Exam 19 September 2017, questions and answers Marketing Management (Alliance University) Chapter 2 to Chapter 10 Exam 19 September 2017, questions and answers Marketing Management (Alliance University) Chapter 2 to Chapter 10 Chapter 2: Developing Marketing Strategies and Plans GENERAL CONCEPT QUESTIONS Multiple Choice 66 Chapter 1: Marketing: Managing Profitable Customer Relationships 1. A key ingredient of the marketing management process is insightful, marketing strategies and plans that can guide marketing activities. a. creative b. measurable c. macro d. micro e. niche Page: 35 2. According to a chapter story about H&M clothing stores, H&M is able to put products out quickly and inexpensively by all of the following EXCEPT . a. having few middlemen and owning no factories b. buying large volumes c. having extensive experience in the clothing industry d. having a great knowledge of which goods should be bought from which markets e. having total control of its distribution channel from the time the goods are produced until the time they are sold Page: 36 3. The task of any business is to deliver at a profit. a. customer needs b. products c. customer value d. products and services e. improved quality Page: 36 4. In a hypercompetitive economy such as ours, a company can win only by fine- tuning the value delivery process and choosing, providing, and superior value. a. communicating b. selecting target markets with c. composing d. developing e. researching Page: 36 5. The traditional view of marketing is that the firm makes something and then it. a. markets b. sells c. distributes d. prices e. services Page: 36 67 Part 1: Defining Marketing and the Marketing Process 6. Today, the “mass-market” is actually splintering into numerous , each with its own wants, perceptions, preferences, and buying criteria. a. micromarkets b. market targets c. macromarkets d. customer cliques e. demographic units Page: 37 7. The first phase of the value creation and delivery sequence is that represents the “homework” marketing must do before any product exists. a. choosing the value b. market research c. target marketing d. service consideration e. projective thinking Page: 37 8. The last step in the value creation and delivery sequence is the value where the sales force, sales promotion, advertising, and other communication tools announce and promote the product. a. developing b. distributing c. communicating d. reversing e. researching Page: 37 9. The Japanese have refined the value delivery process to include a component that emphasizes . a. zero servicing b. zero customer feedback time c. zero promotion d. zero dependency on intermediaries e. zero marketing costs Page: 38 10. The is a tool for identifying ways to create more customer value. a. value chain b. customer survey c. brand loyalty index d. promotion channel e. supplier database Page: 38 11. The identifies nine strategically relevant activities that create value and cost in a specific business. a. value proposition b. value chain c. mission statement 68 Chapter 1: Marketing: Managing Profitable Customer Relationships d. annual report e. manager’s log Page: 38 12. The in the value chain cover the sequence of bringing materials into the business (inbound logistics), converting them into final products (operations), shipping out final products (outbound logistics), marketing them (marketing and sales), and servicing them (service). a. operations process b. manufacturing process c. primary activities d. secondary activities e. tertiary activities Page: 38 13. Procurement, technology development, human resource management, and firm infrastructure are handled in certain specialized departments and are called . a. materials handling b. support activities c. inventory activities d. primary activities e. benchmark activities Page: 38 14. The firm should estimate its competitors’ costs and performances as against which to compare its own costs and performance. a. competition b. standards c. challenges d. benchmarks e. moveable standards Page: 38 15. The firm’s success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct . a. core strategies b. satellite businesses c. core values d. core business processes e. core technologies Page: 38 16. With respect to core business processes, all the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information is referred to as the . a. market sensing process b. market research process c. target marketing process d. market pulse process 69 Part 1: Defining Marketing and the Marketing Process e. deployment process Page: 38 17. With respect to the core business processes, all the activities involved in researching, developing, and launching new high-quality offerings quickly and within budget are referred to as the . a. new product process b. new offering realization process c. product development process d. product launch process e. return on investment process Page: 38 18. With respect to the core business processes, the is considered to be all the activities involved in defining target markets and prospecting for new customers. a. customer acquisition process b. customer relationship management process c. fulfillment management process d. customer prospecting process e. customer equity process Page: 38 70 Chapter 1: Marketing: Managing Profitable Customer Relationships 19. A good way to describe the would be discuss all the activities involved in building deeper understanding, relationships, and offerings to individual customers. a. customer acquisition process b. customer relationship management process c. customer prospecting process d. customer fulfillment management process e. customer equity process Page: 38 20. Another way to describe a value delivery network (partnering with specific suppliers and distributors) is to call it a . a. teamwork group b. cabal c. domestic power center d. link to relationships e. supply chain Page: 39 21. The key to utilizing organizational core competencies is to that make up the essence of the business. a. make the competencies pay for themselves b. own all intermediaries who come in contact with your goods and services c. own and nurture the resources and competencies d. emphasize global promotions e. segment workforces Page: 39 22. We can say that a has three characteristics: (1) It is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits, (2) it has applications in a wide variety of markets, and (3) it is difficult for competitors to imitate. a. core competency b. business strategy c. core technology d. strategic business unit e. winning strategy Page: 39 23. Core competencies tend to refer to areas of special technical and production expertise, where tend to describe excellence in broader business processes. a. process benchmarks b. distinctive capabilities c. core business values d. value statements e. mission statements Page: 40 24. George Day sees market-driven organizations as excelling in three distinctive capabilities: , customer linking, and channel bonding. 71 Part 1: Defining Marketing and the Marketing Process a. target marketing b. market research c. fulfilling customer needs d. market sensing e. customer service relationships Page: 40 25. Competitors find it hard to imitate companies such as Southwest Airlines, Dell, or IKEA because they are unable to copy their . a. product innovations b. distribution strategy c. pricing policies d. activity systems e. logistics system Page: 40 26. One conception of holistic marketing views it as “integrating the value exploration, , and value delivery activities with the purpose of building long-term, mutually satisfying relationships and co-prosperity among key stakeholders.” a. value creation b. value proposition c. value management d. value research e. value chain Page: 40 27. Holistic marketers achieve profitable growth by expanding customer share, , and capturing customer lifetime value. a. undermining competitive competencies b. building customer loyalty c. milking the market for product desires d. renewing a customer base e. inspecting all market share data Page: 40 28. The holistic marketing framework is designed to address three key management questions. Which of the following is one of those questions? a. Value claims—how does the company deal with value erosion? b. Value proposition—how can value propositions be made profitable? c. Value chain—are there weak links in the company’s value chain d. Value network—how can a company effectively network? e. Value exploration—how can a company identify new value opportunities? Page: 41 29. The customer’s reflects existing and latent needs and includes dimensions such as the need for participation, stability, freedom, and change. a. competence space b. resource space c. emotional space 72 Chapter 1: Marketing: Managing Profitable Customer Relationships d. relationship space e. cognitive space Page: 41 30. The company’s can be described in terms of breadth—broad versus focused scope of business; and depth—physical versus knowledge-based capabilities. a. business mission b. core strategy c. cognitive space d. competency space e. resource space Page: 41 31. The collaborator’s involves horizontal partnerships, where companies choose partners based on their ability to exploit related market opportunities, and vertical partnerships, where companies choose partners based on their ability to serve their value creation. a. resource space b. competency space c. cognitive space d. rational space e. service space Page: 41 32. Business realignment may be necessary to maximize core competencies. Which of the following would be one of the steps in this realignment process? a. Reviewing all macro relationships. b. Reviewing global outreach projections. c. Redefining the business concept (the “big idea”). d. Reviewing successes from e-commerce (if any). e. Revamping the ethics statement. Page: 41 Part 1: Defining Marketing and the Marketing Process 33. allows the company to discover who its customers are, how they behave, and what they need or want. It also enables the company to respond appropriately, coherently, and quickly to different customer opportunities. a. Network management b. Strategic management c. Marketing management d. Customer relationship management e. Total quality management Page: 41 34. To respond effectively and provide value delivery, the company requires to integrate major business processes (e.g., order processing, general ledger, payroll, and production) within a single family of software modules. a. human resource management b. internal auditing management c. internal resource management d. strategic management e. marketing management Page: 41 35. With respect to value delivery, allows the company to handle complex relationships with its trading partners to source, process, and deliver products. a. a value matrix b. a global distribution policy c. a business development strategy d. business partnership management e. total quality management Page: 41 36. Successful marketing requires having capabilities such as understanding , creating customer value, delivering customer value, capturing customer value, and sustaining customer value. a. customer loyalty b. customer perks c. customer retention d. customer value e. customer benefits Page: 41 Chapter 1: Marketing: Managing Profitable Customer Relationships 37. According to a McKinsey research study, which of the following is one of the main challenges that marketing must face in the twenty-first century? a. The threat of ethics-based lawsuits. b. Doing more with less. c. Hostile takeover attempts. d. Increasing control by big government. e. Being independent of the distribution process. Page: 42 38. Strategic planning in the twenty-first century calls for action in three key areas. Which of these key areas deals specifically with devising a long-term game plan for achieving long-run objectives? a. Creating a viable business opportunity. b. Producing a strategic fit. c. Developing an investment portfolio. d. Expanding core competencies. e. Establishing a strategy. Page: 42 39. Most large companies consist of four organizational levels: the , the division level, the business unit level, and the product level. a. board of director level b. major stakeholder level c. management team level d. corporate level e. strategic level Page: 43 40. The is the central instrument for directing and coordinating the marketing effort. a. strategic plan b. marketing plan c. tactical plan d. customer value statement e. corporate mission Page: 43 41. The lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities. a. organizational plan b. strategic marketing plan c. corporate tactical plan d. corporate mission e. customer value statement Page: 43 42. In which of the following plans would we most likely find directions for implementing and addressing daily challenges and opportunities in product features, promotion, merchandising, pricing, sales channels, and service areas. a. The tactical marketing plan. 75 Part 1: Defining Marketing and the Marketing Process b. The target marketing plan. c. The deployment plan. d. The product launch plan. e. The product development plan. Page: 43 43. If you wanted to find out more about target markets and the organization’s value proposition, which of the following types of plans would most likely contain information that might be useful to you in your quest? a. The marketing plan. b. The organizational plan. c. The strategic marketing plan. d. The tactical marketing plan. e. The marketing mix plan. Page: 43 44. The process consists of corporate, division, business, and product planning. a. implementing b. controlling c. innovation d. planning e. competitive Page: 44 45. All corporate headquarters undertake four planning activities, the first of which is . a. defining the corporate mission b. establishing strategic business units and assigning resources (SBUs) c. assigning resources to each SBU d. assessing growth opportunities e. understanding target markets Page: 44 46. A clear, thoughtful mission statement provides employees with a shared sense of purpose, direction, and . a. profitability b. target market feasibility c. opportunity d. continuous improvement e. quality products Page: 44 76 Chapter 1: Marketing: Managing Profitable Customer Relationships 47. Mission statements are at their best when they reflect a . a. market b. strength c. competency d. vision e. value Page: 44 48. Which of the following terms matches to the phrase “it is a single business or collection of related businesses that can be planned separately from the rest of the company”? a. Strategic business unit. b. Diverse business unit. c. Growth business unit. d. Niche market unit. e. Specialized business unit. Page: 47 49. Market-penetration, product-development, and market-development strategies would all be examples of strategies. a. concentric b. conglomerate c. horizontal d. intensive growth e. integrative growth Page: 48 50. A(n) is when a company might seek new businesses that have no relationship to its current technology, products, or markets. a. concentric strategy b. conglomerate strategy c. horizontal strategy d. intensive growth strategy e. integrative strategy Page: 49 51. Which of the following terms most closely matches to “the shared experiences, stories, beliefs, and norms that characterize an organization”? a. Organizational dynamics. b. A business mission. c. An ethical/value statement. d. Customer relationships. e. Corporate culture. Page: 50 52. The first step in the business unit strategic-planning process deals with which of the following? a. Goal formulation. b. Business mission. c. Strategy formulation. Part 1: Defining Marketing and the Marketing Process d. Program formulation. e. SWOT analysis. Page: 51 53. When a business gets to know market segments intimately and pursues either cost leadership or differentiation within the target segment it is referred to as a . a. defined strategy b. focused strategy c. value-added strategy d. competitive advantage strategy e. customer-focused strategy Page: 56 54. If a firm pursues a strategy, it must be good at engineering, purchasing, manufacturing, and physical distribution. a. differentiation b. overall cost leadership c. focus d. domestic customer relationship e. market share Page: 56 55. To keep their strategic alliances thriving, corporations have begun to develop organizational structures to support them and have come to view the ability to form and manage partnerships as core skills. This is called . a. value managed partnership b. synergistic partnership c. centralized partnership d. partner relationship management e. win-win relationship management Page: 57 56. Traditionally, most businesses focused on stockholders. Today, the focus is on what are called . a. stakeholders b. partners c. regulators d. consumer triads e. supply-chain relationships Page: 58 57. A is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. a. strategic plan b. marketing plan c. sales plan d. target market plan e. competitive analysis plan Page: 60 78Chapter 1: Marketing: Managing Profitable Customer Relationships 58. Which of the following permits senior management to grasp the marketing plan’s major thrust? a. The situation analysis. b. The marketing strategy. c. The executive summary and table of contents. d. Financial projections. e. Implementation and controls. Page: 60 59. Most marketing plans cover . a. one year b. two years c. three years d. four years e. five years Page: 60 60. The most frequently cited shortcomings of current marketing plans, according to marketing executives, are lack of realism, insufficient competitive analysis, and a focus. a. long-term b. profit c. short-run d. product e. price Page: 60 True/False 61. The traditional view of marketing is that the firm makes something and then sells it. Page: 36 62. The traditional view of marketing begins with a first step called strategic marketing. Page: 36 63. The formula, segmentation, targeting, and positioning (STP) is the essence of strategic marketing. Page: 37 64. The Japanese have extended the value delivery process by adding the concept of zero promotions after five years. Page: 38 65. The customer relationship management process is all the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment. 79Part 1: Defining Marketing and the Marketing Process Page: 38 66. A principle of the value chain is that every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product. Page: 38 67. Another name for a company’s value delivery network is “the intermediary team.” Page: 39 68. A core competency is usually common among competitors in a given industry. Page: 39 69. Holistic marketing focuses on the integration of value exploration, value creation, and value delivery as a means to build long-term relationships with consumers. Page: 40 70. If a manager asks “How can my company identify new value opportunities?,” he or she is examining a management question identified as being value creation. Page: 41 71. According to McKinsey research, a recommendation to managers and CEOs who are concerned about marketing performance was that marketers must test and develop programs more quickly as they enhance planning processes and research approaches. Page: 42 72. The marketing plan is the central instrument for directing and coordinating the marketing effort. Page: 43 73. A mission statement has as its primary focus the product and how to make it. Page: 44 74. One of the characteristics of a good mission statement is that it has an expansive number of goals for doing business. Page: 44 75. A good illustration of a market definition of the business a company is in would be “We sell gasoline.” Page: 46 76. If a company sought to expand the number of existing products sold to its current markets, it would use an integrative growth strategy labeled as “market- penetration strategy.” Page: 48 77. If a company sought to grow via a strategy that required the company to seek new businesses that have no relationship to its current technology, products, or markets, the company would be using a diversification strategy called a conglomerate strategy. 80 Chapter 1: Marketing: Managing Profitable Customer Relationships Page: 49 78. Scenario analysis can be used to assist companies in appraising how well their corporate culture might match (or not match) potential business partners or acquisitions. Page: 51 79. Once an organization has established a business mission in its business unit strategic-planning process, it may proceed to the second step of the planning process called goal formulation. Page: 51 80. Good illustrations of microenvironment actors in the strategic planning process would be demographics, technology, and the social-cultural arena. Page: 52 81. To evaluate opportunities, companies can use Market Opportunity Analysis (MOA) to determine the attractiveness and probability of success. Page: 53 82. An environmental threat is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to lower sales or profit. Page: 53 83. Once a SWOT analysis has been completed, the strategic planner is ready to proceed to the goal formulation stage of the strategic planning process model. Page: 54 84. In applying MBO (management by objectives) all objectives are treated as being equally important—objective discrimination is not allowed. Page: 54 85. For an MBO (management by objectives) system to work, one of the four criteria that the unit’s objectives must meet is that objectives must be stated quantitatively whenever possible. Page: 55 86. A strategy is a game plan for achieving what the business unit wants to achieve. Page: 56 87. Firms choosing a generic strategy centering on focus must be good at engineering, purchasing, manufacturing, and physical distribution. Page: 56 88. One of the four major categories of strategic alliance involves sharing personnel (e.g., human resource alliance) to staff alliance member marketing departments. Page: 57 81 Part 1: Defining Marketing and the Marketing Process 89. Partner Relationship Management (PRM) can be thought of as a corporation’s development of structures that support strategic alliances and treats the formation and management of partnerships as a core skill. Page: 57 90. Companies normally measure their profit performance using ROI; however, this approach suffers because profits are arbitrarily measured and subject to manipulation. Page: 58 91. A marketing vision statement is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. Page: 60 92. Marketing plans are becoming more production-oriented because of the high costs of doing business in today’s economy. Page: 60 93. The marketing plan should open with a situation analysis. Page: 60 94. When a manager reaches the marketing strategy section of a marketing plan, he or she will define the mission and marketing and financial objectives. Page: 60 95. One of the key questions to ask in evaluating a marketing plan is whether the plan is simple or not. Page: 61 96. Such areas as sales forecasts, expense forecasts, and breakeven analysis are usually found in the financial projections section of the marketing plan. Page: 61 97. Return on investment (ROI) shows how many units must be sold monthly to offset the monthly fixed costs and average per-unit variable costs. Page: 61 98. Most marketing plans conclude with a section that indicates how the plan will be implemented. Page: 61 99. During the marketing strategy section of the marketing plan, goals and budgets are spelled out for each month or quarter so management can review each period’s results and take corrective action as needed. Page: 61 100. A good illustration of a marketing objective would to “decrease customer acquisition costs by 1.5 percent per quarter.” Page: 64 82Chapter 1: Marketing: Managing Profitable Customer Relationships Essay 101. There are two views of the value delivery process that may be followed by organizations seeking to gain business from consumers. Briefly, summarize each of those views. 102. The firm’s success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct core business processes. List and briefly describe the five core business processes outlined in the text. 103. A successful company nurtures its resources and competencies. A core competency has three characteristics. Describe those characteristics. 104. A holistic marketing orientation can provide insight into the process of capturing customer value. In this vain, the holistic marketing framework is 83 Part 1: Defining Marketing and the Marketing Process designed to address three key management questions. Describe and illustrate each of these key management questions. Page: 41 105. Marketing faces a number of challenges in the twenty-first century. Based on an extensive 2002 research study, McKinsey (a noted consulting firm) identified three main challenges as reflected by differences in opinion between chief executive officers (CEOs) and their most senior marketing executives or chief marketing officers (CMOs). What were those challenges and which of the challenges do you think is most important? Why? 84 Chapter 1: Marketing: Managing Profitable Customer Relationships However, be sure that any answer chosen is supported by materials found in this section of the chapter. Page: 42 106. Indicate the differences and similarities between the following terms: marketing plan, strategic marketing plan, and tactical marketing plan. 107. Good mission statements are essential to being a success in business. Describe the three major characteristics that good mission statements should have. 108. Assessing growth opportunities involves planning new businesses, downsizing, or terminating older businesses. The company’s plans for existing businesses allow it to project total sales and profits. If there is a gap between future desired sales and projected sales, corporate management will have to develop or acquire new businesses to fill it. Identify and describe the three strategies that can be used to fill the strategic gap. 85 Part 1: Defining Marketing and the Marketing Process 109. Assume that you are directed to prepare short brief explaining the steps of the Business Unit Strategic-Planning Process. Your task is to construct such a brief by carefully outlining the steps of the aforementioned process. 110. As a marketing manager for a large steel company you have been assigned the task of educating a group of new managers on how to prepare a marketing plan. Though few of these managers will actually ever have to prepare such a plan because of their functional roles in the organization, it is still very useful that each new manager know how to construct a marketing plan. Prepare a brief summary of the contents of the marketing plan for the new managers. You may keep your discussion general or make it specific to the steel industry. APPLICATION QUESTIONS Multiple Choice 111. If a manager were following the traditional view of marketing wherein the firm makes something and then sells it, all of the following would part of the “sell the product” process sequence EXCEPT . a. price b. advertise/promote c. design product d. distribute e. service Page: 36 86 Chapter 1: Marketing: Managing Profitable Customer Relationships 112. As indicated in the text, critics of Nike and its shoe products often complain that . a. Nike has too many professional athletes endorsing their products b. Nike has an unfair advantage in product design c. Nike has unfair leverage with distributors d. Nike shoes cost almost nothing to make yet cost the consumer so much e. Nike does not support ecological causes Page: 37 113. According to the Japanese view of the value delivery process, the company should receive the required parts and supplies continuously through just-in- time arrangements with suppliers. This concept would be most appropriately called . a. zero customer feedback time b. zero product improvement time c. zero purchasing time d. zero setup time e. zero defect Page: 38 114. Apex Corporation is known in its industry being “best of class” in terms of costs and performance. Many companies will probably use Apex Corporation as a . a. target b. benchmark c. competitor to beat d. future supplier e. sounding board for ideas Page: 38 115. James Franks has been put in charge of gathering marketing intelligence, disseminating it within his organization, and eventually directing action on the information. Which of the following core business processes most closely matches with the task that Mr. Franks has been given? a. The market sensing process. b. The new offering realization process. c. The customer acquisition process. d. The customer relationship management process. e. The fulfillment management process. Page: 38 87Part 1: Defining Marketing and the Marketing Process 116. Netflix, the pioneer online DVD rental service, has what is called because they are excellent in broad business processes. a. core competency b. distinctive capabilities c. market savvy d. business touch e. intuitive synergy Page: 40 117. George Day sees organizations as excelling in three distinctive capabilities: market sensing, customer linking, and channel bonding. a. production-driven b. globally-driven c. human resource-driven d. engineering-driven e. market-driven Page: 40 118. Holistic marketers achieve profitable growth by expanding , building customer loyalty, and capturing customer lifetime value. a. design skills b. customer share c. promotion venues d. database resources e. competitive space share Page: 40 119. In the past Kodak was not necessarily known for embracing technology that did not come from Kodak engineers and designers. However, as Kodak addresses the digital revolution taking over the photographic industry, it wants customers to see it as a leader in digital photography and is moving away from its connection to print-only photography. This would be an example of which of the following value-creation steps? a. Redefining the big idea. b. Reshaping the business scope. c. Repositioning the company’s brand identity. d. Redoing its corporate logo. e. Researching its competitors. Page: 41 88 Chapter 1: Marketing: Managing Profitable Customer Relationships 120. According to a McKinsey report, CEOs need and expect all areas of their organizations to be more efficient. Which of the following statements would be the best illustration of this need and expectation? a. Doing more with more. b. Doing less with less. c. Doing less with more. d. Doing more with less. e. Doing about the same with more. Page: 42 121. According to a recent McKinsey report regarding characteristics that help to position marketers as business development leaders, illustrates one of those characteristics. a. “never bite off more than you can chew” b. “if it ain’t broke, don’t fix it” c. “always pursue Internet opportunities” d. “strike while the iron is hot” e. “identify profitable unmet needs before brainstorming creative solutions” Page: 42 122. According to Collins and Porras’ Built to Last, is characterized as a visionary company—acknowledged as the industry leader and widely admired because they set ambitious goals, communicated them to their employees, and embraced a high purpose beyond making money. a. General Electric b. Delta Airlines c. Farmer’s Insurance d. Wells Fargo e. McDonald’s Page: 43 123. Juan Garcia is seen as a planner because he plans the daily promotional releases about his company’s products and services. a. strategic b. selective c. tactical d. niche e. organizational Page: 43 Part 1: Defining Marketing and the Marketing Process 124. Sony’s former president, Akio Morita, wanted everyone to have access to “personal portable sound,” so his company created the Walkman and portable CD player. Which of the following planning aids most likely assisted Mr. Morita with his vision? a. The mission statement. b. A SWOT analysis. c. Knowledge of customers. d. A database. e. An executive summary to a formal marketing plan. Page: 44 125. Which of the following most closely matches a correct market-oriented definition of a business? a. Missouri-Pacific Railroad—we run a railroad. b. Xerox—we make copying equipment. c. Standard Oil—we sell gasoline. d. Encyclopedia Britannica—we distribute information. e. Columbia Pictures—we make movies. Page: 46 126. If you were the CEO of a company that was looking to implement strategies to fill a perceived strategic-planning gap, you would most likely explore growth first because it would be easier to improve an existing business rather than building a new one. a. intensive b. integrative c. diversification d. conglomerate e. concentric Page: 47 127. If you were the marketing manager of an organization that had chosen growth via current products sold to new markets, your organization would have chosen a strategy. a. market-penetration b. market-development c. product-development d. diversification e. concentric Page: 48 Chapter 1: Marketing: Managing Profitable Customer Relationships 128. describes the way people in an organization are dressed, how they talk to one another, and the way they greet their customers. a. Strategic orientation b. Competitive positioning c. Distinctive advantage d. HR training strategy e. Corporate culture Page: 50 129. Once an organization establishes its business mission, conducts a SWOT analysis, and goes through a goal formulation process, it is ready to go through a step called to continue with a strategic-planning process. a. program formulation b. strategy formulation c. implementation d. functional analysis e. feedback and control Page: 51 130. McDonald’s has often teamed up with Disney to offer products related to current Disney films as part of its meals for children. The best description of this form of alliance would a alliance. a. product alliance b. logistics alliance c. pricing collaboration d. service e. promotional Page: 57 Short Answer 131. If you were the marketing manager for small regional toy manufacturer who embraced strategic marketing application to your value creation and delivery sequence process, you would use three processes or acts to choose the value of your offer. Name those three processes. Page: 36 132. In the example of Gymboree, we learn that they are a 530-store chain that sells children’s clothing to upscale parents. Because there are not enough parents making more than $65,000 year to support more stores, Gymboree has created Janie and Jack, a chain selling upscale baby gifts. Hot Topic, a chain that sells rock-band inspired clothes for teens, recently launched Torrid to give plus-size teens the same fashion options. Instead of emphasizing making and selling, this company sees itself as part of a value delivery process. The value delivery process consists of three parts. What are those parts and what is their function? Part 1: Defining Marketing and the Marketing Process Page: 37 133. Define value chain. What does a value chain do? 134. If an organization was very strong at defining target markets and prospecting for new customers, which of the core business processes would this organization have mastered? 135. In a holistic marketing framework with respect to customer focus, what would be components that would match to value exploration, value creation, and value delivery? 136. What three spaces are discussed when a holistic marketing organization goes through a value exploration? Chapter 1: Marketing: Managing Profitable Customer Relationships 137. In the central role of strategic planning, only a handful of companies stand out as master marketers—Procter & Gamble, Southwest Airlines, Nike, Disney, Nordstrom, Wal-Mart, and McDonald’s to name a few. From a consumers perspective why do you think they stand out? Explain. 138. All corporate headquarters undertake four planning activities. What are those activities? 139. Porsche makes only expensive cars and Gerber serves primarily the baby market. Which of the major competitive spheres within which a company will operate matches most closely to the examples above? 140. Ansoft’s product-market expansion grid shows three intensive growth strategies that can be used to assist a marketing manager in finding creative ways to close a perceived strategic gap. Characterize each of the cells of Ansoft’s grid. 141. If a company decides to acquire one of its suppliers to gain more control or generate profit, it would have chosen which form of integrative growth 142. When Yahoo! began to flounder in the 2001, CEO Terry Semel imposed a more conservative, buttoned-down atmosphere on the freewheeling Internet Part 1: Defining Marketing and the Marketing Process startup. At the new Yahoo!, spontaneity is out and order is in. What term is most closely applied to the organizational change phenomenon described above? Be sure to explain what the term means with respect to the example provided. 143. Describe what happens in scenario analysis and explain why firms such as Royal Dutch/Shell Group use the technique. 144. Explain what happens in a SWOT analysis during the strategic planning process. Page: 52 145. What questions would typically be asked during a market opportunity analysis (MOA)? Page: 53 Chapter 1: Marketing: Managing Profitable Customer Relationships 146. For an MBO system to work, the business unit attempting to implement the process must meet four criteria. What are those criteria? 147. Which of Michael Porter’s generic strategies would be most appropriate for an organization that concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market? Quality leadership would be one example of the end result of such a strategy. 148. When H&R Block and Hyatt Legal Services combined their efforts (two service businesses), they also joined marketing forces to create a strong alliance. Which of the alliance forms cited in the text most closely matches the H&R Block and Hyatt Legal Services alliance? Explain. 149. Characterize a marketing plan. Page: 60 150. During which stage of the marketing plan will the marketing manager establish the product line’s positioning? Chapter 3: Gathering Information and Scanning the Environment GENERAL CONCEPT QUESTIONS Part 1: Defining Marketing and the Marketing Process Multiple Choice 1. The major responsibility for identifying significant marketplace changes falls to the . a. U.S. Department of Labor b. company’s marketers c. American Marketing Association d. industry lobby groups found in Washington, D.C. e. marketing research industry Page: 72 2. Marketers have extensive information about how consumption patterns vary across countries. On a per capita basis within Western Europe, the smoke the most cigarettes. a. Swiss b. Greeks c. Irish d. Austrians e. French Page: 72 3. All of the following questions EXCEPT , would be considered to be forms of information needs probes. a. What decisions do you regularly make? b. What information do you need to make decisions? c. What data analysis programs would you want? d. What magazines and trade reports would you like to see on a regular basis? e. What products would be most closely matched to consumer needs? Page: 73 96 Chapter 1: Marketing: Managing Profitable Customer Relationships 4. consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. a. A marketing information system b. A marketing research system c. A marketing intelligence system d. A promotional campaign e. A marketing database Page: 73 5. The company’s marketing information system should be a cross between what managers think they need, what managers really need, and . a. what the marketing research department is able to do b. what consumers are willing to share c. what the competition is doing d. what is acceptable industry practice e. what is economically feasible Page: 73 6. Marketing managers rely on internal reports. By analyzing this information, they can spot . a. micro-markets b. opportunities and problems c. macro-markets d. competitive strategies e. consumer demographic units Page: 73 7. The heart of the internal records system is the . a. database b. asset acquisition process c. order-to-payment cycle d. service consideration e. information liquidity ratio Page: 73 8. When a marketer “mines” his or her company’s database, fresh insights can be gained into neglected customer segments, , and other useful information. a. recent customer trends b. long-term competitive trends c. possible new inventions d. possible new technologies e. new primary data possibilities Page: 74 9. The internal records system supplies results data, but the marketing intelligence system supplies data. a. concurrent b. secondary c. research 97 Part 1: Defining Marketing and the Marketing Process d. happenings e. premium Page: 74 10. A is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment. a. marketing research system b. marketing information system c. product management system d. marketing intelligence system e. vertical system Page: 74 11. A company can take several steps to improve the quality of its marketing intelligence. If the company purchases competitive products for study, attends open houses and trade shows, and reads competitors’ published reports and stockholder information, the company is using to improve the quality of its marketing intelligence. a. sales force surrogates b. intermediaries c. external networks d. advisory panels e. customer feedback systems Pages: 74–75 12. All of the following would be considered to be steps to improve the quality of marketing intelligence in a company EXCEPT . a. a company can train and motivate the sales force to spot and report new developments b. a company can use guerrilla tactics such as going through a competitor’s trash c. a company can motivate intermediaries to pass along important information d. a company can network externally e. a company can purchase information from outside suppliers Pages: 74–76 98 Chapter 1: Marketing: Managing Profitable Customer Relationships 13. The 2000 U.S. census provides an in-depth look at the population swings, demographic groups, regional migrations, and changing family structure of 281 million people. Which of the following steps to improve the quality of company marketing intelligence system would be most closely associated the above illustration? a. A company can purchase information from outside suppliers. b. A company can take advantage of government data sources. c. A company can use online customer feedback systems to collect data. d. A company can network externally. e. A company can use its sales force to collect and report data. Page: 76 14. There are four main ways that marketers can find relevant online information on competitors’ products and weaknesses, and summary comments and overall performance rating of a product, service, or supplier. is(are) a type of site that is concentrated in financial services and high-tech products that require professional knowledge. a. Independent customer goods and service reviews b. Distributor or sales agent feedback sites c. Combo-sites offering customer reviews and expert opinions d. Customer complaint sites e. Shopping bot service sites Page: 77 15. A is “unpredictable, short-lived, and without social, economic, and political significance.” a. fad b. fashion c. trend d. megatrend e. style Page: 77 16. A is a direction or sequence of events that has some momentum and durability; the shape of the future is revealed and many opportunities are provided. a. fad b. fashion c. trend d. megatrend e. style Page: 77 99 Part 1: Defining Marketing and the Marketing Process 17. have been described as “large social, economic, political and technological changes [that] are slow to form, and once in place, they influence us for some time—between seven and ten years, or longer. a. Fads b. Fashions c. Trends d. Megatrends e. Styles Page: 77 18. Which of the following minority groups in the United States has been associated with one of the ten megatrends shaping the consumer landscape? a. African Americans b. Asian Americans c. European Americans d. Hispanic Americans e. Middle Eastern Americans Page: 78 19. The beginning of the new century brought a series of new challenges. All of the following would be considered to be among those challenges EXCEPT . a. a deterioration of innovative ideas b. steep decline of the stock market c. increasing unemployment d. corporate scandals e. the rise of terrorism Page: 78 20. With the rapidly changing global picture, the firm must monitor six major forces. All of the following would be among those forces EXCEPT . a. demographic b. economic c. social-cultural d. natural e. promotional Page: 78 21. The main demographic force that marketers monitor is(are) . a. suppliers b. competitors c. communication (such as advertising) d. government reports dealing with birth rates e. population Page: 79 22. The population explosion has been a source of major concern. Unchecked population growth and consumption could eventually result in all of the following EXCEPT . a. insufficient food supply b. depletion of key minerals 100 Chapter 1: Marketing: Managing Profitable Customer Relationships c. overcrowding d. restrictions on competition e. pollution Page: 79 23. One impact of explosive population growth is illustrated by the case of China. The Chinese government passed regulations limiting families to one child. One consequence of these regulations is that . a. the children are so fussed over and spoiled that they become “little emperors” b. school enrollments are dropping c. the fledgling automotive business in China will not have customers in a few years d. open rebellion is being preached e. “child-oriented businesses” have few customers Page: 80 24. A significant fact about population growth and population shifts is that in 2004 or 2005, . a. the youth market will exceed that of the adult market b. people over the age of 60 will outnumber those under five years of age c. baby boomers will be eclipsed by Gen X young adults d. most age group segments will be about equal e. Gen Y young adults will surpass the baby boomers as the largest age segment Page: 80 25. Which of the following age groups is thought to control three-quarters of the country’s wealth? a. 0–20 age segment b. 60 age segment c. 20–30 age segment d. 30–40 age segment e. 40 age segment Page: 81 101 Part 1: Defining Marketing and the Marketing Process 26. At one time the United States was called a “melting pot” society because of the number of different cultures that were integrated into the U.S. culture. Today, the United States is described as a society because many ethnic groups are maintaining their ethnic differences, neighborhoods, and cultures. a. “boiling pot” b. “salad bowl” c. “banana split” d. “doubled up” e. “non-communicative” Page: 81 27. According to the 2000 census, the U.S. population of 276.2 million was 72 percent white and percent African American. The remainder consisted of Hispanic Americans and other minorities. a. 20 b. 18 c. 15 d. 13 e. 11 Page: 81 28. Diversity goes beyond ethnic and racial markets. More than million Americans have disabilities, and they constitute a market for home delivery companies (and others). a. 50 b. 40 c. 30 d. 20 e. 10 Page: 83 29. Which of the following countries is known for having 99 percent of its population literate? a. England b. Germany c. France d. United States e. Japan Page: 83 102 Chapter 1: Marketing: Managing Profitable Customer Relationships 30. The household consists of a husband, wife, and children (and sometimes grandparents). a. “traditional” b. “extended” c. “diversity” d. “modern” e. “revised” Page: 83 31. Married couple households—the dominant cohort since the formulation of the United States—has slipped from nearly 80 percent in the 1950s to around percent today. a. 70 b. 60 c. 50 d. 40 e. 35 Page: 83 32. The twenty-first century saw markets grow more rapidly again due to a higher birth rate, a lower death rate, and rapid growth from foreign immigration. a. suburban b. urban c. rural d. coastal e. secondary Page: 84 33. The movement by population to the has lessened the demand for warm clothing and home heating equipment and increased demand for air conditioning. a. Grainbelt b. Pacific Northwest c. Sunbelt d. Mid-Coastal areas e. Heartland Page: 84 103 Part 1: Defining Marketing and the Marketing Process 34. Marketers look at where consumers are gathering. Almost one in people over the age of five (120 million) moved at least one time between 1995 and 2000, according to a Census 2000 brief. a. two b. three c. four d. five e. ten Page: 85 35. In which of the following economies would we expect to find few opportunities for marketers? a. Industrializing economies. b. Land-locked economies. c. Raw-material-exporting economies. d. Industrial economies. e. Subsistence economies. Page: 86 36. According to information presented in the text, which of the following countries is surprisingly a very good market for Lamborghini automobiles (costing more than $150,000) because of the number of wealthy families that can afford expensive cars. a. Greece b. Switzerland c. Holland d. Russia e. Portugal Page: 86 37. Over the past three decades in the United States, the rich have grown richer and the middle class has . a. stayed about the same b. shrunk c. increased slightly d. matched the rich in terms of relative growth e. been ignored because of problems with the poorer classes Page: 86 38. shapes the beliefs, values, and norms that largely define the tastes and preferences. a. Marketing b. The mass media c. Government d. Production innovation and engineering e. Society Page: 87 39. If a consumer lives the lifestyle of a “pleasure seeker” or goes on a “self- realization” quest, he or she is expressing what is called . a. views of others 104 Chapter 1: Marketing: Managing Profitable Customer Relationships b. views of society c. views of themselves d. views of organizations e. views of the universe Pages: 87–88 40. According to the information found in the social-cultural environment, with respect to views of others, are considered to be things that allow people who are alone to feel they are not (e.g., television, home video games, and chat rooms on the Internet). a. social surrogates b. subliminal fantasies c. relationship avoidance d. primary products e. secondary products Page: 88 41. Today, corporations need to make sure that they are good corporate citizens and that their consumer messages are honest. Such a view would be consistent with which of the following views? a. Views of others. b. Views of organizations. c. Views of themselves. d. Views of the universe. e. Views of society. Page: 88 42. People vary in their attitudes toward their society. usually live more frugally, drive smaller cars, and wear simpler clothing. a. Makers b. Escapers c. Seekers d. Changers e. Developers Page: 88 105 Part 1: Defining Marketing and the Marketing Process 43. People vary in their attitudes toward society and react accordingly. are a major market for movies, music, surfing, and camping. a. Makers b. Preservers c. Escapers d. Changers e. Developers Page: 88 44. All of the following have been cited by the text as being among Americans’ core values EXCEPT . a. they believe in work b. they believe in getting married c. they believe in giving to charity d. they believe in being honest e. they believe in sexual permissiveness Page: 88 45. Which of the following would be the best illustration of a secondary belief or value? a. Belief in work. b. Belief in giving to charity. c. Belief in getting married. d. Belief in getting married early. e. Belief in being honest. Page: 88 46. Which of the following is by far the most popular American leisure activity in that it is preferred by 59 percent of adults who participate in such activities? a. Gardening. b. Walking for exercise. c. Swimming. d. Photography. e. Jogging or running. Page: 89 47. Each society contains , groups with shared values emerging from their special life experiences or circumstances. a. demographic segments b. cliques c. consumer bundles d. subcultures e. behavioral niches Page: 89 106 Chapter 1: Marketing: Managing Profitable Customer Relationships 48. Which of the following would be the best illustration of a subculture? a. A softball team. b. A university alumni association. c. Teenagers. d. A Boy Scout troop. e. Frequent flyers. Page: 89 49. All of the following EXCEPT have been found to influence young people today and cause a shift of secondary cores values for this group. a. U2’s Bono. b. Elvis Presley. c. The NBA’s LeBron James. d. Golf’s Tiger Woods. e. Skateboarder Tony Hawk. Page: 89 50. Although core values are fairly persistent, cultural swings do take place. caused such a swing in the 1960s. a. Ford Motor Company b. George McGovern c. G.I. Joe action characters d. The infomercial e. The Beatles Page: 89 51. Marketers need to be aware of threats and opportunities associated with four trends in the natural environment. All of the following are among those trends EXCEPT . a. the shortage of raw materials b. the increased cost of energy c. near 90 percent corporate support for “green causes” d. increased pollution levels e. the changing role of governments Page: 90 52. With respect to the shortage of raw materials, air and water are classified as resources. However, as we know, problems are beginning to plague both our air and water quality. a. infinite b. near finite c. finite renewable d. finite nonrenewable e. absolute Page: 90 107 Part 1: Defining Marketing and the Marketing Process 53. One finite nonrenewable resource, , has created serious problems for the world economy. Because of anticipated shortages, investment and commodity markets have had wild swings. a. water b. air c. sugar d. coffee e. oil Page: 90 54. From a branding perspective, “green marketing” programs have not been entirely successful. has been cited as one of the obstacles that must be overcome for “green marketing” programs to be more successful. a. Overexposure and lack of credibility b. High cost c. Poor promotions d. Resistance by the youth segment in the marketplace e. Lack of support by governmental agencies and concerns Page: 91 55. Which of the following countries is noted for their “green movement” and support within its government for environmental quality enhancement? a. Mexico b. China c. Germany d. England e. Italy Page: 91 56. The marketer should monitor the following trends in technology, EXCEPT , if progress is to be made in business. a. the pace of change b. the difficulties found in sharing information c. the opportunities for innovation d. varying R&D budgets e. increased regulation Page: 92 57. According to some industry analysts and inventors, will eventually eclipse the PC as our most important technological device. a. iPod b. HDTV c. holographic television d. the mobile phone e. solar-powered car Page: 92 58. All of the following will most likely be among the advantages for a society that embraces telecommuting as an employment/communication alternative EXCEPT . a. reduction of auto pollution 108 Chapter 1: Marketing: Managing Profitable Customer Relationships b. bringing the family closer together c. increased bonuses and compensation perks d. creating more home-centered shopping e. entertainment centered on the home environment Page: 92 59. legislation has as its purposes to protect companies from unfair competition, to protect consumers from unfair business practices, and to protect the interests of society from unbridled business behavior. a. Business b. Consumer c. Bi-partisan d. Activist e. Global Page: 94 60. An important force affecting business is the —a movement of citizens and government organized to strengthen the rights and powers of buyers in relation to sellers. a. lobbyist movement b. consumerist movement c. environmental movement d. self-rights movement e. ethical reform movement Page: 95 True/False 61. The major responsibility for identifying significant marketplace changes falls to the company’s marketers. Page: 72 62. Today, most firms are rather sophisticated about gathering information. Page: 72 63. A marketing information system is developed from internal company records, marketing intelligence, and promotional models supplied by the marketing department. Page: 73 109 Part 1: Defining Marketing and the Marketing Process 64. The heart of the internal records system is the bar code. Page: 73 65. According to principles found in database construction and usage, a “carpet bombing” mail out of a new offer is usually the most successful strategy. Page: 74 66. The internal records system supplies results data, but the marketing intelligence system supplies happenings data. Page: 74 67. If a company were pursuing a policy of networking externally it might collect competitors’ ads or look up news stories about competitors. Page: 75 68. One of the ways to find relevant online information on competitors’ strengths and weaknesses might be to frequent distributor or sales agent feedback sites. Page: 76 69. A style is unpredictable, short-lived, and without social, economic, and political significance. Page: 77 70. A megatrend has been described as being what follows all fads that stay on the market at least one year. Page: 77 71. One of the ten significant megatrends that will impact marketing efforts in the future is delayed retirement. Page: 78 72. Microenvironmental forces have been labeled as being “uncontrollable.” Page: 78 73. The main demographic force that marketers monitor is population. Page: 79 74. If the world were a village of 1,000 people, it would consist of 520 men and 480 women. Page: 79 75. A growing population always means a growing market. Page: 80 76. Japan has one of the world’s oldest populations. Page: 80 77. According to population studies, Gen X (numbering 72 million) is almost the same size as the huge baby boomer market. Page: 81 110 Chapter 1: Marketing: Managing Profitable Customer Relationships 78. At present the largest minority in the United States is the Latinos with 13 percent of the total population. Page: 81 79. In the United States, 10 to 15 percent of the population may be functionally illiterate. Page: 83 80. Based on research done in England, a conclusion drawn about families is that “friends are the new family.” Page: 83 81. According to studies of minority markets, the disabled market is ten times more likely to be in a professional job, almost twice as likely to own a vacation home, eight times more likely to own a notebook computer, and twice as likely to own individual stocks as compared to the general population. Page: 84 82. Urban markets are once again growing because of higher birth rates, a lower death rate, and rapid growth from foreign immigration. Page: 84 83. The small office—home office segment of our society has grown to nearly 40 million; thereby, boosting the sales of electronic conveniences and ready to assemble furniture. Page: 85 84. Almost one in two people over the age of five (120 million) moved at least one time between 1995 and 2000, according to a Census 2000 brief. Page: 85 85. Available purchasing power in an economy depends on mainly one facet—supply and demand. Page: 85 86. A good illustration of a raw-material exporting economy is Egypt. Page: 86 87. Conventional retailers who offer medium-priced goods are the most vulnerable to the growing trend in the United States called a two-tier market. Page: 86 88. Through outsourcing, companies can feasibly cut between 20 to 70 percent of their labor costs. Page: 87 89. “Pleasure seekers” of the 1970s had their beliefs, values, and norms shaped by views of others. Pages: 87–88 111 Part 1: Defining Marketing and the Marketing Process 90. If a single person has a home entertainment system that is rich in television capabilities and home video games, he or she may be using such a system as a “social surrogate.” Page: 88 91. In recent years, because of a tough job market, there has been an increasing amount of organizational loyalty among most employees. Page: 88 92. If a young college student decides to join the military to defend the principles of his or her country, the student would be classified as a “changer.” Page: 88 93. Most Americans still believe in getting married as a core belief. Page: 88 94. Teenagers would be a good example of a culture in the United States. Page: 89 95. Marketers need to be aware of the threats and opportunities associated with the trend toward increased pollution levels. Page: 90 96. Research studies have shown that consumers as a whole may not be willing to pay a premium for environmental benefits. Page: 91 97. Every new technology is a force for “creative destruction.” Page: 92 98. Virtual reality is giving consumers what they dream about. Page: 93 99. One of the major trends in the political-legal environment is the trend toward the growth of special interest groups. Page: 93 100. Today, customers are still willing to swap personal information for customized products from firms. Page: 95 Essay 101. Describe a marketing information system (MIS). From what sources is the MIS developed? Suggested marketing information system (MIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. A 112 Chapter 1: Marketing: Managing Profitable Customer Relationships marketing information system is developed from internal company records, marketing intelligence activities, and marketing research. Page: 73 102. Describe the order-to-payment cycle and why it is important to internal records information keeping. 103. What are the various steps to improve the quality of its marketing intelligence function that can be taken by a company? 113 Part 1: Defining Marketing and the Marketing Process 104. List and briefly describe the four main ways marketers can find relevant online information on competitors’ strengths and weaknesses, and summary comments and overall performance rating of a product, service, or supplier. Page: 77 105. What is a “megatrend”? Briefly describe five megatrends shaping the consumer landscape. Pages: 77–78 106. What is the main demographic force monitored by marketers? Why? 107. Describe the two dominant “household patterns” in the last 50 years. 114 Chapter 1: Marketing: Managing Profitable Customer Relationships 108. People absorb, almost unconsciously, a worldview that defines their relationships. List and describe the “views” that assist or retard this relationship development process. 109. Describe the differences between a core belief and a secondary belief. List the primary core beliefs of Americans as revealed by the text. 110. Many marketers have tried and failed with “green sales pitches” (appeals to o

MGMT3720 Chapter 1 What Is Organizational Behavior Answers 100% Provided and Fully Explained MGMT3720: Chapter 1 What Is Organizational Behavior? MULTIPLE CHOICE 1. Successful managers and entrepreneurs recognize that: a. technical knowledge is all that is needed for success. b. interpersonal skills are not important. c. technical skills are necessary, but insufficient, for succeeding in management. d. an understanding of human behavior does not impact effectiveness ( Challenging; pp. 2-3) What Managers Do 2. Which one of the following is not considered an organization? a. church b. university c. a military unit d. all 45-year-old adults in a community ( Easy; p. 4) 3. A(n) is a consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals. a. organization b. unit c. team d. ethnic group ( Moderat p. 4) 4. The four management functions include all of the following except: a. controlling. b. planning. c. staffing. d. organizing. ( Moderat p. 4) 5. includes defining an organization’s goals and establishing an overall strategy for achieving these goals and developing a comprehensive hierarchy of plans to integrate and coordinate activities. a. Controlling b. Planning c. Leading d. Coordinating ( Moderat p. 4) 6. The determination of how tasks are to be grouped is part of which management function? a. planning b. leading c. controlling d. organizing ( Easy; p. 4) 7. The organizing function includes a determination of which of the following? a. what tasks are to be done b. who is to do these tasks c. who reports to whom d. all of the above ( Moderat p. 4) 8. Every organization contains people, and it is management’s job to direct and coordinate these people. This is the function. a. planning b. leading c. controlling d. organizing ( Moderat p.4) 9. According to Henry Mintzberg, the ten managerial roles can be grouped into three categories. Which of the following is not one of these groups? a. concern with the interpersonal relationships b. the transfer of information c. decision making d. liaison roles ( Challenging; Exh. 1-1; p. 6. ) 10. An example of Mintzberg’s interpersonal management role is: a. spokesperson. b. leader. c. negotiator. d. monitor. ( Moderat Exh. 1-1; p. 6) 11. When a manager searches the organization and its environment for opportunities and initiates projects to bring about change, the manager is acting in which role? a. negotiator b. entrepreneur c. disturbance handler d. resource allocator ( Challenging; Exh. 1-1; p. 6) 12. Which of the following is not an essential management skill identified by Robert Katz? a. technical b. computer c. human d. conceptual ( Moderat p. 5) 13. When managers have the mental ability to analyze and diagnose complex situations, they possess: a. technical skills. b. computer skills. c. human skills. d. conceptual skills. ( Challenging; pp. 6-7 ) 14. Which one of the following would not be considered a human skill? a. completing accounting reports b. communicating c. resolving conflicts d. working as part of a team ( Moderat pp 5-6) 15. According to Luthans and his associates, which of the following is not considered a part of traditional management? a. interacting with outsiders b. decision making c. controlling d. planning ( Moderat p. 7) 16. Which of Luthan’s managerial activities involves socializing, politicking, and interacting with outsiders? a. traditional management b. communication c. human resource management d. networking ( Challenging; p. 7 ) 17. According to Luthans, successful managers spent more of their time on than on any other activity. a. traditional management b. human resource management c. networking d. communicating ( Challenging; p. 8) 18. A common thread running through the functions, roles, skills, and activities approaches to management recognizes the importance of: a. managing technology. b. managing people. c. politicking. d. being efficient. ( Moderat p. 8) Enter Organizational Behavior 19. Organizational behavior is all of the following except: a. a field of study. b. an applied field. c. an intuitive analysis of human behavior. d. studying what people do in an organization. ( Moderat p. 8) 20. is a field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness. a. Organizational development b. Management c. Organizational behavior d. People management ( Easy; p. 8) 21. Which of the following is not a core topic of organizational behavior? a. motivation b. attitude development c. conflict d. computers ( Easy; p. 8 ) 22. According to the text, the best approach for obtaining knowledge about human behavior is a. the common sense approach. b. an observational approach. c. a systematic approach. d. a theoretical approach. ( Easy; p. 10) 23. A major theme in your textbook is that behavior is not: a. caused. b. random. c. consistent. d. predictable. ( Easy; p. 9) 24. If we know how a person perceives a situation and what is important to him/her, then behavior is generally a. predictable. b. predetermined. c. uncontrollable. d. controllable. ( Moderat p. 9) 25. Fundamental consistencies allow of behavior. a. observation b. systematizing c. research d. predictability ( Moderat pp. 9-10) 26. Behavior is generally and the of behavior is a means to making reasonably accurate predictions. a. predetermine observation b. predictabl systematic study c. controllabl theoretical application d. uncontrollabl systematic study ( Moderat p. 10) 27. includes analyzing relationships, determining causes and effects, and basing conclusions on scientific evidence. a. Organizational behavior b. The observational approach to understanding organizational behavior c. A theoretical approach to organizational behavior d. A systematic study of organizational behavior ( Moderat p. 10) 28. In the study of OB, intuition is replaced by: a. systematic study. b. generalization. c. listening. d. prediction. ( Easy; p. 10) Contributing Disciplines to the OB Field 29. Organizational behavior is built upon contributions from all of the following disciplines except: a. humanities. b. psychology. c. anthropology. d. political science. ( Moderat p. 11) 30. The science that seeks to measure, explain, and sometimes change the behavior of humans and other animals is: a. psychiatry. b. psychology. c. sociology. d. political science. ( Moderat p. 12) 31. Which behavioral science discipline has made the most significant contribution to understanding individual behavior? a. sociology b. social psychology c. psychology d. anthropology ( Moderat p. 12) 32. The OB topic of motivation has been most influenced by which behavioral science discipline? a. psychology b. social psychology c. sociology d. political science ( Moderat p. 12) 33. The most significant contribution to OB in the area of formal organization theory and structure has been made by: a. psychology. b. sociology. c. anthropology. d. political science. ( Moderat p. 12) 34. studies people in relation to their fellow human beings. a. Psychology b. Sociology c. Anthropology d. Political science ( Moderat p. 12) 35. The science that focuses on the influence of people on one another is: a. psychology. b. anthropology. c. political science. d. social psychology. ( Moderat p. 12) 36. One of the major areas receiving considerable investigation from social psychologists has been: a. change. b. motivation. c. job satisfaction. d. job stress. ( Challenging; p. 12 ) 37. The OB subject of “organizational culture” has been most influenced by which behavioral science discipline? a. anthropology b. psychology c. social psychology d. political science ( Moderat p. 12) 38. has helped us understand differences in fundamental values, attitudes, and behavior between people in different countries. a. Anthropology b. Psychology c. Social psychology d. Political science ( Challenging; p. 12) 39. Topics of study in political science include all of the following except: a. structuring of conflict. b. the social system in which individuals fill their roles. c. allocation of power. d. how people manipulate power for individual self interest. ( Challenging; p. 12) There are Few Absolutes in OB 40. Which of the following is the best description of OB’s current state? a. It is based on universal truths. b. It is based on contingencies. c. There is little disagreement among OB researchers and scholars. d. Cause-effect principles have been isolated which tend to apply to all situations. ( Moderat p. 13) Challenges and Opportunities for OB 41. Whereas focuses on differences between people from different countries, addresses differences among people within given countries. a. workforce diversity; globalization b. globalization; workforce diversity c. cultur diversity d. culturization; workforce diversity ( Challenging; pp. 14-15) 42. means that organizations are becoming more heterogeneous in terms of gender, race, and ethnicity. a. Globalization b. Workforce diversity c. Affirmative action d. Organizational culture ( Easy; p. 15) 43. The assumption is being replaced by one that recognizes and values . a. melting pot; differences b. melting pot; similarities c. diversity; differences d. heterogeneous; similarities ( Moderat p. 15) 44. Which of the following is not true? a. Currently, 46 percent of the U.S. labor force are women. b. Minorities and immigrants make up 23 percent of the workforce. c. The male Caucasian working full time to support a non-employed wife and school-aged children is a minority. d. The proportion of minorities and women is shrinking. ( Challenging; p. 15) 45. The implications of workforce diversity include all of the following except: a. managers have to shift their philosophy from treating everyone alike to recognizing differences. b. diversity training should be provided. c. revamping benefit programs is needed to accommodate the different needs of different employees. d. the same perceptions are used in decision making. ( Challenging; p. 15) 46. is a philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes. a. MBO b. Quality management c. Reengineering d. Organizational behavior ( Easy; p. 16) 47. Quality management requires employee involvement. a. very little b. occasional c. extensive d. no ( Moderat p. 16) 48. asks managers to reconsider how work would be done and their organization structured if they were starting over. a. Process reengineering b. MBO c. TQM d. Diversity training ( Easy; p. 16) 49. Predictions suggest there will be a labor shortage for at least another: a. 1-2 years. b. 4-5 years. c. 10-15 years. d. 20-25 years. ( Moderat p.17) 50. The U.S. labor shortage is a function of: a. birth rates and labor participation rates. b. birth rates and mobility. c. brain drain. d. poor wages and benefits. ( Moderat p. 17) 51. Many employees have been led to retire early as a result of: a. expanded Social Security benefits. b. a healthy stock market. c. improved pension plans. d. all of the above ( Challenging; p. 17) 52. The majority of employees today in developed countries work in: a. manufacturing jobs. b. service jobs. c. MNCs. d. government agencies. ( Moderat p. 18) 53. When managers put employees in charge of what they do, they are the employees. a. reengineering b. empowering c. diversifying d. dehiring ( Moderat p. 19) 54. Managing today can be described as long periods of ongoing interrupted occasionally by short periods of . a. chang stability b. stability; change c. flexibility; rigidity d. rigidity; flexibility ( Moderat p. 19) 55. Which of the following has not contributed to blurring the lines between employees’ work life and personal life? a. the creation of global organizations b. communications technology allowing employees to work any time and from any place c. organizations asking employees to put in longer hours d. fewer dual-income couples ( Easy; p. 20) 56. Situations where an individual is required to define right and wrong conduct are termed: a. diversity issues. b. human resource problems. c. ethical dilemmas. d. loyalty oaths. ( Easy; p. 21) Coming Attractions: Developing an OB Model 57. A model is a(an): a. abstraction of reality. b. response that is affected by an independent variable. c. independent variable. d. real-world scenario. ( Easy; p. 22) 58. Primary dependent variables in OB include: a. productivity. b. absenteeism. c. job satisfaction. d. all of the above ( Easy; p. 23) 59. is achievement of goals. a. Efficiency b. Effectiveness c. Productivity d. Motivation ( Easy; p. 23) 60. Which of the following is an example of being an efficient company or employee? a. operating a hospital at the lowest possible cost but still yielding a high profit b. being the most pleasant real estate broker in the southeast c. as a telemarketer, making the required number of calls at the end of the day d. a sales person who acquires the most clients of anyone in the company ( Challenging; p. 23) 61. Sears trained employees to improve the employee-customer interaction to ultimately: a. generate additional revenue. b. decrease returns. c. improve repeat customer business. d. none of the above ( Moderat p. 23) 62. is discretionary behavior that is not part of an employee’s formal job requirement, but that promotes the effective functioning of the organization. a. Productivity b. Motivation c. Organizational citizenship d. Organizational behavior ( Moderat p. 25) 63. Individual-level independent variables include: a. technology. b. organizational culture. c. perception. d. human resource policy. ( Moderat pp. 25-26) 64. is the voluntary and involuntary permanent withdrawal from an organization. a. Absenteeism b. Turnover c. Downsizing d. Exit ( Easy; p. 24) TRUE/E 65. The single biggest reason for the failure of managers is poor interpersonal skills. 66. While managers must be technically competent, technical knowledge is not enough for success. What Managers Do 67. Managers get things done through other people. 68. The term organization, as used in your textbook, is meant to include business firms but exclude government agencies. 69. Managers may be referred to as administrators in not-for-profit organizations. 70. Henri Fayol listed five management functions: planning, organizing, commanding, coordinating, and controlling. 71. Modern theorists have condensed Fayol’s five management functions down to four: planning, organizing, commanding, and controlling. 72. The controlling function includes the determination of what tasks are to be done. 73. Monitoring, comparing, and potential correcting is what is meant by the controlling process. 74. Mintzberg concluded that managers perform ten different highly-interrelated roles, or sets of behaviors, attributable to their jobs. 75. The role of spokesperson is an example of an informational role. 76. As resource allocators, managers are responsible for allocating human, physical, and monetary resources. Moderat Exh. 1-1; p. 6) 77. When managers initiate and oversee new projects that will improve their organization’s performance, they are acting in the capacity of an entrepreneur, an example of an informational role. 78. Robert Katz has identified three essential management skills: technical, human, and conceptual. 79. According to Katz, human skills encompass the ability to apply specialized knowledge or expertise. ( Moderat pp. 5-6) 80. The ability to analyze and diagnose complex situations is referred to as an individual’s conceptual skills. Easy; pp. 6-7) 81. According to Luthans and his associates, those managers who are most “successful” will spend more time networking than those managers who are considered most “effective.” Challenging; Exh. 1-2; p. 7) 82. Research conducted by Luthans supports the theory that promotions are based on performance. ( Moderat p. 7) 83. Luthans’ research indicates that among effective managers, communication made the largest relative contribution and networking the least. Challenging; Exh. 1-2; pp. 7-8) 84. Managers need to develop their people skills if they are going to be effective and successful. Moderat p. 8) Enter Organizational Behavior 85. Organizational behavior is a field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness. Moderat p. 8) 86. Organizational behavior is concerned with the study of what people do in an organization and how that behavior affects the performance of the organization. Moderat p. 8) 87. Behavior is generally predictable, and the systematic study of behavior is a means to making reasonably accurate predictions. Moderat p. 10) 88. Many people’s views on human behavior are based on intuition. Easy; pp. 9-10) 89. It is the consistencies in behavior that make prediction possible. Moderat p. 9) 90. Regardless of appearances, people usually intend their behavior to be rational. Moderat p. 9) 91. Anything you learn in an unsystematic way is incorrect. ( Moderat p. 10) 92. Intuition is gut feelings about “why I do what I do.” Easy; p. 10) Contributing Disciplines to the OB Field 93. OB is an applied behavioral science that is built upon contributions from a number of behavioral disciplines. Easy; p. 11) 94. Learning, perception, and personality have been OB topics whose contributions have generally come from psychology. Moderat Exh. 1-3; p. 11) 95. What psychology is to the individual, sociology is to the group. Moderat p. 12) 96. Social psychology is an area within psychology, blending concepts from both psychology and political science. ( Moderat p.12) 97. Anthropology has helped us understand differences in values and attitudes between people in different countries. Moderat p. 12) 98. Conflict and power have been major topics of concern to political scientists. Easy; Exh. 1-3; p. 12) There are Few Absolutes in OB 99. There are many simple and universal principles that explain organizational behavior. ( Easy; p. 13) 100. OB researchers cannot offers reasonably accurate explanations of human behavior since people act very differently in the same situation. ( Moderat p. 13) Challenges and Opportunities for OB 101. As the world has become a global village, managers have to become capable of working with people from different cultures. Moderat p. 14) 102. Workforce diversity means that organizations are becoming more homogeneous in terms of gender, race, and ethnicity. ( Moderat p. 15) 103. People must set aside their cultural values when they come to work. ( Moderat p. 15) 104. 46 percent of the U.S. labor force are women. Challenging; p. 15) 105. Diversity, if positively managed, can increase creativity and innovation in organizations. Easy; p. 15) 106. A philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes is termed “reengineering.” ( Moderat p. 16) 107. Quality management has an intense focus on the customer and a goal of employee empowerment. Easy; p. 16) 108. Putting employees in charge of what they do is termed “reengineering.” ( Easy; p. 16) 109. Process reengineering asks, “How would we do things around here if we were starting over from scratch?” Easy; p. 16) 110. In tight labor markets, those managers who don’t understand human behavior risk having no one to manage. Moderat p. 17) 111. An employee who is empowered is given greater opportunity to determine how she does her job. Moderat p. 19) 112. There’s a blurring between the roles of managers and workers. Moderat p. 20) 113. Managing today is described as long periods of ongoing change, interrupted occasionally by short periods of stability. Moderat p. 21) 114. Today’s managers and employees must learn to cope with temporariness – learning to live with flexibility, spontaneity, and unpredictability. Moderat p. 19) 115. OB has little to offer in stimulating employee creativity and tolerance for change. ( Challenging; p. 20) 116. Your firm is experiencing lower than normal profits. You realize that you should write off some questionable accounts, but your supervisor suggests that you wait until next year. This is a modern example of an ethical dilemma. Easy; p. 21) Coming Attractions: Developing an OB Model 117. There are three levels of analysis in OB, and, as we move from the individual level to the group level to the organization systems level, we add systematically to our understanding of behavior in organizations. Challenging; p.22) 118. The key factors you want to explain or predict in a model are termed independent variables. ( Moderat p. 23) 119. Typical dependent variables in organizational behavior are productivity, absenteeism, and job satisfaction. Moderat p. 23) 120. Organizational behavior models generally assume job satisfaction to be an independent variable. ( Moderat p. 23) 121. An organization is productive if it achieves its goals and does so by transferring inputs to outputs at the lowest cost. Moderat p. 23) 122. The annual cost of absenteeism in the U.S. is estimated at over $40 billion. Challenging; p. 24) 123. A conservative estimate of the cost of recruiting, selecting, and training an employee is about $25,000. ( Challenging; p. 24) 124. Reasonable levels of employee-initiated turnover facilitate organizational flexibility and employee independence. Challenging; p. 24) 125. The difference between the amount of rewards workers receive and the amount they believe they should receive is termed job satisfaction. Moderat p. 25) 126. Job satisfaction represents an attitude rather than a behavior. Moderat p. 25) 127. Independent group level variables studied in organizational behavior include perception, learning, and motivation. ( Moderat p. 25) SCENARIO-BASED QUESTIONS Application of What Managers Do Joseph Wood is a manager at the XYZ Company. He performs all the management functions as condensed from Henri Fayol’s work. 128. When Mr. Wood estimates an overall strategy for achieving his department’s goals, he is performing the function. a. planning b. organizing c. leading d. controlling ( Moderat p. 4) 129. When Mr. Wood determines what tasks are to be performed by his employees and how they are to be grouped, he is performing the function. a. planning b. organizing c. leading d. controlling ( Moderat p. 4) 130. When Mr. Wood motivates his employees and attempts to resolve conflicts among department members, he is performing the function. a. planning b. organizing c. leading d. controlling ( Moderat p. 4) 131. When Mr. Wood compares projected sales to actual sales in his department, he is performing the function. a. planning b. organizing c. leading d. controlling ( Moderat p. 4) Application of Contributing Disciplines to the OB Field You are bringing together faculty from different behavioral disciplines to author a new textbook in organizational behavior. You have faculty from the fields of psychology, sociology, social psychology, anthropology, and political science. 132. You should expect that the faculty member from will probably contribute information about intergroup behavior. a. sociology b. psychology c. social psychology d. anthropology ( Challenging; p. 12) 133. Information on which of the following would probably not be a contribution from the faculty member from political science? a. conflict b. power c. organizational change d. intraorganizational politics ( Challenging; p. 12) 134. To whom would you expect to address issues of communication? a. the psychologist b. the anthropologist c. the political scientist d. the social psychologist ( Challenging; p. 12) 135. You would expect the faculty member from to furnish information about personality, learning, and motivation. a. sociology b. psychology c. anthropology d. political science ( Moderat p. 12) Application of Quality Management You are an employee of Acme, Inc. who has just been approached by your manager with a new philosophy that management wishes to institute. Your manager is stressing that he wants your involvement and that the emphasis is going to be on the customer and continual improvement. 136. You would probably believe that management is trying to implement: a. quality management. b. MBO. c. process reengineering. d. organizational behavior. ( Moderat p. 16) 137. As part of the program, you should expect to see all of the following except: a. improvement in quality. b. empowerment of employees. c. emphasis on individual achievement. d. accurate measurement. ( Moderat p. 16) 138. You should expect your job to change in which of the following ways? a. more imposed rules from management b. more measurement of performance variables c. more free time d. less real employee power ( Moderat p. 16) Application of Developing an OB Model Allison and Gail both are studying for a final exam. Both students have a goal of making a grade of 91 or better. Gail studied 6 hours and made a grade of 92. Allison studied for 9 hours and also made a grade of 92. 139. Which of the students was effective? a. only Gail b. only Allison c. neither Gail nor Allison d. both Gail and Allison ( Moderat p. 23) 140. Which of the following statements is true? a. Gail is more efficient than Allison. b. Allison is more efficient than Gail. c. Gail is more effective than Allison. d. Allison is more effective than Gail. ( Moderat p. 23) 141. Which of the students was more productive? a. Gail b. Allison c. Neither Gail nor Allison was productive. d. It is impossible to tell from the information given. ( Moderat p. 23) SHORT DISCUSSION QUESTIONS 142. Discuss the four management functions described by your text. (Page 4) 143. Why is it important to replace intuition with systematic study in our attempts to understand behavior within organizations? (Pages 8-10) 144. How have the fields of psychology and sociology contributed to our understanding of organizational behavior? (Page 12) 145. How does globalization affect a manager’s people skills? 146. Explain the term “workforce diversity.” (Page 15) 147. What is the difference between effectiveness and efficiency? (Page 25) 148. Discuss the U.S. labor shortage. (Page 17) MEDIUM LENGTH DISCUSSION QUESTIONS 149. Briefly discuss three of the challenges facing contemporary managers. (Pages 14-16) 150. Explain quality management and process reengineering. (Pages 16-17) 151. What independent and dependent variables are usually identified for construction of an OB model? (Pages 23-26) COMPREHENSIVE ESSAYS 152. Discuss Mintzberg’s ten different roles. Group them as being primarily concerned with interpersonal relationships, the transfer of information, and decision making. (Exh. 1-1; Pages 4-5) 153. Organizational behavior is an applied behavioral science built upon contributions from a number of different disciplines. What are these disciplines and what are the contributions of each discipline? Be complete in your response and include five different behavioral science disciplines. (Exh. 1-3; Pages 11-12) 154. How have the roles of managers and workers been blurred? (Pages 20-21) 155. What is an ethical dilemma? How are organizations responding to these dilemmas? (Pages 21-22) 156. Define turnover. Why is it of concern to organizations? (Page 24) Chapter 2 Foundations of Individual Behavior MULTIPLE CHOICE Biographical Characteristics 1. The biographical characteristic that will grow in importance during the next decade is: a. sex. b. marital status. c. age. d. length of service. ( Moderat p. 37) 2. All of the following are examples of biographical characteristics except: a. sexual orientation. b. age. c. sex. d. marital status. ( Moderat p. 37) 3. The age of a worker seems to have a direct relationship to: a. productivity. b. turnover. c. absenteeism. d. vacation taken. ( Challenging; p. 38) 4. Which of the following statements is not true? a. In general, older employees have lower rates of avoidable absence than do younger employees. b. Older employees have higher rates of unavoidable absence than younger workers probably due to their poorer health. c. The older you get, the more likely you are to quit your job. d. Older workers are perceived as lacking flexibility. ( Moderate, p. 38) 5. Which of the following is true concerning the relationship between age and job satisfaction? a. Most studies found a negative association between age and satisfaction. b. There is a U-shaped relationship. c. Satisfaction decreases among professionals as they age. d. Satisfaction increases among nonprofessionals during middle age. ( Challenging; p. 39) 6. Studies have found that all of the following are true except: a. women are more willing to conform to authority than men. b. men are more aggressive than women. c. women tend to be more productive at work than men. d. men are more likely to have expectations of success. ( Moderat p. 39) 7. In comparing men and women in the workplace, it was found that: a. men are more productive. b. women are more productive. c. women have more absences. d. men are more prone to resign. ( Moderat p. 39) 8. According to your text, a likely explanation for the higher absentee rate for women is that: a. women tend to have more illnesses that keep them from work than do men. b. traditionally, women have had the responsibility of caring for home and family. c. women tend to be less satisfied with their jobs than men and are consequently absent more often. d. women generally have jobs for which a temporary replacement can be hired so absences are more permissible. ( Challenging; p. 39) 9. All of the following are true about married employees except: a. they are more productive than single employees. b. they have fewer absences than single employees. c. they undergo less turnover than single employees. d. they are more satisfied with their jobs than single employees. ( Moderat pp. 39-40) 10. Which of the following statements concerning tenure is not true? a. The most recent evidence demonstrates a positive relationship between seniority and job productivity. b. Tenure does not appear to be a good predictor of employee productivity. c. Tenure is a potent variable in explaining turnover. d. Tenure and satisfaction are positively related. ( Moderat p. 40) 11. Studies indicate that employees with more tenure: a. are generally less satisfied than newer employees. b. are generally less productive than newer employees. c. are generally absent less than newer employees. d. are generally absent more than newer employees. ( Moderat p. 40) Ability 12. As used in the text, the term “ability:” a. refers to an individual’s willingness to perform the various tasks in a job. b. is a current assessment of what one can do. c. is made up of only intellectual skills. d. is made up of people skills. ( Moderat p. 40) 13. Which one of the following is the best synonym for “ability?” a. motivation b. capacity c. experience d. intellect ( Moderat p. 40) 14. Which of the following is not a dimension of intellectual ability as discussed in your text? a. number aptitude b. perceptual speed c. spatial visualization d. dynamic strength ( Moderat Exh. 2-1; p. 41) 15. Tests that measure specific dimensions of intelligence have been found to be strong predictors of: a. job satisfaction. b. turnover. c. job performance. d. ability to work with others. ( Moderat p. 41) 16. A major problem resulting from the use of ability tests for selection and promotion of personnel is: a. the low reliability of the tests. b. the tests fail to take into account the personality of the individual. c. the adverse impact the tests have on racial and ethnic groups. d. some individuals with high intelligence are poor test takers. ( Moderat p. 41) 17. Recent evidence suggests that intelligence can be better understood by breaking it down into four sub-parts. Which one of the following is not one of those sub-parts? a. cognitive b. social c. emotional d. physical strength ( Moderat pp. 41-42) 18. encompasses the aptitudes that have long been tapped by traditional intelligence tests. a. Cognitive intelligence b. Social intelligence c. Emotional intelligence d. Physical strength ( Easy; p. 42) 19. intelligence is a person’s ability to relate effectively to others. a. Cognitive b. Social c. Emotional d. Cultural ( Easy; p. 42) 20. intelligence is awareness of cross-cultural differences and the ability to successfully function in cross-cultural situations. a. Cognitive b. Social c. Emotional d. Cultural ( Easy; p. 42) 21. intelligence is the ability to identify, understand, and manage emotions. a. Cognitive b. Social c. Emotional d. Cultural ( Easy; p. 42) 22. Multiple intelligences may help explain why so-called “smart people” don’t: a. necessarily adapt well to everyday life. b. work well with others. c. succeed when placed in leadership roles. d. all of the above ( Moderat p. 42) 23. Which of the following is not a characteristic of physical ability? a. stamina b. strength c. looks d. dexterity ( Moderat p. 42) 24. Research indicates that there are nine basic abilities involved in the performance of physical tests. Which of the following is not a correct description of the ability listed? a. dynamic strength–ability to exert muscular force repeatedly b. dynamic flexibility–ability to move the trunk and back muscles as far as possible c. balance–ability to maintain equilibrium despite forces pulling off balance d. stamina–ability to continue maximum effort requiring prolonged effort over time ( Challenging; Exh. 2-2; p. 42) Learning 25. According to a psychologist’s definition, indicates that learning has taken place. a. ability to perform well on exams b. change in attitude c. change in behavior d. a high IQ score ( Easy; p. 43) 26. Any relatively permanent change in behavior that occurs as a result of experience is termed: a. learning. b. classical nt conditioning. c. social learning theory. ( Moderat p. 43) 27. All of the following are true about learning except: a. it involves change. b. the change can be permanent or temporary. c. it requires a change in actions of behavior. d. it requires some form of experience. ( Moderat p. 44) 28. Experience may be acquired: a. directly through observation or practice. b. directly through reading. c. but is not necessary for learning. d. but is meaningless. ( Moderat p. 44) 29. The classical conditioning theory of learning grew out of: a. experiments performed by Ivan Pavlov. b. the need for better managers. c. experiments performed by B. F. Skinner. d. advances in technology. ( Moderat p. 44) 30. In Pavlov’s experiment, the meat was: a. an unconditioned stimulus. b. an unconditioned response. c. a conditioned stimulus. d. a conditioned response. ( Easy; p. 44) 31. Which of the following is not a conditioned response? a. wincing when you stub your toe b. driving on the right side of the road c. feeling hunger around noon time d. looking for shelter when the sky turns gray ( Moderat p. 44) 32. In Pavlov’s experiment, the bell was: a. an unconditioned stimulus. b. an unconditioned response. c. a conditioned stimulus. d. a conditioned response. ( Easy; p. 44) 33. Which of the following is not true of classical conditioning? a. Classical conditioning is passive. b. Classical conditioning can explain simple reflexive behaviors. c. Learning a conditioned response involves building up an association between a conditioned stimulus and an unconditioned stimulus. d. The neutral stimulus takes on the properties of the conditioned stimulus. ( Moderat pp. 44-45) 34. A smell that brings back memories of a certain time and place is an example of: a. classical conditioning. b. operant conditioning. c. sensory conditioning. d. association conditioning. ( Easy; p. 44) 35. Most behavior of individuals in organizations is: a elicited. b. emitted. c. reflexive. d. uncontrollable. ( Moderat p. 45) 36. Operant conditioning argues that: a. behavior is reflexive. b. behavior is unlearned. c. behavior is a function of its consequences. d. the tendency to repeat a behavior is very strong. ( Moderat p. 45) 37. Reinforcement is the major tenet of: a. Pavlov. b. Fayol. c. Skinner. d. Deming. ( Challenging; p. 46) 38. What did for classical conditioning, did for operant conditioning. a. Pavlov; Skinner b. Herzberg; Deming c. Fayol; Mintzberg d. McGregor; Maslow ( Challenging; p. 46) 39. Your boss does not follow through on his/her promise to pay you double for overtime hours worked. When asked again to work overtime, you decline. This is an application of a. employer/employee relations. b. operant conditioning. c. lack of commitment. d. social learning. ( Moderat p. 46) 40. According to operant conditioning, if a behavior fails to be positively reinforced, the probability that behavior will be repeated: a. increases. b. declines. c. remains unchanged. d. is not impacted. ( Moderat p. 46) 41. The view that we can learn both through observation and direct experience is called: a. situational learning theory. b. classical learning. c. social learning theory. d. hands-on learning experience. ( Easy; p. 46) 42. Social learning theory is an extension of: a. classical conditioning. b. operant conditioning. c. shaping. d. extinction. ( Challenging; p. 46) 43. Four processes have been found to determine the influence that a model will have on an individual. Which of the following is not one of the processes? a. shaping processes b. attentional processes c. motor reproduction processes d. reinforcement processes ( Challenging; pp. 46-47) 44. Using processes in creating employee training programs recognizes that models’ influence will depend on how well the individual remembers the model’s action after the model is no longer readily available. a. attentional b. retention c. motor reproduction d. reinforcement ( Moderat pp. 46-47) 45. The learning concept of reinforcing closer and closer approximations to the desired new behavior is called: a. modeling. b. shaping. c. classical conditioning. d. social learning. ( Easy; p. 47) 46. Individual-difference factors found to significantly influence learning and training actions include all of the following except: a. ability. b. motivational level. c. personality. d. age. ( Moderat p. 47) 47. All of the following are ways in which to shape learning except: a. positive reinforcement. b. punishment. c. extinction. d. manipulation. ( Moderat pp. 47-48) 48. When a response is followed by the termination or withdrawal of something unpleasant, it is called: a. negative reinforcement. b. positive reinforcement. c. manipulation. d. elimination. ( Easy; p. 47) 49. Suspending an employee who shows up for work drunk is an example of: a. extinction. b. negative reinforcement. c. punishment. d. poor planning. ( Moderat p. 48) 50. An example of is when an employee receives a one-week suspension from work and is fined $200 for stealing company property. a. penalization b. punishment c. extinction d. negative reinforcement ( Easy; p. 48) 51. Eliminating any reinforcement that is maintaining an unwanted behavior is called: a. extinction. b. punishment. c. negative reinforcement. d. positive reinforcement. ( Easy; p. 48) 52. All of the following are true about both positive and negative reinforcement except: a. both positive and negative reinforcement result in learning. b. both positive and negative reinforcement strengthen a response and increase the probability of repetition. c. both positive and negative reinforcement tend to weaken behavior and decrease its subsequent frequency. d. both positive and negative reinforcement are effective shaping tools. ( Challenging; pp. 48-49) 53. In a case where an employee is frequently late for work and every time he/she is not tardy the manager compliments him/her for being on time, the manager is using: a. continuous schedule reinforcement. b. negative reinforcement. c. an intermittent schedule of reinforcement. d. a repetitious schedule of reinforcement. ( Moderat p. 49) 54. According to research, the form of reinforcement tends to promote more resistance to extinction than does the form. a. varie repetitious b. repetitious; intermittent c. intermittent; continuous d. continuous; varied ( Moderat p. 49) 55. In a reinforcement schedule, after a constant number of responses are given, a reward is initiated. a. variable-ratio b. fixed-ratio c. variable-interval d. fixed-interval ( Moderat pp. 49-50) 56. In general, reinforcement schedules tend to lead to higher performance than reinforcement schedules. a. variabl fixed b. fixe intermittent c. fixe variable d. variabl occasional ( Moderat pp. 49-50) 57. A series of randomly timed, unannounced visits to a company office by the corporate audit staff is an example of: a. surprise tactic. b. variable-interval reinforcement schedule. c. continuous reinforcement schedule. d. fixed reinforcement schedule. ( Moderat p. 50) 58. The now-classic study at Emery Air Freight illustrates the use of: a. classical conditioning. b. self-management. c. reengineering. d. behavior modification. ( Moderat p. 51) 59. The application of reinforcement concepts to individuals in the work setting is referred to as: a. classical conditioning. b. self-management. c. reengineering. d. OB Mod. ( Moderat p. 51) 60. Which of the following is not one of the steps of the problem-solving model followed by the typical OB Mod program? a. identifying critical behaviors b. avoiding evaluation and performance c. developing baseline data d. developing and implementing an intervention strategy ( Challenging; p. 52) 61. Examples of how managers can use learning theory include all the following except: a. using lotteries to reduce absenteeism. b. disciplining employees. c. developing training programs. d. using radio advertisements for recruiting. ( Moderat pp. 53-54) 62. Which of the following does not describe the effect of discipline on employees? a. It tells employees what not to do. b. It tells employees what to do in the future. c. It produces fast results in the short run. d. It leads to employee frustration, fear of the manager, and increases in absenteeism and turnover. ( Moderat p. 53) 63. Learning techniques that allow individuals to manage their own behavior so that less external management control is necessary are termed: a. self-management. b. MBO. c. reengineering. d. mentor programs. ( Easy; p. 54) TRUE/E Biographical Characteristics 64. Biographical data is easier to acquire than information on employee motivation levels. Easy; p. 37) 65. Personal characteristics that are objective and easily obtained from personnel records (such as age, sex, and marital status) are termed biographical characteristics. Easy; p. 37) 66. The relationship between age and job performance is likely to be an issue of increasing importance during the next decade. Moderat p. 38) 67. Recent American legislation makes it easier for a company to enforce mandatory retirement. ( Moderat p. 38) 68. Age and turnover rates are directly related. ( Moderat p. 38) 69. Age and avoidable absences are positively related. ( Moderat p. 38) 70. Productivity declines with age. ( Challenging; p. 38) 71. Age and job satisfaction are related for professional workers. Challenging; p. 39) 72. It is best to assume that there are not significant differences as to job productivity between males and females. Easy; p. 39) 73. Men have a higher rate of absenteeism than women. ( Easy; p. 39) 74. Working mothers are more likely to prefer part-time work, flexible work schedules, and telecommuting. Easy; p. 39) 75. Women have higher absenteeism rates than men do. Easy; p. 39) 76. Married employees tend to be more satisfied with their jobs than single employees. Easy; pp. 39-40) 77. Married employees tend to have higher turnover rates than single employees. ( Moderat pp. 39-40) 78. People who have been on a job longer are more productive than those with less seniority. Moderat p. 40) 79. Seniority is negatively related to absenteeism. Moderat p. 40) 80. Seniority is negatively related to turnover and is one of the single best predictors of turnover. Challenging; p. 40) 81. Tenure and satisfaction are negatively related. ( Moderat p. 40) Ability 82. Everyone has strengths and weaknesses in terms of ability that make them relatively superior or inferior to others in performing certain tasks or activities. Moderat p. 40) 83. Ability is the assessment of what one will do. ( Easy; p. 40) 84. An individual’s overall abilities are essentially made up of two sets of factors: intellectual and physical abilities. Moderat p. 40) 85. It is now illegal for employers to use IQ tests for employment selection. ( Moderat p. 40) 86. A high IQ is a prerequisite for all jobs. ( Easy; p. 41) 87. Tests that measure specific dimensions of intelligence have been found to be strong predictors of future job performance. Moderat p. 41) 88. Mental ability tests used for selection, promotion, training, and similar personnel decisions may have a negative impact on racial and ethnic groups. Challenging; p. 41) 89. Stamina, dexterity, and strength are dimensions of intellectual ability. ( Easy; Exh. 2-2; p. 42) 90. Emotional intelligence is the ability to identify, understand, and manage emotions. Moderat p. 42) 91. The multiple intelligence line of inquiry holds little promise. ( Easy; p. 42) 92. Employee performance is enhanced when there is a high ability-job fit. Easy; p. 42) 93. Individuals who have a high score on one dimension of physical ability will almost always score high on the other dimensions. ( Moderat p. 42) Learning 94. Learning consists of any relatively permanent change in behavior that occurs as a result of experience. Easy; p. 43) 95. One can easily observe others learning. ( Easy; p. 43) 96. Classical conditioning grew out of the work of B.F. Skinner. ( Moderat p. 44) 97. Pavlov taught dogs to salivate in response to the ringing of a bell. Easy; p. 44) 98. The meat in Pavlov’s experiment was an unconditioned stimulus. Moderat p. 44) 99. Learning a conditioned response involves building up an association between a conditioned stimulus and an unconditioned stimulus. Challenging; p. 44) 100. Operant conditioning can be used to explain why Christmas carols often bring back pleasant memories of childhood. ( Challenging; p. 44) 101. Classical conditioning is passive. Moderat p. 45) 102. Classical conditioning can explain simple reflexive behaviors. Moderat p. 45) 103. What Pavlov did for operant conditioning, Skinner did for classical conditioning. ( Challenging; p. 46) 104. Operant behavior means voluntary or learned behavior in contrast to reflexive or unlearned behavior. Challenging; p. 45) 105. According to operant conditioning, behavior is assumed to be determined from without. Moderat p. 46) 106. Your supervisor has explained that he will positively reward those who take extra effort to see that their jobs are done well. You should suspect he has read the work of B.F. Skinner. Easy; p. 46) 107. Rewards are most effective if they are delayed following the desired response. ( Moderat p. 46) 108. Learning through observation and direct experience has been called classical conditioning. ( Easy; p. 46) 109. The old adage “you can’t teach an old dog new tricks” is definitely true. ( Easy; p. 47) 110. Older workers are not as capable of learning as other employee groups. ( Moderat p. 47) 111. One method of shaping behavior is called positive reinforcement and refers to a response being followed with something pleasant. Moderat p. 47) 112. Eliminating any reinforcement that is maintaining a behavior is called punishment. ( Moderat pp. 47-48) 113. Both positive and negative reinforcement result in learning. Easy; p. 48) 114. Both punishment and extinction weaken behavior and tend to decrease its subsequent frequency. Challenging; p. 48) 115. Some type of reinforcement is necessary to produce a change in behavior. Easy; p. 49) 116. A continuous reinforcement schedule reinforces the desired behavior each and every time it is demonstrated. Easy; p. 49) 117. A piece-rate incentive plan is an example of a variable-ratio schedule of reinforcement. ( Moderat p. 49) 118. Salespeople on commission are examples of individuals on a variable-ratio schedule. Moderat p. 50) 119. Evidence indicates that the variable form of reinforcement leads to early satiation. ( Challenging; p. 50) 120. In the typical OB Mod program, everything an employee does on his or her job is equally important in terms of performance outcomes. ( Moderat p. 51) 121. The first step in OB Mod is to identify critical behaviors impacting the employee’s performance. Moderat p. 52) 122. Organizations with paid sick leave programs experience approximately one-half the absenteeism of organizations without such programs. ( Moderat p. 53) 123. Discipline is very effective in producing long-term change in employee behavior. ( Moderat p. 53) 124. Discipline tends to be popular because of its ability to produce fast results in the short run. Easy; p. 53) 125. Organizations can use social-learning theory to design training programs. Easy; pp. 53-54) 126. Self-management requires an individual to deliberately manipulate stimuli, internal processes, and responses to achieve personal behavioral outcomes. Moderat p. 54) SCENARIO-BASED QUESTIONS Application of Biographical Characteristics Your division is made up of four people with very different biological characteristics. Gina is 27 years old, single and female. She has been with the company only six months. Robert is 33 years old and married and has been with the firm since he graduated from college. Jonathan is 63 years old and a widower. Jonathan has been with the company for thirty years. Sally is a single mother with four children who has been working here for five years. 127. You would expect that the lowest rate of avoidable absence will be: a. Robert’s. b. Sally’s. c. Gina’s. d. Jonathan’s. ( Moderat pp. 37-40) 128. You would expect to be the first employee to choose telecommuting or a flexible work schedule. a. Jonathan b. Sally c. Gina d. Robert ( Moderat pp. 37-40) 129. You would expect Robert, because he is , will be more satisfied with his job than his coworkers. a. married b. middle aged c. college educated d. a father ( Challenging; pp. 37-40) 130. You would believe that is the least likely to quit his or her job. a. Gina b. Robert c. Jonathan d. Sally ( Moderat pp. 37-40) Application of Ability-Job Fit Martin has just been appointed as Director of Career Services for a small community college. He has decided to consider the particular dimensions of intellectual ability that each student has to try to place him or her in an appropriate position. 131. Gary is a marketing major and has decided that he wants to be a Market Researcher. The ability that he will need most is: a. number aptitude. b. perceptual speed. c. inductive reasoning. d. deductive reasoning. ( Challenging; Exh. 2-1; pp. 42-43) 132. Martha is interested in a career in interior decorating. The intellectual ability that she will need most is: a. number aptitude. b. perceptual speed. c. spatial visualization. d. deductive reasoning. ( Moderat Exh. 2-1; pp. 42-43) 133. You have just met Ted. Ted has returned to college after a successful career as a fire investigator. Ted probably has the intellectual ability that is termed: a. number aptitude. b. perceptual speed. c. inductive reasoning. d. deductive reasoning. ( Challenging; Exh. 2-1; pp. 42-43) 134. Martin’s own supervisor cannot seem to make a choice when two different suggestions are offered by her employees. Martin suspects that his supervisor is not strong in the ability termed: a. number aptitude. b. perceptual speed. c. inductive reasoning. d. deductive reasoning. ( Challenging; Exh. 2-1; pp. 42-43) Application of Learning Theory—Shaping Behavior You are the first-line supervisor for a group of employees who make green widgets. Their job is not terribly interesting or challenging and you have noticed that they are frequently tardy returning from their breaks. You have studied the concept of shaping behavior and decide that you will try to apply it to this situation. 135. You praise Allen for returning on time from break. This is an example of: a. negative reinforcement. b. positive reinforcement. c. extinction. d. social learning. ( Moderat pp. 47-49) 136. You want Allison to take an accounting course so that she can help with the bookkeeping. Allison does not want to go to night school to take the course and has been resisting. You know that her least favorite duty is preparing payroll. You tell her that she will be doing payroll until she takes the accounting course. This is an example of: a. positive reinforcement. b. negative reinforcement. c. punishment. d. extinction. ( Challenging; pp. 47-49) 137. Sam is late coming back to work again and you reduce his pay by a half hour’s wages. This is an example of: a. positive reinforcement. b. negative reinforcement. c. punishment. d. extinction. ( Moderat pp. 47-49) Application of Different Schedules of Reinforcement You have decided to experiment with the relationship between reinforcement schedules and maintaining desired employee behavior. You are interested in observing the differences between continuous and intermittent reinforcement and between the various types of intermittent reinforcement schedules. 138. Veronica is paid $10.00 per dozen widgets that she produces. This is an example of: a. intermittent, fixed-interval reinforcement. b. continuous reinforcement. c. intermittent, variable-interval reinforcement. d. negative reinforcement. ( Moderat pp. 49-50) 139. Gerald is a staff accountant who is visited several times a year by the corporate auditor. These visits are unannounced. This is an example of: a. intermittent, fixed-interval reinforcement. b. continuous reinforcement. c. intermittent, variable-interval reinforcement. d. negative reinforcement. ( Moderat pp. 49-50) 140. John’s attendance has historically been unreliable and you have decided to use reinforcement to compliment him when his attendance record shows improvement. The most effective schedule of reinforcement will probably be: a. variable-interval intermittent. b. fixed-interval intermittent. c. continuous. d. punishment-based. ( Challenging; pp. 49-50) 141. You know that the reinforcement schedule that your firm chooses for compensation will have an impact on the behavior of the employees. Which of the following is not true based on available research? a. Continuous reinforcement schedules can lead to early satiation. b. Continuous reinforcement schedules are appropriate for newly emitted, unstable, or low- frequency responses. c. Variable schedules do not clearly link performance and rewards. d. Fixed schedules tend to lead to higher performance than variable schedules. ( Challenging; pp. 49-50) Application of Behavior Modification Your manager has read about the now-classic study of Emery’s use of OB Mod. He was impressed by the savings to the company of $2 million over a three-year period. He has announced that he is implementing an OB Mod program. 142. You can expect to see the application of in the work setting. a. reinforcement concepts to individuals b. open book management c. additional stock option plans d. a cafeteria benefit plan ( Challenging; p. 51) 143. The first step that your manager is likely to take is: a. identifying behavioral consequences. b. identifying critical behaviors. c. evaluating performance improvement. d. developing baseline data. ( Challenging; pp.51-52) 144. In the first step of the OB Mod program, your manager will most likely be attempting to identify those five to ten percent of behaviors that may account for up to percent of each employee’s performance. a. 20-25 b. 40-50 c. 60-70 d. 70-80 ( Challenging; pp. 51-52) SHORT DISCUSSION QUESTIONS 145. Briefly discuss whether women perform as well in the workplace as men. (Page 39) 146. Why is the relationship between age and job performance likely to be an issue of increasing importance during the next decade? (Pages 37-38) 147. What is the relationship between job satisfaction and the following biological characteristics: age, gender, marital status, and tenure? (Pages 37-40) 148. What are the four sub-parts of intelligence? (Pages 40-42) identify, understand, and manage emotions. And cultural intelligence is awareness of cross-cultural differences and the ability to successfully function in cross-cultural situations. 149. What prediction can you make when the ability-job fit is poor? (Page 43) 150. How can managers shape employee behavior? (Pages 47-48) 151. Give an example of a fixed-ratio schedule for paying employees and an example of a variable-ratio schedule for payment. (Page 50) 152. How might a lottery be used to reduce absenteeism? (Page 53) MEDIUM LENGTH DISCUSSION QUESTIONS 153. What is the relationship between age and productivity, turnover and satisfaction? (Pages 37-39) 154. What is ability? What are the two sets of factors comprising ability? (Pages 40-43) 155. Identify the five steps of a typical OB Mod program. (Page 52) COMPREHENSIVE ESSAYS 156. Discuss classical conditioning, operant conditioning, and social learning. (Pages 44-47) 157. Discuss the four processes management should include when creating employee training programs. (Pages 52-54) Chapter 3 Values, Attitudes, and Job Satisfaction MULTIPLE CHOICE Values 1. represent basic convictions that “a specific mode of conduct or end state of existence is personally or socially preferable to an opposite mode of conduct.” a. Values b. Attitudes c. Convictions d. Preferences ( Moderat p. 63) 2. The content attribute states a value is: a. complete. b. important. c. a basic conviction. d. related to behavior. ( Moderat p. 63) 3. When we rank an individual’s values in terms of his/her , we obtain the person’s value system. a. intensity b. content c. context d. social acceptance ( Moderat p. 63) 4. Values are best described as: a. flexible. b. synonymous with attitudes. c. consistent among occupational groups. d. fairly stable over time. ( Moderat p. 64) 5. Rokeach studied instrumental values and: a. terminal values. b. attitudes. c. ethical decision making. d. speed of decision making. ( Moderat p. 64) 6. Rokeach found that the instrumental value of ambitious (hardworking and aspiring) people was related to the terminal value of: a. a comfortable life. b. freedom. c. happiness. d. self-respect. ( Challenging; Exh. 3-1; p. 65) 7. According to Rokeach, a. instrumental b. aesthetic c. theoretical d. terminal ( Moderat p. 64) values refer to desirable end-states of existence. 8. Which of the following was ranked as the highest terminal value by executives? a. family security b. self-respect c. equality d. freedom ( Challenging; Exh. 3-2; p. 65) 9. Frederick and Weber compiled a list of values that are held by different organizational groups. Which of the following groups ranked “honest” as the highest instrumental value? a. union members and activists b. executives and union members c. executives and activists d. existentials ( Challenging; Exh. 3-2; p. 65) 10. Which category of dominant work values is likely to characterize a 60-year-old employee? a. pragmatism b. egalitarianism c. existentialism d. Protestant work ethic ( Challenging; Exh. 3-3; p. 65) 11. At which age is an employee most likely to be characterized by values that place high loyalty on career? a. 30 b. 40 c. 50 d. 60 ( Challenging; p. 66) 12. Those individuals whose lives have been shaped by globalization, MTV, AIDS, and computers; who value flexibility, life options and the achievement of job satisfaction, are referred to as the: a. Veterans. b. Boomers. c. Nexters. d. Xers. ( Easy; p. 66) 13. Throughout the mid-1970s, the managerial ranks were dominated by Veterans, whose loyalties were to their employer. When faced with ethical dilemmas, their decisions were made in terms of: a. what was best for their organization. b. what was best for their family. c. what was best for society. d. what was best for them on an individual basis. ( Moderat p. 68) 14. tended to be loyal to their employer. a. Veterans. b. Boomers. c. Nexters. d. Xers. ( Moderat Exh. 3-3; p. 66) 15. entered the work force from the mid-1960s through the mid-1980s. a. Veterans. b. Boomers. c. Nexters. d. Xers. ( Moderat Exh. 3-3; p. 66) 16. The most recent entrants to the workforce are: a. Veterans. b. Boomers. c. Nexters. d. Xers. ( Moderat p. 67) 17. The loyalty of is to their careers. a. Veterans. b. Boomers. c. Nexters. d. Xers. ( Moderat p. 68) 18. A comprehensive analysis of cultural diversity has been done by: a. Maslow. b. Hofstede. c. McGregor. d. Follett. ( Moderat p. 68) 19. Which of the following is not one of Hofstede’s five dimensions of national culture? a. power distance b. language proficiency c. quantity of life vs. quality of life d. long-term orientation ( Challenging; pp. 68-69) 20. The measure of the extent to which people in a country accept the fact that power in institutions and organizations is distributed unequally is called: a. institutional distribution theory. b. collectivism. c. power distance. d. quantity of life. ( Moderat p. 68) 21. Cultures that emphasize value relationships and show sensitivity and concern for the welfare of others. a. quantity of life b. quality of life c. power distance d. collectivism ( Challenging; p. 68) 22. Capitalism, which values aggressiveness and acquisition of material goods, is consistent with Hofstede’s characteristics. a. collectivism b. quality of life c. quantity of life d. hierarchical ( Challenging; p. 68) 23. If Hofstede’s study on national culture were to be updated, which of the following would most likely be true? a. China would now rank low on power distance. b. Mexico would have a stronger emphasis on collectivism. c. The United States would have a higher power distance. d. The United States would have shifted from an emphasis on quantity of life to an emphasis on quality of life. ( Challenging; p. 68) 24. is the equivalent of low individualism. a. Collectivism b. Power distance c. Long-term orientation d. Uncertainty avoidance ( Easy; p. 69) 25. is the degree to which people in a country prefer structured over unstructured situations. a. Collectivism b. Power distance c. Long-term orientation d. Uncertainty avoidance ( Easy; p. 69) 26. Which of the following is not one of the cultural dimensions identified by the GLOBE team? a. assertiveness b. future orientation c. humane orientation d. societal institutions ( Moderat pp. 69-70) 27. Which of the following cultural dimensions was identified by GLOBE, but not Hofstede? a. uncertainty avoidance b. power distance c. performance orientation d. individualism/collectivism ( Moderat pp 69-70) 28. According to the GLOBE team, encompasses the extent to which members of a society take pride in membership in small groups. a. in-group collectivism b. individualism/collectivism c. performance orientation d. human orientation ( Challenging; p. 69) Attitudes 29. In contrasting values and attitudes, which one of the following is true? a. They come from different sources. b. There is no significant correlation between the two. c. Attitudes are more stable than values. d. Values are more stable than attitudes. ( Challenging; p. 71) 30. The belief that “discrimination is wrong” is a value statement. Such an opinion is the component of an attitude. a. cognitive b. affective c. reactive d. behavioral ( Challenging; p. 71) 31. The component is the emotional or feeling segment of an attitude. a. affective b. cognitive c. behavioral d. evaluative ( Moderat p. 71) 32. The component of an attitude refers to an intention to behave in a certain way toward someone or something. a. affective b. cognitive c. behavioral d. evaluative ( Moderat p. 71) 33. Which one of the following is not an attitude? a. job productivity b. job satisfaction c. job involvement d. organizational commitment ( Easy; p. 71) 34. The degree to which a person identifies with his or her job, actively participates in it, and considers his or her performance important to self-worth is: a. job satisfaction. b. job involvement. c. job stability. d. organizational commitment. ( Moderat p. 72) 35. refers to an individual’s general attitude toward his or her job. a. Job satisfaction b. Job involvement c. Job stability d. Organizational commitment ( Moderat p. 72) 36. Job involvement is best defined as a worker’s:

BAM402 all unit exams (Unit 1, 2, 3 & 4) Unit 1 Question 1) Which of the following is/are essential to any comprehensive definition of public relations? A) Public relations is a planned activity. B) Public relations is a management function. C) Public relations is socially responsible. D) B and C E) All of the above. 2) Award-winning professionals prefer this Hunt and Grunig model of public relations. A) the process facilitation model B) the two-way asymmetrical model C) the two-way symmetrical model D) the press agentry/publicity model E) the public information model 3) A profession is distinguished from a trade by ________. A) the establishment of ethical standards B) ongoing research in support of the profession C) a form of licensing or government control D) A and B E) All of the above. 4) One of the advantages of a public relations career is that ________. A) it is a profession that is understood and respected by most people B) it is a stress-free profession C) its skills are transferable across a broad range of career opportunities D) All of the above. E) None of the above. 5) Public relations practitioners ________. A) work for nonprofit organizations B) serve as independent consultants C) are employed by public relations agencies D) All of the above. E) None of the above. 6) ________ is one of the four steps in the public relations process. A) Publicity B) Promotion C) Planning D) Programming E) Propaganda Unit 1 Examination 7) Among the flaws in the traditional four-step model of public relations is/are that it ________. A) doesn’t take into account the importance of values B) implies a process where one step automatically follows another C) oversimplifies a very dynamic process D) All of the above. E) None of the above. 8) The first question an organization should ask itself when developing a values statement is: A) How can we win the respect of others? B) Why should be care about our customers? C) Why are we in business? D) How much money do we want to make? E) What is in it for us? 9) The use of public relations strategies and tactics to foster and enhance the shared interests and values of an organization and the publics important to its success is known as ________. A) human relations B) advertising C) integrated marketing communications D) marketing E) relationship management 10) In which broad category of public relations jobs are practitioners least likely to have the term public relations included in their job titles? A) governments B) nonprofit organizations and trade associations C) corporations D) independent public relations consultancies E) public relations agencies 11) In which broad category of public relations jobs do practitioners bear the greatest responsibility of their personal success or failure? A) independent public relations consultancies B) governments C) public relations agencies D) corporations E) nonprofit organizations and trade associations 12) According to a University of Georgia survey of 2005 graduates, the average starting salary for public relations practitioners is ________. A) $25,000 B) $22,000 C) $16,500 D) $30,000 E) $20,000 13) According to a 2000 PRSA/IABC survey, which of these qualities were more important to practitioners than salary? A) recognition by colleagues B) access to technology C) professional development D) creative opportunity E) all of the above 14) Many public relations practitioners record how they spend their working hours ________. A) as a means of billing clients B) to allow their supervisors to see how employees spend their time C) for internal billing purposes D) all of the above E) none of the above 15) Practitioners who act for the good of a relationship, rather than just one side of a relationship are fulfilling a(n) ________. A) manager’s role B) boundary spanning role C) consultant’s role D) press agent role E) independent endorsement 16) Which of these individuals is generally credited with being “the father of public relations”? A) George Creel B) George V.S. Michaelis C) Ivy Ledbetter Lee D) Ron Zeigler E) Edward L. Bernays 17) Edward Bernays gets more credit as being the “father of public relations” than Ivy Ledbetter Lee because ________. A) Bernays coined the phrase “public relations” B) Bernays introduced the concepts of accuracy and ethics to the profession C) Lee worked for the Nazi sympathizers; Bernays did not D) A and B E) A and C 18) The Scopes Monkey Trial ________. A) was a historic clash between science and religion B) was a publicity stunt C) focused on Darwin’s theory of evolution D) All of the above. E) None of the above. 19) The so-called “Four Minute Men” ________. A) are former track and field stars who now serve as PR spokespersons B) were affiliated with the Creel Committee C) delivered patriotic messages during the First World War D) A and B E) B and C 20) Edward L. Bernays’ critics claimed that he ________. A) was sexist B) was dishonest C) was a Nazi sympathizer D) was too self-promotional E) didn’t understand the plight of poor people 21) When you communicate with one public in an attempt to reach another public, the public with whom you are communicating is known as ________. A) a latent public B) a primary public C) an aware public D) a secondary public E) an intervening public 22) ________ is/are the most powerful force in the U.S. economy. A) Business expenditures B) Government spending C) Consumer spending D) Industrial expenditures E) Foreign investment 23) The group that spends the most money is consumers ages ________. A) 18-25 B) 26-34 C) 35-44 D) 45-54 E) 55-64 24) Objections to a movie promotion in German Subway restaurants centered on ________. A) the stereotyping of minority groups B) its anti-war message C) explicit sexual content D) a lack of sensitivity concerning the 9/11 terror attacks in New York E) the lack of diversity in the movie’s cast 25) Among U.S. voters, the age group with the highest percentage of voters is ________. A) this is a trick question; voting rates don’t differ by age B) 65 and older C) 45-64 D) 30-44 UNIT 2 1) This element of the communication model represents the content of communication. A) noise B) receiver C) channel D) message E) source 2) This element of the communication model represents the medium used to transmit the communication. A) message B) channel C) receiver D) source E) noise 3) This theory of mass communication says people are influenced by opinion leaders who may change from issue to issue. A) Agenda Setting Hypothesis B) Magic Bullet Theory C) Diffusion Theory D) N-Step Theory E) Uses and Gratifications Theory 4) According to Abraham Maslow, ________ is/are the most basic order of needs people have. A) acceptance B) safety needs C) self-actualization D) self-esteem E) physiological needs 5) The purpose of Monroe’s Motivated Sequence is to ________. A) anticipate future trends B) study the evolution of public opinion C) measure public opinion D) build persuasive messages E) counteract Maslow’s Hierarchy of Needs 6) According to Aristotle, an appeal to one’s reason is known as ________. A) pathos B) ethos C) eggos D) legos E) logos 7) ________ is what happens when a public debate leads to a consensus. A) A social action B) An issue C) A social value D) An already present mass sentiment E) Public opinion 8) When public relations practitioners attempt to manipulate public opinion, they run the risk of losing their ________. A) credibility B) license C) accreditation D) respect E) innocence 9) Communicating an idea in such a way that an audience is influenced, either intentionally or unintentionally, by the way it is expressed is known as ________. A) spinning B) manipulation C) framing D) shading E) coloring 10) The Ten Commandments is an example of ________. A) an organizational ethics code B) a really, really long movie C) a professional ethics code D) a societal ethics code E) a personal ethics codes 11) When you evaluate an ethical dilemma by determining definitions, values, principles and loyalties, you are applying the ethical process known as ________. A) Utilitarianism B) the veil of ignorance C) the Potter Box D) the golden mean E) values-driven public relations 12) In an ethical dilemma, when you try to understand the situation from others’ viewpoints, you are applying the ethical principle known as ________. A) the Potter Box B) the veil of ignorance C) the golden mean D) values-driven public relations E) Utilitarianism 13) The public relations practitioner’s role as a relationship manager ________. A) resolves the misleading question of whether one should serve as an advocate or as an objective observer B) can mean that sometimes it is necessary to be an advocate C) can involve the delivery of unpopular truths D) All of the above. E) None of the above. 14) The believe that one system of ethics is superior to all others and leaves no room for flexibility is known as ________. A) cultural relativism B) cross-cultural ethics C) the golden mean D) ethical imperialism E) dilemmas 15) Immanuel Kant’s categorical imperative requires one to make ethical decisions as if _______. A) we have reach the “Golden Mean of Enlightenment” B) it’s the end of the world as we know it C) there is a veil of ignorance descending upon the world D) they would be applied as rules you want everyone else to follow E) it were a life or death situation 16) ROI stands for ________. A) return on investment B) relevance of information C) relationship ordinal indexing D) real or imagined E) rate of interest 17) “What is your favorite color?” is an example of ________. A) a closed-ended question B) an open-ended question C) a rating-scale question D) a trick question E) a dichotomous question 18) Research that focuses upon determining the issues and the client’s stake in those issues is ________. A) stakeholder research B) quantitative research C) client research D) evaluation research E) problem-opportunity research 19) When everyone in a sampling frame is included in the sample, the sampling technique is known as ________. A) simple random sampling B) cluster sampling C) a census D) systematic sampling E) cross-tabulation sampling 20) The Pentagon came under sharp criticism in 2003 when it created a PAM, an online trading market designed to predict ________. A) the flow illegal immigration into the U.S. B) future terrorist activities C) future economic conditions D) the effects of global warming E) military intentions of other nations 21) A public relations plan that contains strategies for dealing with a situation that may arise is called ________. A) an adhoc plan B) a logistical plan C) a flexible plan D) a contingency plan E) a standing plan 22) Crisis communications plans are a form of ________. A) standing plan B) logistical plan C) contingency plan D) flexible plan E) ad hoc plan 23) Generalized statements of the outcomes you hope your plan will achieve are ________. A) building consensus B) tactics C) objectives D) brainstorming E) goals 24) An accurate and unbiased description of the reasons why it has become necessary to take public relations actions is known as ________. A) a planning grid B) team building C) a situation analysis D) goal setting E) evaluative research 25) A good plan is ________. A) one that includes free balloons for the kids B) linked to dynamic and creative tactics C) one that is inexpensive D) makes targeted audiences happy E) tied to a specific goal UNIT 3 1) Public relations tactics can involve the use of ________. A) controlled media B) uncontrolled media C) special events D) All of the above E) None of the above 2) Special events are designed for ________. A) participants B) observers C) survey respondents D) A and B E) B and C 3) VNR stands for ________. A) values-negotiated risk B) video news release C) values-neutral research D) video network registration E) variable noncompliance restriction 4) The acronym PAC stands for________. A) political access committee B) public access committee C) political assistance committee D) political action committee E) positive attitude committee 5) What’s the best advice for a news conference? A) Have refreshments for reporters. B) Don’t do it if alternatives such as a news release would work as well. C) Have hot coffee on hand. D) Schedule it when all media can attend. E) Invite only media you know are friendly. 6) Media kits can include ________. A) backgrounders B) fact sheets C) news releases D) B and C E) All of the above 7) The difference between a media advisory and a news release is ________. A) a media advisory is generally longer than a news release B) media advisories are generally used for fast-breaking news stories C) news releases are factual and media advisories are not D) news releases can be openly promotional; media advisories usually can’t E) There is no difference. These are two names for the same document. 8) When executing a public relations plan, ________ is/are among the key factors to be considered. A) deadlines B) quality control C) communication within the team D) All of the above E) None of the above 9) The person responsible for the success of a public relations plan should ________. A) always make saving the client’s/company’s money the highest priority B) communicate frequently with clients or supervisors C) evaluate the process only after it is completed and all the facts are available D) All of the above E) None of the above 10) PR Week magazine lists this/these skill(s) as essential for entry-level public relations practitioners. A) writing B) advertising copywriting C) public speaking D) web design E) A and C 11) Writing for the web is different from writing for a printed page because ________. A) the Internet provides unlimited space for detail B) computer users are more sophisticated than traditional print users C) computer screens are harder to read than the printed page D) A and B E) A and C 12) When writing a speech, it is important to ________. A) use precise nouns and verbs B) use concrete words and images C) place attribution after a quotation D) A and B E) all of the above 13) Presentation research starts with ________. A) planning B) a company party C) organization D) knowing your targeted public E) visual aids 14) Presentation planning starts with ________. A) research B) deciding what personality you want to project C) hiring a consultant D) being yourself E) focus groups 15) One of the best ways to get over presentation jitters is to ________. A) tell a funny joke to get everyone in a good mood B) drink several cups of coffee to calm your nerves before speaking C) ignore them D) eat a good meal E) practice your presentation 16) ________ refers to a new generation of Internet services that encourage online collaboration and sharing. A) Global village B) Web 2.0 C) Viral marketing D) Push technology E) E-commerce 17) Viral marketing proved to be an effective tactic ________. A) that led to the election of Bill Clinton as U.S. president in 1992 B) with the introduction of Microsoft’s Vista operating system in 2005 C) following the SARS outbreak in Canada in 2003 D) with the introduction of the personal computer in 1977 E) that helped the Allies counter Nazi propaganda in World War II 18) The first thing one should do before establishing an Internet web site is ________. A) create a memorable URL B) determine who the audience is and what you want to say C) estimate costs D) locate a server E) learn HTML 19) A popular collaborative software that allows multiple people to contribute to online content is known as ________. A) wi fi B) bluetooth C) cybersharing D) RSS E) wiki 20) In the People’s Republic of China, the punishment for a “gross violation” of its Internet policies is ________. A) death B) a prison sentence C) loss of Internet access D) deportation E) a substantial fine 21) During the Sago mine disaster in 2006, families of the trapped miners were erroneously led to believe that the men had been successfully rescued because ________. A) the mining company did not have crisis communication plan B) state offi cials “jumped the gun” in a effort to get credit for the rescue C) the mining company’s crisis communications plan was not followed D) the families were impatient E) company offi cials lied to them 22) The second stage of a crisis is known as ________. A) when things return to normal B) the critical moment C) the point of no return D) the cleanup phase E) the warning stage 23) Which of the following statements is/are true? A) NASA learned to communicate better during crises after the Challenger accident. B) NASA won public praise for its handling of the Columbia accident. C) In both shuttle disasters, NASA suffered from what investigators called “go fever.” D) All of the above. E) None of the above. 24) The crisis management team meets in the ________. A) executive suite B) media information center C) central command post D) place where the crisis is occurring E) emergency operations center 25) During the 2006 Sago mine disaster, ________. A) the mining did not have a crisis communications plan B) the mining company president acknowledged that he made a mistake C) the mining company initially received praise for its crisis communications D) A and C E) B and C UNIT 4 1) At the start of the 21st century, the use of mass marketing is ________. A) holding steady B) considered the new wave of the future C) declining D) increasing at a rapid pace E) None of the above. 2) An indication that consumer-focused marketing is influencing public relations is ________. A) the growing number of mergers of advertising and public relations agencies B) the decline in the growth of public relations C) the increasing sophistication of marketing public relations D) A and B E) A and C 3) Which of the following is not one of Robert Lauterborn’s four C’s of IMC? A) convenience to buy B) consumer wants and needs C) consumer’s cost D) consumer commitment E) communication 4) An IMC audit ________. A) evaluates an organization’s customer databases B) analyzes the communications network used in marketing C) identifies and prioritizes key stakeholder groups D) All of the above. E) None of the above. 5) An information-bearing experience that a customer or prospect has with a product, service, or the market that relates to that product or service is known as a ________. A) sale B) message C) double jeopardy D) contact 6) Revlon’s use of Grammy-award winner Sheryl Crow as a spokesperson for a new line of products was an example of ________. A) targeted advertising B) convergence of media C) database marketing D) glamour marketing E) marketing public relations 7) Database marketing in the European Union ________. A) is in an unsafe harbor B) is less restricted than in the United States C) is illegal D) is called “relationship marketing” E) is more restricted than in the United States 8) Umbro was surprised when it discovered that its new running show was named after ________. A) a mythical sexual predator B) the poison gas used in Nazi concentration camps C) the devil D) a variety of aardvark E) a body part 9) The Campaign for Real Beauty ________. A) used advertising as a tactic B) used viral video as a tactic C) was based on a global survey of 10,000 women D) A and B E) All of the above. 10) If the world were a village of 100 people, ________. A) 50 would own a computer B) 11 would be over the age of 79 C) 9 would speak English D) 2 would live in substandard housing E) 3 would have no electricity 11) According to Hofstede’s cultural dimensions, ________ measures how well a society tolerates ambiguity. A) long-term orientation B) individualism versus collectivism C) masculinity versus femininity D) power distance E) uncertainty avoidance 12) Some have expressed concern that U.S. influence is being exerted globally because of U.S. dominance of ________. A) the Olympics B) television programming C) the movies D) popular music E) the Internet 13) Which of the follow is/are true? A) All Swiss are punctual. B) All Japanese are polite. C) All baby boomers like the Beatles. D) All of the above. E) None of the above. 14) The final step in the cross-cultural communications process is ________. A) evaluation B) continuing education C) advocacy D) sensitivity E) testing 15) characteristics based on where a person or group lives is ________. A) geoautonomy B) geometrics C) geocharactization D) geometry E) geodemographics 16) Expression associated with the normal conduct of a democracy is known as ________ speech. A) absolute B) free C) democratic D) political E) republican 17) The U.S. Supreme Court has consistently ruled that commercial speech ________. A) has no First Amendment protection B) has limited First Amendment protection C) is more restricted than political speech D) A and C E) B and C 18) Public relations practitioners should ________. A) study law books B) hire a really, really good lawyer C) know the laws that govern their organization D) intern at a law firm E) take the state bar exam 19) The use of someone else’s likeness for a commercial purpose without consent is ________. A) slander B) intrusion C) fraud D) false light E) appropriation 20) A litigation public relations practitioner usually ________. A) has legal immunity B) works for the attorney C) has a law degree D) works for the client E) works for the court 21) ________ is how the United Nations describes as “the growing interdependence of the world’s people through shrinking space, shrinking time, and disappearing borders?” A) Darwinism B) Globalization C) Socialism D) McLuhanism E) Populism 22) Which of the following was not identified in your book as a social force at work influencing the future of public relations? A) the growth in world population B) the downsizing of the United States C) the changing face of the United States D) the global spread of democracy E) Feminization in the workplace 23) The demand that women be included in decision making is known as ________. A) empowerment B) role enhancement C) salary equity D) feminization E) girl power 24) According to the PRSA credibility study, ________. A) public relations practitioners got high ratings for the tactics they used B) public relations practitioners were rated near the bottom of all professions C) public relations practitioners rated higher than activists, athletes and politicians D) A and B E) B and C 25) ________ skills are among the most desired skills for students planning a career in public relations. A) Foreign language B) Research analysis C) Writing D) All of the above.

HSA 599 week 5 Case Study - GE Healthcare (A): Innovating for Emerging Markets (Perfect and Plagiarism free work) HSA 599 week 5 Case Study - GE Healthcare (A): Innovating for Emerging Markets Read the case study titled “GE Healthcare (A): Innovating for Emerging Markets” located in the XanEdu case pack (Link Below) Write a three to four (3-4) page paper in which you: • Determine two (2) emerging trends in the external environment that prompted General Electric (GE) Healthcare to develop a new strategy for the production and marketing of a low cost Electroencephalography (EEG) machine in bottom of the pyramid markets (BOP). • Examine two (2) internal barriers GE Healthcare faced when developing its BOP market in India and determine the manner in which they hindered GE Healthcare’s growth in this market segment. • Analyze two (2) of the significant external barriers that GE Healthcare faced when trying to meet its marketing goals in the Indian market. Propose two (2) ways to address these barriers. • Analyze the specific steps GE took in developing its strategy to grow its BOP market. Determine the manner in which those actions apply to the principles of strategic thinking and strategic planning. • Determine the manner in which GE Healthcare’s strategy to improve its position in BOP markets contributed to the organization’s value chain in both emerging and developed markets. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: • Differentiate between strategic management, strategic thinking, strategic planning, and managing strategic momentum. • Analyze the significance of the external environment’s impact on health care organizations. • Examine the role of internal environmental analysis in identifying the basis for sustained competitive advantage. • Examine the organizational value chain, including the components of the service delivery and support activities. • Examine barriers to new product development that comply with initiatives in the health care industry. • Use technology and information resources to research issues in the strategic management of health care organizations. • Write clearly and concisely about strategic management of health care organizations using proper writing mechanics. Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following rubric.

BUS 475 Capstone Final Examination Part 2 NEW 2016 1. Sampling is used heavily in manufacturing and service settings to ensure high-quality products. In which of the following areas would sampling be inappropriate? Custom cabinet making Computer assembly Technical support by phone Cell phone manufacturing 2. The preparation of adjusting entries is: needed to ensure that the expense recognition principle is followed. straightforward because the accounts that need adjustment will be out of balance optional when financial statements are prepared. only required for accounts that do not have a normal balance. 3. What is an advantage of the correlation coefficient over the covariance? It falls between -1 and 1. It is a unit-free measure, therefore making it easier to interpret. It falls between -1 and 1; and it is a unit free measure, therefore making it easier to interpret. It falls between 0 and 1. 4. Interest may be included in the acquisition cost of a plant asset: during the construction period of a self-constructed asset. if the asset acquisition is financed by a long-term note payable. if the asset is purchased on credit. if it is a part of a lump-sum purchase. 5. Which trial balance will consist of the greatest number of accounts? Balance Adjusted trial balance Trial balance Post-closing trial balance 6. Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally: capitalized as a part of the cost of the asset. not recorded until they become material in amount. expensed when incurred. debited to the Accumulated Depreciation account. 7. A SWOT analysis is a framework for analyzing a firm’s environments. A SWOT is made up of Internal environmental analysis of threats and weaknesses. External analysis of strengths and opportunities. Internal threats and weakness and external strengths and opportunities. Internal strengths and weaknesses; external threats and opportunities. 8. GAAP, compared to IFRS, tends to be more: simple in disclosure requirements simple in accounting requirements principles-based rules-based 9. Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is: the idea that organizations are solely responsible to local citizens the idea that businesses are responsible to maintain a healthy social climate for their employees the expectation that business will strive to improve the overall welfare of society the fact that court costs could impact the financial bottom line 10. Which of the following can be represented by a continuous random variable? The number of typos found on a randomly selected page of this test bank The number of students who will get financial assistance in a group of 50 randomly selected students The number of customers who visit a department store between 10:00 a.m. and 11:00 a.m. on Mondays The average temperature in Tampa, Florida, during the month of July 11. According to value-chain analysis, which of the following would be considered part of the general administration in a firm? procurement technology development information systems human resource management 12. Which of the following can be represented by a discrete random variable? The number of defective light bulbs in a sample of five The average distance achieved in a series of long jumps The circumference of a randomly generated circle The time of a flight between Chicago and New York 13. Sarbanes Oxley applies to: U.S and international companies. international companies but not U.S. companies. U.S. and Canadian companies but not other international companies. U.S companies but not international companies. 14. Vertical analysis is a technique that expresses each item in a financial statement: as a percent of the item in the previous year. starting with the highest value down to the lowest value. in dollars and cents. as a percent of a base amount. 15. The owner of a company has recently decided to raise the salary of one employee, who was already making the highest salary, by 20%. Which of the following is(are) expected to be affected by this raise? Mean, median, and mode Median only Mean and median only Mean only 16. Which of the following meets the requirements of a simple random sample? A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people chosen at random, without regard to age. A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include two people chosen at random under the age of 25 and four people chosen at random over 25. A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people who volunteer for the sample. A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six males chosen at random, without regard to age. 17. The acquisition of treasury stock by a corporation: decreases its total assets and total stockholders’ equity. requires that a gain or loss be recognized on the income statement. increases its total assets and total stockholders’ equity. has no effect on total assets and total stockholders’ equity. 18. Under the accrual basis of accounting: the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. cash must be received before revenue is recognized. events that change a company’s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. net income is calculated by matching cash outflows against cash inflows. 19. The acquisition of treasury stock by a corporation: has no effect on total assets and total stockholders’ equity. decreases its total assets and total stockholders’ equity. increases its total assets and total stockholders’ equity. requires that a gain or loss be recognized on the income statement. 20. In multiple regression, plot the residuals against ____ to detect changing variability. Collinear variables All explanatory variables The response variable The predicted values 21. The resource-based view (RBV) of the firm combines two perspectives: the interrelationships among the primary activities of the firm and corporate management the industry and the competitive environment the internal analysis of the firm and the external analysis of the industry and competitive environment the primary and support activities of the firm 22. Cost allocation of an intangible asset is referred to as: accretion capitalization depreciation amortization 23. The fraud triangle applies to: U.S. and Canadian companies, but not other international companies. U.S companies but not international companies. international companies but not U.S. companies. U.S and international companies. 24. On March 1st, Candy, Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800. The March 31st balance sheet should report what balance in their supplies account? $1,600 $1,500 $2,900 $2,800 25. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. using related diversification to achieve value by integrating vertically in order to acquire market power using related diversification to achieve value by pooling negotiating power to achieve market power using related diversification to achieve value by leveraging core competencies to achieve economies of scope using related diversification to achieve value by integrating vertically in order to attain economies of scope 26. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows. Does not represent a cash flow. Financing activities section. Investing activities section. Operating activities section. 27. __________involves ensuring proper strategic controls and organizational designs. Strategy implementation Business-level strategy Corporate-level strategy Corporate governance 28. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager’s bonus if FIFO is adopted instead of LIFO? $9,000 $1,800 $6,300 $12,600 29. Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company’s checkbook for subsequent misappropriation of funds? Tracing any debit memorandums from the bank to the company’s records A review of the cash budget An accounting policies manual The use of pre-numbered checks 30. Which of the following is not a current liability on December 31, 2014? A Note Payable due December 31, 2015 A lawsuit judgment to be decided on January 10, 2015 An Accounts Payable due January 31, 2015 Accrued salaries payable from 2014 31. When collection is made on Accounts Receivable, Stockholders equity will increase. total assets will remain the same. total assets will decrease. total assets will increase. 32. Which financial statement would best indicate whether the company relies on debt or stockholders’ equity to finance its assets? Retained earnings statement Statement of cash flows Income statement Balance sheet 33. Is it possible for a data set to have no mode? No, if the data set is nonempty, there is always a mode No, unless there is an odd number of observations Yes, if there are no observations that occur more than once Yes, if two observations occur twice 34. An analyst believes the probability that U.S. stock returns exceed long-term corporate bond returns over a 5-year period is based on personal assessment. This type of probability is best characterized as a(n) ____________. Empirical probability A priori probability Objectivity probability Subjective probability 35. Continuous monitoring in the contemporary approach, is beneficial because _____________. organization response time is increased it increases the time it takes to detect changes in the competitive environment It reduces time lags organizational flexibility is reduced 36. WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a: Strategic objective Line manger’s individual goal Vague statement of direction Vision statement 37. A post-closing trial balance will show: zero balances for all accounts only income statement accounts only balance sheet accounts zero balances for balance sheet accounts 38. Which of the following requirements about internal controls were enacted under the Sarbanes Oxley Act: Independent outside auditors must eliminate redundant internal controls. Companies must develop sound internal controls over financial reporting. Companies must assess the functionality of internal controls only when a violation occurs. Internal auditors replace independent outside auditors when evaluating the level of internal control. 39. Which of these statements regarding the industry life cycle is correct? Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives. Trends suggested by the market life cycle model are generally not reversible or repeatable. 40. International Financial Reporting Standards (IFRS): implies that receivables with different characteristics should be reported separately. implies that receivables with different characteristics should be reported as one un-segregated amount. requires that receivables with different characteristics should be reported separately. requires that receivables with different characteristics should be reported as one un-segregated amount. 41. In a simple linear regression model, if the plots on a scatter diagram lie on a straight line, what is the standard error of the estimate? Infinity 0 -1 1 42. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. using related diversification to achieve value by integrating vertically in order to attain economies of scope using related diversification to achieve value by pooling negotiating power to achieve market power using related diversification to achieve value by integrating vertically in order to acquire market power using related diversification to achieve value by leveraging core competencies to achieve economies of scope 43. The four key attributes of strategic management include the idea that: Strategy must be focused on long-term objectives. Strategy must be focused on one specific area of an organization. Strategy must be directed toward overall organizational goals and objectives. Strategy must be focused on competitor strengths. 44. If a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? $120,000 $280,000 $400,000 $4,000,000 45. Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was: 1-for-8 4-for-1 8-for-1 2-for-8 46. You work in marketing for a company that produces work boots. Quality control has sent you a memo detailing the length of time before the boots wear out under heavy use. They find that the boots wear out in an average of 208 days, but the exact amount of time varies, following a normal distribution with a standard deviation of 14 days. For an upcoming ad campaign, you need to know the percent of the pairs that last longer than six months-that is, 180 days. Use the empirical rule to approximate this percent. 95% 97.5% 5% 2.5% 47. What is a difference between merchandising companies and service enterprises? Cost of goods sold is an expense for service enterprises but not for merchandising companies. The operations in merchandising companies and service enterprises are identical. Merchandising companies must prepare multiple-step income statements and service enterprises must prepare single-step income statements. Merchandising companies generally have a longer operating cycle than service enterprises. 48. For both qualitative and quantitative data, what is the difference between the relative frequency and the percent frequency? The percent frequency equals the relative frequency multiplied by 100 As opposed to the percent frequency, the relative frequency is divided by the number of observations the data set. The relative frequency equals the percent frequency multiplied by 100. The percent frequency equals the relative frequency multiplied by 100 49. According to the text the triple bottom line approach to corporate accounting includes three components: financial, organizational, and customer financial, environmental, and customer financial, organizational, and psychological financial, environmental, and social 50. As opposed to the relative frequency, the percent frequency is divided by the number of observations in the data set. Trumpeting Trumpets has the following inventory data: July 1: Beginning inventory 30 units at $120 July 5: Purchases 180 units at $112 July 14: Sale 120 units July 21: Purchases 90 units at $115 July 30: Sale 84 units Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis? $10,992 $23,118 $11,022 $23,088 51. For both qualitative and quantitative data what is the difference between the relative frequency and the percent frequency? The percent frequency equals the relative frequency multiplied by 100 As opposed to the percent frequency, the relative frequency is divided by the number of observations the data set. The relative frequency equals the percent frequency multiplied by 100. The percent frequency equals the relative frequency multiplied by 100

BUS 475 Capstone Final Examination Part 2 (Latest) (Already graded A ) BUS 475 Capstone Final Examination Part 2 1. Which of the following is not a current liability on December 31, 2014? • A lawsuit judgment to be decided on January 10,2015 • A Note Payable due December 31 2015 • Accrued salaries payable from 2014 • An Accounts Payable due January 31,2015 2. Continuous monitoring, in the contemporary approach, is beneficial because_____________. • it increases the time it takes to detect changes in the competitive environment • organization response time is increased • organizational flexibility is reduced • It reduces time lags 3. The acquisition of treasury stock by a corporation: • requires that a gain or loss be recognized on the income statement. • increases its total assets and total stockholders’ equity. • has no effect on total assets and total stockholders’ equity. • decreases its total assets and total stockholders’ equity. 4. You work in marketing for a company that produces work boots. Quality control has sent you a memo detailing the length of time before the boots wear out under heavy use. They find that the boots wear out in an average of 208 days, but the exact amount of time varies, following a normal distribution with a standard deviation of 14 days. For an upcoming ad campaign, you need to know the percent of the pairs that last longer than six months-that is, 180 days. Use the empirical rule to approximate this percent. • 97.5% • 95% • 2.5% • 5% 5. __________involves ensuring proper strategic controls and organizational designs. • Corporate governance • Strategy implementation • Business-level strategy • Corporate-level strategy 6. A post-closing trial balance will show: • only income statement accounts • zero balances for balance sheet accounts • only balance sheet accounts • zero balances for all accounts 7. The preparation of adjusting entries is: • straightforward because the accounts that need adjustment will be out of balance • needed to ensure that the expense recognition principle is followed. • only required for accounts that do not have a normal balance. • optional when financial statements are prepared. 8. In a simple linear regression model, if the plots on a scatter diagram lie on a straight line, what is the standard error of the estimate? • Infinity • 0 • 1 • -1 9. The fraud triangle applies to: • U.S. and Canadian companies, but not other international companies. • U.S companies but not international companies. • U.S and international companies. • international companies but not U.S. companies. 10. According to value-chain analysis, which of the following would be considered part of the general administration in a firm? • information systems • procurement • technology development • human resource management 11. Which of the following can be represented by a discrete random variable? • The circumference of a randomly generated circle • The number of defective light bulbs in a sample of five • The time of a flight between Chicago and New York • The average distance achieved in a series of long jumps 12. What is an advantage of the correlation coefficient over the covariance? • It falls between 0 and 1. • It falls between -1 and 1. • It falls between -1 and 1; and it is a unit free measure, therefore making it easier to interpret. • It is a unit-free measure, therefore making it easier to interpret. 13. GAAP, compared to IFRS, tends to be more: • rules-based • simple in accounting requirements • principles-based • simple in disclosure requirements 14. The resource-based view (RBV) of the firm combines two perspectives: • the internal analysis of the firm and the external analysis of the industry and competitive environment • the primary and support activities of the firm • the industry and the competitive environment • the interrelationships among the primary activities of the firm and corporate management 15. Sarbanes Oxley applies to: • U.S and international companies. • U.S. and Canadian companies but not other international companies. • U.S companies but not international companies. • international companies but not U.S. companies. 16. Is it possible for a data set to have no mode? • No, unless there is an odd number of observations • Yes, if two observations occur twice • Yes, if there are no observations that occur more than once • No, if the data set is nonempty, there is always a mode 17. Under the accrual basis of accounting: • events that change a company\'s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. • the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. • cash must be received before revenue is recognized. • net income is calculated by matching cash outflows against cash inflows. 18. Which trial balance will consist of the greatest number of accounts? • Trial balance • Adjusted trial balance • Balance • Post-closing trial balance 19. Vertical analysis is a technique that expresses each item in a financial statement: • in dollars and cents. • as a percent of a base amount. • as a percent of the item in the previous year. • starting with the highest value down to the lowest value. 20. Cost allocation of an intangible asset is referred to as: • accretion • amortization • depreciation • capitalization 21. According to the text, the triple bottom line approach to corporate accounting includes three components: • financial, environmental, and social • financial, organizational, and customer • financial, environmental, and customer • financial, organizational, and psychological 22. An analyst believes the probability that U.S. stock returns exceed long-term corporate bond returns over a 5-year period is based on personal assessment. This type of probability is best characterized as a(n) ____________. • Subjective probability • Objectivity probability • Empirical probability • A priori probability 23. Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was: • 2-for-8 • 1-for-8 • 8-for-1 • 4-for-1 24. Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is: • the expectation that business will strive to improve the overall welfare of society • the fact that court costs could impact the financial bottom line • the idea that organizations are solely responsible to local citizens • the idea that businesses are responsible to maintain a healthy social climate for their employees 25. Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally: • expensed when incurred. • not recorded until they become material in amount. • debited to the Accumulated Depreciation account. • capitalized as a part of the cost of the asset. 26. For both qualitative and quantitative data, what is the difference between the relative frequency and the percent frequency? • The relative frequency equals the percent frequency multiplied by 100. • The percent frequency equals the relative frequency multiplied by 100 • As opposed to the relative frequency, the percent frequency is divided by the number of observations in the data set. • As opposed to the percent frequency, the relative frequency is divided by the number of observations in the data set. 27. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. • using related diversification to achieve value by leveraging core competencies to achieve economies of scope • using related diversification to achieve value by pooling negotiating power to achieve market power • using related diversification to achieve value by integrating vertically in order to attain economies of scope • using related diversification to achieve value by integrating vertically in order to acquire market power 28. Which of the following can be represented by a continuous random variable? • The average temperature in Tampa, Florida, during the month of July • The number of customers who visit a department store between 10:00 a.m. and 11:00 a.m. on Mondays • The number of students who will get financial assistance in a group of 50 randomly selected students • The number of typos found on a randomly selected page of this test bank 29. Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company\'s checkbook for subsequent misappropriation of funds? • An accounting policies manual • Tracing any debit memorandums from the bank to the company\'s records • A review of the cash budget • The use of pre-numbered checks 30. A SWOT analysis is a framework for analyzing a firm’s environments. A SWOT is made up of • Internal environmental analysis of threats and weaknesses. • Internal strengths and weaknesses; external threats and opportunities. • Internal threats and weakness and external strengths and opportunities. • External analysis of strengths and opportunities. 31. Trumpeting Trumpets has the following inventory data: July 1: Beginning inventory 30 units at $120 July 5: Purchases 180 units at $112 July 14: Sale 120 units July 21: Purchases 90 units at $115 July 30: Sale 84 units Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis? • $23,088 • $11,022 • $10,992 • $23,118 32. Which of these statements regarding the industry life cycle is correct? • It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. • Trends suggested by the market life cycle model are generally not reversible or repeatable. • It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives. • Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. 33. What is a difference between merchandising companies and service enterprises? • Merchandising companies must prepare multiple-step income statements and service enterprises must prepare single-step income statements. • Cost of goods sold is an expense for service enterprises but not for merchandising companies. • The operations in merchandising companies and service enterprises are identical. • Merchandising companies generally have a longer operating cycle than service enterprises. 34. Which of the following meets the requirements of a simple random sample? • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six males chosen at random, without regard to age. • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people who volunteer for the sample. • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people chosen at random, without regard to age. • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include two people chosen at random under the age of 25 and four people chosen at random over 25. 35. The acquisition of treasury stock by a corporation: • increases its total assets and total stockholders’ equity. • requires that a gain or loss be recognized on the income statement. • has no effect on total assets and total stockholders’ equity. • decreases its total assets and total stockholders’ equity. 36. WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a: • Vision statement • Vague statement of direction • Strategic objective • Line manger’s individual goal 37. If a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? • $400,000 • $120,000 • $4,000,000 • $280,000 38. International Financial Reporting Standards (IFRS): • implies that receivables with different characteristics should be reported separately. • implies that receivables with different characteristics should be reported as one un-segregated amount. • requires that receivables with different characteristics should be reported as one un-segregated amount. • requires that receivables with different characteristics should be reported separately. 39. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows. • Does not represent a cash flow. • Operating activities section. • Financing activities section. • Investing activities section. 40. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. • using related diversification to achieve value by integrating vertically in order to acquire market power • using related diversification to achieve value by leveraging core competencies to achieve economies of scope • using related diversification to achieve value by pooling negotiating power to achieve market power • using related diversification to achieve value by integrating vertically in order to attain economies of scope 41. In multiple regression, plot the residuals against ____ to detect changing variability. • The response variable • The predicted values • Collinear variables • All explanatory variables 42. On March 1st, Candy, Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800. The March 31st balance sheet should report what balance in their supplies account? • $2,800 • $1,500 • $1,600 • $2,900 43. Which of the following requirements about internal controls were enacted under the Sarbanes Oxley Act: • Companies must assess the functionality of internal controls only when a violation occurs. • Companies must develop sound internal controls over financial reporting. • Independent outside auditors must eliminate redundant internal controls. • Internal auditors replace independent outside auditors when evaluating the level of internal control. 44. The four key attributes of strategic management include the idea that: • Strategy must be focused on competitor strengths. • Strategy must be directed toward overall organizational goals and objectives. • Strategy must be focused on one specific area of an organization. • Strategy must be focused on long-term objectives. 45. Which financial statement would best indicate whether the company relies on debt or stockholders’ equity to finance its assets? • Statement of cash flows • Retained earnings statement • Income statement • Balance sheet 46. When collection is made on Accounts Receivable, • total assets will decrease. • stockholders equity will increase. • total assets will increase. • total assets will remain the same. 47. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager\'s bonus if FIFO is adopted instead of LIFO? • $12,600 • $9,000 • $6,300 • $1,800 48. Sampling is used heavily in manufacturing and service settings to ensure high-quality products. In which of the following areas would sampling be inappropriate? • Cell phone manufacturing • Custom cabinet making • Computer assembly • Technical support by phone 49. Interest may be included in the acquisition cost of a plant asset: • if the asset is purchased on credit. • during the construction period of a self-constructed asset. • if it is a part of a lump-sum purchase. • if the asset acquisition is financed by a long-term note payable. 50. The owner of a company has recently decided to raise the salary of one employee, who was already making the highest salary, by 20%. Which of the following is(are) expected to be affected by this raise? • Median only • Mean and median only • Mean only • Mean, median, and mode

University of Phoenix > HRM 300 - LATEST TEST BANK FOR FINAL EXAM > (A) RATED File: ch01, CHAPTER 1: The Dynamic Environment of HRM TRUE/FALSE 1. Multinational corporations became commonplace in the 1920s. 2. According New York Times author, Thomas Friedman, there are three eras of globalization: transportation, communication, and technology. 3. When off the job, an employer cannot legally control an employee’s behavior by prohibiting such things as riding a motorcycle, skydiving, smoking, or drinking alcohol. 4. Most organizations take a ‘melting pot’ approach to diversity. 5. Many Gen Xers and Gen Yers, while passionate about their careers, will not sacrifice family and leisure for their career. 6. Your text foresees an end to the labor shortage within the next year or two due to population and technology shifts. 7. Part-time employees are those employees who work fewer than 40 hours a week. 8. Quality management is an organizational commitment to continuous process of improvement that expands the definition of customer to include everyone involved in the organization. 9. Continuous improvement programs aim at constantly improving the quality of products and services. 10. Work process engineering focuses on radical changes in an organization. 11. Employee involvement increases when managers make clear, forceful decisions for subordinates. 12. Recent corporate scandals have created a lack of trust for management. 13. Organizations do not like to use contract workers because their labor cost is unknown and their service is usually poor as compared to full-time employees. 14. An employee is defined by the Internal Revenue Service (IRS) as an individual who performs work for you, and you have the right to control or direct only the result of the work and not the means and methods of accomplishing the result. 15. Mergers are a common way for businesses to enter new or global markets, acquire new technology, or gain a financial advantage by achieving economies of scale. MATCHING KEY TERMS AND DEFINITIONS 16. A process of interaction and integration among the people, companies, and governments of different nations, driven by international trade and investment, accelerated by information technology. 17. Corporations with significant operations in more than one country 18. The varied personal characteristics that make the workforce heterogeneous. 19. Those individuals born between 1946 and 1965. 20. An activity in an organization aimed at creating greater efficiency by eliminating certain jobs. 21. Linking employee needs to organizational strategy. 22. The part-time, temporary, and contract workers used by organizations to fill peak staffing needs. 23. Employees whose jobs are designed around acquisition and application of information. 24. Using outside firms for providing necessary products and services. 25. A formal document that states an organization’s primary values and the ethical rules it expects organizational members to follow. 26. The Japanese term for an organization’s commitment to continuous improvement. 27. Radical, quantum change in an organization. 28. An organization’s full-time employee population. 29. Organizational commitment to continuous process of improvement that expands the definition of customer to include everyone involved in the organization. 30. The transfer of ownership and control of one organization to another. FILL IN THE BLANKS 31. The fact that organizations are no longer constrained by national borders in producing goods and services illustrates the __ of businesses. ( 32. According to Thomas Friedman, _ _ was the second era of globalization. 33. Women and __ _ are the fastest growing segments of the U.S. workforce. 34. In times of labor _, good wages and benefits are not enough to hire and keep skilled workers. 35. Contacting a pool of qualified applicants is one of the most critical aspects of _ 36. _ _, a Wyoming statistician, is credited with introducing continuous improvement programs to Japan. 37. __ _ goes beyond incremental change and requires an organization to face the possibility that what the organization may really need is radical or quantum change. 38. A __ _ may tend to view their work as not critically important to an organization. 39. Work teams, delegation, and peer influence are all examples of _ _ practices. 40. A set of rules or principles that defines right and wrong is commonly referred to as _ MULTIPLE CHOICE 41. Multinational corporations became commonplace in the a) 1880s. b) 1920s c) 1960s. d) 1970s. e) 1990s 42. Elizabeth is the training manager of a Chicago-based company. She is working on a training program for a subsidiary in Venezuela. The training program focuses on work-related cultural differences in Venezuela and the United States. It is very important for Elizabeth to emphasize that: a) both Venezuela and the United States are individualistic countries. b) both Venezuela and the United States are collectivist countries. c) Venezuela is a collectivist society whereas the United States is an individualistic society. d) Spanish is the official language in Venezuela whereas English is the official language in the United States. e) future orientation is highly valued and rewarded both in Venezuela and the United States. 43. Don, a Canadian native, has just been cleared for assignment as a country manager. He went to school in the United States and speaks English, Spanish, and French. What assignment would work best for him if there is no time for additional training? a) Mexico. b) Brazil. c) Australia. d) Spain. e) India. 44. Different countries perceive status differently. For example, status in French society depends to a large extent on education and seniority. Such an emphasis on education and seniority is called: a) ascribed status b) prescribed status c) status differentiation d) achieved status e) earned status 45. A California-based software company has just started a joint venture with a Japanese company in Tokyo. Doug, a U.S. expatriate, is the new general manager of the joint-venture. He is very excited about his foreign assignment in Japan. However, Doug has quickly become frustrated with the lack of assertiveness of his Japanese managers and employees. He feels things are not accomplished fast enough. What should Doug do? a) Confront his Japanese managers and employees about their lack of assertiveness. b) Train his Japanese managers and employees on how to become more assertive. c) Reward his Japanese managers and employees for being assertive. d) Make an effort to better understand the Japanese culture. e) Make an effort to speak with his managers and employees in Japanese more often. 46. All of the following statements about knowledge workers are accurate except a) They currently comprise about 75% of the U. S. workforce. b) They are expected to be among the fastest growing job sectors in the next decade. c) Their jobs are designed around the acquisition and application of information. d) Their job skills need to be continually upgraded e) They are paid a premium for their skills. 47. One way technology has changed HRM practices is a) the HR function is simpler. b) recruiting using the web generates smaller, more focused applicant pools. c) employee training is often delivered on demand rather than through scheduled courses. d) electronic resumes take more time to evaluate than paper resumes. e) employees are happy to be under surveillance by their employers. 48. Diane is employed by a company that monitors employee emails and telephone conversations. While off the job, Diane’s employer can legally do all of the following except a) Prevent her from riding a motorcycle. b) Tell her who to marry. c) Prevent her from smoking. d) Not allow her to eat junk food. e) None of the above. 49. Your text mentioned that telephone calls are monitored in which of these organizations? a) Ford. b) American Express. c) IBM. d) IRS. e) GE. 50. One of the implications of technology in HRM is a) workers will need the ability to read and comprehend software and hardware manuals, technical journals, and detailed reports. b) employees will need more face time with their superiors. c) managers will have to revert to autocratic decision making. d) employees are motivated to work a constant 8-hour day. e) abuse of email and web surfing is eliminated. 51. All of these changes are causing an increased diversity in the U.S. workforce except a) fewer younger workers enter the workforce. b) more baby boomers take early retirement. c) Federal legislation prohibits employee discrimination. d) passage of the Senior Citizens Freedom to Work Act. e) globalization lowers barriers to immigrants. 52. Which of the following is NOT true regarding workforce diversity in the United States? a) Differences are increasingly recognized and celebrated in organizations. b) Minority and female applicants have become the fastest-growing segments of the workforce over the last 30 years. c) Firms increasingly establish policies that consider various work styles. d) As globalization becomes more pronounced, so does the importance of managing workforce diversity for U.S. organizations. e) Accommodating the needs of minority and female employees is less and less a major responsibility for managers 53. According to the text, communication via a blog has all of the following advantages except: a) it’s a quick and efficient means of advertising a company’s products. b) companies can discuss ideas among organizational members. c) dissatisfied customers and disgruntled employees can write about anything they do not like. d) companies can provide more believable public relations information. e) employees can discuss the good things that are happening to them, which personalizes the faceless company to the readers. 54. A recent survey found that women in the _________ are world leaders with 50 percent holding senior management positions. a) United States b) Philippines c) Canada d) Brazil e) Hong Kong 55. Today, the percentage of women managers in the United States is approximately a) 50% b) 37% c) 12% d) 23% e) 8% 56. Which of the following is NOT true regarding work/life issues in the United States? a) Fewer families have only a single breadwinner. b) The line between work and non-work has become blurred. c) Many employees are asked to put in longer hours. d) It has become easier for married employees to find the time to fulfill non-work commitments. e) Communication technology allows employees to work at anytime from anywhere. 57. The Bureau of Labor Statistics predicts that by 2014 nearly 2.4 million jobs will go unfilled due to all of these factors except: a) a major exodus of baby boomers due to retirement. b) a declining birthrate. c) potential training redundancy is developing. d) immigrants do not have skills in the needed areas. e) the terror attacks of September 11, 2001 may reduce immigration. 58. Why are so many organizations exhibiting a trend toward downsizing? a) Quality emphasis programs are creating flatter structures and redesigning work to increase efficiency. b) Greater control reduces flexibility. c) Quality programs create steeper hierarchies with fewer workers at the lower levels. d) Organizations are no longer global. e) Big companies are vanishing. 59. Which statement is the best comparison of downsizing and rightsizing? a) Rightsizing maintains long term employee commitment. Downsizing leads to outsourcing. b) Rightsizing links long term organizational goals to staffing levels. Downsizing is one of the actions that may be performed. c) Rightsizing maintains competitive levels of employee surplus. Downsizing emphasizes quality management. d) Rightsizing is another term for offshoring. Downsizing is another term for outsourcing. e) Rightsizing is a euphemism for a racist workforce. Downsizing means cutting the number of employees. 60. A large manufacturing firm needs to increase production to meet a seasonal demand. The demand is not sufficient to justify building new production facilities. Of the following options, which one provides the greatest flexibility and responsiveness to the changing environment? a) downsizing. b) flextime. c) outsourcing. d) telecommuting. e) automating. 61. Technology increasingly impacts HRM practices in the following areas except a) recruiting b) employee selection c) training and development d) motivating factory workers e) motivating knowledge workers 62. Work process engineering is: a) another name for downsizing. b) another name for rightsizing. c) a continuous improvement method that radically increase an organization’s productivity. d) an organizational commitment to incrementally improving the quality of products and services. e) is a radical change in an organization. 63. According to the text, one of the biggest challenges facing HR leaders is a) understanding that workers will need to be recruited in a different way than just advertising a position and then selecting a candidate. b) creating an environment that balances core and contingency employees. c) training immigrant workers who do not have the skill set for the available jobs. d) ensuring management treats all of their employees with respect. e) rewriting HR policy manuals to satisfy the new generation of workers. 64. HRM typically provides which of these types of training to temporary employees? a) Orientation. b) Retirement planning. c) Benefits options. d) Career management. e) Technology certification. 65. An amusement park needs customer representatives during the summer season. The best staffing option for this amusement park is to use: a) part-time employees. b) core employees. c) contract workers. d) independent contractors. e) recent college graduates 66. Which of the following is not a component of continuous improvement? a) Intense focus on the customer. b) Improvement in the quality of everything the organization does. c) Intense focus on individual performance. d) Accurate measurement. e) Empowerment of employees. 67. Which of the following quality experts has been credited for helping Japanese firms improve their productivity following World War II? a) W. Edwards Deming. b) Robert Fleming. c) Albert Duran. d) Joseph Juran. e) Frederick Taylor. 68. Which of the following is a component of continuous improvement? a) Outsourcing of customer needs. b) Eliminating perfectionist tendencies to constantly be better than “very good.” c) Refocusing quality on only the production process. d) Replacing statistical techniques with benchmark roots for problem solving. e) Empowering employees. 69. According to W. Edward Deming, a well-managed organization is one in which: a) statistical control increases variability in production processes. b) statistical control reduces variability in production processes and also results in uniform quality and predictable level of production. c) most employees like their job. d) employees are paid at least the market wage rate. e) All of the above. 70. A Kaizen is the Japanese term for: a) a radical change in an organization. b) work process reengineering. c) a firm’s commitment to continuous improvement. d) empowering employees. e) intense focus on the customer. 71. Which of the following statements best compares continuous improvement and work process engineering? a) Continuous improvement asks, “How can we do it better?” Work process improvement asks, “Are we doing the right thing?” b) Continuous improvement has increased training requirements. Work process engineering has increased security requirements. c) Continuous improvement is effective in turbulent environments. Work process engineering is effective in stable organizational settings. d) Continuous improvement is used in the service sector. Work process engineering is used in the manufacturing sector. e) Continuous improvement decreases the number of employees in an organization. Work process engineering increases the number of employees in an organization. 72. Which type of organizational change may provide a false sense of security? a) Continuous improvement methods. b) Work process engineering. c) Horizontal alliances. d) Status quo. e) Lateral combinations. 73. Suppose you are the HR manager of an organization that has just adopted the philosophy of continuous improvement. You can support improvement programs in all of these ways except a) Provide clear and extensive communication regarding the organizational change. b) Help employees overcome barriers to change. c) Explain new performance expectations. d) Design jobs very narrowly to ensure that employees can specialize on a few tasks. e) Train employees to adapt to the new work arrangement 74. Which of the following provides the best description of work process engineering? a) A slow process of incremental change. b) An alternative to rapid technology transfer. c) An alternative to retraining a workforce. d) A focus on the whole work process. e) A safeguard for traditional work attitudes. 75. A major drawback of focusing on continuous improvements is that it: a) may prevent employers from making needed radical changes. b) works well for Japanese companies but not for U.S. companies. c) makes it difficult to discharge low-performing employees. d) usually requires the layoff of employees. e) requires the use of complicated statistical techniques. 76. Ivan is the vice-president of human resources for a large manufacturing organization involved in work process engineering. What kinds of training needs should he anticipate? a) New work procedures. b) Technology enhancements. c) Decision making. d) Working in teams. e) All of the above. 77. All of the following types of employees are considered contingent employees except a) part-time employees b) contract workers c) full-time temporary workers d) full-time long-term employees e) freelancers 78. Maurice is suing an organization, claiming that because he is an employee and not an independent contractor, the organization should have withheld taxes for him. All of these factors could be used to support his claim except a) He is allowed great flexibility in scheduling his work time. b) He received training on company policies and procedures. c) He receives no insurance or pension benefits. d) He is paid market rate for his services. e) He is reimbursed for travel. 79. Ruxandra Lopez is the vice-president for human resources of a major manufacturing company. She is thinking of increasing the proportion of contingent workers in the different plants. As a consultant, you advise Ruxandra that a major disadvantage associated with contingent workers is that: a) contingent workers are entitled to retirement benefits. b) contingent employees complain more than core employees. c) contingent workers may be less loyal and committed than core employees. d) contingent workers do not require extensive skill training before they become fully productive to an organization. e) contingent employees are usually less reliable than core employees. 80. HRM is often involved in all of the following for their contingent workers except a) Motivation. b) Locating temporary workers. c) Scheduling options to meet workers’ needs. d) Conflict resolution between contingent and core employees. e) Negotiating health care benefits. 81. HRM provides support in all of these areas to increase employee involvement except a) Delegation. b) Retirement planning. c) Work teams. d) Goal setting. e) Participative management. 82. Many of today’s companies emphasize: a) clear lines of authority. b) teamwork. c) bureaucratic organizational structures. d) a hierarchical chain of command. e) a centralized decision-making process. 83. How does group decision making empower a workforce? a) Employees have less input to work processes. b) Isolated workers are prone to fewer work conflicts. c) Employees have greater access to needed information. d) There is less stress due to new job skill requirements. e) Employees have the benefit of tried-and-true past decisions. 84. Which of the following is the best illustration of a work team? a) A one-man band. b) A football team that has separate players who specialize in offense, defense, and kickoff. c) A symphony orchestra with special sections for wind, percussion, and strings d) A surgical team of 3 nurses and 3 surgeons. e) Airline employees who may handle baggage today, check in customers tomorrow, or serve on the information desk. 85. Useful employee involvement requires: a) demonstrated leadership and supportive management. b) increased compensation, rather than extensive training. c) extensive training and increased compensation. d) clear decision making responsibility by upper management. e) greater precision in job descriptions. 86. Which of the following is not true regarding the employee involvement for HRM? a) Employees are expected to work in teams. b) Employees are expected to delegate. c) Employees are expected to withhold strategic information from co-workers. d) Employees need to be trained in all aspects of the job. e) Employees need training in interpersonal skills. 87. Ethics refers to: a) a set of rules or principles that defines what is legal and what is illegal. b) a set of rules or principles that defines right and wrong conduct. c) a situation in which decisions are made based on religious rules or principles d) a situation in which individuals make decisions based primarily on their best interest. e) a situation in which individuals act make decisions based primarily on the best interest of the most economically disadvantaged individuals 88. People who lack a strong moral sense are much less likely to do wrong if: a) the company has a code of ethics. b) they feel constrained by rules and strong cultural norms that discourage unethical behaviors. c) they attend a business ethics seminar. d) the company monitors their emails. e) the employer performs an integrity test during the selection process 89. Which of the following is NOT true regarding ethics in organizations? a) In recent years, ethics has become a major issue in U.S. organizations owing to corporate scandals such as Enron or WorldCom. b) Corporate scandals such as Enron and WorldCom have created a lack of trust in management. c) Companies that were in corporate scandals did not have codes of ethics. d) Codes of ethics are increasingly popular in U.S. organizations. e) A mission statement details an organization’s primary values and the ethical rules it expects managers and employees to follow. . File: Ch05, Chapter 5, Human Resource Planning and Job Analysis TRUE/FALSE 1. Human resource planning is one of the most important elements in a successful human resource management program. 2. A SWOT analysis is a process for determining an organization’s core competency. 3. The mission statement is the foundation on which every decision in the organization should be made. 4. Job analysis involves the identification and analysis of the qualifications of the firm’s new employees. 5. The structured questionnaire method of job analysis captures job exceptions more effectively than other methods. 6. The best results with respect to job analysis are usually achieved with some combination of job analysis methods. 7. A job evaluation states minimum acceptable qualifications for the incumbent. 8. Most technology organizations have replaced the job analysis process with definitional structuring. 9. A job description is a statement indicating what a job entails. 10. A decrease in the supply of any unit’s human resources usually comes from new hires. 11. The Department of Labor’s O*Net Job Content Model replaced the Dictionary of Occupational Titles. 12. The observation method of job analysis requires job incumbents to record their daily activities. 13. A replacement chart is an HRM organizational chart that indicates positions that may become vacant in the near future and the individuals who may fill the vacancies. 14. The Analysis of a Position Questionnaire (APQ) is the job analysis technique that rates jobs on elements in six activity categories. 15. An employee who telecommutes shares one job with someone else by splitting the work week and the responsibilities of the position. MATCHING KEY TERMS AND DEFINITIONS 16. Allows employees to work longer days in exchange for longer weekends or other days off. 17. Process of determining an organization’s human resource needs. 18. Organizational strengths that represent unique skills or resources. 19. HRM organization charts indicating positions that may become vacant in the near future and the individuals who may fill the vacancy. 20. A specifically designed questionnaire on which employee’s rate items they perform in their job from a long list of possible task items. 21. Statements indicating the minimal acceptable qualifications incumbents must possess to successfully perform the essential elements of their jobs. 22. Meeting with a group of employees to collectively determine what their job entails. 23. A job analysis technique that involves extensive input from the employee’s supervisor. 24. A job analysis technique in which data are gathered by watching the work of employees. 25. A job analysis method requiring job incumbents to record their daily activities. 26. An organization’s best attributes and abilities. 27. A statement indicating what a job entails. 28. Readjusting skills to match job requirements. 29. A job analysis technique that rates jobs on elements in six activity categories. 30. Specifies the relative value of each job. FILL-IN THE BLANKS 31. must be linked to an organization’s overall strategy. 32. The expresses the reason an organization is in business. 33. A analysis determines an organization’s strengths, weaknesses, opportunities, and threats. 34. To determine what skills are needed, HRM conducts a . 35. is the outcome of the strategic planning process when the demand of labor exceeds the internal supply of labor. 36. The job analysis technique that consists of meeting with an employee to determine what his or her job entails is called the 37. The DOL job analysis process categorizes elements into ____________________: data, people, and things. Response: See page 133 Ref: EXHIBIT 5-5 38. are part of the job description that describe the skills and abilities of a successful incumbent. 39. The state the minimum acceptable qualifications that the incumbent must possess to perform the job successfully. 40. Frederick Herzberg believed the best way to motivate employees with through his model of , which expands job content to create more opportunities for job satisfaction. MULTIPLE-CHOICE 41. Top executives at company ABC have agreed on a new mission statement. More specifically, they have agreed on what business the company should be in and who their consumers are. What should the next step be for these top executives? a) Begin the corporate assessment b) Set strategic goals c) Identify the core competency of the company d) Evaluate the strengths and weaknesses of the company e) Conduct a SWOT analysis 42. Effective employment planning includes all of the following except a) translating organizational goals into types of workers needed. b) translating organizational goals into the number of workers needed. c) understanding the strategic planning process. d) product modifications for new kinds of families. e) a direct link to the organization’s strategic direction. 43. Which of the following is not true regarding the SWOT analysis? a) The SWOT analysis is a process for determining an organization’s strengths, weaknesses, opportunities, and threats. b) The SWOT analysis forces management to recognize that companies, regardless of their size, are constrained to some extent by the resources and skills they have available. c) The SWOT analysis is the foundation on which every decision in the company should be made. d) The SWOT analysis should lead to a clear assessment of the firm’s internal resources. e) The SWOT analysis serves as the link between the firm’s goals and ensuring that the company can achieve its objectives. 44. The SWOT analysis is a process for determining a firm’s a) mission statement, strengths, weaknesses, and opportunities b) mission statement, strengths, weaknesses, and threats c) strengths, weaknesses, threats, and core competency d) strengths, weaknesses, opportunities, and threats e) strengths, weaknesses, opportunities, and core competency 45. Diane is vice-president of human resources for a large manufacturing firm. What should her involvement be for the strategic planning for her organization? a) She needs to understand the process to play a vital role in it. b) She should never be involved in it. That function should be performed in financial management and marketing areas. c) She should never be involved in it. Globalization and technology have made strategic planning obsolete. d) She does all of it as a routine part of her job description. e) Her real contribution comes with offshoring decisions. 46. During a meeting Julandre, a top executive at XYZ, Inc. made a presentation about the organizational strengths that represent the firm’s unique skills and resources. Julandre insisted that these organizational strengths should give XYZ, Inc, a competitive edge in the future. What was Julandre referring to in this meeting? a) The mission statement of the company b) The strategic statement of the company c) The strategic planning process of the company d) The core strategy of the company e) The core competency of the company 47. Which of the following is not true regarding competitive intelligence? a) Competitive intelligence is another way to describe organizational espionage. b) Competitive intelligence is one of the fastest-growing areas of a SWOT analysis. c) Most of the information used for competitive intelligence is available and accessible to the public. d) Competitive intelligence provides basic information about a firm’s competitors. e) Competitive intelligence is more difficult to obtain in a global business environment. 48. The steps of the strategic planning process, in order, are a) mission, people, strategy, structure. b) goals, structure, mission, people. c) mission, strategy, structure, people. d) structure, people, vision, mission. e) needs, goals, strategy, vision. 49. Which of the following describes the “Strategy” phase of the strategic planning process? a) Determining what business the organization will be in. b) Setting goals and objectives. c) Determining how goals and objectives will be attained. d) Determining what jobs need to be done and by whom. e) Matching skills, knowledge, and abilities to required jobs. 50. Which of the following describes the “Structure” phase of the strategic planning process? a) Determining what business the organization will be in. b) Setting goals and objectives. c) Determining how goals and objectives will be attained. d) Determining what jobs need to be done and by whom. e) Matching skills, knowledge, and abilities to required jobs. 51. Which of the following describes the “People” phase of the strategic planning process? a) Determining what business the organization will be in. b) Setting goals and objectives. c) Determining how goals and objectives will be attained. d) Determining what jobs need to be done and by whom. e) Matching skills, knowledge, and abilities to required jobs. 52. Which of the following describes the “Mission” phase of the strategic planning process? a) Determining what business the organization will be in. b) Setting goals and objectives. c) Determining how goals and objectives will be attained. d) Determining what jobs need to be done and by whom. e) Matching skills, knowledge, and abilities to required jobs. 53. A replacement chart is used a) to spot skill shortages in the organization. b) to switch health care plans. c) to help recruiters identify the best geographical areas to find certain skills. d) to transfer technology to web based organization control systems. e) to align salary data with skill and experience levels. 54. a) dismissals. b) deaths. c) retirements. d) voluntary quits. e) prolonged illnesses. 55. Employee retention is a major HRM issue. According to the text, it is estimated that about _______ of the reasons employees quit their jobs and leave organizations are within the control of managers. a) 25 percent b) 35 percent c) 45 percent d) 55 percent e) 75 percent 56. Dee works in the human resources area of a large organization. As part of her duties, she routinely uses such methods as observation, individual and group interviews, technical conferences, and diary monitoring. What does she do? a) Job identification. b) Job clarification. c) Job analysis. d) Position description. e) Position strategy description. 57. During a job analysis, which of these tasks are performed? a) Promotion patterns and succession plans are identified. b) An estimation of the labor supply is verified. c) Skills, knowledge and abilities necessary to perform a job are determined. d) Duties and responsibilities of a job are matched with pay grades. e) EEO compliance is assessed. 58. Pierre is attempting to forecast the firm’s future supply of human resources. He is currently looking at retirements, transfers out of a unit, layoffs, sabbaticals, and dismissals. Which one is likely to be the most difficult to predict? a) Retirements b) Transfers out of a unit c) Layoffs d) Sabbaticals e) Dismissals 59. Where does job analysis occur in the strategic planning process? a) Before corporate goals and objectives are established. b) After corporate goals and objectives are established. c) After the labor supply and demand are compared. d) Before organizational mission is defined. e) Before the SWOT. 60. Fatima is working on the employment planning of her company. She expects that the demand for human resources will increase in the near future. Which of the following is not an appropriate option for Fatima? a) Hire more full-time employees b) Contract with additional staff c) Offer early retirements d) Change the company’s objectives e) Transfer employees within the company 61. Frank, a college intern in human resources management at a large service organization, recently completed a job analysis for the 600 jobs in the Phoenix operations center. When Lloyd, his boss, reviewed Frank’s work, he found that many known job activities were not included. Further, some odd, even bizarre, activities were reported. Frank cited the Hawthorne studies in his explanation of the results. What technique did Frank use? a) Observation. b) Diary. c) Structured questionnaire. d) Group interview. e) Technical Conference. 62. Michelle has gathered job analysis data with the observation technique for jobs in Plant #101. She wants to use an additional collection technique to make sure her analysis is accurate. Much of the work is done collectively, and she is skilled in dealing with issues related to group dynamics. Which job analysis method should she use? a) Hawthorne. b) Structured questionnaire. c) Group interview. d) Diary. e) Technical conference. 63. Leona has gathered job analysis data with a structured questionnaire for managerial jobs in remote locations of her firm. Exit interviews have produced comments like, \"You should have told me what was really expected.\" She wants to use an additional collection technique to avoid misrepresentation in job descriptions. Leona’s boss told her, “Be thorough. Job analysis time and cost are nothing compared to the cost of replacing these managers.” Which method should she use? a) Observation. b) Individual interview. c) Technical conference. d) Diary. e) Gap analysis. 64. Monique, the director of job analysis, must write job descriptions for new supervisors in a new plant. The new robotics line will make this location comparable to existing sites. She has a limited budget and a limited amount of time. Many former plant managers (they would have supervised these supervisory positions) are in Monique’s building. Which job analysis method should she use? a) Observation. b) Individual interview. c) Benchmark. d) Diary. e) Technical conference. 65. Felicia, a new analyst, is considering asking managers at various facilities to use the diary method of job analysis. As an expert in HR matters, what advice would you give her, since you want to help her do the right thing. a) This technique is the quickest of all the job analysis methods. b) It is the most objective method. c) It is easy to use – no training required. d) Sometimes people report what they think you want to hear rather than what they do. e) The PAQ is an automated package that facilitates this process. 66. Which of the following is not considered a flexible work schedule? a) Flex time. b) Job sharing. c) Telecommuting. d) Job enrichment. e) Compressed work week schedule. 67. Rhona, a junior job analyst, needs to use several techniques for some new assembly line positions in a new production facility. Her supervisor warns her against using the PAQ for which of these reasons? a) It is not quantitative. b) It is not structured. c) It appears to be more applicable to higher-level professional jobs. d) It is too time-consuming. e) It duplicates the results of the technical conference, which has already been performed for this set of jobs. 68. Which of the following is not a category of the Position Analysis Questionnaire (PQA)? a) Information input b) Mental processes c) Job evaluation d) Work output e) Relationships with other people 69. The job analysis process should generate: a) only job descriptions b) job descriptions and job specifications c) job evaluations and job specifications d) job descriptions, job specifications, and job evaluations e) job descriptions and job evaluations 70. Which of the following is not true with respect to job specifications? a) Specify the relative value of each job in the company. b) State the minimum acceptable qualifications that the incumbent must have to perform the job successfully. c) Identify the knowledge, skills, and abilities required to perform the job successfully. d) Represent one of the tangible outcomes of the job analysis process. e) Help determine whether job applicants are essentially qualified to perform the firm’s jobs. 71. Job design does all except a) set the salary of a job. b) describe what tasks are included in a job. c) tells the order in which tasks are done in a job. d) set the conditions under which the tasks of a job are completed. e) how and when the tasks of a job are completed. 72. Which statement best compares job specifications and job descriptions? a) Job description focuses on managerial positions. Job specification is used for hourly workers. b) Job specification focuses on qualifications for incumbents. Job description focuses on what the incumbent does. c) Job description focuses on qualifications for incumbent. Job specification focuses on what the incumbent does. d) Job description is the computerized version of job specification. e) Job specification occurs after job analysis. Job description occurs before job analysis. 73. The job analysis process has a multifaceted nature. Indeed, many activities in an organization are affected by the job analysis. Which of the following is not directly affected by the job analysis process? a) Recruiting b) Benefits administration c) Labor relations d) Safety and health e) Selection 74. What use has the job description served under the ADA? a) There is no use. b) It provides reasonable accommodation. c) It assures comparable worth. d) It identifies essential job functions. e) It protects against adverse impact. 75. Stan, vice-president of human resources, is explaining why job descriptions are an important organizational resource to the rest of the executive board. He could use all of the following to support his discussion except a) The job description can be used as a reference by recruiters during job interviews with prospective job candidates. b) The job description can be used to create advertisements for job classifieds. c) The job description can be used to identify essential job functions for ADA compliance requirements. d) The job description can be used to identify target areas for retirement planning. e) The job description can be used to appraise whether an incumbent’s actual duties line up with her stated duties. 76. How important is job analysis to the contemporary organization? a) Job analysis is the starting point of sound human resource management. b) Job analysis has replaced other aspects of strategic human resource management. c) Job analysis is the starting point of the organizational visioning process. d) Job analysis, once so important to large organizations, has become obsolete. e) Job analysis is crucial to the hiring process, but that’s where it ends. 77. Which of the following is not an activity that organizations frequently cite as being affected by the job analysis process? a) Recruiting b) Selection c) Compensation d) Succession planning e) Performance appraisal 78. All of the following are disadvantages of flexible scheduling except a) potential reduction in productivity. b) reduced childcare costs. c) a lack of supervision of employees. d) increased work stress levels. e) increased employee turnover who aren’t productive. 79. Which of the following is not a job analysis method? a) Situational method b) Observation method c) Diary method d) Technical conference method e) Structured questionnaire method 80. Brad is comparing various job analysis methods. He is looking for the best job analysis method. As a consultant, you advise Brad that he should choose a) the observation method. b) the structured questionnaire method. c) some combination of job analysis methods. d) the individual interview method. e) the group interview method. File: Ch04, Chapter 4, Employee Rights and Discipline TRUE/FALSE 1. The Privacy Act of 1974 requires federal government agencies to make available information in an individual’s personnel file. 2. The Drug-Free Workplace Act of 1988 requires federal contractors to actively pursue a drug-free environment. 3. Companies employing 50 or more employees are required to give employees 30 days notice when closing down a plant or laying off large numbers of workers. 4. Long-haul truck drivers, regulated by the Department of Transportation, are required to take drug tests. 5. Substance abusers are 20 times more likely to miss work than employees who are not substance abusers. 6. The Fair Credit Reporting Act of 1971 allows employers to secretly check the credit history of job applicants. 7. Employees who do not accept the responsibility of self-discipline require some degree of extrinsic disciplinary action. 8. Discipline should be punitive rather than corrective. 9. If theft in an organization is discovered, an employer has the right to give a polygraph test to every employee to determine the guilty party under the guidelines of the Polygraph Protection Act of 1988. 10. Other than a good cause, an employer cannot terminate an employee under the terms of the employment-at-will doctrine. 11. Employers are not permitted to electronically monitor employees, unless given permission by the employee to do so. 12. Having a workplace romance with your supervisor is acceptable in most organizations because it will enhance the productivity of a department. 13. All disciplinary warnings, including written verbal warnings are forwarded to HRM for inclusion in the employee’s personnel file. 14. The progressive discipline process starts with a written warning, followed by a suspension, then a written verbal warning, and ending with a dismissal. 15. Under the hot-stove rule, discipline should be delayed until the periodic performance review between the employee and manager. MATCHING KEY TERMS AND DEFINITIONS 16. A specialized question-and-answer test designed to assess one’s honesty. 17. This is the first formal stage of the disciplinary procedure that becomes part of an employee’s official personnel file. 18. This act was passed to help keep the problem of substance abuse from entering the workplace. 19. A concept rooted in nineteenth-century common law, which permitted employers to discipline of discharge employees at their discretion. 20. Requires the federal government agencies to make information available in an individual’s personnel file available to him or her. 21. Requires an employer to notify job candidates of its intent to check into their credit. 22. Any organizational guarantee or promise about job security. 23. A condition in the organization when employees conduct themselves in accordance with the organization’s rules and standards of acceptable behavior. 24. A situation in which an employee reports the organization to an outside agency for what the employee believes is an illegal or unethical practice. 25. Discipline should be immediate, provide ample warning, be consistent, and be impersonal. 26. Temporary record that a verbal reprimand has been given to an employee. 27. The process of testing applicants/employees to determine if they are using illicit substances. 28. Final step of the disciplinary process. 29. A period of time off from work as a result of a disciplinary process. 30. Prohibits the use of lie detectors in screening all job applicants. FILL-IN THE BLANKS 31. The federal employees the right to review letters of recommendation written on their behalf. 32. Under the government agencies, federal contractors, and those receiving federal funds ($25,000 or more) are required to actively pursue a drug-free environment. 33. Under the a company employing 100 or more individuals must notify workers 60 days in advance if it is going to close its facility or lay off 50 or more workers. 34. is a situation in which an employee notifies authorities of wrongdoing in an organization. 35. are also known as integrity tests. 36. Under a contractual employee relationship, discharge may occur only if it is based onjust cause. 37. _______________________, such as the seriousness and duration of the problem, should be considered when analyzing discipline problems. Response: See page 98 Ref: Factors to Consider When Disciplining 38. Typically, begins with a verbal warning and proceeds through a written warning, suspension, and only in the most serious cases, dismissal. 39. A is the second step in the progressive discipline process. 40. A disciplinary layoff is also known as MULTIPLE-CHOICE QUESTIONS 41. Which amendment of the U.S. Constitution prohibits illegal searches and seizures by the government or its agents? a) Third Amendment b) Fourth Amendment c) Fifth Amendment d) Sixth Amendment e) Seventh Amendment 42. Dana is rewriting the section of the policies and procedures manual for her organization regarding employees\' access to their employment history files. All of the following statements are appropriateexcept a) Any information an employee has waived the right to review will be kept separated from the accessible file. b) Employees are encouraged to drop into the personnel office to review the contents of their employee information files any time they wish. c) Personnel files are not permitted to leave the HRM area. d) Employees may review the contents of their files in the presence of an HRM representative. e) An employee may take notes on the file contents, but nothing may be photocopied. 43. A bank would like to obtain information regarding the credit history of applicants as well as their lifestyle and spending habits. What should the bank do to obtain this information? a) The bank cannot obtain this information because it is illegal to check the credit of job applicants. b) The bank should just ask friends and relatives of the applicants. c) The bank should obtain the information through a third-party investigation d) The bank should contact a credit reporting agency without notifying the applicants that their credit is being checked. e) The bank should contact a credit reporting agency and notify the applicants that their credit is being checked. 44. Which of the following is not a law affecting employee rights? a) The Privacy Act b) The Drug-Free Workplace Act c) The Fair Credit Reporting Act d) The Fairness in Employment Act e) The Employee Polygraph Protection Act. 45. Ethel applied for a job as a credit card account manager with a major financial institution. Your organization obtained her credit report through a third party investigation. She was not hired because of her recent bankruptcy and poor credit history. As the vice-president of human resources, you are aware of this situation because Ethel is suing the company for your hiring practices. Which of these facts of the case shows that your procedures were faulty? a) Ethel received a copy of her credit report. b) Ethel was not given written notice the third party investigation was being conducted. 3. Ethel was asked questions about how she made account decisions for credit applicants during the interview. d) Ethel’s resume was incomplete. e) Credit problems are not reasonable exclusions for this job. 46. Which of the following jobs is subjected to drug tests under the Drug-Free Workplace Act of 1988? a) Elementary school teacher in a private school b) Cashier at a retail store c) Taxi driver d) Technician in a company regulated by the Nuclear Regulatory Commission. e) Software designer at Microsoft 47. The Drug-Free Workplace Act of 1988 requires all of the following except a) mandatory drug testing of certain employees. b) providing substance-free awareness programs for employees. c) a drug-fee work environment policy must be established. d) mandatory dismissal for employees found in violation of any part of the policy. e) the policy must spell out employee expectations in terms of being substance free and infraction penalties. 48. Which of the following is not true regarding the Polygraph Protection Act of 1988? a) It prohibits employers in the private sector from using polygraph tests in all employment decisions. b) Polygraph tests have been found to have very strong job-related value. c) Polygraph tests can be used when theft occurs in the organization. d) When theft occurs in the organization, a suspected employee has the right to refuse to take a polygraph test without fear of retaliation from the employer. e) If an employee failed a polygraph test, he or she has the right to challenge the results. 49. Carol was forced to take a lie detector test about a workplace violence incident. During the course of questioning, she became very upset and emotional. Carol asked the questioner to stop. He refused to discontinue the test. What action can be taken? a) The Department of Labor may assess civil penalties up to $10,000 against the organization. b) None. This sounds like standard procedure. c) The Department of Commerce may bring court actions to restrain violators. d) A collective bargaining unit can ratify an agreement that is more restrictive. e) Criminal charges may be filed against the questioner. 50. Last month a large consumer electronics wholesaler reported a 27% stock loss due to \"breakage.\" The average loss is less than 1% a month. There are over 100 employees at the facility. The only recent hires, Tom, Dick, and Harry, were hired six weeks ago. Dan, the plant manager has come to you, the vice-president of human resources, for advice on how to stop the stealing in a fair and ethical way. What is your advice? a) Drug tests should be administered immediately to all employees. b) A polygraph test could be administered to Tom, Dick, and Harry if they were given a baseline polygraph at the time of employment. c) Encourage Dan to install additional surveillance cameras immediately. d) A polygraph test should be administered immediately, with no warning or explanation, to Tom, Dick, and Harry. e) Provide written notice to Tom, Dick, and Harry that they will be scheduled for a polygraph test. 51. Which of these statements are provisions of the Worker Adjustment and Retraining Notification Act? a) An organization with more than 100 employees must notify workers 30 days in advance if it is going to close a facility. b) An organization with more than 200 employees must notify workers 60 days in advance if it is going to lay off more than 50 workers. c) Organizations that fail to notify employees are subject to a penalty subject to one day\'s pay and benefits to each affected employee for each day\'s notice that should have been given. d) Organizations that file bankruptcy are exempt for hourly workers. e) Organizations may be forced to keep a plant open if such action would threaten the economic base of the community. 52. A company with 350 workers is laying off 75 employees. How much notice is this company required to provide to the laid-off employees? a) 30 days b) 40 days c) 50 days d) 60 days e) 70 days 53. Rajiv has worked for 22 years at a 40-employee branch of a large auto parts chain. Business has been very bad lately, and there are rumors of consolidation, reorganization, even bankruptcy. What protection is Rajiv given under the Worker Adjustment and Retraining Notification Act? a) With less than 25 years seniority, he can be laid off with less than six months notice. b) Rajiv will be given 60 days warning if his location closes. c) No protection. His industry is not covered by the act. d) No protection. His branch is too small for coverage. e) Rajiv will be given 30 days warning, but only if the whole organization closes. 54. Luis has worked for a 2500-employee chemical manufacturer, ABCHEM, for two years. He went to work Monday morning to find his key no longer fit the front door lock and a new sign \"FUTURE HOME OFFICE OF ALLIED PLASTICS” on the front door. He called his office and found that the telephone had been disconnected. He then noticed the local paper with headlines, \"ABCHEM sells plastics subsidiary: 2000 layoffs!!\" Luis remembered the letter he received from the HRM department three months earlier which had warned of this probable plant closing, but he ignored it as a rumor. What protection is Luis given under W.A.R.N.? a) He is entitled to an amount equal to pay and benefits for up to 60 days. b) His job must be given back to him. c) No protection. He was notified in an appropriate manner. d) No protection. The employee layoff number is too small. e) No protection. He hasn’t worked there long enough. 55. Dwight, vice-president of human resources for a large textile firm, is in a strategic restructuring meeting. The discussion topics include which one of three production facilities to close. There are 40 employees at each of the facilities. When asked, \"What should we tell the employees?\" Dwight responds, a) \"Tell them we are keeping the newest plant open for another 2 years. Transfer all employees with 20 years of seniority to that plant.\" b) \"Notify all workers immediately of probable plant closings within the next 4 years.\" c) If we close, workers in affected areas get 30 days notice or 90 days pay and benefits upon closing.\" d) \"Legally, we are not required to tell the employees anything unless we lay off 50 or more individuals.\" e) \"Bankruptcy would let us charge workers for the past year’s medical benefits.\" 56. Over two-thirds of all U.S. organizations use some form of drug testing. Which of the following isnot true regarding substance abuse in the U.S. workplace? 1. Nearly half of all on-the-job injuries are related to substance abuse. 2. Nearly half of all work-related deaths are attributed to substance abuse. 3. It is estimated that employee substance abuse costs U.S. organizations about $100 million annually in increased health-care costs, lost productivity, and workplace accidents. 4. Substance abusers are 10 times more likely to miss work than non-users. 5. Substance abusers are about a third less productive than non-users. 57. What actions can organizations take to reduce criticism of their drug testing policies? Your text mentions all of the following except a) state consequences of failing a test. b) explain testing procedures clearly. c) conduct drug screening after a conditional employment offer has been made. d) build safeguards into the process to challenge false tests. e) rehabilitate prospective employees. 58. How much money does substance abuse cost U.S. companies annually, according to your text? a) $100 million b) $500 million c) $10 billion d) $100 billion e) $500 billion 59. Which of the following is not true regarding honesty tests? a) Honesty tests tend to focus on theft and drug use. b) Since honesty tests are very expensive, very few companies use them. c) Honesty tests mostly entice applicants to provide information about themselves that otherwise would be difficult to obtain. d) Individuals are frequently truthful about their dishonesty. e) Honesty tests are designed with multiple questions to assess consistency. 60. Research studies suggest that a) honesty tests are not reliable. b) honesty tests are very expensive to administer. c) a small number of companies in the United States are using honesty tests to screen applicants. d) honesty tests can be effective devices to screen applicants. e) honesty tests are not valid. 61. Integrity tests a) assess consistency patterns in responses. b) are more valid than fingerprints. c) are used as an alternative to honesty tests. d) provide information that is easily obtainable by other techniques. e) accept dishonesty as a valid behavior, as long as the respondent is truthful about that behavior. 62. According to a survey by V ___________ percent of professionals admitted to having been involved in an office romance and another 19 percent have considered it. a) 47 b) 57 c) 67 d) 77 e) 87 63. Lynne, an officer of a major corporation, noticed that David, her boss, reported personal expenses on his expense account when they traveled. He usually bought new clothes on a trip (suit, shoes, topcoat), brought along a family member or friend, and attended sight-seeing or cultural events with them. All of these items ended up on David’s expense report. When Lynne reported these practices to federal authorities, she was a) employee surveillance. b) whistle-blowing. c) integrity testing. d) reengineering work processes. e) utilizing graphology. 64. Elizabeth works for a large appliances store in the Midwest. She has heard a rumor that employees are filmed in the restroom. Can this rumor be true? a) No, because it would violate the Privacy Act of 1974. b) No, because it would violate the Decent Workplace Act of 1985. c) No. It is unethical to film employees in the restroom. d) Yes, if the employer included this type of employee monitoring in a written policy and explained the policy to the employees. e) Yes, because the employer owns the company. 65. Which of the following is not true regarding workplace security? a) Workplace security has become a critical issue for employers. b) Workplace security is defined as actions on behalf of an employer to ensure that the employer’s interests are protected. c) Workplace security issues have become less prevalent in U.S. organizations over the last five years. d) Telephone, system computers, and emails are the primary targets of employee monitoring. e) Most large companies monitor their employees’ email and Internet usage. 66. Nineteenth-century common law permitted employers to discipline or discharge employees at their discretion. This concept is the basis for a) the employment-at-will doctrine. b) the hot stove policy. c) property rights. d) employee surveillance. e) labor arbitration. 67. Joan was fired for booking her modeling jobs from her desk as secretary for a manufacturing firm. She had business cards printed for her part time modeling agency with her office phone, email, and mailing address. The other secretaries had complained that they took personal (modeling) calls for her when she was absent from the office. She claimed that during her job interview she had been told about the company flexibility and the low demands on workers. She said employees were encouraged to develop other interests and skills. What type of wrongful discharge suit could she file? a) Contractual relationship. b) Breach of good faith. c) Statutory considerations. d) Public policy violation. e) Implied contract. 68. Erica was fired for refusing to sign her name to a financial report that she knew was inaccurate. What type of wrongful discharge suit could she file? a) Public policy violation. b) Breach of good faith. c) Employment-at-will doctrine. d) Contractual relationship. e) Implied contract. 69. Which of the following is not an exception to the employment-at-will doctrine? a) Contractual relationship b) Public policy violations c) Implied employment contract d) Closed employment clause e) Statutory considerations. 70. Diane had been Frank\'s secretary for 35 years. Frank fired Diane last month because he could hire an entry-level secretary for about half the money he paid Diane. What type of wrongful discharge suit could Diane file? a) Contractual relationship. b) Breach of good faith. c) Statutory considerations. d) Public policy violation. e) Implied employment contract. 71. Carrying a concealed weapon, gross insubordination, and sexually harassing another employee are examples of which type of disciplinary problem? a) Attendance. . b) On-the-job behaviors. c) Dishonesty. d) Outside activities. e) Shirking 72. Chris and David both arrived one hour late for work today. Chris was fired. David was given a verbal warning. Such disparate treatment for the same offense could be considered fair and equitable for all of these reasons except a) Chris was a long term employee. David was a new hire. b) Chris comes in late three or four days a week. He has been warned repeatedly about consequences for such behavior. David has never been late before. c) Chris has proven to be an unreliable employee. He is inaccurate and late in written work. He often misses meetings that he says he attends. David is a reliable employee in other aspects of the job. d) Upper management demands that time rules be followed by all employees. e) Chris missed the annual board review. David had nothing scheduled until noon. 73. Debbie is ready to fire Sharon, a new employee who tends to do only the work that she wants to do. Debbie found customer receipts in the trash 3 days last week, not in the appropriate customer files. She knows that Sharon does not like to file. Debbie has scheduled Sharon for the clerical skills course offered next month. There is a half day in that course devoted to upholding the organization’s standards of acceptable behavior. What contingency factor is Debbie considering as she begins the disciplinary process? a) Nature and extent of the problem. b) Extenuating circumstances. c) Severity of the problem. d) Management backing. e) Degree of socialization 74. Sharon has been disruptive and unprepared for several important meetings in the past few weeks. Debbie, her boss, hesitates to fire her. Debbie’s boss frequently brags that no employee in his division has ever been fired. Why is Debbie hesitating? a) Nature and extent of the problem. b) Extenuating circumstances. c) Severity of the problem. d) Organization history. e) Degree of socialization. 75. Sharon has been disruptive and unprepared for several important meetings in the past few weeks. Debbie, her boss, hesitates to fire Sharon because she has been an excellent employee for over five years. Debbie decides to talk to Sharon about any issues or distractions that might be affecting her work. Why is Debbie hesitating? a) Nature and extent of the problem. b) Extenuating circumstances. c) Severity of the problem. d) Organization history. e) Management backing. 76. Sam is a night watchman for a small computer manufacturer. He is working his way through college and usually either sleeps or does his homework during his shift. His supervisor told him that homework was permissible, as long as he scanned the monitors every 10 minutes and walked the building every hour. Sleeping, however, is grounds for dismissal. Sam has been written up two times for sleeping during his work shift. After the last time, he was told there would be no more chances. Last week, $1 million worth of equipment vanished from inventory. When the thieves were caught, they mentioned the sleeping night watchman. Sam’s boss fired him immediately, yelling at him that he was just like his brother, a no good lazy bum. What was wrong with the boss’ actions? a) The boss should not have made personal comments. b) Sam should have been warned. c) The boss should have waited several weeks before firing Sam. d) Sam should be transferred to a less responsible job. e) The boss should have inquired about extenuating circumstances in the offense. 77. Cindy, a college secretary, discarded transcript updates instead of filing them. David, the dean, spoke to Cindy this

Accounting All in One For Dummies (2014). Table of Contents Introduction................................................................. 1 About This Book ..............................................................................................1 Foolish Assumptions.......................................................................................2 Icons Used in This Book .................................................................................2 Beyond the Book .............................................................................................3 Where to Go from Here...................................................................................3 Book I: Setting Up Your Accounting System ................... 5 Chapter 1: Grasping Bookkeeping and Accounting Basics 7 Knowing What Bookkeeping and Accounting Are All About .....................8 Distinguishing between bookkeeping and accounting......................8 Taking a panoramic view of bookkeeping and accounting ..............9 Wrapping Your Brain around the Accounting Cycle ................................10 Working the Fundamental Accounting Equation.......................................14 Chapter 2: Outlining Your Financial Road Map with a Chart of Accounts 17 Getting to Know the Chart of Accounts......................................................17 Connecting the chart of accounts to financial statements.............18 Organizing the accounts .....................................................................18 Balancing transactions........................................................................19 Setting Up Your Chart of Accounts .............................................................20 Mulling Over Debits versus Credits ............................................................21 Understanding Double-Entry Accounting...................................................22 Revisiting the balance sheet equation ..............................................22 Recording journal entries ...................................................................22 Figuring out a complex journal entry................................................24 Chapter 3: Using Journal Entries and Ledgers 27 Keeping a Journal ..........................................................................................27 Using journals to record cash transactions .....................................28 Recording accrual transactions.........................................................31 Exploring other journals .....................................................................33 Checking out examples of common journal entries........................35 Bringing It All Together in the Ledger ........................................................37 Realizing what a ledger is ...................................................................37 Posting to the ledgers .........................................................................38viii Accounting All-In-One For Dummies Viewing an example of a general ledger............................................38 Recognizing the purpose of the trial balance ..................................39 Putting Accounting Software to Work for You...........................................40 Chapter 4: Choosing an Accounting Method 43 Distinguishing between Cash and Accrual Basis.......................................43 The cash basis......................................................................................44 The accrual basis.................................................................................45 Sorting through Standards for Other Types of Accounting.....................46 Managerial accounting........................................................................47 Not-for-profit accounting ....................................................................47 Governmental accounting...................................................................48 International accounting.....................................................................49 Considering the Conceptual Framework of Financial Accounting..........49 The objective of financial reporting ..................................................50 Characteristics of accounting information.......................................50 Elements of the financial statements ................................................51 Financial statement measurements...................................................52 Book II: Recording Accounting Transactions ................. 53 Chapter 1: Keeping the Books 55 Analyzing the Effect of Business Transactions..........................................55 Revisiting the fundamental accounting equation............................56 Getting familiar with accounts ...........................................................56 Defining debits and credits.................................................................57 Knowing more about the transaction methodology .......................57 Managing Your Bookkeeping and Accounting System .............................58 Categorizing your financial information: The chart of accounts........................................................................................58 Standardizing source document forms and processing procedures ............................................................59 Hiring competent personnel...............................................................60 Enforcing strong internal controls ....................................................62 Wrapping Up with End-of-Period Procedures............................................63 Tidying up the books...........................................................................63 Leaving good audit trails ....................................................................64 Staying alert for unusual events and developments .......................64 Designing truly useful reports for managers....................................65 Chapter 2: Tracking Purchases 67 Keeping Track of Inventory..........................................................................68 Entering initial cost..............................................................................69 Managing inventory and its value......................................................71Table of Contents ix Buying and Monitoring Supplies..................................................................75 Staying on Top of Your Bills.........................................................................76 Segregating duties to prevent theft ...................................................76 Taking advantage of discounts ..........................................................77 Chapter 3: Counting Your Sales 79 Collecting on Cash Sales...............................................................................79 Discovering the value of sales receipts ............................................80 Recording cash transactions in the books .......................................81 Selling on Credit.............................................................................................82 Deciding whether to offer store credit..............................................82 Recording store credit transactions in the books...........................83 Proving Out the Cash Register.....................................................................85 Tracking Sales Discounts..............................................................................86 Recording Sales Returns and Allowances ..................................................87 Monitoring Accounts Receivable.................................................................89 Accepting Your Losses .................................................................................89 Chapter 4: Processing Employee Payroll and Benefits 91 Staffing Your Business ..................................................................................91 Completing government forms ..........................................................92 Picking pay periods .............................................................................96 Determining wage and salary types ..................................................97 Collecting Employee Taxes ..........................................................................98 Sorting out Social Security tax ...........................................................98 Making sense of Medicare tax ............................................................98 Figuring out federal withholding tax .................................................99 Settling up state and local withholding taxes ................................100 Determining Net Pay ...................................................................................100 Surveying Your Benefits Options ..............................................................101 Tax-exempt benefits ..........................................................................101 Taxable benefits.................................................................................102 Dealing with cafeteria plans .............................................................102 Preparing Payroll and Posting It in the Books.........................................103 Calculating payroll for hourly employees ......................................103 Doling out funds to salaried employees .........................................104 Totaling up for commission checks ................................................104 Putting it together to prepare payroll.............................................106 Depositing Employee Taxes .......................................................................107 Chapter 5: Computing and Reporting Payroll Taxes 111 Paying Employer Taxes on Social Security and Medicare .....................111 Filing Form 941 ...................................................................................112 Knowing how often to file .................................................................113x Accounting All-In-One For Dummies Completing Unemployment Reports and Paying Unemployment Taxes..............................................................................113 How states calculate the FUTA tax rate..........................................114 Calculating FUTA tax .........................................................................114 Filing and paying unemployment taxes to state governments ....118 Carrying Workers’ Compensation Insurance...........................................118 Maintaining Employee Records .................................................................120 Book III: Adjusting and Closing Entries...................... 123 Chapter 1: Depreciating Your Assets 125 Defining Depreciation..................................................................................125 Knowing what you can and can’t depreciate .................................126 Figuring out the useful life of a fixed asset .....................................127 Delving into cost basis ......................................................................128 Evaluating Your Depreciation Options.....................................................128 Walking through the straight-line method .....................................130 Accelerating by using declining balance ........................................130 Calculating sum-of-the-years’-digits ................................................132 Using the units-of-production method............................................133 Seeing how the methods compare ..................................................133 Figuring partial year depreciation ...................................................135 Tackling Taxes and Depreciation ..............................................................135 Section 179..........................................................................................136 MACRS.................................................................................................136 Chapter 2: Paying and Collecting Interest 137 Deciphering Types of Interest....................................................................137 Simple interest ...................................................................................138 Compound interest............................................................................138 Handling Interest Income ...........................................................................139 Delving into Loans and Interest Expenses ...............................................140 Short-term debt..................................................................................140 Long-term debt...................................................................................143 Chapter 3: Proving Out the Cash 147 Why Prove Out the Cash?...........................................................................147 Making Sure Ending Cash Is Right .............................................................148 Closing the Cash Journals ..........................................................................150 Finalizing cash receipts.....................................................................150 Finalizing cash outlays ......................................................................154 Using a Temporary Posting Journal..........................................................155 Chapter 4: Reconciling Accounts and Closing Journal Entries 157 Reconciling Bank Accounts........................................................................157 Tracking down reconciling items ....................................................159 Using a computerized system ..........................................................160Table of Contents xi Posting Adjustments and Corrections......................................................161 Prepping to Close: Checking for Accuracy and Tallying Things Up..................................................................................................162 Paying attention to initial transaction details................................162 Summarizing journal entries ............................................................163 Analyzing summary results ..............................................................167 Planning for cash flow .......................................................................168 Posting to the General Ledger ...................................................................168 Checking Out Computerized Journal Records.........................................169 Chapter 5: Checking Your Accuracy 175 Working with a Trial Balance.....................................................................175 Conducting your trial balance..........................................................176 Dealing with trial balance errors .....................................................178 Testing Your Balance by Using Computerized Accounting Systems....179 Developing a Financial Statement Worksheet .........................................181 Replacing Worksheets with Computerized Reports ...............................183 Chapter 6: Adjusting the Books 185 Adjusting All the Right Areas .....................................................................185 Depreciating assets ...........................................................................187 Allocating prepaid expenses ............................................................188 Counting inventory............................................................................189 Allowing for bad debts ......................................................................190 Recognizing unpaid salaries and wages..........................................193 Testing an Adjusted Trial Balance ............................................................194 Book IV: Preparing Income Statements and Balance Sheets .................................................. 195 Chapter 1: Brushing Up on Accounting Standards 197 Exploring the Origins of Accounting Standards ......................................198 Recognizing the Role of the American Institute of Certified Public Accountants (AICPA)...............................................................................199 Tying together regulators for audits of publicly traded companies ..........................................................................199 ASB audit and attestation standards...............................................200 AICPA Code of Professional Conduct..............................................201 Checking Out the U.S. Securities and Exchange Commission (SEC).....202 Getting to Know the Financial Accounting Standards Board (FASB) .......203 Understanding generally accepted accounting principles (GAAP) ..........................................................................204 Looking online for FASB standards .................................................205 Pick a standard: Domestic or international....................................205xii Accounting All-In-One For Dummies Chapter 2: Preparing an Income Statement and Considering Profit 207 Understanding the Nature of Profit...........................................................207 Choosing the Income Statement Format ..................................................208 Deciding What to Disclose in the Income Statement..............................210 Considering expense disclosure......................................................210 Presenting the right amount of expense information ...................210 Examining How Sales and Expenses Change Assets and Liabilities ...........................................................................................211 Sizing up a business’s financial condition ......................................211 Noting how accounting transactions affect the income statement and balance sheet........................................................212 Considering the Diverse Financial Effects of Making a Profit ................214 Introducing T-accounts.....................................................................214 Combining activity into one journal entry......................................215 Explaining additional transactions related to profit .....................216 Reporting Extraordinary Gains and Losses .............................................217 Segregating the income statement ..................................................217 Considering business disruptions ...................................................217 Questioning whether activity is truly unusual...............................219 Correcting Common Misconceptions about Profit .................................220 Clearing up profit misconceptions ..................................................220 Comparing to industry standards....................................................221 Waving the red flag when you see revenue and credit sales increase .................................................................................221 Chapter 3: Assessing the Balance Sheet’s Asset Section 223 Homing in on Historic Cost ........................................................................224 Discovering What Makes an Asset Current..............................................224 Cash .....................................................................................................224 Short-term investments ....................................................................226 Accounts receivable ..........................................................................227 Notes receivable ................................................................................230 Inventory.............................................................................................230 Prepaid expenses...............................................................................232 Keeping Track of Noncurrent (Long-Term) Assets.................................232 Meeting the tangibles: Property, plant, and equipment (PP&E)..................................................................233 Investigating intangible assets.........................................................235 Exploring the Asset Section of the Balance Sheet...................................237 Chapter 4: Digging for Debt in the Balance Sheet’s Liabilities Section 239 Seeing How Businesses Account for Liabilities .......................................239 Keeping Current Liabilities under Control...............................................241 Accounts payable ..............................................................................242 Payroll and taxes................................................................................243Table of Contents xiii Unearned revenue..............................................................................244 Other short-term liabilities...............................................................244 Planning for Long-Term Obligations .........................................................246 Financing asset purchases with debt versus equity .....................247 Managing long-term debt..................................................................247 Anticipating contingent liabilities....................................................248 Accounting for Bond Issuances .................................................................249 Mulling over bond basics..................................................................249 Examining sample bond transactions .............................................250 Journaling bond transactions ..........................................................251 Chapter 5: Explaining Ownership in the Equity Section of the Balance Sheet 253 Understanding How Owner Equity Varies among Business Entities......................................................................................253 Sole proprietorship ...........................................................................253 Partnership.........................................................................................254 Corporation ........................................................................................255 Distinguishing between Two Types of Capital Stock..............................255 Preferred stock...................................................................................255 Common stock ...................................................................................256 Recording stock transactions on the balance sheet .....................256 Defining Paid-In Capital...............................................................................257 Recording Retained Earnings.....................................................................258 Spotting Reductions to Stockholders’ Equity ..........................................258 Paying dividends................................................................................259 Buying back shares: Treasury stock ...............................................261 Exploring Stock Splits .................................................................................261 Computing Earnings per Share ..................................................................262 Simple capital structure....................................................................262 Complex capital structure ................................................................263 Chapter 6: Coupling the Income Statement and Balance Sheet 265 Rejoining the Income Statement and Balance Sheet...............................266 Seeing connections between accounts ...........................................266 Using transactions to explain the connections..............................267 Introducing Operating Ratios.....................................................................269 Comparing expected with actual operating ratios ........................269 Generating balance sheet amounts by using ratios ......................270 Adding Fixed Assets, Depreciation, and Owners’ Equity .......................273 Dealing with fixed assets and depreciation....................................273 Tacking on owners’ equity................................................................275 Completing the Balance Sheet with Debt .................................................276 Going over the debt section of the balance sheet.........................276 Tying in the new equity section.......................................................277xiv Accounting All-In-One For Dummies Book V: Reporting on Your Financial Statements......... 279 Chapter 1: Presenting Financial Condition and Business Valuation 281 Clarifying the Values of Assets in Balance Sheets...................................281 Considering options for balance sheet valuation..........................282 Comparing two balance sheet valuations.......................................283 Introducing Business Valuation.................................................................285 Grasping the practical applications of business valuations ........285 Considering a CVA designation........................................................286 Comparing Business Valuation Methods .................................................287 Replacing assets: Replacement value .............................................287 Using future earnings and cash flow ...............................................288 Chapter 2: Laying Out Cash Flows and Changes in Equity 291 Understanding the Difference between Cash and Profit ........................291 Seeing how noncash transactions affect profit..............................292 Distinguishing costs from expenses................................................292 Realizing the Purpose of the Statement of Cash Flows...........................293 Walking through the Cash Flow Sections .................................................294 Figuring cash operating results .......................................................295 Showing cash investing transactions..............................................297 Accounting for financing activities..................................................298 Recognizing Methods for Preparing the Statement of Cash Flows .......299 Using the direct method ...................................................................301 Starting indirectly with net income.................................................302 Interpreting the Statement of Cash Flows................................................303 Looking Quickly at the Statement of Changes in Stockholders Equity ............................................................................304 Chapter 3: Analyzing Financial Statements 305 Judging Solvency and Liquidity.................................................................305 Understanding the risks of late payments......................................306 Recognizing current assets and liabilities......................................306 Brushing up on current and quick ratios........................................308 Understanding That Transactions Drive the Balance Sheet..................310 Analyzing three types of balance sheet transactions ...................310 Reviewing changes in balance sheet accounts ..............................311 Measuring Profitability ...............................................................................312 Understanding trend analysis ..........................................................313 Focusing on return on investment...................................................314 Homing in on return on equity.........................................................315 Exploring Activity Measures ......................................................................315 Accounts receivable turnover..........................................................316 Inventory turnover ............................................................................317Table of Contents xv Comparing Horizontal and Vertical Analysis...........................................317 Using horizontal analysis..................................................................318 Implementing vertical analysis ........................................................319 Using Common Size Financial Statements................................................320 Chapter 4: Reading Explanatory Notes and Disclosures 321 Realizing How Corporations Should Govern Themselves......................321 Identifying Corporate Characteristics ......................................................322 Reviewing Common Explanatory Notes ...................................................324 Leveling the playing field among financial statements .................324 Explaining significant accounting policies .....................................325 Looking for important event disclosures .......................................328 Putting the Onus on the Preparer .............................................................332 Chapter 5: Studying the Report to the Shareholders 335 Why Private and Public Companies Treat Annual Reports Differently .................................................................................................336 Fulfilling Three Purposes............................................................................337 Serving a marketing and PR function ..............................................337 Stating financial performance and goals.........................................337 Meeting regulatory requirements....................................................338 Reading the Annual Report to Shareholders ...........................................338 Meeting the chair of the board of directors...................................339 Highlighting key financial data.........................................................339 Touting company achievements......................................................341 Looking into the future......................................................................341 Getting to know key management and board members ...............342 Walking through Form 10-K........................................................................342 Facing page: Identifying the affected company..............................343 Part I: Finding out more about the registrant ................................343 Part II: Revealing the company’s financial performance ..............343 Part III: Identifying management and corporate governance.......345 Part IV: Exhibits, financial statement schedules, and signature..........................................................................................346 Book VI: Planning and Budgeting for Your Business.... 347 Chapter 1: Incorporating Your Business 349 Securing Capital: Starting with Owners ....................................................349 Contrasting two sources of equity ..................................................350 Leveraging equity capital with debt................................................352 Recognizing the Legal Roots of Business Entities...................................353 Incorporating a Business............................................................................354 Issuing stock shares ..........................................................................355 Offering different classes of stock shares.......................................355xvi Accounting All-In-One For Dummies Determining market value of stock shares.....................................357 Keeping alert for dilution of share value ........................................358 Recognizing conflicts between stockholders and managers .......360 Chapter 2: Choosing a Legal Structure for a Business 361 Differentiating between Partnerships and Limited Liability Companies .................................................................................361 Partnerships .......................................................................................362 Limited liability company (LLC) ......................................................363 Limiting liability: Professional corporations and LLPs.................363 Understanding how partnerships and LLCs distribute profits....364 Going It Alone: Sole Proprietorships.........................................................365 Describing a sole proprietorship.....................................................365 Understanding liability and financial reporting.............................365 Choosing the Right Legal Structure for Income Tax ...............................366 C corporations ...................................................................................366 S corporations....................................................................................368 Partnerships and LLCs......................................................................369 Summing up the legal structure issue.............................................370 Chapter 3: Drawing Up a Business Plan to Secure Cash 371 Outlining the Basic Business Plan.............................................................371 The executive summary....................................................................372 The market assessment ....................................................................373 The operational overview.................................................................374 The financial summary: Performance and required capital.........374 Developing a Business Plan........................................................................375 Recognizing the evolution of business plans: BOTE, WAG, and SWAG........................................................................................375 Getting the process going.................................................................377 Analyzing and streamlining information with SWOT and KISS....378 Incorporating Third-Party Information into Your Plan...........................380 Gathering the info ..............................................................................381 Riding the CART concept: Complete, accurate, reliable, and timely ........................................................................381 Chapter 4: Budgeting for a Better Bottom Line 383 Brushing Up on Budgeting Basics .............................................................383 Meeting the master budget...............................................................384 Understanding key budgeting concepts .........................................384 Planning strategically........................................................................385 Recognizing Factors That Impact Your Budgeting Process...................385 Experience counts .............................................................................386 Timing is everything..........................................................................386 People get you headed in the right direction.................................387 Sales projections pay off...................................................................387 The Nuts and Bolts of Budgeting...............................................................388 Understanding the budgeting financials.........................................389 Reviewing revenue and production budgets .................................392Table of Contents xvii Chapter 5: Mastering and Flexing Your Budgeting 395 Budgeting with Cash or Accrual Accounting ...........................................395 Cash basis accounting: Using your checkbook to budget............396 I accrue, you accrue, we all accrue with accrual accounting ......398 Budgeting to Produce the Income Statement and Balance Sheet .........398 The well-balanced balance sheet.....................................................399 The incredible income statement....................................................399 Flexing Your Budget: When Plans Change ...............................................400 Controlling your business.................................................................400 Dealing with budget variances.........................................................401 Implementing a flexible budget........................................................402 Chapter 6: Planning for Long-Term Obligations 407 Managing Long-Term Debt .........................................................................407 The many faces of notes payable ....................................................408 Treasury bonds defined....................................................................413 The dark side of debt-free.................................................................414 Accounting for Bonds .................................................................................415 Valuing bonds payable......................................................................415 Figuring out the present value of a bond........................................416 Issuing at face value ..........................................................................417 Book VII: Making Savvy Business Decisions ............... 419 Chapter 1: Estimating Costs with Job Costing 421 Understanding How Job Costing Works ...................................................421 Cost objects: The sponges that absorb money .............................422 Charging customers for direct and indirect costs.........................423 Implementing job costing in manufacturing: An example................425 Taking a Closer Look at Indirect Costs by Using Normal Costing.........428 Budgeting for indirect costs.............................................................429 Following a normal job costing system...........................................430 Following the Flow of Costs through a Manufacturing System .............432 Control starts with control accounts..............................................432 Walking through a manufacturing cost example ...........................433 Applying the methodology to other control accounts .................435 Chapter 2: Performing Activity-Based Costing 437 Avoiding the Slippery Slope of Peanut Butter Costing ...........................437 Recognizing a single indirect cost allocation.................................438 A fly in the peanut butter: Dealing with different levels of client activity..............................................................................439 Undercosting and overcosting.........................................................440 Designing an Activity-Based Costing System...........................................442 Refining your approach.....................................................................442 Grouping costs by using a cost hierarchy......................................443 Testing your ABC design...................................................................444xviii Accounting All-In-One For Dummies Using Activity-Based Costing to Compute Total Cost, Profit, and Sale Price ...........................................................................................448 Allocating indirect costs evenly by product ..................................449 Analyzing and reallocating cost activities......................................449 Changing allocations to cost pools .................................................450 Changing prices after ABC................................................................451 Chapter 3: Examining Contribution Margin 453 Computing Contribution Margin ...............................................................454 Figuring total contribution margin ..................................................454 Calculating contribution margin per unit .......................................456 Working out contribution margin ratio...........................................456 Preparing a Cost-Volume-Profit Analysis..................................................457 Drafting a cost-volume-profit graph ................................................457 Trying out the total contribution margin formula.........................459 Practicing the contribution margin per unit formula....................460 Eyeing the contribution margin ratio formula ...............................460 Generating a Break-Even Analysis.............................................................461 Plotting the break-even point...........................................................461 Using the formula approach.............................................................462 Shooting for Target Profit...........................................................................463 Observing Margin of Safety ........................................................................465 Using a graph to depict margin of safety........................................465 Calculating the margin of safety ......................................................465 Taking Advantage of Operating Leverage ................................................466 Graphing operating leverage............................................................466 Looking at the operating leverage formula ....................................467 Chapter 4: Accounting for Change with Variance Analysis 469 Setting Up Standard Costs..........................................................................469 Establishing direct materials standards .........................................470 Determining direct labor standards................................................472 Calculating the overhead rate..........................................................473 Adding up standard cost per unit....................................................474 Understanding Variances ...........................................................................474 Computing direct materials variances............................................475 Calculating direct labor variances...................................................478 Computing overhead variances .......................................................481 Looking past the favorable/unfavorable label ...............................482 Teasing Out Variances................................................................................483 Interpreting variances in action.......................................................483 Focusing on the big numbers...........................................................484 Tracing little numbers back to big problems.................................485 Chapter 5: Making Smart Pricing Decisions 487 Differentiating Products .............................................................................487 Taking All Costs into Account with Absorption Costing........................488Table of Contents xix Pricing at Cost-Plus .....................................................................................489 Computing fixed markups.................................................................489 Setting a cost-plus percentage .........................................................490 Considering problems with cost-plus pricing................................490 Extreme Accounting: Trying Variable-Cost Pricing.................................491 Working out variable-cost pricing ...................................................492 Spotting the hazards of variable-cost pricing ................................493 Bull’s-Eye: Hitting Your Target Cost..........................................................493 Calculating your target cost .............................................................494 Knowing when to use target costing ...............................................495 Book VIII: Handling Cash and Making Purchase Decisions................................................... 497 Chapter 1: Identifying Costs and Matching Costs with Revenue 499 Defining Costs and Expenses in the Business World..............................500 Satisfying the Matching Principle..............................................................500 Identifying Product and Period Costs.......................................................501 Discovering Which Costs Are Depreciated ..............................................501 Handling real property depreciation...............................................502 Allocating costs between land and buildings.................................502 Expensing repairs and maintenance ...............................................503 Preparing a Depreciation Schedule...........................................................503 Deciding When to Recognize Revenue......................................................505 Going over the revenue recognition principle...............................505 Recognizing revenue and cash flow ................................................506 Chapter 2: Exploring Inventory Cost Flow Assumptions 507 Discovering How Inventory Valuation Affects the Financial Statements.........................................................................507 Comparing merchandising and manufacturing companies .........508 Connecting inventory to revenue ....................................................508 Logging Inventory for Service Companies................................................509 Classifying Inventory Types.......................................................................509 Accounting for merchandising company inventory......................509 Accounting for manufacturing company inventory ......................512 Getting to Know Inventory Valuation Methods .......................................513 Understanding guidelines used for all methods ............................513 Specific identification........................................................................514 Weighted average ..............................................................................514 First-in, first-out (FIFO)......................................................................515 Last-in, first-out (LIFO)......................................................................515 Comparing inventory cost-flow assumptions ................................515 Preparing an Inventory Worksheet ...........................................................518xx Accounting All-In-One For Dummies Chapter 3: Answering the Question: Should I Buy That? 519 Identifying Incremental and Opportunity Costs......................................520 Keeping It Simple: The Cash Payback Method ........................................520 Using the cash payback method with equal annual net cash flows .................................................................................521 Applying the cash payback method when annual net cash flows change each year .................................................................522 It’s All in the Timing: The Net Present Value (NPV) Method.................523 Calculating time value of money with one payment for one year.....................................................................................524 Finding time value of money with one payment held for two periods or more .......................................................525 Calculating NPV with a series of future cash flows .......................526 Measuring Internal Rate of Return (IRR) ..................................................529 Considering Qualitative Factors ................................................................530 Chapter 4: Knowing When to Use Debt to Finance Your Business 533 Understanding the Basics of Debt Capital................................................534 Debt maturity .....................................................................................534 Debt security ......................................................................................535 Other debt attributes ........................................................................536 Determining When Debt Is Most Appropriate .........................................537 When you can offer security or collateral ......................................537 When business is stable....................................................................538 When you have financial strength ...................................................538 Using Loans, Leases, and Other Sources of Debt....................................539 Borrowing from banks.......................................................................539 Making friends with asset-based lenders........................................541 Leasing as a source of capital ..........................................................542 Tapping government programs and the SBA .................................543 Using other sources of debt-based capital.....................................544 Getting Creative with Capital .....................................................................545 Generating internal cash flow ..........................................................545 Leveraging unsecured creditors......................................................545 Going after government aid, gifts, and grants................................546 Partnering up......................................................................................546 Chapter 5: Interpreting Your Financial Results as a Manager 547 Gauging the Relative Importance of Information ....................................548 Reviewing Profit and Earnings ...................................................................548 Judging profit performance ..............................................................548 Testing earnings per share (EPS) against change in bottom line .................................................................................549 Judging the Company’s Cash Position......................................................551 Tackling Extraordinary Gains and Losses................................................552 Recognizing the Risks of Restatement......................................................553 Remembering the Limits of Financial Reports.........................................554Table of Contents xxi Book IX: Auditing and Detecting Financial Fraud ....... 555 Chapter 1: Mulling Over Sarbanes-Oxley Regulation 557 Pre-SOX Securities Laws.............................................................................558 The Securities Act of 1933: Arming investors with information.............................................................................558 The Securities Exchange Act of 1934: Establishing the SEC.........559 Other securities laws.........................................................................563 The Scope of SOX: Securities and Issuers ................................................563 Determining what a security is ........................................................564 Defining an issuer...............................................................................565 Figuring out how stock exchanges work.........................................566 Unveiling the SOX surprise...............................................................567 The Post-SOX Paper Trail ...........................................................................569 Form10-K ............................................................................................569 Form10-Q ............................................................................................570 Form 8-K..............................................................................................570 Chapter 2: Preventing Cash Losses from Embezzlement and Fraud 571 Setting the Stage for Protection.................................................................571 Preventing loss with internal controls............................................572 Recognizing the dual purpose of internal accounting controls ...........................................................................................573 Struggling with fraud committed by the business.........................574 Putting Internal Controls to Work .............................................................575 Going down the internal controls checklist ...................................576 Considering some important details of internal control ..............580 Recognizing Limitations of Internal Controls ..........................................582 Keeping internal controls under control ........................................583 Finding fraud that slips through the net.........................................583 Chapter 3: Assessing Audit Risk 585 Using the Audit Risk Model ........................................................................585 Listing the financial statements .......................................................586 Introducing audit risk........................................................................586 Inherent risk: Recognizing the nature of a client’s business........587 Control risk: Assessing a client’s ability to detect and correct problems ...........................................................................589 Detection risk: Figuring out your chances of overlooking inaccuracies..........................................................590 Following Risk Assessment Procedures ...................................................592 Recognizing the nature of the company .........................................593 Examining the quality of company management...........................593 Asking employees for information...................................................594 Analyzing processes and paperwork ..............................................595 Observing the client at work ............................................................596xxii Accounting All-In-One For Dummies Figuring Out What’s Material and What Isn’t...........................................597 Distinguishing errors from fraud .....................................................598 Explaining the triangle of fraud........................................................600 Evaluating Your Audit Risk Results...........................................................604 Tailoring the audit to a low-risk situation ......................................604 Responding to a high-risk assessment............................................605 Documenting audit risk results........................................................606 Chapter 4: Collecting and Documenting Audit Evidence 607 Management Assertions: Assessing the Information a Client Gives You....................................................................................608 Defining financial statement presentation and disclosure...........608 Monitoring classes of transactions .................................................609 Analyzing account balances .............................................................611 Eyeing the Four Concepts of Audit Evidence...........................................612 The nature of the audit evidence.....................................................612 The competence of the audit evidence...........................................613 The sufficiency of the audit evidence .............................................614 The evaluation of the audit evidence..............................................615 Applying Professional Judgment ...............................................................617 Exercising skepticism........................................................................617 Brainstorming with audit team members.......................................618 Using Your Audit Program to Request the Right Evidence....................620 Documenting the Audit Evidence..............................................................621 Types of documentation...................................................................621 Ownership and retention of the audit documentation .................624 Chapter 5: Auditing a Client’s Internal Controls 625 Defining Internal Controls ..........................................................................626 Identifying the Five Components of Internal Controls............................627 Determining When You Need to Audit Internal Controls.......................629 Defining substantive strategy and control testing strategy .........629 Figuring out which strategy is best .................................................630 Testing a Client’s Reliability: Assessing Internal Control Procedures .................................................................................631 Considering external factors ............................................................631 Evaluating how management assesses its controls ......................632 Using questionnaires to evaluate internal controls ......................634 Designing your tests of controls......................................................635 Using sampling to test internal controls.........................................636 Knowing when internal controls are sound or flawed ..................639 Documenting your conclusion .........................................................641 Limiting Audit Procedures When Controls Are Strong...........................641 Tailoring Tests to Internal Control Weaknesses .....................................642 Timing a Client’s Control Procedures.......................................................643 Setting a timeline for the client........................................................644 Conducting interim versus year-end audits ...................................644Table of Contents xxiii Chapter 6: Getting to Know the Most Common Fraud Schemes 647 Frauds Committed by Businesses .............................................................647 Preying on vulnerable populations .................................................648 Picking investors’ pockets................................................................648 Doing business with bribes ..............................................................649 Laundering money.............................................................................649 Perpetrating construction fraud......................................................650 Dealing in subprime and predatory lending...................................651 Taking advantage of employees.......................................................651 Frauds Committed against Businesses.....................................................652 Employee theft ...................................................................................653 Vendor and customer fraud .............................................................653 Insurance fraud ..................................................................................653 Real estate and mortgage fraud .......................................................654 Bilking the Government ..............................................................................655 Tax fraud.............................................................................................655 Contract fraud ....................................................................................658 Medicare and Medicaid fraud ..........................................................659 Social Security fraud..........................................................................660 Introducing the Ponzi Scheme...................................................................661 Chapter 7: Cooked Books: Finding Financial Statement Fraud 663 Exploring the Financial Statement Fraud Triangle..................................664 Understanding the incentive behind financial statement fraud ..............................................................................664 Seeing the fraud opportunity ...........................................................665 Coming up with a rationalization for the fraud..............................665 Spotting the Common Methods of Fraud .................................................666 Hidden liabilities ................................................................................666 Cookie jar reserves............................................................................667 Off–balance sheet transactions........................................................667 Notes no one can comprehend ........................................................668 Uncovering Financial Statement Fraud.....................................................669 Comparative techniques...................................................................669 Ratio analysis .....................................................................................670 Beneish model....................................................................................671 Data mining.........................................................................................672 Index....................................................................... 673

BUS 475 Capstone Final Examination Part 2...GUARANTEED A+ ANSWERS! GOOD LUCK PART 2 1. Sampling is used heavily in manufacturing and service settings to ensure high-quality products. In which of the following areas would sampling be inappropriate? Custom cabinet making Computer assembly Technical support by phone Cell phone manufacturing 2. The preparation of adjusting entries is: needed to ensure that the expense recognition principle is followed. straightforward because the accounts that need adjustment will be out of balance optional when financial statements are prepared. only required for accounts that do not have a normal balance. 3. What is an advantage of the correlation coefficient over the covariance? It falls between -1 and 1. It is a unit-free measure, therefore making it easier to interpret. It falls between -1 and 1; and it is a unit free measure, therefore making it easier to interpret. It falls between 0 and 1. 4. Interest may be included in the acquisition cost of a plant asset: during the construction period of a self-constructed asset. if the asset acquisition is financed by a long-term note payable. if the asset is purchased on credit. if it is a part of a lump-sum purchase. 5. Which trial balance will consist of the greatest number of accounts? Balance Adjusted trial balance Trial balance Post-closing trial balance 6. Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally: capitalized as a part of the cost of the asset. not recorded until they become material in amount. expensed when incurred. debited to the Accumulated Depreciation account. 7. A SWOT analysis is a framework for analyzing a firm’s environments. A SWOT is made up of Internal environmental analysis of threats and weaknesses. External analysis of strengths and opportunities. Internal threats and weakness and external strengths and opportunities. Internal strengths and weaknesses; external threats and opportunities. 8. GAAP, compared to IFRS, tends to be more: simple in disclosure requirements simple in accounting requirements principles-based rules-based 9. Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is: the idea that organizations are solely responsible to local citizens the idea that businesses are responsible to maintain a healthy social climate for their employees the expectation that business will strive to improve the overall welfare of society the fact that court costs could impact the financial bottom line 10. Which of the following can be represented by a continuous random variable? The number of typos found on a randomly selected page of this test bank The number of students who will get financial assistance in a group of 50 randomly selected students The number of customers who visit a department store between 10:00 a.m. and 11:00 a.m. on Mondays The average temperature in Tampa, Florida, during the month of July 11. According to value-chain analysis, which of the following would be considered part of the general administration in a firm? procurement technology development information systems human resource management 12. Which of the following can be represented by a discrete random variable? The number of defective light bulbs in a sample of five The average distance achieved in a series of long jumps The circumference of a randomly generated circle The time of a flight between Chicago and New York 13. Sarbanes Oxley applies to: U.S and international companies. international companies but not U.S. companies. U.S. and Canadian companies but not other international companies. U.S companies but not international companies. 14. Vertical analysis is a technique that expresses each item in a financial statement: as a percent of the item in the previous year. starting with the highest value down to the lowest value. in dollars and cents. as a percent of a base amount. 15. The owner of a company has recently decided to raise the salary of one employee, who was already making the highest salary, by 20%. Which of the following is(are) expected to be affected by this raise? Mean, median, and mode Median only Mean and median only Mean only 16. Which of the following meets the requirements of a simple random sample? A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people chosen at random, without regard to age. A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include two people chosen at random under the age of 25 and four people chosen at random over 25. A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people who volunteer for the sample. A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six males chosen at random, without regard to age. 17. The acquisition of treasury stock by a corporation: decreases its total assets and total stockholders’ equity. requires that a gain or loss be recognized on the income statement. increases its total assets and total stockholders’ equity. has no effect on total assets and total stockholders’ equity. 18. Under the accrual basis of accounting: the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. cash must be received before revenue is recognized. events that change a company’s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. net income is calculated by matching cash outflows against cash inflows. 19. The acquisition of treasury stock by a corporation: has no effect on total assets and total stockholders’ equity. decreases its total assets and total stockholders’ equity. increases its total assets and total stockholders’ equity. requires that a gain or loss be recognized on the income statement. 20. In multiple regression, plot the residuals against ____ to detect changing variability. Collinear variables All explanatory variables The response variable The predicted values 21. The resource-based view (RBV) of the firm combines two perspectives: the interrelationships among the primary activities of the firm and corporate management the industry and the competitive environment the internal analysis of the firm and the external analysis of the industry and competitive environment the primary and support activities of the firm 22. Cost allocation of an intangible asset is referred to as: accretion capitalization depreciation amortization 23. The fraud triangle applies to: U.S. and Canadian companies, but not other international companies. U.S companies but not international companies. international companies but not U.S. companies. U.S and international companies. 24. On March 1st, Candy, Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800. The March 31st balance sheet should report what balance in their supplies account? $1,600 $1,500 $2,900 $2,800 25. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. using related diversification to achieve value by integrating vertically in order to acquire market power using related diversification to achieve value by pooling negotiating power to achieve market power using related diversification to achieve value by leveraging core competencies to achieve economies of scope using related diversification to achieve value by integrating vertically in order to attain economies of scope 26. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows. Does not represent a cash flow. Financing activities section. Investing activities section. Operating activities section. 27. __________involves ensuring proper strategic controls and organizational designs. Strategy implementation Business-level strategy Corporate-level strategy Corporate governance 28. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager’s bonus if FIFO is adopted instead of LIFO? $9,000 $1,800 $6,300 $12,600 29. Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company’s checkbook for subsequent misappropriation of funds? Tracing any debit memorandums from the bank to the company’s records A review of the cash budget An accounting policies manual The use of pre-numbered checks 30. Which of the following is not a current liability on December 31, 2014? A Note Payable due December 31, 2015 A lawsuit judgment to be decided on January 10, 2015 An Accounts Payable due January 31, 2015 Accrued salaries payable from 2014 31. When collection is made on Accounts Receivable, Stockholders equity will increase. total assets will remain the same. total assets will decrease. total assets will increase. 32. Which financial statement would best indicate whether the company relies on debt or stockholders’ equity to finance its assets? Retained earnings statement Statement of cash flows Income statement Balance sheet 33. Is it possible for a data set to have no mode? No, if the data set is nonempty, there is always a mode No, unless there is an odd number of observations Yes, if there are no observations that occur more than once Yes, if two observations occur twice 34. An analyst believes the probability that U.S. stock returns exceed long-term corporate bond returns over a 5-year period is based on personal assessment. This type of probability is best characterized as a(n) ____________. Empirical probability A priori probability Objectivity probability Subjective probability 35. Continuous monitoring in the contemporary approach, is beneficial because _____________. organization response time is increased it increases the time it takes to detect changes in the competitive environment It reduces time lags organizational flexibility is reduced 36. WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a: Strategic objective Line manger’s individual goal Vague statement of direction Vision statement 37. A post-closing trial balance will show: zero balances for all accounts only income statement accounts only balance sheet accounts zero balances for balance sheet accounts 38. Which of the following requirements about internal controls were enacted under the Sarbanes Oxley Act: Independent outside auditors must eliminate redundant internal controls. Companies must develop sound internal controls over financial reporting. Companies must assess the functionality of internal controls only when a violation occurs. Internal auditors replace independent outside auditors when evaluating the level of internal control. 39. Which of these statements regarding the industry life cycle is correct? Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives. Trends suggested by the market life cycle model are generally not reversible or repeatable. 40. International Financial Reporting Standards (IFRS): implies that receivables with different characteristics should be reported separately. implies that receivables with different characteristics should be reported as one un-segregated amount. requires that receivables with different characteristics should be reported separately. requires that receivables with different characteristics should be reported as one un-segregated amount. 41. In a simple linear regression model, if the plots on a scatter diagram lie on a straight line, what is the standard error of the estimate? Infinity 0 -1 1 42. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. using related diversification to achieve value by integrating vertically in order to attain economies of scope using related diversification to achieve value by pooling negotiating power to achieve market power using related diversification to achieve value by integrating vertically in order to acquire market power using related diversification to achieve value by leveraging core competencies to achieve economies of scope 43. The four key attributes of strategic management include the idea that: Strategy must be focused on long-term objectives. Strategy must be focused on one specific area of an organization. Strategy must be directed toward overall organizational goals and objectives. Strategy must be focused on competitor strengths. 44. If a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? $120,000 $280,000 $400,000 $4,000,000 45. Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was: 1-for-8 4-for-1 8-for-1 2-for-8 46. You work in marketing for a company that produces work boots. Quality control has sent you a memo detailing the length of time before the boots wear out under heavy use. They find that the boots wear out in an average of 208 days, but the exact amount of time varies, following a normal distribution with a standard deviation of 14 days. For an upcoming ad campaign, you need to know the percent of the pairs that last longer than six months-that is, 180 days. Use the empirical rule to approximate this percent. 95% 97.5% 5% 2.5% 47. What is a difference between merchandising companies and service enterprises? Cost of goods sold is an expense for service enterprises but not for merchandising companies. The operations in merchandising companies and service enterprises are identical. Merchandising companies must prepare multiple-step income statements and service enterprises must prepare single-step income statements. Merchandising companies generally have a longer operating cycle than service enterprises. 48. For both qualitative and quantitative data, what is the difference between the relative frequency and the percent frequency? The percent frequency equals the relative frequency multiplied by 100 As opposed to the percent frequency, the relative frequency is divided by the number of observations the data set. The relative frequency equals the percent frequency multiplied by 100. The percent frequency equals the relative frequency multiplied by 100 49. According to the text the triple bottom line approach to corporate accounting includes three components: financial, organizational, and customer financial, environmental, and customer financial, organizational, and psychological financial, environmental, and social 50. As opposed to the relative frequency, the percent frequency is divided by the number of observations in the data set. Trumpeting Trumpets has the following inventory data: July 1: Beginning inventory 30 units at $120 July 5: Purchases 180 units at $112 July 14: Sale 120 units July 21: Purchases 90 units at $115 July 30: Sale 84 units Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis? $10,992 $23,118 $11,022 $23,088 (90 × $115) [(120 84 − 90) × $112] = $23,118 51. For both qualitative and quantitative data what is the difference between the relative frequency and the percent frequency? The percent frequency equals the relative frequency multiplied by 100 As opposed to the percent frequency, the relative frequency is divided by the number of observations the data set. The relative frequency equals the percent frequency multiplied by 100. The percent frequency equals the relative frequency multiplied by 100

BUS 475 Capstone Final Examination Part 2 (Already graded A+) BUS 475 Capstone Final Examination Part 2 Vertical analysis is a technique that expresses each item in a financial statement: • in dollars and cents. • as a percent of the item in the previous year. • starting with the highest value down to the lowest value. • as a percent of a base amount. Under the accrual basis of accounting: • cash must be received before revenue is recognized. • net income is calculated by matching cash outflows against cash inflows. • events that change a company\'s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. • the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager\'s bonus if FIFO is adopted instead of LIFO? • $6,300 • $1,800 • $9,000 • $12,600 For both qualitative and quantitative data, what is the difference between the relative frequency and the percent frequency? The percent frequency equals the relative frequency multiplied by 100 • The relative frequency equals the percent frequency multiplied by 100. • As opposed to the relative frequency, the percent frequency is divided by the number of observations in the data set. • The percent frequency equals the relative frequency multiplied by 100 • As opposed to the percent frequency, the relative frequency is divided by the number of observations in the data set. 5 In multiple regression, plot the residuals against ____ to detect changing variability. • Collinear variables • All explanatory variables • The predicted values • The response variable 6 What is an advantage of the correlation coefficient over the covariance? • It falls between -1 and 1; and it is a unit free measure, therefore making it easier to interpret. • It falls between 0 and 1. • It is a unit-free measure, therefore making it easier to interpret. • It falls between -1 and 1. 7 __________involves ensuring proper strategic controls and organizational designs. • Corporate-level strategy • Business-level strategy • Corporate governance • Strategy implementation 8 Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was: • 8-for-1 • 2-for-8 • 1-for-8 • 4-for-1 9 A post-closing trial balance will show: • zero balances for all accounts • only balance sheet accounts • only income statement accounts • zero balances for balance sheet accounts 10 Sarbanes Oxley applies to: • U.S and international companies. • U.S. and Canadian companies but not other international companies. • international companies but not U.S. companies. • U.S companies but not international companies. 11 The acquisition of treasury stock by a corporation: • decreases its total assets and total stockholders’ equity. • increases its total assets and total stockholders’ equity. • has no effect on total assets and total stockholders’ equity. • requires that a gain or loss be recognized on the income statement. 12 Trumpeting Trumpets has the following inventory data: July 1: Beginning inventory 30 units at $120 July 5: Purchases 180 units at $112 July 14: Sale 120 units July 21: Purchases 90 units at $115 July 30: Sale 84 units Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis? • $23,088 • $11,022 • $10,992 • $23,118 13 A SWOT analysis is a framework for analyzing a firm’s environments. A SWOT is made up of • Internal threats and weakness and external strengths and opportunities. • Internal environmental analysis of threats and weaknesses. • External analysis of strengths and opportunities. • Internal strengths and weaknesses; external threats and opportunities. 14 WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a: • Strategic objective • Line manger’s individual goal • Vague statement of direction • Vision statement 15 Continuous monitoring, in the contemporary approach, is beneficial because _____________. • organization response time is increased • organizational flexibility is reduced • It reduces time lags • it increases the time it takes to detect changes in the competitive environment 16 Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally: • debited to the Accumulated Depreciation account. • expensed when incurred. • capitalized as a part of the cost of the asset. • not recorded until they become material in amount. 17 What is a difference between merchandising companies and service enterprises? • Merchandising companies must prepare multiple-step income statements and service enterprises must prepare single-step income statements. • Cost of goods sold is an expense for service enterprises but not for merchandising companies. • The operations in merchandising companies and service enterprises are identical. • Merchandising companies generally have a longer operating cycle than service enterprises. 18 According to the text, the triple bottom line approach to corporate accounting includes three components: • financial, organizational, and psychological • financial, environmental, and customer • financial, organizational, and customer • financial, environmental, and social 19 The preparation of adjusting entries is: • optional when financial statements are prepared. • needed to ensure that the expense recognition principle is followed. • straightforward because the accounts that need adjustment will be out of balance • only required for accounts that do not have a normal balance. 20 In a simple linear regression model, if the plots on a scatter diagram lie on a straight line, what is the standard error of the estimate? • 1 • Infinity • -1 • 0 21 GAAP, compared to IFRS, tends to be more: • simple in disclosure requirements • principles-based • rules-based • simple in accounting requirements 22 The four key attributes of strategic management include the idea that: • Strategy must be focused on long-term objectives. • Strategy must be directed toward overall organizational goals and objectives. • Strategy must be focused on competitor strengths. • Strategy must be focused on one specific area of an organization. 23 Which of the following meets the requirements of a simple random sample? • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six males chosen at random, without regard to age. • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people who volunteer for the sample. • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people chosen at random, without regard to age. • A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include two people chosen at random under the age of 25 and four people chosen at random over 25. 24 You work in marketing for a company that produces work boots. Quality control has sent you a memo detailing the length of time before the boots wear out under heavy use. They find that the boots wear out in an average of 208 days, but the exact amount of time varies, following a normal distribution with a standard deviation of 14 days. For an upcoming ad campaign, you need to know the percent of the pairs that last longer than six months-that is, 180 days. Use the empirical rule to approximate this percent. • 2.5% • 5% • 95% • 97.5% 25 Is it possible for a data set to have no mode? • No, if the data set is nonempty, there is always a mode • Yes, if two observations occur twice • No, unless there is an odd number of observations • Yes, if there are no observations that occur more than once 26 Which of these statements regarding the industry life cycle is correct? • It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives. • Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. • Trends suggested by the market life cycle model are generally not reversible or repeatable. • It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. 27 The resource-based view (RBV) of the firm combines two perspectives: • the industry and the competitive environment • the primary and support activities of the firm • the interrelationships among the primary activities of the firm and corporate management • the internal analysis of the firm and the external analysis of the industry and competitive environment 28 Which of the following can be represented by a discrete random variable? • The average distance achieved in a series of long jumps • The number of defective light bulbs in a sample of five • The time of a flight between Chicago and New York • The circumference of a randomly generated circle 29 The fraud triangle applies to: • U.S and international companies. • international companies but not U.S. companies. • U.S companies but not international companies. • U.S. and Canadian companies, but not other international companies. 30 Sampling is used heavily in manufacturing and service settings to ensure high-quality products. In which of the following areas would sampling be inappropriate? • Computer assembly • Cell phone manufacturing • Custom cabinet making • Technical support by phone 31 According to value-chain analysis, which of the following would be considered part of the general administration in a firm? • procurement • technology development • human resource management • information systems 32 Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. • using related diversification to achieve value by leveraging core competencies to achieve economies of scope • using related diversification to achieve value by integrating vertically in order to acquire market power • using related diversification to achieve value by pooling negotiating power to achieve market power • using related diversification to achieve value by integrating vertically in order to attain economies of scope 33 Which of the following can be represented by a continuous random variable? • The number of customers who visit a department store between 10:00 a.m. and 11:00 a.m. on Mondays • The number of students who will get financial assistance in a group of 50 randomly selected students • The number of typos found on a randomly selected page of this test bank • The average temperature in Tampa, Florida, during the month of July 34 Which of the following requirements about internal controls were enacted under the Sarbanes Oxley Act: • Companies must assess the functionality of internal controls only when a violation occurs. • Internal auditors replace independent outside auditors when evaluating the level of internal control. • Independent outside auditors must eliminate redundant internal controls. • Companies must develop sound internal controls over financial reporting. 35 International Financial Reporting Standards (IFRS): • requires that receivables with different characteristics should be reported separately. • implies that receivables with different characteristics should be reported as one un-segregated amount. • implies that receivables with different characteristics should be reported separately. • requires that receivables with different characteristics should be reported as one un-segregated amount. 36 Which of the following is not a current liability on December 31, 2014? • A lawsuit judgment to be decided on January 10, 2015 • A Note Payable due December 31, 2015 • An Accounts Payable due January 31, 2015 • Accrued salaries payable from 2014 37 Interest may be included in the acquisition cost of a plant asset: • if it is a part of a lump-sum purchase. • if the asset acquisition is financed by a long-term note payable. • if the asset is purchased on credit. • during the construction period of a self-constructed asset. 38 On March 1st, Candy, Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800. The March 31st balance sheet should report what balance in their supplies account? • $2,800 • $2,900 • $1,500 • $1,600 39 Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is: • the idea that businesses are responsible to maintain a healthy social climate for their employees • the expectation that business will strive to improve the overall welfare of society • the idea that organizations are solely responsible to local citizens • the fact that court costs could impact the financial bottom line 40 Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company\'s checkbook for subsequent misappropriation of funds? • Tracing any debit memorandums from the bank to the company\'s records • A review of the cash budget • An accounting policies manual • The use of pre-numbered checks 41 Cost allocation of an intangible asset is referred to as: • accretion • depreciation • capitalization • amortization 42 The owner of a company has recently decided to raise the salary of one employee, who was already making the highest salary, by 20%. Which of the following is(are) expected to be affected by this raise? • Median only • Mean only • Mean and median only • Mean, median, and mode 43 The acquisition of treasury stock by a corporation: • requires that a gain or loss be recognized on the income statement. • decreases its total assets and total stockholders’ equity. • has no effect on total assets and total stockholders’ equity. • increases its total assets and total stockholders’ equity. 44 Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows. • Operating activities section. • Financing activities section. • Does not represent a cash flow. • Investing activities section. 45 Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. • using related diversification to achieve value by leveraging core competencies to achieve economies of scope • using related diversification to achieve value by integrating vertically in order to attain economies of scope • using related diversification to achieve value by integrating vertically in order to acquire market power • using related diversification to achieve value by pooling negotiating power to achieve market power 46 When collection is made on Accounts Receivable, • total assets will decrease. • total assets will remain the same. • total assets will increase. • stockholders equity will increase. 47 An analyst believes the probability that U.S. stock returns exceed long-term corporate bond returns over a 5-year period is based on personal assessment. This type of probability is best characterized as a(n) ____________. • Empirical probability • A priori probability • Subjective probability • Objectivity probability 48 If a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? • $280,000 • $400,000 • $4,000,000 • $120,000 question49 Which trial balance will consist of the greatest number of accounts? • Post-closing trial balance • Adjusted trial balance • Trial balance • Balance 50 Which financial statement would best indicate whether the company relies on debt or stockholders’ equity to finance its assets? • Balance sheet • Income statement • Retained earnings statement • Statement of cash flows