The Management Environment True / False 1) The $10 test showed that clever management can benefit both workers and managers. Answer: Explanation: The $10 test that gave housekeepers up to $10 for cleaning rooms impeccably was a success for both workers and managers. Workers earned extra pay. Managers got the high standards for cleaning that they were looking for Diff: 1 Page Ref: 29 Objective: 2. 1 2) The $10 test was enthusiastically accepted by workers immediately. Answer: Explanation: The $10 test was at first resented by workers.
They didn’t like being checked up on. As time passed, workers adjusted to the standards of the test and began to look forward to the extra money they could earn. Diff: 2 Page Ref: 29 Objective: 2. 1 3) One area in which most global companies are cutting back is customer service. Answer: Explanation: Most companies are recognizing that customer service is the key to their success. So they are increasing, rather than reducing, customer service efforts. Diff: 2 Page Ref: 29 Objective: 2. 1 4) A major cause of the economic downturn that began in 2008 was too much debt taken on by both consumers and businesses.
Answer: Explanation: Cheap and available credit in the early 2000s ushered in an atmosphere in which consumers and businesses borrowed heavily. When things went bad in the fall of 2008, many people were left owing more than they could pay. Diff: 2 Page Ref: 30 AACSB: Globalizations Objective: 2. 1 5) The U. S. economy has been the primary model for economic systems around the world. Answer: Explanation: The approach used by the U. S. economic system that features open markets, corporate ownership, mass production techniques, and hierarchical organization structures has been emulated around the world.
Many nations have prospered using this approach or a modified version of the approach. Diff: 2 Page Ref: 31 AACSB: Globalizations Objective: 2. 1 6) Multinational corporations maintain significant operations in two or more countries simultaneously. Answer: Explanation: A multinational corporation comes in three different forms? the multidomestic corporation, the global corporation, and the transnational corporation. All three forms maintain operations in multiple countries. Diff: 2 Page Ref: 33 AACSB: Globalizations Objective: 2. 2 7) Transnational corporations run their businesses from their home country.
Answer: Explanation: A transnational corporation is an MNC that has different operations in different countries but has no centralized “headquarters” or home country. Diff: 2 Page Ref: 33 AACSB: Globalizations Objective: 2. 2 8) When organizations go global, they often start by simply exporting products to one or more foreign countries. Answer: Explanation: Before exporting, organizations often begin the globalization process by outsourcing labor or materials. An example of outsourcing is having a factory in Asia manufacture products for a U. S. based company. Diff: 2 Page Ref: 34
AACSB: Globalizations Objective: 2. 2 9) After the outsourcing stage, companies that are going global often turn to exporting and importing goods across international borders. Answer: Explanation: Exporting and importing is often the second stage an organization passes through to go global. Diff: 2 Page Ref: 34 AACSB: Globalizations Objective: 2. 2 10) Licensing and franchising typically follow the export-import phase of globalization. Answer: Explanation: An example of licensing would sell the rights to bottle a well-known soft drink to a plant in another country.
A franchise might allow restaurants to use a well-known chain’s name and products in another country. Diff: 2 Page Ref: 35 AACSB: Globalizations Objective: 2. 2 11) In a strategic alliance, companies join together to form a separate entity to produce a product. Answer: Explanation: In a strategic alliance, companies join together to create a product. When the companies joining create a separate organization to create their product, the enterprise is called a joint venture. Diff: 2 Page Ref: 35 AACSB: Globalizations Objective: 2. 2 2) Managers with a parochial view of the world tend to see things from the point of view of a foreign culture. Answer: Explanation: Parochialism is a narrow, rather than a broad point of view. A manager with a parochial view sees things only through his or her own culture and does not try to understand the perspective of a person from another culture. Diff: 2 Page Ref: 36 AACSB: Diversity Objective: 2. 2 13) French organizations have a very different view of status than American organizations. Answer: Explanation: The French see status as the sum of such factors as education, experience, and seniority.
American organizations tend to confer status only for individual achievements. Diff: 3 Page Ref: 36 AACSB: Diversity Objective: 2. 2 14) According to Hofstede, countries such as Singapore and Japan are more collectivist than the United States. Answer: Explanation: Hofstede’s framework rates Japan and Singapore as “collectivist” and the United States as “individualistic. ” A collectivist cultures has a stronger group identity than an individualistic culture. Diff: 2 Page Ref: 36 AACSB: Diversity Objective: 2. 2 15) The United States is an example of a country with small power distance.
Answer: Explanation: Having a low power distance indicates that people in a culture do not tolerate excessive asymmetries in power in their communities. If the United States has a low power distance it means that people are wary of a “big boss” who controls many institutions in a community. Conversely, a culture with a high power distance would be more accepting of a “big boss” in their midst. Diff: 2 Page Ref: 36 AACSB: Diversity Objective: 2. 2 16) A society with high uncertainty avoidance relies on rules and trusts its social institutions to deal with an uncertain future. Answer:
Explanation: High uncertainty avoidance indicates a culture that relies on rules and social institutions to deal with uncertainty. People in a society with low uncertainty avoidance prefer fewer rules that are more flexible and rely less on formal social institutions. Diff: 3 Page Ref: 36-38 AACSB: Analytic Skills Objective: 2. 2 17) Cultures with a high assertiveness rating tend to have people who are timid and shy. Answer: Explanation: A high assertive rating is the opposite of being timid and shy. Assertive people are confrontational and not reluctant to demand what they want. Diff: 2 Page Ref: 37 AACSB: Analytic Skills
Objective: 2. 2 18) Future orientation is a measure of how successful a society is at delaying gratification. Answer: Explanation: People who delay gratification are able to turn down small rewards in the present to reap larger rewards in the future. Societies that save for the future are generally successful. Diff: 2 Page Ref: 37 AACSB: Analytic Skills Objective: 2. 2 19) Hofstede based his ratings on the traits of people of different nationalities with whom he was personally acquainted. Answer: Explanation: Hofstede’s results were based on interviews of over 100,000 IBM employees in 40 countries, not people he knew personally.
Diff: 1 Page Ref: 36 Objective: 2. 2 20) Hofstede’s findings were not confirmed by later studies. Answer: Explanation: Hofstede’s findings were generally confirmed by the GLOBE study that was completed in 2001. Categories were added and modified somewhat, but both studies had the same general results. For example, Japan rated high on the collectivism scale for both Hofstede’s and the GLOBE study. Diff: 2 Page Ref: 38 Objective: 2. 2 21) There is little evidence that managers of major organizations ever fail to act responsibly and ethically. Answer:
Explanation: Several high-profile scandals indicate that there is a great deal of evidence that managers fail to act responsibly and ethically. The exploits of Enron, Bernard Madoff, AIG, HealthSouth and many others provide examples of managers of major organizations failing to act responsibly and ethically. Diff: 2 Page Ref: 38 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 22) The classical view of organizational social responsibility is that management’s only social responsibility is to maximize profits. Answer: Explanation: The classical view is hard to argue with.
If a profit-making organization’s goal is to make money for the stockholders, any activity that fails to maximize profits can be seen as “cheating” the stockholders. Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 23) In the socioeconomic view of organizational social responsibility, management’s responsibility includes protecting and improving society. Answer: Explanation: The socioeconomic view assumes that the organization is part of society and that all parts of society have a responsibility to do their share to do good.
If one component of society feels exempt from this responsibility then others will quickly follow in kind, breaking the social compact and inviting chaos. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 24) One argument against businesses championing social responsibility issues is that being socially responsible can harm an organization’s public image. Answer: Explanation: In today’s world, rather than harm an organization’s public image, being socially responsible serves to improve an organization’s public image, identifying it as a force for good.
Diff: 1 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 25) Long-term stability is an argument for social responsibility. Answer: Explanation: Socially responsible companies tend to have more long-term stability than their counterparts that are not socially responsible. Presumably, a better public image from being socially responsible helps build company loyalty, which in turn becomes an important asset during hard economic times. Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 6) As long as it has broken no laws and done nothing unethical, a business has fulfilled its obligation to society. Answer: Explanation: People today believe that since a business is given the opportunity to function in an economic arena, it is obligated to do more than just avoid criminal or unethical actions. Instead, a business is obligated to improve conditions in the world. Diff: 3 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 27) A good example of social responsiveness is a company whose managers conduct business in an ethical way and strictly follows all local laws.
Answer: Explanation: Social responsiveness requires the organization to be responsive to some popular social need. For example, a company that builds a community recreation center in a community that lacks facilities is being socially responsive. Diff: 3 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 28) Any action that is illegal is unethical and any action that is legal is ethical. Answer: Explanation: There are many things that are legal but not ethical.
For example, it is legal to be wasteful with fossil fuels, but given the problems we face today with global climate change, pollution, and high energy prices, this wastefulness is clearly not ethical. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 29) Having a written code of ethics ensures that an organization’s members will behave ethically. Answer: Explanation: Over 90 percent of organizations, large and small, have written codes of ethics. Yet, that doesn’t prevent organizations like Enron from committing wildly unethical and illegal acts.
Diff: 2 Page Ref: 41 AACSB: Analytic Skills Objective: 2. 3 30) Managers have found that a “melting pot” approach of expecting diverse employees to assimilate is sufficient for harmony in the workplace. Answer: Explanation: Managers have found that allowing workers to assimilate on their own is not a good approach. Many workers have no interest in assimilation, so managers need to find ways to accommodate these people and make sure they are comfortable and productive. Diff: 2 Page Ref: 42 AACSB: Diversity Objective: 2. 4 31) The U. S. orkforce is now over 50 percent female. Answer: Explanation: The U. S. workforce stands now at 49. 1 percent female. With changes in employment that are likely to take place after the current recession ends, women are likely to make up the majority of workers. Diff: 1 Page Ref: 43 AACSB: Diversity Objective: 2. 4 32) Managers should expect contingent workers and core employees to be equally committed to the organization’s goals. Answer: Explanation: Contingent workers are employees who work part-time, just for a specific project, or as needed on a provisional basis.
Since they usually work on a temporary interim basis, managers cannot expect contingent workers to have the same level of commitment to and identification with the organization that permanent, full-time employees have. Diff: 2 Page Ref: 44 Objective: 2. 4 33) Traditionally, managers ignored customer relations and focused on other things. Answer: Explanation: Until recently, managers tended to leave customer service to marketing departments. However, the recent success of many customer-friendly organizations such as L. L. Bean has thrust customer service into a front-and-center position in management circles.
Diff: 2 Page Ref: 46 Objective: 2. 5 34) To increase customer responsiveness, organizations should hire employees who are outgoing and friendly. Answer: Explanation: Customer service begins with the employee him- or herself. A person who tends to be helpful, empathetic, friendly, and outgoing tends to make a good customer service rep. Diff: 1 Page Ref: 47 AACSB: Communication Objective: 2. 5 35) To create a successful customer service culture, an organization should draft a written set of customer service rules that should be stringently followed. Answer: FALSE
Explanation: Rules are too confining for customer service reps to be able to do their jobs well. Customer service reps need the freedom to be creative in meeting the customer’s needs. Diff: 2 Page Ref: 47 Objective: 2. 5 36) Good listening skills are an important characteristic of a successful customer service employee. Answer: Explanation: Listening skills are critical for customer service success. If the representative is not a good listener, he or she will not be able to understand the customer’s problem. If the problem is not understood, it is not likely to be solved.
Diff: 2 Page Ref: 47 AACSB: Communication Objective: 2. 5 Multiple Choice 37) The $10 hotel test was deemed a success because ________. A) managers got better service and workers got more pay B) managers got better service without increasing their costs C) workers got paid more without actually increasing their work load D) hotel occupancy rates increased during the time the policy was in place. Answer: Explanation: A) The $10 test gave housekeepers a predictable way to earn extra pay. If they fulfilled all of management’s requirements, they would get an instant bonus of up to $10.
This resulted in better service for managers and more money for workers. The policy did increase costs for managers and work load for housekeepers somewhat. The policy might have increased customer satisfaction, but there is no documented evidence that it actually increased occupancy rates. Diff: 2 Page Ref: 29 Objective: 2. 1 38) Which of the following is NOT a feature of the U. S. model of capitalism in the twentieth and twenty-first centuries? A) open markets B) large-scale operations C) full lifetime job security D) corporate model of ownership and organization Answer: Explanation: C) The U.
S. model that has been emulated around the world includes open markets, large operations based on mass production, and a hierarchical corporate model of organization that features separate business divisions and collective bargaining with labor. The U. S. model does not ensure job security for any period of time. Diff: 2 Page Ref: 31 Objective: 2. 1 39) The financial crisis that began in 2008 has resulted in the current climate in which there has been ________ business and business leaders. A) new-found confidence in B) indifference toward C) new curiosity in D) an erosion of trust in Answer:
Explanation: D) The 2008 crisis ushered in an era in which a great deal of trust and good will was destroyed by the overreaching of financial managers during the previous decade. Taking on too much risk and making speculative deals ended up bringing the economy to its knees and threatening the solvency of the entire financial system. When the federal government bailed out the large institutions whose irresponsible actions had caused the crisis, citizens were outraged, and that anger has not subsided as bankers continue to behave recklessly and reward themselves with lavish compensation in the face of abject failure.
The other choices? confidence, indifference, or curiosity in the system? are all incorrect because they don’t evince this anger and distrust. Diff: 2 Page Ref: 30 Objective: 2. 1 40) Which of the following is most likely to be the biggest change that the “new economy” will usher in? A) organizations taking on more risk B) fewer regulations C) a smaller government role D) a larger government role Answer: Explanation: D) The fallout from the financial crisis that began in 2008 is likely to result in increased regulation, oversight, and enforcement of standards and rules by the government.
More regulations and a larger role for government would clearly rule out a smaller government role or fewer regulations. Enforcement of standards and rules as well as increased regulation would preclude organizations taking on increased risk and would be likely to decrease the amount of risk they take on. Diff: 2 Page Ref: 31 Objective: 2. 1 41) Globalization can be best characterized as a business climate in which there are ________. A) rigid international boundaries B) no international boundaries C) rigid rules and standards
D) no rules or standards Answer: Explanation: B) A globalized world is a world in which boundaries between countries largely disappear between countries. In a global organization, different operations of the same organization can be located across the globe from one another. Rules and standards in a globalized world still exist, but they need to be flexible to conform to local customs, laws, and traditions. Diff: 2 Page Ref: 32-33 AACSB: Globalizations Objective: 2. 2 42) Which of the following is NOT a key characteristic of a global organization?
A) exchanges goods and services with consumers in other countries B) employs high-level technical employees and managerial talent from other countries C) uses resources from other countries D) has a home country in which all decisions are made and all profits flow Answer: Explanation: D) On the most basic level, global organizations exchange with foreign countries. Having executives and top-level managers who are not domestic increases an organization’s global profile, while being funded and receiving other resources from non-domestic sources (financial globalization) increases the global profile to an even greater degree.
Finally, not all global organizations claim a home country. Transnational organizations integrate operations in several locations without designating one of them as the home base. Diff: 3 Page Ref: 33 AACSB: Globalizations Objective: 2. 2 43) A multinational corporation (MNC) ________. A) is any organization that maintains operations in more than one country B) is defined as a company that has its home base in the United States and various operations overseas C) includes any company that exports goods overseas D) is defined as any company that has no “home base”
Answer: Explanation: A) An MNC is any corporation that has operations in more than one country. The typical MNC has its headquarters in its home country and other operations in other countries. A company with its home base in the United States and various operations overseas seems nearly correct but fails to take transnational organizations—organizations that don’t have a “home base”—into account. A company that exports goods overseas is incorrect because a company can easily ship overseas without having overseas operations. Diff: 2 Page Ref: 33 AACSB: Globalizations
Objective: 2. 2 44) A global corporation ________. A) centralizes management in a single home country B) decentralizes management so that each local country’s operation is managed locally C) decentralizes management so there is no single home location D) has two main management locations located on different sides of the globe Answer: Explanation: A) A global corporation is the classic stereotype of an MNC with domestic centralized management in the home country that coordinates operations overseas. Exxon is an example of a typical global corporation.
Decentralizing management so that each local country’s operation is managed locally is an example of a multidomestic corporation. Decentralizing management so there is no single home location describes a transnational corporation. Having two main management locations on different sides of the globe may exist but it is not a recognized model of an MNC. Diff: 2 Page Ref: 33 AACSB: Globalizations Objective: 2. 2 45) ________ is a good example of a multidomestic corporation. A) Coca-Cola B) Nestle C) Procter & Gamble D) The New York Yankees Answer:
Explanation: B) In a multidomestic corporation, operations in each country are controlled locally. Products and services offered by the company in one country may differ from those offered in another country. Nestle is a classic example of a multidomestic with fairly autonomous structures in different countries that are overseen by the parent company. Both Coca-Cola and Procter & Gamble are centralized global corporations, not multidomestics. The Yankees, on the other hand, are strictly a domestic organization with significant operations only in the United States.
Diff: 2 Page Ref: 33 AACSB: Globalizations Objective: 2. 2 46) Which of the following best characterizes a transnational corporation? A) a single central home-country management B) an organization in which multiple operations function with a large degree of autonomy C) a loose alliance of totally separate, wholly independent companies D) an organization in which multiple operations are all integrated toward the same goals Answer: Explanation: D) A transnational corporation is a “borderless organization” of multiple operations that have no single home base.
This rules out a single central home-country management since a transnational is not centralized and has no home-country. The choices regarding having multiple operations function with a large degree of autonomy and loose alliance of separate companies are not correct because operations in a transnational are integrated and do not work independently of one another. Diff: 2 Page Ref: 33 AACSB: Globalizations Objective: 2. 2 47) Which of the following would NOT be called an “American company”? A) a multidomestic with a home base in Memphis, Tennessee
B) a global corporation that originated in Dallas, Texas and has operations in 12 countries C) a transnational that originated in New York City with operations in 6 countries D) a global corporation that began in Japan but has since relocated and now has its sole headquarters in Chicago Answer: Explanation: C) The multidomestic in Memphis, the global corporation from Dallas, and the global corporation that now has its headquarters in Chicago may have different managing arrangements, but all three have a home base in the United States and none of the three are transnationals.
That means that all three are “American companies. ” That cannot be said of the transnational that originated in New York City, which by virtue of being a transnational is “borderless” and therefore cannot be called an “American company. ” Diff: 3 Page Ref: 33 AACSB: Globalizations Objective: 2. 2 48) Which choice constitutes the typical first step for an organization that is “going global”? A) outsourcing B) franchising C) licensing D) strategic alliance Answer:
Explanation: A) To go global, a company usually begins by global sourcing or outsourcing, in which the company purchases materials or labor from a foreign market at a lower price than it can obtain from its domestic market. Steps that follow outsourcing include franchising and licensing, both of which involve selling an organization’s brand name and other trade practices for a fee. An even later stage involves a strategic alliance, in which the company forms a partnership with a foreign organization. Diff: 2 Page Ref: 34 AACSB: Globalizations
Objective: 2. 2 49) Franchising is used widely by ________. A) universities B) accounting firms C) restaurant chains D) electric power companies Answer: Explanation: C) Franchising involves selling the rights to do business under a company brand name, using the tried-and-true methods developed by the company. This type of operation works especially well with such businesses as restaurant chains, which develop a recognizable image and menu that they sell to local business people who set up independent restaurants that are often supplied by the parent company.
None of these methods would work well for universities, accounting firms, or power companies because none of these services could be easily duplicated at a location that was separate from the primary enterprise. Diff: 1 Page Ref: 35 Objective: 2. 2 50) A fully global organization might set up a ________ with a foreign company to create a new, independent company that produces a specific product. A) foreign subsidiary B) strategic alliance C) licensing agreement D) joint venture Answer:
Explanation: D) A joint venture uses the talents and expertise of two separate companies to create a specific product. A joint venture differs from a strategic alliance in that a new, independent company is created in a joint venture but not in a strategic alliance. A licensing agreement is a type of partnership but it does not create a new product or a separate, new company. Finally, a foreign subsidiary is not the correct choice here because it is a foreign branch of an existing company and not a type of partnership between companies. Diff: 2 Page Ref: 35 AACSB: Globalizations Objective: 2. 51) Which of the following is usually found in the final stage of an organization’s global evolution? A) exporting products to other countries B) outsourcing jobs to foreign countries C) establishing strategic alliances with partners D) licensing products in foreign countries Answer: Explanation: C) The sequence of events for “going global” typically begins with outsourcing labor and materials to other countries, followed by exporting and importing, then licensing products to foreign markets. The third and final stage of the process includes forming strategic alliances with foreign partners.
A strategic alliance represents a more “global” stage than the others because it transfers some decision-making authority of the organization to its foreign partner, thereby decentralizing and thus globalizing the power of the organization. Diff: 2 Page Ref: 35 AACSB: Globalizations Objective: 2. 2 52) Of the approaches to pursuing international markets, developing a ________ involves the greatest commitment and risk. A) franchise B) joint venture C) strategic alliance D) foreign subsidiary Answer: Explanation: D) Unlike the other three choices, a foreign subsidiary is not a partnership with an existing foreign company.
Instead, a foreign subsidiary requires an organization to commit resources to build an entire facility in a foreign country. Without a partner for guidance or shared responsibility, if things go wrong the organization itself will bear all consequences of the failure—making the subsidiary the riskiest of all four ventures. Diff: 2 Page Ref: 44 AACSB: Globalizations Objective: 2. 2 53) Joint ventures are a type of ________. A) license B) franchise C) foreign subsidiary D) strategic alliance Answer: Explanation: D) A joint venture is a special type of strategic alliance.
In a generic strategic alliance, companies merely form a partnership to create a new product. A joint venture is not merely a partnership; it creates an entirely new entity that bears the name of neither partner and is separate from each organization. A license or franchise does not qualify as a strategic alliance because the parent company maintains control of the product—it merely sells the right to produce the product to a foreign entity. A foreign subsidiary, on the other hand, is not an alliance of any type. Instead, it is a branch of the original organization that has been built on foreign soil.
Diff: 2 Page Ref: 35 AACSB: Globalizations Objective: 2. 2 54) A Coca-Cola bottling plant in Bolivia is wholly owned by a local businessperson. What kind of venture is this plant likely to be? A) a franchise B) a licensed plant C) a foreign subsidiary D) a joint venture Answer: Explanation: B) The plant cannot be a joint venture or foreign subsidiary because it is owned by the local businessperson. The plant is not likely to be a franchise because it is is marketing a single product—Coca-Cola—rather than an entire operation. That leaves the correct response, a licensed plant.
The company has licensed the right to produce Coca-Cola to the local businessperson who has complete control of the plant. Diff: 2 Page Ref: 35 AACSB: Globalizations Objective: 2. 2 55) Which of the following is the best synonym for the word parochial? A) religious B) catholic C) broad D) narrow Answer: Explanation: D) A parochial view is a narrow view of the world. The word parochial is often associated with religious schools (such as Roman Catholic schools) because those schools have a narrow focus—they serve only members of the church.
Note that a Jewish or Muslim school can also be called a parochial school, so the term has no attachment to “catholic” or the Roman Catholic faith. In fact, the term catholic itself means “broad”—the opposite of the meaning of parochial. Diff: 1 Page Ref: 36 Objective: 2. 2 56) Parochialism is ________. A) acceptance of diverse points of view B) a desire to leave one’s own culture for a foreign culture C) a tendency to view the world through a single perspective D) recognition of diverse religious beliefs Answer: Explanation: C) A manager with a parochial point of view assumes that there is only one way to view the world? is way? and that all people, despite their different traditions, culture, upbringing, and life experiences should share his values and beliefs. Parochialism is a form of arrogance because it fails to accept the possibility that other points of view can be valid. For this reason, the choices regarding acceptance of diverse points of view and recognition of diverse religious beliefs are incorrect. The choice regarding a desire to leave one’s culture is incorrect because abandoning one’s culture constitutes an appropriation, not a rejection of a divergent point of view and is therefore the opposite of parochial.
Diff: 2 Page Ref: 36 AACSB: Diversity Objective: 2. 2 57) Status in France within a corporation is largely ________. A) measured in the same way it is in the United States. B) based on how much money a person makes C) based on such things as seniority and educational level D) based on an individual’s personal accomplishments Answer: Explanation: C) A look at how status in France is measured provides an example of how values can be different in different cultures. In the United States, status is generally based on a person’s accomplishments.
In France, seniority and education level are much more important for determining status. Money is probably more important for status than either culture is willing to admit, but in any event, it has not been identified as the primary factor for conferring status. Diff: 2 Page Ref: 36 AACSB: Diversity Objective: 2. 2 58) In his study of differences in cultural environments, Geert Hofstede found that ________. A) people are largely the same from culture to culture with respect to values B) the views of managers differ greatly from those of mployees with respect to values C) the views of IBM employees differ widely from the general population with respect to values D) people vary from culture to culture in five value categories Answer: Explanation: D) Hofstede’s landmark study showed that different cultures varied widely in values that Hofstede termed cultural dimensions. This eliminates the choice regarding people being largely the same culture to culture as a correct response, since views varied widely. Hofstede did not indicate any great difference in the views of managers versus employees or IBM employees versus the general population.
Diff: 2 Page Ref: 36 AACSB: Diversity Objective: 2. 2 59) ________ is a cultural dimension measured by Hofstede in which people identify strongly with a group within a society. A) Power distance B) Collectivism C) Individualism D) Uncertainty avoidance Answer: Explanation: B) Hofstede measured individualism and collectivism on the same scale. Individualism measured how independent people considered themselves, while collectivism measured how strongly they identified with a group. The more individualistic a person was, the less collectivist he or she tended to be.
The dimensions of power distance and uncertainty avoidance are not measures of the strength of a person’s identification with a group so neither is a correct response. Diff: 1 Page Ref: 36 AACSB: Diversity Objective: 2. 2 60) Which of the following would be likely to be true in a country with a high power distance? A) Hundreds of statues, billboards, and posters of the leader would appear all over the capital. B) The leader’s likeness would appear only in the newspaper from time to time. C) Top managers and employees would dress in similar ways.
D) Rather than employ a driver, top managers would drive their own cars to work. Answer: Explanation: A) A country with high power distance would tolerate leaders to have enormous amounts of power and prestige. That corresponds to the choice regarding a leader who plasters his image all over the city. The other three choices describe a more humble leader and a situation of low power distance. The image of an all-powerful leader describes a situation of high power distance. Diff: 3 Page Ref: 36 AACSB: Diversity Objective: 2. 2 61) A country with a high uncertainty avoidance ________.
A) is highly structured and depends on rules and social institutions to cope with uncertainty B) is highly structured and does not depend on rules and social institutions to cope with uncertainty C) has no rules D) has no structure or social institutions Answer: Explanation: A) Uncertainty avoidance is the degree to which a society is structured, depends on rules, and looks to its social institutions to deal with uncertainty. Countries with high uncertainty avoidance are not comfortable with unstructured situations, so they tend to follow rules rather than have a flexible point of view when faced with uncertainty.
India, for example, has a high uncertainty avoidance rating, so it tends to avoid making tough decisions and relies on rules in unstructured situations. The correct choice describes a rule-following society with high uncertainty avoidance. None of the other choices describe a society that depends on rules or social institutions, so all of those choices describe countries with low uncertainty avoidance. Diff: 3 Page Ref: 36-38 AACSB: Diversity Objective: 2. 2 62) In a country with a low uncertainty avoidance, people cope with uncertainty ________.
A) by following rules and depending on social institutions B) by making new rules C) largely without rules or strong social institutions D) by looking to the religious teachings Answer: Explanation: C) Low uncertainty avoidance identifies a society that doesn’t depend on rules or social institutions such as religion to cope with uncertainty. In countries that have a low uncertainty avoidance rating, people don’t shy away from uncertain situations as much as high uncertainty avoidance cultures do, and they try to be creative and flexible in facing uncertainty, rather than relying on rules.
The correct choice describes a society with low uncertainty avoidance, where people don’t impose a lot of rules or restrictions on themselves. The other choices all describe cultures with high rather than low uncertainty avoidance. Diff: 3 Page Ref: 36-38 AACSB: Diversity Objective: 2. 2 63) Societies with a high assertiveness rating would tend to be ________. A) passive B) excessively polite C) competitive D) uncertain Answer: Explanation: C) Assertiveness is a measure of how tough, aggressive, and competitive a society is. This indicates that competitive is the correct response.
Passive, excessively polite, and uncertain are all traits that are the opposite of assertive. Diff: 2 Page Ref: 36-38 AACSB: Diversity Objective: 2. 2 64) In a society with high ________, you would expect members of a corporation to have a strong identification with the corporation. A) gender differentiation B) future orientation C) in-group collectivism D) humane orientation Answer: Explanation: C) People who strongly identify with a corporation are displaying in-group collectivism by taking pride in the group they belong to.
Identifying with a group is not related to gender role differences, how enthusiastically a society plans for the future, or how fair and altruistic a society aspires to be. Accordingly, in-group collectivism is the correct response. Diff: 2 Page Ref: 37 AACSB: Diversity Objective: 2. 2 65) ________ is an attribute that describes how materialistic a society is. A) Power distance B) Quality of life C) Quantity of life D) Individualism Answer: Explanation: C) Quantity of life and quality of life contrast how materialistic a society is as opposed to how caring and non-materialistic it is.
Power distance has nothing to do with how materialistic people are, but rather how much they tolerate societal power imbalances. Individualism describes how independent members of a society are, not how materialistic they are. Diff: 2 Page Ref: 36 AACSB: Diversity Objective: 2. 2 66) Which feature of Hofstede’s study lends it a great deal of validity? A) It measured attitudes of IBM employees. B) It measured attitudes of many successful people. C) The survey was carried out in the 1970s. D) It surveyed 116,000 people. Answer: Explanation: D) The most compelling part of Hofstede’s study was the enormous size of his sample.
In general, the greater the sample size a statistical study has, the more confidence its interpreters have in its findings. In fact, being limited to IBM employees diminishes the study’s credibility somewhat, as a more diverse group of people probably would have provided a more representative sampling. The fact that the study queried successful people and it took place in the 1970s lends it no extra credibility. Diff: 2 Page Ref: 36 AACSB: Analytic Skills Objective: 2. 2 67) Which of the following dimensions from the GLOBE framework has no equivalent counterpart in Hofstede’s framework?
A) gender differentiation B) humane orientation C) future orientation D) individualism/collectivism Answer: Explanation: A) Humane orientation roughly corresponds to Hofstede’s quality of life category. Future orientation corresponds to Hofstede’s long-term versus short-term orientation. Individualism/collectivism is virtually identical to Hofstede’s individualism versus collectivism category. Only gender differentiation has no counterpart in the Hofstede study, so it is the correct response. Diff: 2 Page Ref: 36-38 AACSB: Analytic Skills Objective: 2. 2 8) Which implication best summarizes the meaning of the quote below? “… ethics… is essential to our survival as a wealth-creating nation. ” A) Being ethical is bad for business. B) Being ethical has no impact on business. C) Being ethical in the long run is good for business. D) Being ethical in the long run is more important than making a profit. Answer: Explanation: C) The quote implies that ethics not only do not decrease profits, in the long run they create wealth. The choices regarding ethics being bad for and having no impact on business are not consistent with the quotation.
Finally, the choice regarding ethics being more important than making a profit may be true, but it is far beyond what the quote intends to claim. Diff: 2 Page Ref: 38 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 2 69) The cases of Enron and Bernard Madoff go beyond a question of ethics because in both cases ________. A) laws were clearly broken B) many people were hurt C) billions of dollars were involved D) no harm was intended and they had good reasons for what they did Answer: Explanation: A) The line between ethics and crime is crossed when laws are broken.
This is clearly what happened in the Enron and the Madoff cases—in both situations individuals committed crimes and ended up going to prison for those crimes. The fact that billions of dollars were involved, many people lost their life savings, and the perpetrators may have claimed to have excuses for what they did does not change the fact that people behaved both unethically and illegally in both cases. Diff: 2 Page Ref: 38 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 70) Which of the following would NOT be an example of green management?
A) a company using wind energy for electricity B) a company using reusable rather than disposable containers C) a company shipping in expensive all-natural fruits for employees all year round D) a company rewarding workers to carpool Answer: Explanation: C) Using renewable wind energy, reusable containers, and encouraging carpooling are clearly “green” actions because they conserve energy or reduce waste. Importing fruits, while perhaps healthy for employees, presumably entails burning a large amount of fossil fuels to transport the fruits long distances and so would not qualify as green.
Diff: 2 Page Ref: 38 AACSB: Technology Objective: 2. 3 71) The classical view of social responsibility is that a for-profit organization’s responsibility is ________. A) to help as many people as possible B) to maximize both profits and the general welfare C) to maximize profits only D) to maximize opportunity for all Answer: Explanation: C) The classical view of social responsibility is a purely economic view that looks at profits only. A for-profit company exists to make money. Therefore its only responsibility is to maximize profits.
Any actions for social good, such as to help people, create opportunity, or to improve the general welfare would be looked upon as irresponsible because these actions would divert the organization from its stated goal. Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 72) A company that meets its social obligation ________. A) fulfills its economic responsibilities only B) fulfills its legal and economic responsibilities only C) goes beyond its legal and economic responsibilities and responds to some pressing social need D) does not need to obey local laws
Answer: Explanation: B) An organization’s social obligation includes following legal and economic responsibilities only. Anything above that, such as responding to a pressing social need, is beyond the organization’s social responsibility. All companies in general must follow laws and meet economic responsibilities to prosper and survive, but these items alone do not fulfill social obligation requirements. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 73) Which of the following is the best example of a company being socially responsive?
A) meeting hazardous materials standards B) giving Christmas bonuses to worthy employees C) displaying “think green” posters D) building a community day-care center Answer: Explanation: D) Social responsiveness requires that an organization respond to some social need that has been identified within the community. Of the choices listed, only building a day-care center meets this requirement so it is the correct response. Meeting hazardous materials standards is simply an example of following the law. Christmas bonuses may be generous, but they are helping members of the organization, not the community at large. Think green” posters may help people take action on environmental matters, but the posters themselves do not constitute effective actions that respond to a social need. Diff: 3 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 74) The classical view of social responsibility holds that spending time, money, labor, or energy to improve society’s welfare would ________. A) deprive stockholders of resources that could be used to generate profits B) not have any positive or negative impact on stockholders C) help maximize profits for stockholders
D) show stockholders that the company knows best Answer: Explanation: A) The classical view of social responsibility holds that any use of resources that does not explicitly seek to increase profits is wasteful and deprives stockholders of the income that would otherwise be theirs. This means that spending on social welfare has a negative impact on profits, thus ruling out the choices regarding not having any impact on stockholders and maximizing profits for stockholders as correct responses. The idea that the company knows better than stockholders is not part of the classical view of social responsibility.
Diff: 2 Page Ref: 39-40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 75) The socioeconomic view of social responsibility states that a business ________. A) is an economic agent only B) has no responsibility C) is a moral agent D) is a harmful agent Answer: Explanation: C) A socioeconomic view of social responsibility sees businesses not just as economic entities without moral responsibilities. Since a business exists within a sphere that is both economic and moral, a business should be considered to be both an economic and a moral agent.
This eliminates economic agent and harmful agent as the correct response and identifies moral agent as the correct response. Note that as a moral agent, a business defines itself as a force for good or bad by its actions. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 76) The socioeconomic view is that management’s social responsibility goes beyond making profits to include ________. A) challenging norms within society and inciting people to rise up against injustice B) protecting and improving society’s welfare
C) sacrificing its own welfare to advance the cause of justice D) prosecuting those who break the law Answer: Explanation: B) The socioeconomic view sees organizations as moral citizens of the society with a moral role to play. The view goes only as far as an organization looking after the general welfare of society as best it can in ways that are reasonable and not overly onerous. It does not suggest that organizations take on a revolutionary role, prosecute law-breakers, or harm themselves in any way to fight injustice. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities
Objective: 2. 3 77) Proponents of the socioeconomic view of social responsibility believe that being socially responsive is ________. A) good for business B) bad for business C) neither good nor bad for business D) bad for any business in a competitive market Answer: Explanation: A) Supporters of the socioeconomic view think that being socially responsive gives an organization a positive public image that in the long run pays for itself in customer loyalty and profits. Being good for business rules out the choices regarding being bad for business and neither good nor bad for business as correct choices.
Positing that social responsibility is harmful only in competitive markets is beside the point since almost all businesses operate within competitive markets. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 78) ________ dictates that being socially responsible is the “right thing to do. ” A) A public image B) An ethical obligation C) A public expectation D) A dilution of purpose Answer: Explanation: B) A public image identifies the favorable publicity that an organization can get from being socially responsible, but it does not identify socially responsible behavior as the right thing to do.
Similarly, public expectation reflects the modern attitude of people toward organizations, not a mandate of what must be done. A dilution of purpose is actually an argument against being socially responsible, so it is not a correct choice here. An ethical obligation is the correct response because it does require that individuals or organizations do the “right thing. ” Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 79) Supporters of social responsibility claim that being socially responsible ________. A) increases short-term profits B) decreases long-term profits C) increases long-term profits
D) decreases short-term profits Answer: Explanation: C) Supporters claim that being socially responsible is good for business, builds customer loyalty, and over the long run increases profits. Supporters make no claims for short-term profits, thus eliminating increases and decreases in short-term profits. Decreases long-term profits is incorrect because it states the opposite of the actual claim that supporters of being socially responsible make. Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 80) Supporters of socially responsible businesses claim that by becoming ocially responsible, businesses can expect ________. A) less government regulation B) more government regulation C) more strict enforcement of laws D) more government interference Answer: Explanation: A) The case that supporters make is that the more socially responsible companies are, the more government will trust them to do the right thing and the less government will see the need to intervene with regulations. This eliminates more government regulation and interference as correct choices because they both increase rather than decrease the amount of government intervention.
It also militates against more strict enforcement of laws which can be thought of as an indirect form of government interference. Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 81) Since businesses have more power and resources than ordinary individuals, supporters of social responsibility claim that businesses have ________. A) a good reason to ignore the needs of ordinary individuals B) no reason to act in a socially responsible way C) more reason to act in a socially responsible way D) less reason to act in a socially responsible way
Answer: Explanation: C) The very size and influence of businesses require them to do more than ordinary individuals to advance the public welfare, supporters of social responsibility argue. Since society allows the organization to have its privileged position of power and influence, the organization owes society a larger debt than any individual citizen. These ideas make “more reason to act in a socially responsible way” the correct response, and rule out the other choices, all of which claim to diminish, rather than increase, the moral obligation of a business.
Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 82) The argument against social responsibility that states that pursuing goals other than making profits diverts a company away from its primary goal of making profits is known as ________. A) possession of resources B) too much power C) lack of skills D) dilution of purpose Answer: Explanation: D) When a company whose primary goal is to make profits uses its resources for anything other than making profits, it is said to be diluting its purpose.
Too much power refers to a company acquiring an unfair oversupply of power from being socially responsible while lack of skills makes the argument that managers are not competent to tackle social issues. Finally, possession of resources is an argument for, not against, social responsibility. Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 83) One prominent argument against being socially responsible makes the claim that business managers are ________ to address social concerns. A) too impractical B) not competent C) too wealthy D) too out of touch Answer:
Explanation: B) No one makes the claim that business leaders are too impractical or too out of touch to be socially responsible, though the ideas may have a small measure of validity. Similarly, wealthy business leaders would in no way be prevented from addressing social concerns and in fact, according to the idea of noblesse oblige, wealth might be a good reason to act in a socially responsible way. That leaves the choice on not being competent that states that many people think that business leaders, not having training in social areas, are not qualified to try to help in these areas as the correct response.
Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 84) Those arguing against being socially responsible might make the claim that costs for social goals are ultimately ________. A) paid for by the people being helped B) paid for by companies in the form of tax breaks C) paid for by consumers in the form of higher prices D) are never paid by anyone Answer: Explanation: C) There is no evidence that the cost of social goals gets paid for by the people who benefit from the services provided, so that is not a correct response.
Tax breaks would be an extra cost, not a way to pay for social goals, so that would rule out the choice regarding tax breaks. The choice regarding never being paid by anyone is incorrect because all costs are presumed to be ultimately paid by someone. Paid for by consumers in the form of higher prices is the correct response, since companies may initially bear the costs of social goals, but as they see their costs rising they are likely to raise prices, effectively causing consumers to ultimately be the payers of the bill. Diff: 3 Page Ref: 39
AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 85) Which of the following is NOT an argument against the idea that companies should be socially responsible? A) costs B) too much power C) violation of profit maximization D) public expectations Answer: Explanation: D) Costs, too much power, and violation of profit maximization are all legitimate arguments against companies being socially responsible. Costs indicate that socially responsible actions do not cover their own costs and so end up costing a company money.
Too much power indicates that companies will accumulate an overabundance of power as a result of pursuing social goals, thereby increasing their already too-large social influence. Violation of profit maximization indicates that pursuing social goals violates a company’s obligation to seek the highest profits possible. Only public expectations is an argument for social responsibility—it claims that public opinion strongly supports social goals, so companies benefit from positive publicity when they pursue them. Diff: 1 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 6) “Lack of accountability” argues against a firm being socially responsible by saying that once actions are taken there is no one ________. A) to take responsibility if things go wrong B) to take credit if things work out well C) to speak to the media to put a spin on actions taken D) to follow up afterward Answer: Explanation: A) Accountability is taking responsibility for actions. That means that taking responsibility if things go wrong is the correct response because companies that pursue social goals typically have no mechanism in place to deal with problems that arise due to actions on behalf of social goals.
There would also be no specific person to take credit for successful actions, to follow up on actions, or to “spin” the actions. However, only the correct choice constitutes an argument against social responsibility. Diff: 2 Page Ref: 39 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 87) When a company does the minimum that the law requires, it is meeting its ________. A) social responsiveness goal B) economic responsibility C) ethical responsibility D) social obligation Answer: Explanation: D) Social responsiveness goes beyond the minimum that the law requires and entails responding to some popular social need.
An ethical responsibility also goes beyond a minimal legal stance, requiring a company not only to obey all laws but also to behave in a way that is fair and just. An economic responsibility requires the firm to pursue financial goals only. That leaves a social obligation, which may include only what is legally necessary as the minimum that a company must do. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 88) A factory that has adhered to all pollution control standards has ________. A) been socially responsive B) been economically responsible C) been ethical
D) met its social obligation Answer: Explanation: D) Social responsiveness would require the factory to do more than simply follow the law; it would need to respond to some societal need as well. Economic responsiveness would require the factory to meet its goals with respect to financial considerations. There is no way of knowing whether meeting pollution controls would accomplish this. Similarly, meeting pollution standards does not guarantee a factory has behaved ethically. Meeting those standards does, however, show that the factory’s social obligation has been met. Diff: 2 Page Ref: 40
AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 89) Social responsiveness refers to the capacity of a firm to ________. A) address some pressing public need B) follow all government regulations C) differentiate between right and wrong D) be a role model for other organizations Answer: Explanation: A) Social responsiveness must address some public need, such as improving the environment or helping people who lack the basic necessities of life. Merely following government regulations, behaving ethically, or acting as a model for other organizations does not address a public need, so none of these choices is correct.
Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 90) When a firm advertises that it only uses recycled paper products, it is ________. A) meeting its social obligation B) being cynical C) being socially responsive D) paying attention to the bottom line Answer: Explanation: C) In using recycled paper products, the firm is meeting a societal need of reducing the amount of waste in the environment, so it qualifies as social responsiveness.
A social obligation does only what the law requires, so unless there are laws requiring mandatory recycling, this act goes beyond what the law requires and does not qualify as social responsiveness. Recycling may not improve a company’s bottom line, so recycling cannot be classified as paying attention to the bottom line. Similarly, though recycling can be done purely to improve a company’s public image, there is no way of proving that the act has even a small element of cynicism. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities
Objective: 2. 3 91) Which of the following is a basic definition of ethics? A) rules that define good and evil B) laws that define legal and illegal C) principles that define right and wrong D) principles that define standards of decency Answer: Explanation: C) Ethics is concerned with the evaluation of actions—whether they are right or wrong—rather than the conditions of good and evil that often underlie those actions. This indicates that “principles that define right and wrong” is the correct choice for this question and “rules that define good and evil” is incorrect.
Questions of whether acts are legal or illegal are also related to ethics, but legal and illegal refer to formal written laws covering a wide array of issues while ethics generally refers to more basic moral principles that always focus on right and wrong. Standards of decency are also related to ethics, but they are more concerned with what is socially acceptable rather than what is right and wrong. Diff: 2 Page Ref: 40 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 2) A ________ is a formal document that states an organization’s primary values and the ethical rules it expects its employees to follow. A) mission statement B) statement of purpose C) code of ethics D) vision statement Answer: Explanation: C) How ethical questions are addressed within an organization can be different from how they are dealt with in the outside world. For example, fraternization between individuals inside an organization (e. g. , teacher and student in a school) may be frowned upon even though the same relationship outside the organization might not raise any ethical eyebrows (e. . , both teacher and student are adults). That is why most organizations draft a written code of ethics to provide guidance for members. None of the other choices? a mission statement, a statement of purpose, or a vision statement? deals with ethical issues, so these choices are incorrect. Diff: 1 Page Ref: 41 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 93) About ________ of organizations of 10,000 or more employees have a written code of ethics. A) one-third B) half C) 70 percent D) 97 percent Answer:
Explanation: D) The fact that 97 percent of large organizations have written codes of ethics suggests that these codes are at least useful, if not highly effective. However, ethics codes are usually only as effective as the organizational culture in which they are instituted. Those organizations that take ethics seriously usually have fewer problems dealing with ethics, regardless of how prominent their code is in their everyday operations. In most cases, written codes of ethics are not referred to in everyday interactions, but instead used to provide guidance in resolving conflicts and other moral issues.
Diff: 1 Page Ref: 41 Objective: 2. 3 94) In most cases, organizations that have managers who behave ethically tend to have ________. A) more productive employees B) more ethical employees C) less ethical employees D) employees who are no more or less ethical than average Answer: B Explanation: B) Being a good role model with respect to ethics does affect ethics of subordinates. Managers who behave unethically or who tolerate unethical behavior tend to promote similar attitudes among subordinates.
That is why “more ethical employees” is correct—ethical managers tend to have ethical workers—and why “more productive employees” and “employees who are no more or less ethical than average” are not correct. There is no established or documented relationship between ethical behavior and productivity, so “more productive employees” is incorrect. Diff: 2 Page Ref: 41 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 95) A(n) ________ view of ethics states that more productive workers should get more pay, and less productive workers less pay, regardless of other circumstances.
A) rights B) utilitarian C) theory of justice D) individual liberties Answer: Explanation: B) A rights view of ethics is concerned with protecting the rights of individuals to enjoy individual liberties such as free speech and due process, so both rights and individual liberties are not correct responses for this question. A theory of justice view of ethics is concerned with issues like a living wage—employees are entitled to be paid enough to live on no matter what the law says or other circumstances dictate.
The theory of justice view stands in direct contradiction to the utilitarian view, the correct response here, that states that productivity is all that matters with regard to pay, and that abstract ideas such as justice or fairness should not be considered for this issue. Diff: 2 Page Ref: 41 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 96) A manager who subscribes to the theory of justice view of ethics might pay low-level employees ________. A) the minimum wage B) more than the minimum wage C) less than the minimum wage D) according to how productive they were
Answer: Explanation: B) A manager who subscribes to the theory of justice view of ethics takes societal conditions into account when making decisions. If a worker is unable to live on minimum wage, this manager is likely to pay more than that amount to ensure that she is treating her employees in a fair and just way. This rules out the minimum wage and less than the minimum wage. It also rules out “according to how productive they were,” which corresponds to a utilitarian view of ethics, rewarding workers only in proportion to how valuable they are to the organization.
Diff: 2 Page Ref: 41 AACSB: Ethical Understanding and Reasoning Abilities Objective: 2. 3 97) Which of the following is a category of workforce diversity? A) education level B) computer skills C) style of dress D) age Answer: Explanation: D) Workforce diversity includes only permanent or innate features such as age, race, ethnicity, gender, physical abilities/disabilities, and sexual orientation. Any characteristic that arises out of achievement, such as education level or computer skills, does not constitute a diversity category.
Any wholly voluntary characteristic, such as the way a person dresses, should also not be considered a diversity category. The above indicates that only age represents a diversity category so it is the correct response. Diff: 2 Page Ref: 42 AACSB: Diversity Objective: 2. 4 98) Managers have found that the best approach to diversity is ________. A) the “melting pot” approach that allows workers to assimilate naturally B) to allow workers to maintain their differences if that is what they prefer. C) to compel workers to assimilate using rewards and punishments D) to enforce differences even among workers who wish to assimilate Answer:
Explanation: B) Managers previously thought that the melting pot approach worked best, but recently they have recognized that some workers have no desire to assimilate. This requires managers to be flexible and adopt an approach which allows workers to resist assimilation and maintain their differences if they choose to do so. There is no evidence to show that strategies that compel workers to assimilate or maintain differences can be successful, so these choices are incorrect. Diff: 2 Page Ref: 42 AACSB: Diversity Objective: 2. 4 99) Changes in the workforce since the 1960s are largely due to ________.
A) women postponing having babies B) federal anti-discrimination legislation C) migration within the United States D) a booming economy Answer: Explanation: B) Federal legislation is the most important cause of change in the workforce over the past decades. Anti-discrimination laws opened up jobs to women and minorities in unprecedented numbers since the 1960s. Women having babies later in life is probably as much a result of this change as it is a cause. Migration within the United States and a booming economy might also have had some effect on the workforce, but the impact of these factors is dwarfed by the change in laws.
Diff: 2 Page Ref: 43 AACSB: Diversity Objective: 2. 4 100) Workforce diversity will be significantly affected in the next decade by ________. A) increases in the teen worker population B) the aging of the U. S. population C) increases in the U. S. divorce rate D) increases in U. S. birthrates Answer: Explanation: B) The baby boom generation is a larger cohort in the population than any other generation, so its aging will have the greatest impact on the workforce as baby-boomers retire or move on to different kinds of jobs.
Baby-boomer aging as a factor of workforce change is much more important than changes in birthrate, divorce rate, or teen workers. Diff: 1 Page Ref: 43 AACSB: Diversity Objective: 2. 4 101) In global companies, a major cause of the line between work and nonwork getting blurred is ________. A) employees needing to commute long distances B) needing to communicate with overseas operations in different time zones C) needing to communicate on a face-to-face basis with employees D) employees needing to work on holidays Answer:
Explanation: B) In a global company a factory can be in a time zone that is 12 hours different than one’s home time zone. This means that a manager may need to address a problem at 11 PM in her time zone that is occurring at 11 AM in the factory. Needing to communicate with overseas operations in different time zones, therefore, is the correct answer. Needing to communicate on a face-to-face basis with employees is incorrect because face-to-face communication would tend to avoid off-hour interaction and serve to clarify rather than blur the line between work and nonwork.
The other two choices are true in some cases, but do not contribute to the blurring of the line between work and nonwork. Diff: 1 Page Ref: 44 AACSB: Globalizations Objective: 2. 4 102) ________ make(s) some managers feel that there is no escape from issues dealing with their work. A) Email, text messages, and cell phones B) Ethical obligations C) Rigid 8-hour work days D) Being a single wage earner Answer: Explanation: A) The feeling that there is “no escape” is due largely to communication devices that allow managers and other employees to stay in contact with work issues even when they are not working.
Ethical obligations, the increasingly scarce workers who work an eight-hour day, and being a single wage earner do not infringe on workers’ nonwork time, so these choices are incorrect. Diff: 2 Page Ref: 44 AACSB: Technology Objective: 2. 4 103) Which of the following is NOT an attempt by management to provide flexibility in the workplace? A) bonus pay B) on-site day care C) telecommuting D) job sharing Answer: Explanation: A) On-site day care, telecommuting, and job sharing all allow workers to control when and where they work so they represent attempts to provide flexibility.
Day care provides a place for children to free up time for work. Job sharing allows couples to balance personal/family issues with work issues. Telecommuting allows workers to be productive at home when family issues would otherwise prevent them from working. Bonus pay may help families, but it does not provide them with ways to control when and where they work, so it is the correct response. Diff: 2 Page Ref: 44 Objective: 2. 4 104) Part-time, temporary, and contract workers who are available for hire on an as-needed basis are known as ________. A) consultants
B) core employees C) summer employees D) a contingent workforce Answer: Explanation: D) The contingent workforce is the segment of the workforce that is not permanent. Contingent workers may work full time, but they are hired only on a provisional basis and will likely leave when their task is complete. A consultant is a high-level contingent worker, but the contingent workforce contains other workers besides consultants, so consultants is not the correct response. Similarly, summer employees is incorrect because the contingent workforce is not comprised only of summer workers.
Core employees are permanent workers so core employees is incorrect. Diff: 1 Page Ref: 44 AACSB: Diversity Objective: 2. 4 105) Managers hire contingent workers because they are ________ than permanent workers. A) more loyal B) more productive C) more flexible D) less costly Answer: Explanation: D) Hiring contingent workers saves money for managers in several ways. Contingent workers usually don’t get benefits, aren’t paid at as high a rate as full-time workers, and can be dismissed easily when the project they are working on is complete. This makes “less costly” the correct response.
There is no evidence that contingent workers are more loyal, productive, or flexible than full-time workers (in fact they could be less of each category) so these responses are incorrect. Diff: 2 Page Ref: 44 Objective: 2. 4 106) Managers today realize that long-term success is largely achieved by ________. A) satisfying the customer B) focusing on costs C) hiring highly educated managers D) focusing on goals Answer: Explanation: A) Costs, well-educated managers, and goals all may be critical parts of running a business. However, today’s managers see the key to success in making sure the customer is pleased.
A satisfied customer is a customer who will return to your place of business and therefore can make the difference between success and failure in today’s business world. Diff: 2 Page Ref: 45 Objective: 2. 5 107) Which of the following is NOT true of today’s customers? A) They are more demanding. B) They have fewer choices. C) They are more skeptical. D) They are less extravagant. Answer: Explanation: B) Customers today are more demanding. They want better service, lower prices, and higher value than ever before. Customers are also more doubtful about the claims of merchants.
They are media-savvy and wise to the tactics that businesses use to sell things. Customers are also thrifty—hardship in today’s economy has made them highly discriminating buyers. One thing that is not true about today’s customers is that they have fewer choices. If anything, customers have more choices—including the vast selection of the Internet—and ways to choose products than ever before. Diff: 2 Page Ref: 45 Objective: 2. 5 108) Why is a bank teller position classified as a service industry job? A) It deals with the financial industry. B) The teller must interact with customers.
C) It is not a high-paying job. D) The teller must be well-trained and independent. Answer: Explanation: B) The common thread of all service industry jobs is that they require the employee to interact extensively with customers. How well-trained, independent, or well-paid the employee is does not affect how the job is classified, making the choices regarding a high-paying job and the teller being well-trained and independent incorrect. Similarly, financial industry workers can be classified as service workers, but plenty of other industries also include service workers.
With regard to the teller interacting with customers, note that because they deal with customers, many financial consultants qualify as service workers even though they are highly paid. Diff: 2 Page Ref: 46 Objective: 2. 5 109) Improved employee attitudes ________. A) lead directly to increased stock prices B) improve customer attitudes but do not lead to increased revenue C) lead indirectly to increased revenue D) do not improve customer attitudes Answer: Explanation: C) The path from better attitudes to increased revenue is indirect. Better employee attitudes have been shown to foster better attitudes toward the company by customers.
Improved customer attitudes lead to greater sales and increased revenue. The choice regarding improving customer attitudes but not leading to increased revenues is incorrect because it doesn’t acknowledge increased revenue. Not improving customer attitudes is incorrect because customer attitudes have been shown to improve as a result of improved employee attitudes. Leading directly to increased stock prices is incorrect because there is no evidence that stock prices increase as a result of better employee attitudes. Diff: 2 Page Ref: 46 Objective: 2. 5 10) A company with a customer-responsive culture looks primarily to hire employees who are ________. A) assertive and demanding B) passive and introverted C) studious and detail-oriented D) friendly, outgoing, and good at listening Answer: Explanation: D) Employees in a customer-responsive company must be good with people. Thus, being comfortable with people, a good listener, and friendly are all characteristics that managers look to hire. Being assertive, introverted, or studious are not characteristics that fit in well with top-notch service, so these choices are incorrect. Diff: 2 Page Ref: 47 Objective: 2. 5 11) Empowerment might give a customer service employee the ability to ________. A) ignore customers who clearly do not intend to purchase merchandise B) show up to work late several times a week C) modify a service plan for a customer in an unusual way D) break rules that clash with the company code of ethics Answer: Explanation: C) Empowerment allows employees to make changes within limits to make sure that customers are satisfied. This might include modifying a service plan for a customer. It would not include ignoring customers, no matter how unpromising they were, showing up late to work, or ignoring a company code of ethics.
Diff: 2 Page Ref: 47 Objective: 2. 5 112) The management theory of continuous improvement focuses on quality where managers in the past focused on ________. A) keeping prices up B) consistency C) innovation D) productivity Answer: Explanation: D) Though product consistency, innovation, and keeping prices up were all important components of success in management theories of the past, the primary focus of these programs was on productivity. The road to success was defined largely by a matter of efficiency—keeping costs down and profits up.
Continuous improvement sees success in a different, more long-term way, focusing on building customer satisfaction and customer loyalty rather than productivity. Diff: 2 Page Ref: 48 Objective: 2. 5 113) Continuous improvement puts a focus on the customer, who is defined as ________. A) the purchaser of the company’s products B) anyone and everyone who does business with the company C) only those individuals who spend a significant amount of money on the company’s products D) individuals who buy the company’s products or competitor’s products Answer:
Explanation: B) The customer in continuous improvement theory includes people who buy the company’s products directly, and also those who do business with the company in other ways, such as suppliers and subcontractors. This makes everyone who does business with the company rather than the purchaser of the company’s products the correct response. The other two choices both give too limited a definition of customer. Individuals who buy the company’s or competitor’s products is incorrect because it fails to include people who do business with the company without buying its primary products, such as shippers and maintenance personnel. Only those individuals who spend a significant amount” puts a judgment value on customers, failing to realize that circumstances change, and formerly small, unimportant customers can later become big, important customers. Diff: 3 Page Ref: 49 AACSB: Analytic Skills Objective: 2. 5 114) All of the following are characteristics of continuous improvement EXCEPT ________. A) drastic change to improve quality B) improvement in the quality of everything the organization does C) accurate statistical measurement of quality D) empowerment of employees Answer: Explanation: A) Continuous improvement entails a constant quest to keep