivating and leading employees to achieve organizational objectives.
TRUE
All managers must direct their employees by motivating them, often through incentives, to
achieve the goals of the organization.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
23. (p. 185) Taking action to correct deviations from standards is part of the controlling
function.
TRUE
Controlling involves (1) measuring performance, (2) comparing present performance with
standards or objectives, (3) identifying deviations from the standards, (4) investigating the
causes of deviations and (5) taking corrective action when necessary.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-32
Chapter 06 - The Nature of Management
24. (p. 185) An important part of good directing is administering awards and recognition.
TRUE
Directing involves motivating employees, and recognition and appreciation often act as the
best motivators.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Easy
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
Multiple Choice Questions
25. (p. 179) Determining an organization's objectives and deciding how to accomplish them are
part of the management function known as
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
Planning involves forecasting events and determining the best course of action from a set of
options or choices in order to attain organizational objectives.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-33
Chapter 06 - The Nature of Management
26. (p. 179) Forecasting is most closely associated with
A. organizing.
B. directing.
C. staffing.
D. planning.
E. controlling.
Planning involves forecasting events and determining the best course of action from a set of
options or choices.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
27. (p. 181) The type of planning conducted on a long-range basis by top managers is usually
called
A. incremental.
B. tactical.
C. strategic.
D. crisis.
E. static.
Strategic plans generally cover a period between 2 and 10 years or even longer.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-34
Chapter 06 - The Nature of Management
28. (p. 183) Crisis management plans generally cover maintaining business operations during a
crisis and
A. firing those responsible for the crisis.
B. avoiding responsibility for the crisis.
C. communicating with others about the situation and the company's response to it.
D. preventing the situations from occurring.
E. all of the above.
Crisis management plans generally cover maintaining business operations throughout a crisis
and communicating with the public, employees, and officials about the nature of and the
company's response to the problem.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
29. (p. 183) Dividing work into small units and assigning it to individuals are tasks related to
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
Managers organize by reviewing plans and determining what activities are necessary to
implement them; then they divide the work into small units and assign it to specific
individuals, groups, or departments.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-35
Chapter 06 - The Nature of Management
30. (p. 184) Maria and Harold have just finished interviewing four candidates who want to work
for Jackson Office Supply, Inc. They are involved in which of the following management
functions?
A. Planning
B. Analyzing
C. Staffing
D. Controlling
E. Directing
Staffing involves hiring people to carry out the work.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
31. (p. 184) Downsizing is an aspect most closely associated with
A. staffing.
B. planning.
C. organizing.
D. controlling.
E. directing.
Another aspect of staffing is downsizing, the elimination of a significant numbers of
employees from an organization, which has been a pervasive and much-talked-about trend.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-36
Chapter 06 - The Nature of Management
32. (p. 185) Giving people incentives to achieve objectives relates to the management function
of
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
Directing is motivating and leading employees to achieve organizational objectives; Managers
may motivate employees by providing incentives—such as the promise of a raise or
promotion—for them to do a good job.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
33. (p. 185) When Betsy pointed out to her supervisor that the furniture assemblers at their
manufacturing plant were using 20 percent more nails than in the preceding month, she was
involved in
A. planning.
B. organizing.
C. staffing.
D. controlling.
E. directing.
Controlling is the process of evaluating and correcting the activities to keep the organization
on course. This requires managers to monitor performance and compare it to standards.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-37
Chapter 06 - The Nature of Management
34. (p. 185) The first step in the control process is to
A. ask your employees to fix any problems.
B. take corrective actions when necessary.
C. investigate the causes of any deviations.
D. measure the actual performance.
E. identify deviations from the standard.
Control involves five activities: (1) measuring performance, (2) comparing present
performance with standards or objectives, (3) identifying deviations from the standards, (4)
investigating the causes of deviations, and (5) taking corrective actions when necessary.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
Essay Questions
35. (p. 185) What are the five activities, in the order delineated in your text, of the control
process?
Control encompasses five activities: (1) measuring performance, (2) comparing present
performance with standards or objectives, (3) identifying deviations from the standards, (4)
investigating the causes of deviations, and (5) taking corrective actions when necessary.
Controlling and planning are closely linked activities.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
6-38
Chapter 06 - The Nature of Management
36. (p. 130-135) Describe the major functions of management.
To coordinate the use of resources, managers may engage in a series of activities, including
planning, organizing, staffing, directing, and controlling. Planning is the process of
determining the organization's objectives and deciding how to accomplish them. Organizing is
the structuring of resources and activities to accomplish objectives in an efficient and
effective manner. Staffing is the hiring of people to carry out the work of the organization.
Directing refers to motivating and leading employees to achieve organizational objectives.
Controlling is the process of evaluating and correcting activities to keep the organization on
course.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-02 Describe the major functions of management.
Topic: Management Functions
True / False Questions
37. (p. 186) All organizations, regardless of size, have multiple levels of management.
FALSE
Very small organizations may have only one manager who assumes the responsibilities of all
three management levels (top, middle, and first-line management).
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-39
Chapter 06 - The Nature of Management
38. (p. 186) A chief executive officer is a middle manager.
FALSE
A chief executive officer is a top manager.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
39. (p. 187) Top managers focus on strategic decisions to use resources to take advantage of
opportunities.
TRUE
Top managers make the organization's strategic decisions, decisions that focus on an overall
scheme or key idea for using resources to take advantage of opportunities.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
40. (p. 188) Middle managers are responsible for tactical planning that will implement the
general guidelines established by top management.
TRUE
Rather than make strategic decisions about the organization as a whole (as top managers do),
middle managers are responsible for tactical planning that will implement the general
guidelines established by top management.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-40
Chapter 06 - The Nature of Management
41. (p. 189) A department manager is a first-line manager.
FALSE
Department managers are in middle management.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
42. (p. 186) All managers perform all five management functions but not to the same degree.
TRUE
All managers perform the five management functions of planning, organizing, staffing,
directing, and controlling.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-41
Chapter 06 - The Nature of Management
Multiple Choice Questions
43. (p. 187) Decisions regarding adding new products, acquiring companies, and moving into
foreign markets would most typically be made by
A. first-line management.
B. a sales manager.
C. middle management.
D. a production manager.
E. top management.
Top managers decide whether to add products, acquire companies, sell unprofitable business
segments, and move into foreign markets.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
44. (p. 187) Top managers spend most of their time performing which of the following
management functions?
A. Directing
B. Controlling
C. Organizing
D. Staffing
E. Planning
Top managers spend most of their time planning.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-42
Chapter 06 - The Nature of Management
45. (p. 188) _____ are responsible for tactical planning that will implement the general
guidelines established by top management.
A. CEOs
B. Middle managers
C. Top managers
D. First-line supervisors
E. Office managers
Middle managers are those responsible for tactical planning that will implement the general
guidelines established by top management.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
46. (p. 189) The specific operations of the organization, plant, division, or department would
most typically involve
A. top management.
B. middle management.
C. first-line management.
D. the board of directors.
E. stockholders.
In business, plant managers, division managers, and department managers make up middle
management.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-43
Chapter 06 - The Nature of Management
47. (p. 189) Positions such as foremen, supervisors, and office managers are examples of
A. top management.
B. first-line management.
C. middle management.
D. executive levels.
E. strategic decision makers.
Common titles for first-line managers are foremen, supervisors, and office managers.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
48. (p. 189) A person who analyzes a firm's income and expenses over a specified period and
selects appropriate ways to invest extra funds is involved in
A. information technology management.
B. marketing management.
C. human resources management.
D. production and operations management.
E. financial management.
Financial management is responsible for projecting income and expenses over a specified
period along with identifying and selecting appropriate ways to invest extra funds.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-44
Chapter 06 - The Nature of Management
49. (p. 190) Production and operations managers are concerned with
A. identifying and efficiently using sources of financing.
B. managing a division.
C. planning, pricing, and promoting products.
D. transforming resources into products.
E. recruiting new employees and developing employee programs.
Production and operations managers develop and administer the activities involved in
transforming resources into goods, services, and ideas ready for the marketplace.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
50. (p. 190) A person in charge of designing production facilities, purchasing supplies, and
ensuring that products meet quality standards is probably a
A. financial manager.
B. production and operations manager.
C. human resources manager.
D. marketing manager.
E. administrative manager.
Production and operations managers are typically involved in planning and designing
production facilities, purchasing raw materials and supplies, managing inventory, scheduling
processes to meet demand, and ensuring that products meet quality standards.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-45
Chapter 06 - The Nature of Management
51. (p. 190) The development of a performance-appraisal system is primarily the concern of
A. financial management.
B. human resources management.
C. production and operations management.
D. marketing management.
E. administrative management.
One of the responsibilities of human resource managers is to determine performance-appraisal
systems.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
52. (p. 190) Developing and monitoring advertising and promotion efforts of a company would
most likely involve the _______ managers.
A. production
B. operations
C. marketing
D. personnel
E. administrative
Specific jobs in marketing are found in areas such as marketing research, advertising, personal
selling, retailing, telemarketing, Internet marketing, and other forms of company promotion.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-46
Chapter 06 - The Nature of Management
Essay Questions
53. (p. 191) Information technology managers are responsible for which duties within
organizations? Give an example of an important task of an IT manager.
Information Technology (IT) management is responsible for implementing, maintaining, and
controlling technology applications in business, such as computer networks. One major task
in IT management is securing computer systems from unauthorized users while making the
system easy to use for employees, suppliers, and others who have legitimate reason to access
the system. Another crucial task is protecting the systems' data, even during a disaster such as
a fire. IT managers are also responsible for teaching and helping employees use technology
resources efficiently through training and support.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
54. (p. 186-189) How do top managers differ from first-line managers?
Top managers (the president and other top executives) have overall responsibility for the
organization. Although top-level managers perform all major management functions, they
spend most of their time planning. First-line managers supervise workers in day-to-day
operations of the organization and, consequently, they spend most of their time directing and
controlling.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Hard
Learning Objective: 06-03 Distinguish among three levels of management and the concerns of managers at each level.
Topic: Types of Management
6-47
Chapter 06 - The Nature of Management
True / False Questions
55. (p. 193) Autocratic leaders involve their employees in decisions.
FALSE
Democratic leaders involve their employees in decisions.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
56. (p. 193) Free-rein leaders allow their employees to work without much interference.
TRUE
The manager sets performance standards and allows employees to find their own ways to
meet them.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
57. (p. 194) Although managers may not actually perform the specific jobs within organizations,
they need the technical expertise required to performed jobs related to their area of
management in order to train employees and answer questions.
TRUE
Production managers do not necessarily need to perform a job, but they must have technical
expertise to effectively train employees, answer questions, provide guidance, and solve
problems.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
6-48
Chapter 06 - The Nature of Management
58. (p. 194) Conceptual skills are the ability to identify relevant issues and recognize their
importance, understand the relationships between them, and perceive their underlying causes.
FALSE
Conceptual skills involve the ability to think in abstract terms and to see how parts fit together
to form the whole, skills that are needed by top-level managers.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
59. (p. 195) Human relations skills are highly important for managers.
TRUE
Those who can relate to others, communicate well with others, understand the needs of others,
and show a true appreciation for others are generally more successful than managers who lack
human relations skills.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
60. (p. 194) Analytical skills involve the ability to think creatively.
FALSE
Analytical skills involve the ability to identify relevant issues and recognize their importance,
understand the relationships between them, and perceive the underlying causes of a situation.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
6-49
Chapter 06 - The Nature of Management
Multiple Choice Questions
61. (p. 193) Bob has been put in charge of a group of new employees. He has told them they
must perform their duties in the exact manner and order that he has commanded, with no
exceptions. Bob is using
A. democratic leadership.
B. autocratic leadership.
C. free-rein leadership.
D. creative leadership.
E. good leadership.
Autocratic leaders make all the decisions and then tell employees what must be done and how
to do it.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
62. (p. 193) When Karen allows her employees to do their work with little interference, her
leadership style is
A. democratic.
B. republican.
C. autocratic.
D. free-rein.
E. analytical.
Free-rein leaders let their employees work without much interference. The manager sets
performance standards and allows employees to find their own ways to meet them.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
6-50
Chapter 06 - The Nature of Management
63. (p. 193) Joe met with all of his department heads to listen to their opinions about buying a
new machine. Although they all thought it was a good idea, Joe did not buy the machine
because his employees did not think it necessary. Joe's leadership style is
A. democratic.
B. autocratic.
C. free-rein.
D. bad.
E. good.
Democratic leaders present a situation and encourage their subordinates to express opinions
and contribute ideas. The manager then considers the employees' points of view and makes
the decision.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
64. (p. 193) Which of the following is best used when employees know the organization's
standards and are highly motivated to attain them?
A. Democratic leadership
B. Autocratic leadership
C. Free-rein leadership
D. Exemplary leadership
E. No leadership
For a free-rein style of management to be effective, employees must know what the standards
are, and they must be motivated to attain the standards.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
6-51
Chapter 06 - The Nature of Management
65. (p. 194) To train employees, answer questions, and provide guidance in doing a task,
managers need
A. technical expertise.
B. conceptual skills.
C. analytical skills.
D. leadership skills.
E. creative skills.
Technical expertise is the specialized knowledge and training that managers need to perform
jobs related to their area of management and to train employees, answer questions, offer
guidance, and solve problems.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
66. (p. 194) Having conceptual skills often means being able to
A. perceive the causes of problems.
B. identify relevant issues and recognize their importance.
C. use a computer.
D. motivate employees.
E. think creatively and in abstract terms.
Conceptual skills also involve the ability to think creatively.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
6-52
Chapter 06 - The Nature of Management
67. (p. 194) Having analytical skills means that a manager is able to do all of the following
except
A. identify relevant issues and their importance.
B. understand the relationships between issues.
C. think logically.
D. analyze the underlying causes of a problem.
E. think in abstract terms.
Thinking in abstract terms is a conceptual skill, not analytical.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
68. (p. 195) Having good human relations skills means that a manager is able to
A. use a computer.
B. train employees and solve problems.
C. think creatively.
D. work with others.
E. all of the above.
Human relations skills are the ability to deal with people, both inside and outside the
organization.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
6-53
Chapter 06 - The Nature of Management
69. (p. 192) According to the text, all of the following are skills needed by managers except
A. analytical.
B. clerical.
C. technical.
D. conceptual.
E. human relations.
Managing effectively and efficiently requires certain skills—leadership, technical expertise,
conceptual skills, analytical skills, and human relations skills. Clerical skills are not a
requirement.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
70. (p. 193) A(n) ________ leadership style is best for stimulating unskilled or unmotivated
employees.
A. bureaucratic
B. democratic
C. free-rein
D. autocratic
E. inclusive
An autocratic leadership style is best for stimulating unskilled or unmotivated employees.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: The Reality of Management
6-54
Chapter 06 - The Nature of Management
Essay Questions
71. (p. 193) What are the three leadership styles and under what circumstances is each style most
effective?
The three leadership styles are autocratic, democratic and free-rein. An autocratic style of
leadership is generally best for stimulating unskilled, unmotivated employees; highly skilled,
trained, and motivated employees respond better to democratic or free-rein leadership styles.
For the free-rein style to be effective, employees must know what the standards are, and they
must be motivated to attain them.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
72. (p. 192) What are some of the skills needed by managers?
Skills needed by managers include leadership, technical expertise, conceptual skills, analytical
skills, and human relations skills.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-04 Specify the skills managers need to be successful.
Topic: Skills Needed By Managers
6-55
Chapter 06 - The Nature of Management
True / False Questions
73. (p. 197) Situations requiring small-scale decisions generally occur after some warning signs.
FALSE
Situations requiring large-scale decisions generally occur after some warning signs, while
small-scale decisions may have to be made without any warning.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
74. (p. 196) The first step in good managerial decision-making is developing options.
FALSE
The six steps are (1) recognizing and defining the decision situation, (2) developing options to
resolve the situation, (3) analyzing the options, (4) selecting the best option, (5) implementing
the decision, and (6) monitoring the consequences of the decision.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
75. (p. 197) Once a situation has been recognized, management must define it.
TRUE
Once a situation has been recognized, management must define it so that it can be dealt with.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-56
Chapter 06 - The Nature of Management
76. (p. 198) In the analyzing options stage, managers should consider the practicality and
appropriateness of each option.
TRUE
After developing a list of possible courses of action, management should analyze the
practicality and appropriateness of each option.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
77. (p. 198) When making a decision, selecting the best option is an objective procedure.
FALSE
Selection of an option is often a subjective procedure because many situations do not lend
themselves to mathematical analysis.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
78. (p. 198) Effective implementation of a major decision does not require any planning.
FALSE
Effective implementation of a decision to abandon a product, close a plant, purchase a new
business, or something similar requires planning.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-57
Chapter 06 - The Nature of Management
Multiple Choice Questions
79. (p. 198) When selecting the best option among a series of possible decisions,
A. It is always only possible to choose one.
B. Quantitative analysis is almost always helpful.
C. Sometimes all options must be rejected.
D. There may not be a best option.
E. It may be possible to use a combination of several options.
Selection is often a subjective procedure because many situations do not lend themselves to
quantitative analysis. Of course, it is not always necessary to select only one option and reject
all others; it may be possible to select and use a combination of several options.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
80. (p. 198) When assessing the appropriateness of a decision option, managers should
A. consider its impact on the organization as a whole.
B. only think narrowly about the one department most affected by the decision.
C. ask their friends which option they would choose.
D. choose the option that partially addresses the problem.
E. go with his or her gut regarding which option is best.
When assessing appropriateness, the decision maker should consider whether the proposed
option adequately addresses the situation. When analyzing the consequences of an option,
managers should consider its impact on the situation and on the organization as a whole.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-58
Chapter 06 - The Nature of Management
81. (p. 198) When implementing a decision, management should be ready to deal with:
A. Irate consumers
B. Employee confusion
C. Unexpected consequences
D. Payroll
E. Nothing—a well-planned decision will always be implemented smoothly
Management should be ready to deal with the unexpected consequences. No matter how well
planned implementation is, unforeseen problems will arise.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
82. (p. 199) Why is monitoring the consequences of decisions important?
A. Without it, the consequences of decisions may not be apparent quickly enough
B. It is the logical step after implementing the decision
C. It provides a financial barometer of how expensive decisions are
D. Shareholders like to see monitoring of decision on annual reports
E. Monitoring is not important and it is expensive
Without proper monitoring, the consequences of decisions may not be known quickly enough
to make efficient changes. If the desired result is achieved, management can reasonably
conclude that it made a good choice. If the desired result is not achieved, further analysis is
warranted.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-59
Chapter 06 - The Nature of Management
83. (p. 198) Effective implementation of a major decision requires
A. perseverance.
B. luck.
C. directing.
D. planning.
E. controlling.
Effective implementation of a decision to abandon a product, close a plant, purchase a new
business, or something similar requires planning.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
84. (p. 199) After monitoring the consequences of a decision, management determines that the
decision failed to accomplish the desired result. Which of the following is not a possible
reason for this failure?
A. The decision was wrong.
B. The situation changed.
C. The situation was defined incorrectly.
D. The implementation of the decision was flawed.
E. The mathematical management formula was flawed.
Management is not a cut-and-dried process. There is no mathematical formula for managing
an organization.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-60
Chapter 06 - The Nature of Management
85. (p. 198) Selecting the best option in the decision-making process is
A. simply a matter of plugging variables into a formula.
B. often objective.
C. often subjective.
D. easy.
E. all of the above.
Selection is often a subjective procedure because many situations do not lend themselves to
mathematical analysis.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
86. (p. 198) When analyzing options in the decision-making process, managers must consider the
appropriateness and _______ of each option.
A. utility
B. practicality
C. creativity
D. feasibility
E. relevance
Once the options have been developed, management should then analyze the practicality and
appropriateness of each option. An option may be deemed impractical because of a lack of
financial resources to implement it.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-61
Chapter 06 - The Nature of Management
87. (p. 197) Managers at Sprocket Inc. have recognized declining sales on their ABC model
product and must make a decision about what to do. Their next step is to
A. define the situation.
B. develop options.
C. analyze options.
D. select the best option.
E. implement the decision.
As part of the first step, the manager must first recognize the situation and then define it
before developing options.
AACSB: Reflective Thinking
Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
88. (p. 196) All of the following steps are a part of the decision-making process except
A. defining the situation.
B. developing options.
C. analyzing options.
D. delegating the decision.
E. implementing the decision.
The steps involve (1) recognizing and defining the decision situation, (2) developing options
to resolve the situation, (3) analyzing the options, (4) selecting the best option, (5)
implementing the decision, and (6) monitoring the consequences of the decision. There is
nothing in there about delegating the decision.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-62
Chapter 06 - The Nature of Management
Essay Questions
89. (p. 199) Why is monitoring the consequences of decisions important?
Without proper monitoring, the consequences of decisions may not be known quickly enough
to make efficient changes. If the desired result is achieved, management can reasonably
conclude that it made a good choice. If the desired result is not achieved, further analysis is
warranted.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
90. (p. 196) What is the systematic six-step approach that leads to more effective decision
making?
The six steps to more effective management decision making are (1) recognizing and defining
the decision situation, (2) developing options to resolve the situation, (3) analyzing the
options, (4) selecting the best option, (5) implementing the decision, and (6) monitoring its
consequences.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Hard
Learning Objective: 06-05 Summarize the systematic approach to decision making used by many business managers.
Topic: Decision Making
6-63
Chapter 06 - The Nature of Management
Multiple Choice Questions
Solve the Dilemma Making Infinity Computers Competitive
91. (p. 204) What is Infinity Computers' problem in this case?
A. Infinity's computers are too expensive.
B. The strategies that originally made the company successful are no longer successful
anymore.
C. Infinity has no problem; the company is doing great.
D. The president and CEO is a poor leader.
E. Infinity's products are ahead of their time and there is no market for it.
Recognizing that the strategies that initially made the firm successful are no longer working
effectively, Anderson wants to reorganize the company to make it more responsive and
competitive and to cut costs.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-06 Recommend a new strategy to revive a struggling business.
Topic: Solve the Dilemma
92. (p. 204) What is a major weakness of the firm?
A. Having a poor quality product
B. Having a difficult leader
C. Having too many employees and excessive reliance on one product
D. Having too few employees
E. Offering too many products
Infinity Computers has two major weaknesses: too many employees and an excessive reliance
on one product.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 06-06 Recommend a new strategy to revive a struggling business.
Topic: Solve the Dilemma
6-64
Chapter 06 - The Nature of Management
Essay Questions
93. (p. 204) Evaluate Infinity's current situation and analyze its strengths and weaknesses.
Infinity's strengths include the competitive price of its products, the leadership abilities of its
CEO, along with the loyalty and motivation of its employees.
Its weaknesses are its tendency to follow its competitors instead of innovating, its
overcapacity in terms of workforce, and its reliance on a single product.
AACSB: Reflective Thinking
Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 06-06 Recommend a new strategy to revive a struggling business.
Topic: Solve the Dilemma
94. (p. 204) Evaluate the opportunities for Infinity, including using its current strategy, and
propose alternative strategies.
An opportunity for Infinity may be to create a differentiated notebook with special features at
a lower price than its competitors. Infinity could also rely on the loyalty and motivation of its
employees to offer outstanding customer services.
AACSB: Reflective Thinking
Bloom's: Evaluation
Difficulty: Medium
Learning Objective: 06-06 Recommend a new strategy to revive a struggling business.
Topic: Solve the Dilemma
95. (p. 204) Suggest a plan for Infinity to compete successfully over the next 10 years.
Responses will vary, but students should provide the kernel of a strategic plan including such
sections as objectives, means to achieve the objectives, and measures of results.
AACSB: Reflective Thinking
Bloom's: Evaluation
Difficulty: Medium
Learning Objective: 06-06 Recommend a new strategy to revive a struggling business.
Topic: Solve the Dilemma
6-65