I. Single choice questions (Each question has 3 points, a total of 16 questions, and the total score is 48 points in this section) 1) What term denotes a nation's basis for allocating its resources among its citizens? A) Capital structure B) Economic system C) Ownership processes D) Distribution network E) National regulations 2) What is the process for converting government enterprises into individually owned firms known as? A) Production allocation B) Privatization C) Entrepreneurship D) Demand assessment E) Profit maximization 3) Which of the following should be the first step in assessing ethical behavior in a certain situation? A) Seek the advice of managers. B) Make a judgment based on the outcome of the activity. C) Consider appropriate moral values. D) Collect facts related to the situation. E) Gather a range of opinions on the effectiveness of the policy. 4) What is likely the single MOST effective step that a company can take to set ethical standards? A) Offer large cash awards for whistle-blowing. B) Suggest that employees take ethics training. C) Post ethical rules on bulletin boards. D) State that the workplace values diversity. E) Demonstrate support from top management. 5) Why is it difficult to compare relative job growth for different-sized businesses? A) Sourcing up-to-date employment figures is difficult. B) Many small businesses experience rapid unreported growth. C) Spheres of influence overlap between the small and big business sectors. 2 D) Staff size of small businesses tends to change faster than staff size of big businesses. E) It is hard to determine the cutoff point at which a small business becomes a large business. 6) Which of the following can assist a small business and helps to determine standards based on industry? A) The U.S. Department of Commerce B) The Small Business Administration C) A franchise D) Venture capitalist E) The Small Business Development Center 7) Which of the following resulted from NAFTA? A) Companies from other countries, such as Japan, have made fewer business investments in North America. B) U.S. exports to Mexico have decreased. C) Mexican imports to the United States have increased. D) More jobs have been created than what was originally predicted. E) More U.S. jobs were eliminated than what was originally predicted. 8) How does globalization of business benefit shareholders of an organization? A) Through easier and faster international travel B) Through the elimination of diseases in developing nations C) Through increased and improved profitability D) Through lower taxes between trade partners E) Through more distinct cultural heritage 9) What caused manufacturing jobs to move from Mexico to China in the late 1990s? A) Increases in Mexico's cost of living and wages B) Modernization of facilities in China C) Improved international travel abilities D) Increases in China's cost of living and wages E) Higher levels of education and professional jobs in Mexico 10) Which description defines the planning function of the management process? A) Guiding and motivating employees to meet organizational objectives B) Discussing how best to arrange an organization's resources into a coherent structure C) Scanning the business environment for threats and opportunities D) Determining what an organization needs to do and how best to get it done E) Monitoring a firm's performance to make sure that it is meeting its goals 11) Which function in the management process is being utilized when a firm elects to 3 move towards a more centralized structure? A) Planning B) Leading C) Organizing D) Controlling E) Monitoring 12) Which factor plays a key role in determining an organization's structure? A) Competition and technology B) Location and life-cycle stage C) Profitability and leverage D) Research and development E) Mission and strategy 13) Reporting relationships within a company are indicated on an organization chart and represent A) organizational structure. B) mission and strategy responsibility. C) areas of specialization. D) chain of command. E) decision-making responsibility. 14) In which of the following is the customer part of the system during service delivery? A) A high-contact system B) A low-contact system C) A flexible system D) A quality system E) A utility system 15) When a company makes products available conveniently for consumers, based on where they are, which type of utility is created? A) Time B) Form C) Place D) Possession E) Leisure 16) In what way does absenteeism result in a direct cost to a business? A) Additional training must be provided to coworkers. B) Turnover among high quality employees increases. C) Burnout and psychological distress increase for those who are on the job. D) There is confusion about authority roles within the organization. E) A substitute must do the work of the missing employee. 4 II. True or False (Each question has 2 points, a total of 16 questions, and the total score is 32 points in this section) 1) The customs, values, and demographic characteristics of the society in which an organization functions are the principal elements of the political-legal environment. TURE OR FALSE? 2) Physical resources include the data and other information used by businesses. TURE OR FALSE? 3) The ethical norm of utility evaluates whether an act respects the rights of all parties. TURE OR FALSE? 4) The most essential element in encouraging ethical behavior in an organization is letting employees dictate ethical norms. TURE OR FALSE? 5) Small-business investment companies (SBICs) may be sponsored by the federal government. TURE OR FALSE? 6) The Small Business Development Center provides micro loan programs for members. TURE OR FALSE? 7) The purpose of the General Agreement on Tariffs and Trade is to reduce trade barriers. TURE OR FALSE? 8) The primary purpose of the World Trade Organization is to impose tariffs on imported products. TURE OR FALSE? 9) When a sales manager compares actual sales to the quarterly sales quota, he or she is performing the controlling function of management. TURE OR FALSE? 10) The first step in the control process is to compare actual performance to standards. TURE OR FALSE? 11) The chain of command is depicted by solid lines on an organization chart. TURE OR FALSE? 5 12) Organizational structure is a function of the organization's mission and strategy. TURE OR FALSE? 13) By turning raw materials into finished goods, production creates form utility. TURE OR FALSE? 14) Firms that make only tangible products are engaged in goods production. TURE OR FALSE? 15) Organizational commitment reflects an individual's identification with the organization and its mission. TURE OR FALSE? 16) Organizational citizenship reflects the ability of a behavior to detract from, rather than contribute to, organizational performance. TURE OR FALSE? III. Short Answer Questions (Each question has 10 points, a total of 2 questions, and the total score is 20 points in this section) 1) What is an informal organization and how does it relate to the formal structure? 2) What are the advantages and disadvantages for a franchisee?