1. The simplest form of business owned and operated by one person is called a(n) A) franchise. B) partnership. C) S-corporation. D) sole proprietorship. E) syndicate. 2. The company you work for recently has committed itself to implementing a program of social responsibility. After the company has gotten the commitment of top executives, planned the program, and appointed a program director, you suggest that a(n) ____ be prepared periodically to evaluate the success of the program. A) social actions report B) ethics evaluation C) social audit D) departmental memorandum E) research report 3. The leadership style advocating that a leader makes all decisions and tells subordinates what to do and how to do it is called A) existential. B) democratic. C) participative. D) autocratic. E) consensus. 4. An informal organization can be shown on a formal organization chart. A) True B) False 5. All of the following are disadvantages of corporations except A) perpetual life. B) double taxation. C) lack of secrecy. D) expensive formation. E) heavy government regulation. 6. If a new company desires to departmentalize in a way that will simplify supervision and facilitate coordination, it will most likely departmentalize by A) product. B) worker skill level. C) function. D) customer. E) location. 7. An organization in which management consciously attempts to spread authority to the lower organizational levels is said to be centralized. A) True B) False 8. The assignment of part of a manager's work and authority to a worker is called A) accountability. B) responsibility. C) authorization. D) delegation. E) relegation. 9. What is probably the most effective way for a company to encourage ethical behavior? A) Have ethics training sessions for interested employees. B) Develop and enforce a written code of ethics for the organization. C) Hire employees who are ethical and in agreement with the company's views. D) Post signs discouraging sexual harassment and discrimination. E) Threaten employees with immediate termination for unethical behavior. 10. A hostile takeover is a situation in which A) the management and board of directors of the targeted firm disapprove of the proposed merger. B) stockholders are paid a golden parachute. C) the government makes the decision that the corporate raider can purchase the targeted firm. D) the corporate raider receives a sum of money to leave the targeted firm alone. E) the targeted firm is dismantled to avoid the merger. 11. At Ledbetter Industries, employees are allowed one-hour lunches, but it has become common that most stroll back fifteen minutes late every day. The factor affecting the ethical behavior of Ledbetter's employees is A) individual. B) opportunity. C) social. D) code of ethics. E) whistle-blowing. 12. When the management of a large grocery store heard that Walmart might be coming to town, they developed alternative courses of action they could take if their competitive landscape changed. What type of plan di.

1. 1.
The simplest form of business owned and operated by one
person is called a(n)
A) franchise.
B) partnership.
C) S-corporation.
D) sole proprietorship.
E) syndicate.
2.
The company you work for recently has committed itself to
implementing a program of social responsibility. After the
company has gotten the commitment of top executives, planned
the program, and appointed a program director, you suggest that
a(n) ____ be prepared periodically to evaluate the success of the
program.
A) social actions report
B) ethics evaluation
C) social audit
D) departmental memorandum
E) research report
3.
The leadership style advocating that a leader makes all
decisions and tells subordinates what to do and how to do it is
called
A) existential.
B) democratic.
C) participative.
D) autocratic.
E) consensus.
4.
An informal organization can be shown on a formal
organization chart.
A) True
B) False
5.

2. All of the following are disadvantages of corporations except
A) perpetual life.
B) double taxation.
C) lack of secrecy.
D) expensive formation.
E) heavy government regulation.
6.
If a new company desires to departmentalize in a way that will
simplify supervision and facilitate coordination, it will most
likely departmentalize by
A) product.
B) worker skill level.
C) function.
D) customer.
E) location.
7.
An organization in which management consciously attempts to
spread authority to the lower organizational levels is said to be
centralized.
A) True
B) False
8.
The assignment of part of a manager's work and authority to a
worker is called
A) accountability.
B) responsibility.
C) authorization.
D) delegation.
E) relegation.
9.
What is probably the most effective way for a company to
encourage ethical behavior?
A) Have ethics training sessions for interested employees.
B) Develop and enforce a written code of ethics for the
organization.
C) Hire employees who are ethical and in agreement with the

3. company's views.
D) Post signs discouraging sexual harassment and
discrimination.
E) Threaten employees with immediate termination for
unethical behavior.
10.
A hostile takeover is a situation in which
A) the management and board of directors of the targeted firm
disapprove of the proposed merger.
B) stockholders are paid a golden parachute.
C) the government makes the decision that the corporate raider
can purchase the targeted firm.
D) the corporate raider receives a sum of money to leave the
targeted firm alone.
E) the targeted firm is dismantled to avoid the merger.
11.
At Ledbetter Industries, employees are allowed one-hour
lunches, but it has become common that most stroll back fifteen
minutes late every day. The factor affecting the ethical behavior
of Ledbetter's employees is
A) individual.
B) opportunity.
C) social.
D) code of ethics.
E) whistle-blowing.
12.
When the management of a large grocery store heard that
Walmart might be coming to town, they developed alternative
courses of action they could take if their competitive landscape
changed. What type of plan did they develop?
A) Objective
B) Operational
C) Tactical
D) Strategic
E) Contingency
13.

4. Organizations are comprised of:
A) People, structure, and goal-directed activity.
B) People, systems, input/output conversion dynamics, and the
grapevine.
C) Systems, input/output conversion dynamics, and the
grapevine.
D) People working with technology for the purpose of
improving both organizational and individual quality of life.
14.
A system can only be as strong as weakest part.
A) True
B) False
15.
A benefit of job specialization is that it
A) is more difficult to design equipment.
B) is easier to train new employees.
C) eliminates boredom.
D) is more time-consuming to change from one operation to
another.
E) enriches the job.
16.
The economic model of social responsibility places primary
emphasis on
A) economic return.
B) conservation of natural resources.
C) active government involvement.
D) quality of life.
E) the balance of economic return and social return.
17.
An organization's most important resource is its ____ resources.
A) technical
B) human
C) financial
D) material
E) information
18.

5. The span of control is the number of subordinates who report
directly to one manager.
A) True
B) False
19.
A manager with ____ skills has the ability to deal effectively
with people inside and outside the organization.
A) functional
B) conceptual
C) diagnostic
D) interpersonal
E) technical
20.
The first step in the managerial decision-making process is to
A) evaluate the problem.
B) identify an opportunity.
C) identify a solution to the problem.
D) generate alternative solutions to the problem.
E) create a problem.
21.
A disadvantage of the matrix structure is that
A) teams may be too decentralized and incapable of making a
decision.
B) employees' supervisors change, which can cause confusion.
C) employees have to report to more than one supervisor, which
can cause confusion about who is in charge of certain situations.
D) people have more work to do because they are assigned to
special projects in addition to their regular tasks.
E) the quality of work decreases due to project teams' lack of
attention to regular job duties.
22.
When medical research indicated that a high-fiber diet might
help reduce one's risk of colon cancer, a few producers of fiber
cereals suggested in their advertisements that if you eat fiber
cereal, you will not get cancer. This is an example of
A) an unethical organizational relationship.

6. B) unethical communications.
C) ethical persuasion.
D) a conflict of interest.
E) social responsibility.
23.
One way a social responsibility program can be funded is by
passing on the cost to the consumer in the form of higher prices.
A) True
B) False
24.
Melissa purchases a DVD player at a store that sells refurbished
merchandise. The store has a big sign stating Caveat Emptor
posted out front and at the cash register. This sign most likely
translates to a policy of
A) 100 percent satisfaction guaranteed with all merchandise.
B) all sales are final (no refunds or exchanges).
C) selling only French-manufactured products.
D) buying, selling, or trading electronic goods.
E) refunds or exchanges at any time with a receipt.
25.
Since someone must be responsible for a partnership's debts, a
limited partnership must have at least one general partner.
A) True
B) False
26.
A corporate culture is generally defined as the
A) informal interaction of employees outside work during
nonbusiness hours.
B) management philosophy pertaining to customer service.
C) incorporation of company policies and procedures into
employee activities.
D) manner in which employees interact with each other and with
management.
E) inner rites, rituals, heroes, and values of a firm.
27.
The most effective form of business organization for raising

7. capital is the
A) sole proprietorship.
B) partnership.
C) joint venture.
D) corporation.
E) syndicate.
28.
Jack has been saving his excess funds for several years and has
contemplated entering a partnership with a friend from college.
Jack hesitates because he knows that it is ____ to invest money
in a partnership and ____ to get the money back out.
A) difficult; easy
B) easy; difficult
C) difficult; difficult
D) easy; impossible
E) easy; easy
29.
What are the two major problems that affirmative action
programs have faced?
A) Unrealistic expectations and strict enforcement
B) Quotas and the EEOC
C) Quotas and lack of acceptance by some businesspeople
D) Lack of enforcement and lack of acceptance
E) Reverse discrimination and lawsuits
30.
When a worker has to learn only a specific, highly specialized
task, that individual should be able to learn to do it very
efficiently. However, this efficiency could eventually become
inhibited by job monotony and boredom. This situation could be
alleviated through
A) assembly-line production.
B) job rotation.
C) technical job training.
D) job design.
E) job specialization.
31.

8. The field of business ethics applies moral standards to business
situations.
A) True
B) False
32.
Once they are made aware of the pollution problem, most firms
respond rather than waiting to be cited by the EPA.
A) True
B) False
33.
The advantages and disadvantages of a business partnership are
comparable to those of marriage.
A) True
B) False
34.
Middle managers occupy the management level that falls
between the operating employees and first-line managers.
A) True
B) False
35.
Management can achieve its goals by coordinating what four
types of resources?
A) Tangible, intangible, human, and financial
B) Informational, human, controllable, and tangible
C) Financial, material, organizational, and operational
D) Human, material, financial, and intangible
E) Material, informational, human, and financial
36.
The right to be heard implies that companies should listen to
consumer complaints and
A) give them a full refund.
B) do nothing. Just listening is enough.
C) take appropriate action.
D) do whatever the consumer requests.
E) thank them for their time.
37.

9. With regard to taxation of partnerships, which of the following
statements is correct?
A) Taxes are paid on a partnership's profits, after which each
partner pays taxes on his or her share of the profits.
B) Each partner is taxed in the same way as a sole proprietor.
C) Profits are taxed twice.
D) The partnership is taxed as a separate entity.
E) A partnership is exempt from taxes.
38.
An ethical act is one that provides benefit primarily to the
individual, not necessarily benefit to a larger community. The
idea is that if the individual is benefited, so too will be the
larger community.
A) True
B) False
39.
The top governing body of a corporation is known as the
A) stockholders.
B) management.
C) incorporators.
D) board of directors.
E) officers.
40.
Committees and task forces represent ____ groups within an
organization, whereas employee bowling teams and gatherings
represent ____ groups.
A) informal; formal
B) formal; informal
C) line; staff
D) staff; line
E) staff; staff
41.
Leadership can best be defined as the ability to
A) deal effectively with others.
B) relate to others.
C) generate reasonable solutions to problems.

10. D) identify problems.
E) influence others.
42.
Joint ventures are created for a specific purpose and dissolved
when that purpose is achieved.
A) True
B) False
43.
Investors expect management to do all of the following except
A) consult them on ethical decisions.
B) boost the company's profit.
C) make sensible financial decisions.
D) increase sales.
E) increase the return to the investor.
44.
A limited-liability company is
A) taxed like a corporation.
B) taxed like a partnership.
C) the result of a horizontal merger.
D) always used to organize charitable organizations.
E) similar to a cooperative.
45.
A relatively permanent committee charged with performing
some recurring task is called a(n)
A) ad hoc committee.
B) cluster structure.
C) informal group.
D) task force.
E) standing committee.
46.
All of the following are reasons for a greater focus on quality
by U.S. firms except
A) unpredictability on Wall Street.
B) reduced market share.
C) competition from foreign firms.
D) poorer financial performance.

11. E) customers that are more demanding.
47.
Unlimited liability holds a sole proprietor personally
responsible for all the debts of the business.
A) True
B) False
48.
An affirmative action program is designed to ensure that
minority employees are represented in about the same
proportion as their representation within the community.
A) True
B) False
49.
Effective systems include all of the following parts:
A) Inputs and outputs.
B) Outputs, conversation processes, and heuristic modifiers.
C) Inputs, transformation processes, outputs.
D) Inputs, transformation processes, outputs, and feedback.
50.
Human resources is a(n) ____ type of job, so it does not fit
directly into the chain of command.
A) authoritative
B) top management
C) specialized
D) staff
E) line