MANAGEMENT INTRODUCTION QUESTIONS AND

ANSWERS 11 TO 20
Management Introduction
Questions 11 To 20
11. Information that originates outside the organization is known as external information.
Which of the following is/are example(s) of external information in an organization?
Daily receipts and expenditures
Salesperson Quotas
Descriptions of customer satisfaction with products and services
Quantity of an item in hand or in inventory
Cost and selling price of the companys item.
12. Which of the following decision-making models emphasizes short-run solution of a
problem rather than long-term goal accomplishment?
(a) Rational model
(b) Satisficing model
(c) Incremental
model
(d) Garbage-can model
(e) Decision tree.
13. Sofia works in one of seven research and development departments at General
Automobile Corporation. This would suggest that General Automobiles has a
(a) Functional structure
(b) Divisional structure
(c) Flat
structure
(d) High degree of centralization
(e) Tall structure.
14. Which of the following information processing systems gives the output in the form of
summary and exception reports that are useful to the managers?
(a) Decision support system
(b) Management information system
(c) Office automation system
(d) Transaction processing system
(e) Executive support system.
15. In which of Likerts four systems of leadership, managers do not have complete
confidence and trust in subordinates but nevertheless, solicit advice from
subordinates while retaining the right to make final decision?
(a) Participative leadership style
(b) Benevolent-authoritative leadership style
(c) Consultative leadership style
(d) Exploitative-authoritative leadership style
(e) Trait theory of leadership style.
16. Performance appraisals are important in an organization because they
Provide systematic judgments to support promotions.
Provide a basis for coaching.
Provide a basis for counseling.
Let subordinates know where they stand with the boss.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (IV) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
17. Ratio analysis helps a manager to compare the performance of the organization with
its previous performance or the performance of its competitors. Which of the
following is a ratio of creditors contribution to that of the owners?
(a) Current ratio
(c) Return on investment (ROI)

(b) Debt-equity ratio

(d) Net profit margin

(e)

Inventory turnover.
18. Which of the following inventory techniques uses cards to monitor inventory
movement?
(a) ABC Analysis
(b) JIT Approach
(c)
Kanban
(d) Kaizen
(e) Economic Order Quantity.
19. A decision support system (DSS) is an interactive computer system used to plan and
make decisions. Which of the following is/are true with regard to Decision Support
System (DSS)?
Executive decisions are the focal points in DSS.
DSS specializes in easy-to-use software.
DSS employs interactive processing.
The control and use of DSS rests with the central information management
department.
(a) Only (I) above
(b) Both (I) and (II) above
(c) Both (III) and (IV) above
(d) (I), (II) and (III) above
(e) (II), (III) and (IV) above.
20. Which of the following is/are postulates of the path goal theory?
The leader clearly defines the path to goal attainment for subordinates.
The leader motivates subordinates to participate in decision-making.
The leader sets clear and specific goals for subordinates.
The leader suitably rewards employees as per their performance.
Only (II) above
(b) Only (IV) above
(c) Both (II) and (IV) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

Answers

11. Answer : (c)Reason : Descriptions of customer satisfaction with products and services are
examples of external information in an organization. Hence from above discussion, we can infer
that option (c) is correct.
Options (a), (b), (d) and (e) are all examples of internal information in an organization.
Answer
12 : (c)Reason : Incremental model emphasizes short-run solution of a problem rather than long.
term goal accomplishment. (a) Rational model is a model of managerial decision-making, which
suggests that managers engage in completely rational decision process, ultimately make optimal
decisions and process, and understand all information relevant to their decisions at the time they
make them. (b) Satisficing model describe the way modern managers must, of necessity, make
decisions with incomplete information by choosing from among the few most likely alternatives. (d)
Garbage can model is a non-rational model of management decision-making stating that mangers
behave in virtually a random pattern in making non-programmed decisions. (e) Decision tree is a
quantitative decision-making tool based on a graphic model that displays the structure of a
sequence of alternative courses of action and usually shows the payoff associated with various
paths and the probabilities associated with future conditions.
Answer
13 : (b)Reason : Sofia works in one of seven research and development departments at General
.
Automobile Corporation and this suggests that General Automobile has a divisional structure. i.e.
to say divisional structure is a type of departmentation in which positions are grouped according to
similarity of products, services or markets. (a) Functional structure is a type of departmentation in
which positions are grouped according to their main functional or specialized area. (c) Flat
structure is a structure that has few hierarchical levels and wide spans of control. (d) High degree
of centralization is the tendency to restrict delegation of decision-making in an organization
structure, usually by holding authority at or near the top of the organization structure. (e) Tall

structure is a structure that has many hierarchical levels and narrow spans of control.
Answer
14 : (b)Reason : MIS (Management Information System) gives the output in the form of summary and
.
exception reports that are useful to the manager.
Answer
15 : (c)Reason :
When managers have substantial but not complete confidence and trust in
.
subordinates and solicit advice from subordinates while retaining the right to make final decision,
Likerts four systems of management describes it as consultative leadership style. (a) In
Participative leadership style the manager has complete trust and confidence in the subordinates
in all the matters. (b) In Benevolent leadership style the managers have a patronizing confidence
and trust in subordinates, solicit some ideas and opinions from subordinates, motivate with
rewards and some fear and punishment, permit some upward communication and allow some
delegation of decision-making but with close policy control. (d) In exploitative-authoritative
leadership style the managers represents doctorial leadership behavior with all decisions made by
the manager. (e) Trait theory of leadership style assumes that leaders share certain inborn
personality traits.
Answer
16 : (e)Reason : Performance appraisals are important in an organization because they provide
.
systematic judgements to support promotions; provide a basis for coaching; provide a basis for
counseling; and let subordinates know where they stand with the boss.
Answer
17 : (b)Reason : Debt-equity ratio indicates what percentage of the organizations assets creditors
.
furnish. (a) Current ratio is the ratio of current assets to current liabilities. (c) Return on investment
(ROI) is the ratio of net income to total assets. (d) Net profit margin is the ratio of net income to net
sales. (e) Inventory turnover is the ratio of cost of goods sold to inventory.
18 Answer : (c)Reason : Kanban is a subsystem of the JIT approach involving a simple parts
.
movement system that depends on cards and containers to pull parts from one work center to
another. (a)ABC analysis is a technique of inventory management, in which the inventory is
distributed based on price & usage of the inventory. (b) A JIT is an approach to inventory control
that emphasizes having materials arrive just as they are needed in the production process. (d)
Kaizen is a Japanese term implying continuous improvement.
(e) EOQ is an inventory control method developed to minimize ordering plus holding
costs, while avoiding stock out costs.
19 Answer : (d)Reason :
The following are the characteristics of
.
DSS:
(I) Executive decisions are the focal points in DSS.
(II) DSS specializes in easy-to-use software
(III) DSS employs interactive processing.
(1V) The control and use of DSS rests with the users and not the central information management
department
Statement given in (IV) is incorrect; hence option (d) is the correct answer.
Answer
20 : (e) Reason : According to Path-Goal theory, the leader clearly defines the path to goal attainment
.
for subordinates, when leader motivates subordinates to participate in decision-making and sets
clear and specific goals to the organization and a leader should suitably reward employees as per
their performance. So, all the statements mentioned are true for path-goal theory.

MANAGEMENT INTRODUCTION QUESTIONS AND

ANSWERS 1 TO 10
Management Introduction
Questions 1 To 10
1.

In the past three to four decades, many management theorists, and writers have

made remarkable contribution in the study of management. By studying the various

approaches to management analysis, we can understand the concept of
management and have a better understanding of managerial functions. Which
approach to management emphasizes managing people by understanding their
individual psychological needs?

2.

3.

4.

5.

6.

7.

8.

(a) Empirical Approach

(b) Decision Theory Approach
(c) Management Science Approach
(d) Interpersonal Behavior Approach
(e) Contingency Approach.
The communication process is made up of various components. Which of the
following is the actual physical product from the source?
(a) Feedback
(b) Filter
(c)
Message
(d) Channel
(e) Understanding.
Which of the following would not be an accurate depiction of the differences between
strategic and tactical planning?
Strategic planning is developed mainly by upper-level management and tactical
planning is generally developed by lower-level management
Facts for strategic planning are generally easier to gather than facts for tactical
planning
Strategic plans generally contain less details than tactical plans
Strategic plans generally cover a longer period of time than tactical plans
Managers who are engaged in the development of strategic plans tend to work in
more uncertainty than those managers engaged in the development of tactical plans.
Which of the following statements concerning grapevine is not correct?
Grapevine is generally used irregularly in organizations
Grapevine can and often does generate harmful rumors
Grapevine is used largely to serve the self-interests of people within it
Some managers use grapevine to their advantage
In time, and with proper pressure, grapevine can be eliminated.
The conflict-resolution approach that corresponds with a high level of assertiveness
and a low level of cooperativeness, is referred to as
(a) Compromising
(b) Collaborating
(c)
Forcing
(d) Avoiding
(e) Accommodating.
Mr. Sunil works for Energy Engineering Works. Apart from the regular
compensation, the company provides him with things such as tuition reimbursement,
recreational opportunities etc. What is the name given to these things of value?
(a) Incentives
(b) Benefits
(c)
Rewards
(d) Compensation
(e) Social benefits.
The fact that 70-80 percent of a managers time is taken up by his interactions with
others, highlights the need for effective communication for successful management.
Which of the following strategies is not likely to improve communication
effectiveness?
Avoiding non-verbal cues
Using simple, unambiguous language
Using active listening techniques
Using appropriate and consistent nonverbal cues
Using the feedback loop in the communication process.
Two factor theory of motivation provides useful insights into the relationship between
individual and situational or hygiene factors. Which of the following is a hygiene
factor?

9.

(a) Achievement
(b) Interpersonal relations
Recognition
(d) Challenging work
(e) Increased responsibility.
Identify the sequence of different steps in controlling.

(c)

Measurement of performance.
Comparison of actual and standard.
Analysis of causes of deviation.
Actual performance.
Corrective action plan.
(a) (III), (IV), (V), (I), (II)
(b) (II), (III), (IV), (V), (I)
(c) (I), (II), (IV), (III), (V)
(d) (IV), (I), (II), (III), (V)
(e) (V), (IV), (III), (II), (I).
10. JIT (Just-In-Time) inventory control is an approach to inventory control, which
stipulates that materials should arrive just, as they are needed, in the production
process. Which of the following would generally not be associated with a successful
JIT program, for the purpose of inventory control?
Well-organized receiving and handling of materials purchased from suppliers
Strong management commitment
Suppliers located in diverse and distant locations
High quality of materials purchased from suppliers
Dependable and long-lasting relationships with suppliers and customers.

Answers

, we can infer that option (b) is correct.

etary payments over and above the wages paid. (a) Incentives represent special compensation opportunities that are usually tied to performa
in understanding the hidden feelings in people.