FSOT Pq - Management

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FSOT Quizzes & Trivia

FSOT Management Review
Beware of the typos! They're there to keep you on your toes. OK, not really. Just keep an eye out and let me know.


Questions and Answers
  • 1. 

    What is the most effective method for a firm to improve morale for its employees?

    • A.

      Increasing salary.

    • B.

      Having programs that cater to their emotional, psychological, and domestic needs.

    • C.

      Having corporate parties all the time.

    • D.

      Having top management present company directions and strategy.

    Correct Answer
    B. Having programs that cater to their emotional, psychological, and domestic needs.
    Explanation
    Employees all have emotional, psychological, and domestic problems. Having health plans, child-care facilities, and counseling services are just some examples. Increasing salary is a short-term incentive; employees will quickly adjust to the new salary and morale will drop back down again. The other two choices have smaller effects but not as great as the programs cited in answer B.

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  • 2. 

    Which of the two strategies can effectively be used to motivate employees?

    • A.

      Behavior modification and job design.

    • B.

      Overseas posting and self-improvement courses.

    • C.

      Promotions and holidays.

    • D.

      Vouchers and gifts.

    Correct Answer
    A. Behavior modification and job design.
    Explanation
    Behavior modification involves changing behavior and encouraging appropriate actions by relating the consequences of behavior to the behavior itself. Job design itself to motivate and improve employee motivation. This can be done through job rotation, enlargement, and so on. Answers B, C, and D are all useful, but less effective.

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  • 3. 

    Which of these strategies cannot be used to motivate the employee?

    • A.

      Job rotation.

    • B.

      Job enlargement.

    • C.

      Job enrichment.

    • D.

      Job reduction.

    Correct Answer
    D. Job reduction.
    Explanation
    Job rotation is the movement of employees from one job to another in an effort to relieve the boredom often associated with job specialization. Job enlargement is the addition of more tasks to a job instead of treating each task as separate. Job enrichment is the incorporation of motivational factors, such as opportunity for achievement, recognition, responsibility, and advancement. Job reduction, on the other hand, implies that the employee is not able to take up more responsibility and is, therefore, bad.

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  • 4. 

    This is a program that allows employees to choose their starting and ending times, provided that they are at work during the specified core period.  What is it?

    • A.

      Double time.

    • B.

      Flextime.

    • C.

      Part time.

    • D.

      Job sharing.

    Correct Answer
    B. Flextime.
    Explanation
    Flextime is the program adopted by many U.S. companies as they recognize that making allowances for employees' schedule increases employee morale and productivity. Double time and part time are not correct. Job sharing is not correct, but is a useful management tool that occurs when two people share a job. This allows the employee to keep a job without losing income and yet being able to spend time on personal priorities.

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  • 5. 

    With affirmative action programs, legally mandated plans try to increase job opportunities for

    • A.

      Professionals.

    • B.

      White Caucasian males.

    • C.

      Highly qualified individuals.

    • D.

      Women and minorities.

    Correct Answer
    D. Women and minorities.
    Explanation
    Affirmative action programs are legally mandated plans that try to increase job opportunities for minority groups by analyzing the current pool of workers, identifying areas where women and minorities are underrepresented, and establishing specific hiring and promotion goals, with target dates, for addressing the discrepancy.

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  • 6. 

    The Equal Pay Act mandates that men and women who do equal work must receive the same wage.  Wage differences are acceptable only if they are attributed to seniority or

    • A.

      National origin.

    • B.

      Religion.

    • C.

      Performance.

    • D.

      Location.

    Correct Answer
    C. Performance.
    Explanation
    Performance varies across individuals and as such different wages should be applied. Although people in different locations get different gross wages, that approach is still based on the same base wage with different location allowance. National origin and religion are not relevant.

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  • 7. 

    Which of these is not a factor in evaluating employee performance?

    • A.

      Productivity.

    • B.

      Leadership.

    • C.

      Adaptability.

    • D.

      Social skills.

    Correct Answer
    D. Social skills.
    Explanation
    Productivity, leadership, and adaptability are very important in evaluating employee performance. Productivity is the rate at which work is regularly produced and determines the effectiveness of the firm. A firm needs good leadership to grow. Employees that are potential good leaders should be groomed to top management roles. Adaptability is the ability to be comfortable with change. The only thing that is constant in a firm is usually change. Thus employees need to be able to adapt relatively quickly to changes.

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  • 8. 

    In companies, people come and go.  Which of these is not a rule for peaceful separation (resignation)?

    • A.

      Prior to leaving, do not disrupt your current employer's business.

    • B.

      Inform everyone that you are leaving the firm.

    • C.

      Sign an agreement with your new employer only after you have left the old position.

    • D.

      Have the recruiting employer indemnify you from judgments, settlements, and attorney fees resulting from litigation initiated by the former employer.

    Correct Answer
    B. Inform everyone that you are leaving the firm.
    Explanation
    When leaving a company, the decision to leave should only be discussed with those who need to know, such as your immediate supervisor and colleagues. There is no need to let everyone know, because this may dampen morale for the firm and may create more problems later on. There are other rules for peaceful separations, including not disrupting the current employer's workflow and keeping trade secrets of the current employer.

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  • 9. 

    The International Monetary Fund (IMF) was established to

    • A.

      Promote trade among member nations by eliminating trade barriers and fostering financial cooperation.

    • B.

      Loan money to underdeveloped developing countries; it was formally known as the International Bank for Reconstruction and Development.

    • C.

      Ensure that there is no major currency speculation in the world.

    • D.

      All of the above.

    Correct Answer
    A. Promote trade among member nations by eliminating trade barriers and fostering financial cooperation.
    Explanation
    The IMF also makes short-term loans to member countries that have balance-of-payment deficits and provides foreign currencies to member nations. The IMF also avoids financial crises by alerting the international communities about countries that cannot repay their debts. Answer B is what the World Bank does. The World Bank and other multilateral development banks are the largest source of advice and assistance for developing nations.

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  • 10. 

    The negotiation process through which management and unions reach an agreement about compensation, working hours, and working conditions is

    • A.

      Union labor contract.

    • B.

      Union arbitration.

    • C.

      Union Mediation.

    • D.

      Collective bargaining.

    Correct Answer
    D. Collective bargaining.
    Explanation
    The objective of the collective bargaining is to reach a labor contract. In collective bargaining each side tries to reach an agreement that meets its demands. Sometimes, if this is not resolved amicably, it will lead to strikes and picketing.

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  • 11. 

    In the event that a collective bargaining process fails to go through, what can management do?

    • A.

      Strike.

    • B.

      Boycott.

    • C.

      Lock out.

    • D.

      Picket.

    Correct Answer
    C. Lock out.
    Explanation
    A lockout is the management's version of a strike, wherein a work site is closed so that employees cannot go to work. A strike is a walkout by employees, one of the most effective weapons employees have for collective bargaining. A boycott is an attempt to keep people from buying the products of the company, while picketing is a public protest against management practices that involves union members marching and carrying anti-management signs at the employer's plant.

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  • 12. 

    In marketing management, which of these is not part of the marketing mix?

    • A.

      Consumer.

    • B.

      Place.

    • C.

      Price.

    • D.

      Product.

    Correct Answer
    A. Consumer.
    Explanation
    The marketing mix comprises price, product, promotion, and place. The consumer is never part of the marketing mix. A marketing firm needs to target the consumer and then apply the appropriate marketing mix to that targeted consumer group.

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  • 13. 

    The central focus of marketing is to create utility, which refers to a product's ability to satisfy human needs and wants.  A McDonald's Big Mac or a two-day vacation at Walt Disney World both satisfy needs or wants.  Which of the following is a utility not provided by marketing?

    • A.

      Place.

    • B.

      Possession.

    • C.

      Form.

    • D.

      Time.

    Correct Answer
    C. Form.
    Explanation
    Place is the location where the product or service is provided. Possession is the ability of the consumer to afford and own the product or service. Time is the availability of the product or services to the consumer. These three all can be determined by marketing management. Form utility, on the other hand, is the physical product that gives the consumer the utility level so desired.

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  • 14. 

    Why do we need to segment the market before applying the marketing mix?

    • A.

      Because the market is too defragmented, and we need to consolidate.

    • B.

      Because consumers are very heterogeneous, and we need to form similar groups for targeting.

    • C.

      Because it is easier to staff manpower.

    • D.

      Because the marketing mix can be applied only to segments and not masses.

    Correct Answer
    B. Because consumers are very heterogeneous, and we need to form similar groups for targeting.
    Explanation
    Consumers are very heterogeneous. By segmenting, firms are able to better target the specific groups and then apply a concentration marketing mix effort on the segment. This way, the consumers have a better product or service that they need and will be more satisfied. Marketing mix for mass marketing is also possible; thus, D is not an answer.

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  • 15. 

    Which of these is a multiple target market strategy?

    • A.

      Promoting BMW Z4 to a select group of customers.

    • B.

      Selling generic tires nationwide.

    • C.

      Combo meals for parents and kids at McDonald's.

    • D.

      Having product lines with many products.

    Correct Answer
    D. Having product lines with many products.
    Explanation
    Having a product line caters to the needs of multiple users, because consumers are heterogeneous. Answer A is a single market, but narrow approach, because it is only for a select group of consumers, usually for luxury goods. Answer B is a mass-market approach, while answer C is a combined market approach.

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  • 16. 

    Which of these cannot be used as a basis for segmenting consumers?

    • A.

      Demographic information, which includes gender and income.

    • B.

      Geographic information, which includes terrains and population density.

    • C.

      Psychological information, which includes personality and motives.

    • D.

      Medical condition information, which includes health and cancer records.

    Correct Answer
    D. Medical condition information, which includes health and cancer records.
    Explanation
    Medical conditions change with time and location; although it is technically possible to segment based on medical condition, it will be trivial and a secondary finding compared to the first three answers.

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  • 17. 

    What are the 4Ps of the marketing mix?

    • A.

      Place, product, people, promotion.

    • B.

      Product, people, place, promotion.

    • C.

      Product, price, place, promotion.

    • D.

      Product, place, price, promotion.

    Correct Answer
    D. Product, place, price, promotion.
    Explanation
    The 4Ps include product, place, price, and promotion. People or the consumers are never part of the marketing mix. The consumers need to be segmented and targeted before the marketing mix is applied to the specific market segment. However, a marketing firm cannot control or change the people (consumers) and, hence, they are not part of the marketing mix.

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  • 18. 

    In marketing research, what is the difference between primary and secondary data?

    • A.

      The former is used by marketing managers, while the later is used by consumers.

    • B.

      The former is collected directly from consumers, while the latter is aggregated or compiled information.

    • C.

      The former is collected directly from consumers, while the latter is seldom used by marketing managers.

    • D.

      The former is used by marketing managers, while the latter is aggregated or compiled data.

    Correct Answer
    B. The former is collected directly from consumers, while the latter is aggregated or compiled information.
    Explanation
    Primary data is marketing information that is observed, recorded, or collected directly from respondents, while secondary data is market information that is compiled inside or outside an organization for some purpose other than changing the current situation.

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  • 19. 

    For consumer buying behavior, which of these is not a psychological variable affecting it?

    • A.

      Imagination.

    • B.

      Perception.

    • C.

      Attitude.

    • D.

      Personality.

    Correct Answer
    A. Imagination.
    Explanation
    Imagination is the irrelevant answer. Perception is the process by which a person selects, organizes, and interprets information received from his or her senses. Attitude is both knowledge and positive or negative feelings about something. Personality is the organization of an individual's distinguishing character traits, attitudes, or habits. These three psychological factors affect a consumer's buying behavior, so firms need to be aware of them.

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  • 20. 

    Which of these is not a social variable of consumer buying behavior.

    • A.

      Social roles.

    • B.

      Reference groups.

    • C.

      Social learning.

    • D.

      Social class.

    Correct Answer
    C. Social learning.
    Explanation
    Social learning is not a social variable; it is more of a psychological variable. Social roles refer to a set of expectations for individuals based on some position they occupy. Reference groups are groups with whom buyers identify and whose values or attitudes they adopt. Social classes refer to the ranking of people into higher or lower positions of respect.

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  • 21. 

    The marketing environment includes the following:

    • A.

      Political factors, social factors, competitive factors, technological factors.

    • B.

      Psychological factors, social factors, competitive factors, technological factors.

    • C.

      Political factors, social factors, military factors, technological factors.

    • D.

      Political factors, biological factors, competitive factors, technological factors.

    Correct Answer
    A. Political factors, social factors, competitive factors, technological factors.
    Explanation
    The marketing environment includes political factors that cover how laws affect the marketing mix. Social factors include lifestyles and ethics, while competitive factors include economic conditions. Technological factors include technological advances that improve the marketing mix.

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  • 22. 

    What is the bottom line for micro marketing?

    • A.

      Sales.

    • B.

      Expenses.

    • C.

      Profit.

    • D.

      Pricing.

    Correct Answer
    C. Profit.
    Explanation
    The bottom line of micro marketing is profit. Profit is the difference between gross sales and expenses. For macro marketing and nonprofit marketing the bottom lines will be different. For macro marketing, the society must benefit as a whole, while for nonprofit marketing, the subjects or goals of the agency has to be fulfilled.

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  • 23. 

    Many firms need to develop new products.  What do you think is the sequence involved in new products?

    • A.

      Idea development, idea screening, test marketing, product development, commercialization.

    • B.

      Idea development, idea screening, test marketing, commercialization, product development.

    • C.

      Test marketing, idea development, idea screening, product development, commercialization.

    • D.

      Idea development, idea screening, product development, test marketing, commercialization.

    Correct Answer
    D. Idea development, idea screening, product development, test marketing, commercialization.
    Explanation
    Very few products, out of thousands that are introduced, succeed. It is critical that firms conduct the appropriate steps to ensure the product will be successful. Idea development and screening is the first phase to get feasible ideas on the drawing board. The prototype is then developed before a sample market is tested with that product. When the test market feedback is good, full commercialization is possible.

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  • 24. 

    Consumer products are products intended for household or family use.  Which of these is not a consumer convenience product?

    • A.

      Furniture.

    • B.

      Eggs.

    • C.

      Batteries.

    • D.

      Newspapers.

    Correct Answer
    A. Furniture.
    Explanation
    Convenience products are bought frequently, without a lengthy search, and often for immediate consumption. Consumers spend virtually no time planning where to purchase these products and usually accept whatever brand is available. Furniture is a product that requires extensive search.

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  • 25. 

    Which of the following is not a consumer product?

    • A.

      Specialty products.

    • B.

      Raw materials.

    • C.

      Shopping products.

    • D.

      Convenience products.

    Correct Answer
    B. Raw materials.
    Explanation
    Raw materials are natural products taken from the earth, oceans, and recycled solid waste. It is usually the starting phase of any products or business products. Convenience products are frequently purchased products, while shopping products are products in which consumers compare and contrast the benefits and costs. Specialty products are products such as fusion food or designer clothing.

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  • 26. 

    In product management, in which stage of the product life cycle is there a negative profit?

    • A.

      Introduction.

    • B.

      Growth.

    • C.

      Maturity.

    • D.

      Decline.

    Correct Answer
    A. Introduction.
    Explanation
    During the introduction phase, the sales volume is low and the cost of product development is high.

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  • 27. 

    What is the difference between a brand and a trademark?

    • A.

      There is no difference.

    • B.

      Brands are used for consumer goods, while trademarks are for advertising.

    • C.

      A trademark is a brand that is registered and legally protected.

    • D.

      A brand is used for a product or service, while a trademark is used for generic goods.

    Correct Answer
    C. A trademark is a brand that is registered and legally protected.
    Explanation
    Branding is the process of naming and identifying products. A brand is a name, term, symbol, design, or combination that identifies a product and distinguishes it from other products. A trademark needs to be registered with the U.S. patent and trademark office. It is legally protected.

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  • 28. 

    What is price skimming?

    • A.

      Temporary price reductions, often employed to boost sales.

    • B.

      Encouraging purchases based on emotional rather than rational responses to price.

    • C.

      A price designed to help a product enter the market and gain market share rapidly.

    • D.

      Charging the highest possible price that buyers who want the product will pay.

    Correct Answer
    D. Charging the highest possible price that buyers who want the product will pay.
    Explanation
    Price skimming refers to the strategy of charging the highest possible price that buyers who want the product are willing to pay. This approach is commonly used when a new product enters the market and aims to maximize profits by targeting early adopters or customers who are willing to pay a premium for the product. As demand decreases or competition increases, the price may be gradually reduced. This strategy allows companies to capitalize on the initial excitement and willingness to pay a higher price for a new product.

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  • 29. 

    Which of these is an example of marketing direct channel?

    • A.

      IBM selling PCs at a retail store in a mall

    • B.

      IBM selling PCs online on its Web site.

    • C.

      IBM selling PCs at Wal-Mart.

    • D.

      IBM selling PCs at an IBM authorized retail outlet.

    Correct Answer
    B. IBM selling PCs online on its Web site.
    Explanation
    Direct channel occurs when there is no middleman.

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  • 30. 

    For a product like a Lamborghini sports car, what kind of distribution should the company use for market coverage?

    • A.

      Exclusive distribution.

    • B.

      Intensive distribution.

    • C.

      Selective distribution.

    • D.

      Any; it does not matter.

    Correct Answer
    A. Exclusive distribution.
    Explanation
    The awarding of a manufacturer to an intermediary of the sole right to sell a product in a defined geographic territory is exclusive distribution. Such exclusivity provides an incentive for a dealer to handle a product that has a limited market.

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  • 31. 

    Which one of these international transportation means is the cheapest?

    • A.

      Trains.

    • B.

      Ships.

    • C.

      Planes.

    • D.

      Trucks.

    Correct Answer
    B. Ships.
    Explanation
    Ships are the cheapest international transportation means because they have lower fuel and maintenance costs compared to planes or trucks. Ships can carry large quantities of goods at once, making their transportation costs per unit lower. Additionally, ships have a lower carbon footprint compared to other modes of transportation, making them a more cost-effective and environmentally friendly option.

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  • 32. 

    For most salespeople, personal selling is a six-step process.  Which is the correct sequence?

    • A.

      Prospecting, presenting, approaching, handling objections, closing, following up.

    • B.

      Prospecting, approaching, presenting, closing, handling objections, following up.

    • C.

      Prospecting, approaching, handling objections, presenting, closing, following up.

    • D.

      Prospecting, approaching, presenting, handling objections, closing, following up.

    Correct Answer
    D. Prospecting, approaching, presenting, handling objections, closing, following up.
    Explanation
    The correct sequence for the six-step process of personal selling is prospecting, approaching, presenting, handling objections, closing, and following up. This sequence ensures that the salesperson identifies potential customers, initiates contact, delivers a sales pitch, addresses any concerns or objections, secures the sale, and maintains a relationship with the customer after the sale.

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  • 33. 

    Which of these is not a financial statement?

    • A.

      Income statement.

    • B.

      Balance sheet.

    • C.

      Inventory sheet.

    • D.

      Cash flow statement.

    Correct Answer
    C. Inventory sheet.
    Explanation
    An income statement is a financial report that shows an organization's profitability over a period of time, while a balance sheet is a snapshot of an organization's financial strength. A cash flow statement reflects the current assets and liquidity of the firm. An inventory sheet keeps track of inventory, which is not part of financial accounting.

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  • 34. 

    Which of these is not a profitability ratio?

    • A.

      Profit margin.

    • B.

      Return on assets.

    • C.

      Return on equity.

    • D.

      Receivables turnover.

    Correct Answer
    D. Receivables turnover.
    Explanation
    Receivables turnover is an asset utilization ratio. The first three answers are all profitability ratio -- ratios that measure the amount of operating income or net income an organization is able to generate relative to its assets, owners' equity, and sales.

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  • 35. 

    Which of these reflect the three important functions of money?

    • A.

      Medium of exchange, measure of value, store of value.

    • B.

      Medium of exchange, measure of product, store of value.

    • C.

      Medium of exchange, measure of value, store of deposits.

    • D.

      Medium of gold, measure of value, store of value.

    Correct Answer
    A. Medium of exchange, measure of value, store of value.
    Explanation
    Money, and before it, bartering, has always been used as a medium of exchange. It is also a measure of value because more of it means one can obtain better goods and services. It also acts as a common denomination in which people can compare the value of the products or services. It also allows people to keep some of their wealth and use it when needed in the future.

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  • 36. 

    What are some of the characteristics of money?

    • A.

      Acceptability, divisibility, portability, visibility.

    • B.

      Acceptability, durability, portability, visibility.

    • C.

      Acceptability, divisibility, portability, durability.

    • D.

      Acceptability, divisibility, stability, visibility.

    Correct Answer
    C. Acceptability, divisibility, portability, durability.
    Explanation
    Visibility is irrelevant here. Acceptability means that the money can be readily accepted for purchase of goods and services or for debt. Divisibility means there is a wide range of denominations from notes to coins. POrtability means that it has to be light and easily moved around. Stability means the money should carry the same worth day to day. Durability means the money must last for a certain period of time and not be defaced or easily damaged.

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  • 37. 

    What are the different types of money?

    • A.

      Checking accounts, saving accounts, credit cards, counterfeits.

    • B.

      Checking accounts, money market accounts, credit cards.

    • C.

      Checking accounts, savings accounts, certificate of deposit, counterfeits.

    • D.

      Checking accounts, saving accounts, credit cards, far money.

    Correct Answer
    B. Checking accounts, money market accounts, credit cards.
    Explanation
    Although counterfeits are used unknowingly, they are not a form of money. Checking accounts, savings accounts, money market, credit cards, and CDs are all forms of money. There is no far money, only near money, which refers to assets that can be turned into cash easily.

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  • 38. 

    What is the role of Automated Clearing Houses (ACHs)?

    • A.

      Ensure the securities get cleared promptly.

    • B.

      Ensure that ATM machines of different banks are connected and work in sync.

    • C.

      Ensure that international funds transfers are in compliance with anti money laundering policies.

    • D.

      Facilitate payments such as deposits and withdrawals between banks via magnetic tape.

    Correct Answer
    D. Facilitate payments such as deposits and withdrawals between banks via magnetic tape.
    Explanation
    Most large U.S. employers use ACHs to deposit their employees' paychecks directly to the employees' bank accounts. The advantages of direct deposits to consumers' accounts include convenience, safety, and potential interest earnings.

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  • 39. 

    In finance, what are bonds?

    • A.

      Loans backed by collateral that the bank can claim if the borrowers do not repay them.

    • B.

      Loans backed only by the borrower's good reputation and previous credit rating.

    • C.

      An arrangement by which a bank agrees to lend a specified amount of money to an organization upon request.

    • D.

      Debt instruments that larger companies sell to raise long-term funds.

    Correct Answer
    D. Debt instruments that larger companies sell to raise long-term funds.
    Explanation
    For bonds, the buyer loan the issuer of the bond cash in exchange for regular interest payments until the loan is repaid on or before the specified maturity date. A bond is like an IOU.

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  • 40. 

    What is the difference between OTC (over the counter) markets and organized exchanges?

    • A.

      OTC has no central location, while the latter are organized markets where brokers act as agents to buy and sell.

    • B.

      OTC has no central locations, while the latter are organized markets in North America.

    • C.

      OTC has multiple central locations, while the latter are organized markets where brokers act as agents to buy and sell.

    • D.

      OTC has multiple central locations, while the latter are organized markets with only one central market.

    Correct Answer
    A. OTC has no central location, while the latter are organized markets where brokers act as agents to buy and sell.
    Explanation
    Organized exchanges are central locations where investors buy and sell securities. OTC, on the other hand, is a network of dealers all over the country linked by computers, telephones, and teletype machines. It has no central location.

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  • 41. 

    New entrants are newcomers to an existing industry.  They typically bring new capacity, a desire to gain market share, and substantial resources.  Which of these are threats to new entrants?

    • A.

      Economies of scales, product differentiation, counterfeiting.

    • B.

      Economies of scales, product differentiation, switching cost.

    • C.

      Economies of scales, government policy, counterfeiting.

    • D.

      Economies of scales, capital requirements, counterfeiting.

    Correct Answer
    B. Economies of scales, product differentiation, switching cost.
    Explanation
    Economies of scales in the production and sale of mainframe computers, for example, gave IBM a significant cost advantage over any new rival. Product differentiation creates high entry barriers through high levels of advertising and promotion. Switching cost is high especially for software familiarity, like Word or Excel, because, after customers are familiar with a product, they often will not try another software product. Government policy can limit entry through license issuance. Huge capital requirements often prevent competitors especially with the cloud of uncertainty of success. Counterfeiting is irrelevant.

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  • 42. 

    SWOT analysis is often used to analyze the business situation of a firm.  What does SWOT stand for?

    • A.

      Situation work operation test

    • B.

      Strength weaknesses operation test

    • C.

      Strength weaknesses opportunity threats

    • D.

      Situation work opportunity threat

    Correct Answer
    C. Strength weaknesses opportunity threats
    Explanation
    SWOT analysis has proven to be the most widely used and enduring analytical technique in strategic management. It allows the firm to be aware of its internal environment (strength and weaknesses) and its external environment (opportunity and threats).

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  • 43. 

    Core competencies is something that a firm can do exceedingly well.  It is a key strength.  To have distinctive competency, a firm must meet three tests.  Which of these is not a test?

    • A.

      Positive word of mouth.

    • B.

      Customer value.

    • C.

      Competitor unique.

    • D.

      Extendibility.

    Correct Answer
    A. Positive word of mouth.
    Explanation
    Customer value means that the firm must make a disproportionate contribution to customer perceived value. Competitor unique means the firm has unique and superior features to competitors' capabilities. Extendibility means the firm has a product that can be used to develop new products/services or enter new markets.

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  • 44. 

    Reengineering is important to strategy implementation.  It breaks away from the old rules and procedures.  Which of these is not a principle for reengineering?

    • A.

      Organize around outcomes, not tasks.

    • B.

      Have those who use the output of the process perform the process.

    • C.

      Treat geographically dispersed resources as though they were centralized.

    • D.

      Adopt status quo for some areas.

    Correct Answer
    D. Adopt status quo for some areas.
    Explanation
    Reengineering is a process that involves making significant changes to an organization's systems, processes, and procedures in order to improve performance and achieve strategic goals. The principles of reengineering include organizing around outcomes, not tasks, having those who use the output of the process perform the process, and treating geographically dispersed resources as though they were centralized. However, adopting the status quo for some areas goes against the idea of reengineering, as it implies maintaining the current practices and not making any significant changes.

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  • 45. 

    Which of these is not a role of management?

    • A.

      Planning

    • B.

      Organizing

    • C.

      Staffing

    • D.

      Customer service

    Correct Answer
    D. Customer service
    Explanation
    Managers plan, organize, staff, and direct. They have to play the strategic role and have to be free from day-to-day operations. On the other hand, customer service is an operational part of the organization and is for front-line staff.

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  • 46. 

    Which of the following is not in top management?

    • A.

      Customer Service Officer (CSO)

    • B.

      Chief Executive Officer (CEO)

    • C.

      Chief Financial Officer (CFO)

    • D.

      Chier Operations Officer (COO)

    Correct Answer
    A. Customer Service Officer (CSO)
    Explanation
    Customer Service Officer is a front-line staffer.

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  • 47. 

    First line managers do more

    • A.

      Organizing

    • B.

      Planning

    • C.

      Directing

    • D.

      Controlling

    Correct Answer
    D. Controlling
    Explanation
    First-line managers are directly in contact with the front-line staff and customers. Thus, they need to have more control over daily operations. The other options are roles played by mid-level and higher managers.

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  • 48. 

    In every company, there are financial managers.  What is the role of a financial manager?

    • A.

      Develop and administer activities involved in transforming resources into goods, services, and ideas ready for the market place.

    • B.

      Focus on obtaining funds for the successful operation of an organization and using those funds to further organizational goals.

    • C.

      Handle the staffing function and deal with employees in a formalized manner.

    • D.

      Take responsibility for planning, pricing, and promoting products and making them available to customers.

    Correct Answer
    B. Focus on obtaining funds for the successful operation of an organization and using those funds to further organizational goals.
    Explanation
    Financial managers work with funds that make the company operational and profitable.

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  • 49. 

    What is the role of administrative managers?

    • A.

      Develop and administer activities involved in transforming resources into goods, services, and ideas in the market place.

    • B.

      Focus on obtaining funds for the successful operation of an organization and using those funds to further organizational goals.

    • C.

      Handle the staffing function and deal with employees in a formalized manner.

    • D.

      Manage an entire business or a major segment of a business.

    Correct Answer
    D. Manage an entire business or a major segment of a business.
    Explanation
    Administrative managers are generalists, not specialists. They will be trained to manage small or major segments of a business.

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  • 50. 

    Which is the most important asset for top management?

    • A.

      Analytical skills

    • B.

      Leadership

    • C.

      Human relations skills

    • D.

      Technical expertise.

    Correct Answer
    B. Leadership
    Explanation
    Leadership is the most important asset for top management because it involves the ability to guide and inspire a team towards achieving organizational goals. Effective leadership enables managers to make informed decisions, delegate tasks, provide guidance, and motivate employees. It also involves the ability to communicate effectively, build relationships, and resolve conflicts. Without strong leadership skills, top management may struggle to effectively lead and manage their teams, resulting in a lack of direction and cohesion within the organization.

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Omar Ordonez |Army Veteran |
Omar, an Army Veteran, dedicated Biker, and skilled Woodworker, thrives on making impactful changes every day, showcasing determination and versatility.
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