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Understanding Business Test 2

The Small Business Administration defines a small business as a firm that:
is independently owned but not dominant in its industry
Which of the following U.S. issues does entrepreneurship most directly affect?
The ability to create jobs for others
A __________ is a written document that details the business idea, the target market and the business’s competitive advantage, financial resources available for the business, and the qualification of the management.
business plan
A detailed written statement that describes the nature of the business, the target market, the firm’s competitive advantages, as well as the owner’s resources and qualifications is a:
business plan
The goal of an intrapreneur is
to develop new products and generate new profits for the corporation
A new business that sets up a(n) _____________ from the start is saving itself time and grief later.
good accounting system
After personal savings, the next largest source of capital for entrepreneurs is from:
friends and family
Employees of small businesses often have greater job satisfaction than do employees of larger firms. One reason for this difference in job satisfaction is that employees of small businesses often:
get more respect from their bosses
Conversations with people who start their own business often reveal that:
many small business owners got their entrepreneurial idea from a previous job
A(n) ________________ is a group of experienced professionals from different areas of business who join together to develop, make, and market a new product.
joint venture
The Making Ethical Decisions box, “Going Down with the Ship” addresses a dilemma worthy of consideration. It describes:
ethical decisions that need to be considered when employees leave a faltering business to start their own, eventually competing against their previous employer
Which of the following employment statistics about small businesses is true?
A great majority of American workers find their first jobs with a small business
Historically entrepreneurs in the U.S.
started many small firms that later became major corporations employing thousands of workers
For the past twenty-five years, state and city governments have promoted facilities where new businesses can open-up shop and share common services such as secretarial, accounting, and legal services. Due to their remarkable success rate, _______________ continue to grow in popularity.
According to SBA guidelines, a manufacturing firm with 1,000 employees
may be classified as a small business depending upon the size of other firms in the industry.
Entrepreneurs applying for a bank loan should realize that bankers will:
expect the entrepreneur to provide a business plan
When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will:
expect an ownership stake in the company in exchange for financial backing
Successful entrepreneurs are self-nurturing. This means they:
believe in themselves and their ideas.
One reason we have seen continued growth in home-based businesses is:
affordable computer and information technology makes it easier to compete.
A market consists of potential buyers of a good or service. However, for a market to exist:
people must have unsatisfied wants and needs as well as a willingness and ability to buy
Strategic planning looks at the organization as a whole, while ________ planning focuses on daily tasks and decisions.
__________ is a problem solving technique that attempts to come up with as many solutions as possible in a short time without censoring the ideas.
Employees often work with managers to develop a(n) __________ that outlines the fundamental purposes of their organization.
mission statement
A(n) __________ is used by an organization to show who is accountable for the completion of specific work and who reports to whom.
organization chart
___________ is the management function of creating a vision for the organization and guiding, training, coaching, and motivating employees to help achieve the goals and objectives of the organization.
__________ is the art of utilizing organizational resources to accomplish goals at work.
_________ planning is a part of contingency planning that is used to deal with sudden and unexpected changes in the business environment.
_____________ involves creating a vision for others to follow, establishing corporate values and ethics, and transforming the way an organization does business so that it is more effective and efficient.
__________ planning determines the major goals of an organization and lays the foundation for obtaining and using resources to achieve those goals.
A __________ is an overall explanation of why an organization exists and where it is trying to head.
Which of the following statements about leadership styles is most accurate?
Effective managers often use a variety of leadership styles
The revolution in management that is currently underway suggests that the most effective managers of the future will:
emphasize team work.
Which of the following techniques would a team of workers be most likely to use if they wanted to evaluate several possible solutions to a specific problem their company needs to solve?
In comparing the types of skills used by managers at different levels within an organization, which of the following is true?
First-line managers use mainly technical and human relations skills, while top managers devote most of their time to activities involving human relations and conceptual skills
Which of the following statements about effective leadership is the most accurate?
The most effective leadership style depends on who is being led and in what situation
Which of the following activities is part of the planning function of management?
Looking at market forecasts to identify future business opportunities and challenges
When managers identify a market trend that suggests a new opportunity and then devise a strategy to go after this new opportunity, they are involved in the function of:
The Social Media in Business box titled, “Using Social Media to Build Customer Support,” reflects upon the use of blogs and Twitter and other social media sources to measure customer satisfaction. Company employees scan various social media to stay current with customer perceptions and complaints. It is important that customers perceive that products and services are meeting or exceeding the standards that companies set. The _____________ of management involves the monitoring of product and service performance.
control process
After thirteen years as a laborer for Hendrix Construction, Jimmy was promoted to the position of foreman. He is directly responsible for assigning various jobs to his work crew and evaluating their performance on a daily basis. Jimmy is now a member of:
supervisory management.
Pam is a sales manager for Paradise Beauty Products. She has told her sales people that she expects each of them to increase their customer contacts by at least 5 percent in the next month. Pam has set a(n):
performance standard.
_________ is the term used to describe those functions that a firm can do as well or better than others. It agrees to perform these functions in-house, rather than outsourcing.
Core competencies
In recent years, large organizations have tried to improve their efficiency in communication and decision making by:
eliminating several layers of management.
Empowering employees to better serve customers requires __________ front-line employees.
more support for
_____________ refers to companies headquartered abroad who elect to bring production and manufacturing to domestic subsidiaries.
An organization that consists of many layers of management is referred to as a(n) ____________ organization.
Which of the organization models follows all of Fayol’s traditional management rules?
Line organizations
The optimum number of subordinates a manager can supervise is referred to as the:
span of control.
Line-and-staff organizations work well in organizations with:
a relatively unchanging environment.
Which of the following describes a group of employees from different departments working together on a long-term basis?
Cross-functional self-managed teams
Which of the following determines the degree of decentralization a firm might use?
The degree to which lower level management is empowered to make decisions.
Which of the following correctly identifies the explanation behind the unity of command principle of management?
Workers can become frustrated and confused if they have more than one boss
Max Weber favored which of the following?
Staffing and promotions based on qualifications
Which of the following factors help determine a manager’s span of control?
The level of standardization of the work to be done
The informal organization of a business is probably best suited to:
create a feeling of camaraderie among employees and encourage teamwork.
One of the most difficult management challenges today is managing change. This is because:
change requires cooperation and an awareness of a need for change.
Fayol believed that decision-making authority should remain in the hands of top management:
in small organizations, but should be delegated to middle and first-line managers in large organizations.
Within its production department, Sooner Manufacturing has shift leaders, supervisors, assistant plant managers, plant managers, product group managers, assistant division managers, division managers, an assistant vice president for production, and a vice president in charge of production. Given its multiple layer management structure, Sooner Manufacturing is an example of a(n) ____________ organization.
Which of the following is an advantage of a matrix organization structure?
It provides for efficient use of organizational resources
______________ organizations are characteristic of many layers of management and function with well-defined rules and procedures.
In a bureaucratic organization:
employees follow strict rules and regulations.
The purpose of a PERT network is:
to monitor the progress of a multi-step project during its development.
Firms often use a(n) _____________ when working on a major project involving the production of a large item such as an airplane, ship, or bridge.
fixed-position layout
Modular facilities layouts consist of:
teams of workers who work together on a complex assembly.
____________ examines statistical samples of product components at each stage of the production process and plots the results on a graph in order to spot and correct any variances from desired quality levels.
Statistical process control
__________ has transformed the purchasing function in recent years by helping firms find the best suppliers and the best prices.
The Internet
__________ is the physical arrangement of resources in the production process.
Facility layout
CAD has __________ productivity in many firms.
In manufacturing, a __________ is used to produce large quantities of a few types of products.
assembly-line layout
Production management is the traditional term used to describe all the activities managers do to help their firms create:
In a PERT network, the sequence of tasks that takes the longest to complete is called the:
critical path.
A basic characteristic of flexible manufacturing is that it:
uses machines designed to perform multiple tasks so they can be used to produce a variety of products.
The main idea in the Making Ethical Decisions box, “Stay or Leave?” indicates:
a need for firms to consider the economic impact of its existence and/or departure from a particular location.
Which of the following statements about facility location is most accurate?
Manufacturers often seek to reduce time-to-market by locating facilities in areas with access to key modes of transportation
Which of the following would be most helpful to a production manager who wanted to determine the minimum time required to complete a proposed project?
Contemporary operations management planning is an interfirm process. This means:
it is a process where several firms work closely together to produce goods and services, and anticipate a changing environment.
Both PERT diagrams and Gantt charts are useful to managers concerned with:
making sure that projects are completed on time.
Which of the following statements about operations management in the service sector is most accurate? Operations management in the service sector:
should focus on providing customers with a good experience.
Lean manufacturing ___________ productivity.
The main objective of lean manufacturing is to:
produce goods using less of all types of resources.
A company becomes lean by _________ its capacity to produce high-quality goods, while ___________ its need for resources.
increasing; decreasing
In Hertzberg’s theory of _________ factors, job factors that cause employees to be productive and that gives seven satisfaction
Hertzberg’s theory of motivating factors, job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased.
Hygiene factors
The personal satisfaction you feel when you perform well in complete goals.
Intrinsic reward
Something given to you by someone else as recognition for good work; extrinsic reward including pay increases, praise, and promotions
Extrinsic reward
Studying workers to find the most efficient ways of doing things and then teaching people those techniques
Scientific management
Studies, begun by Frederick Taylor, of which tasks must be performed to complete a job and the time needed to do each task
Time-motion studies
A motivational strategy that emphasizes motivating the worker through the job itself. It is based in part on the Herzberg’s theroy of higher-level motivators such as responsibility, achievement, and recognition.
Job enrichment
Is most effective in stable situations that allow managers to make long-range plans with a few changes
Management by objectives’s (MBO)
The idea that setting ambitious But attainable goals can motivate workers and improve performance is if the goals are excepted, accompanied by feedback, and facilitated by organizational conditions.
Goal-setting theory
Managers can either add or subtract stimuli (positive reinforcement, negative reinforcement, or punishers) to increase desired behavior or decrease undesired behavior.
Reinforcement theory
Theory that positive and negative reinforcers motivate a person to behave in certain ways.
Reinforcement theory
The idea that employees try to maintain equity between inputs and outputs compared to others in similar positions.
Equity theory
Ouchi’s research about the effect of natural cultural organizations, type a management relies on individual decision-making and achievements
Ouchi – type A management
Three elements were basic to Taylor’s approach: time, methods, and rolls of work.
Taylor, Frederick – the scientific management
A system of goalsetting and implementation: involves the cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees.
Management by objectives (MOB)
Formulate goals cooperatively with employees, to commit employees to those goals, and monitor results for rewards accomplished.
MOB-a manager must
Before committing maximum effort to a task employees will first ask themselves three questions:
1.) Can I accomplish this time?
2.) If I accomplish it will I be awarded?
3.) Is the reward worth the effort?
Social group membership and informality, management respect and interaction, worker involvement in managerial decisions.
Hawthorne studies-factors that contributed to increased worker productivity
Short-term employment, individual decision-making, individual responsibility, rapid valuation and promotion, explicit formalized Control, specialize career paths, segmented concern for employees.
Ouchi -Type A
Long-term employment, collective decision-making, individual responsibility. Slow evaluation and promotion, implicit, informal control with explicit, formalize control. Moderately specialize career paths, holistic concern for employees including family
Ouchi -Type Z
Lifetime employment, consensual decision-making, collective responsibility, slow evaluation and promotion, implicit informal control, non-specialize career path, holistic concern for employees. Japanese model
Ouchi -Type J
Study the most efficient way to do a task, determine the one best way to do the task, teach people the one best way to do their jobs.
Taylor’s scientific management method
The levels of the hierarchy our psychological, safety, social, esteem, and self-actualization needs
Maslow’s hierarchy
Vroom-The amount of effort employees exert on a specific task depends on their expectations of the outcome
Expectancy theory
1. Determine what rewards employees value
2. Determine each employees desired performance standard
3. Ensure that performance standards are attainable
4. Guarantee rewords tied to performance
5. Be certain that employees consider the rewards adequate.
Nadler and Lawlers -modification to expectancy theory
Theory developed by Frank and Lillian Gilbreth that every job can be broken down into a series of elementary motions
Principle of motion economy
Motivation technique to improve job satisfaction by incorporating task variety and responsibility
Job enrichment
Increasing the scope of the job by combining several tasks into a single, more challenging assignment
Job enlargement
Motivation strategy in which employees are moved between two or more jobs in the plant manner
Job rotation
Management view that employees involvement in the organization and decision-making leads to productivity
Theory Z
Management view that employees enjoy work and take responsibility for meeting their work requirements
Theory Y
Management view that employees are lazy, I’m interested in work, and need to be prodded to perform their jobs.
Theory X

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