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COEB 432:PRINCIPLES OF MANAGEMENT

SEMESTER 1, 2014/2015
TEST 1
NAME:___________________________ SID. NO:__________________ SEC.:_____

ANSWER ALL QUESTIONS

Section A: True/ False Questions [4 marks]
1.

To be effective, goals should be general rather than specific.

2.

Business ethics comprises the moral principles and standards that guide behavior in
the world of business.

3.

Universal needs exist when the tastes and preferences of consumers in different
countries with regard to a product are similar.

4.

A great idea is one of the essential ingredients in a successful entrepreneurial venture.

Section B: Multiple Choice Questions [6 marks]

5.

_____ is the conscious, systematic process of making decisions about goals and
activities that an individual, group, work unit, or organization will pursue in the
future.

A.

Buffering

B.

Benchmarking

C.

Budgeting

D.

Planning

E.

Forecasting

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6.

A unique skill or knowledge an organization possesses that gives it an edge over

competitors is called a _____.

7.

A.

strategic advantage alliance

B.

core competencies

C.

better business benefit

D.

competitive benchmark

E.

comprehensive advantage

Corporate social responsibility is the _____.

A.

ethical system stating that all people should uphold certain values that society
needs to function

B.

obligation toward society assumed by business

C.

system that defines acceptable behavior as that which maximizes

consequences for the individual

D.

ideology that the greatest good for the greatest number should be the
overriding concern of decision makers

E.

8.

maximization of shareholder wealth

Which of the following responsibilities lies at the base of the pyramid of global
corporate social responsibility and performance?

A.

Legal

B.

Economic

C.

Moral

D.

Ethical

E.

Philanthropic

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9.

Which of the following is a consequence of an increasingly integrated global

economy?

A.

World output and trade have decreased to a dramatically low level.

B.

Many companies find their home markets under attack from foreign

competition.

10.

C.

Companies are making foreign direct investments in home companies.

D.

Imports are failing to penetrate deeper into the world's largest economies.

E.

There are reduced opportunities for global trade.

Which of the following characteristics increases the likelihood of an entrepreneur's

success?

A.

Unwillingness to sacrifice

B.

Intolerance of ambiguity

C.

Avoiding risky situations

D.

Avoiding uncertainty

E.

Opportunity obsession

Section C: Scenario Questions [15 marks]

11.

Portland's Pizza, a chain of specialty pizzerias, periodically compares its quality and
service levels to other successful restaurants in order to continually improve its own
performance. What is this practice of comparing called?

12.

Percy Accessories specializes in shoes and handbags. Recently, it has decided to add
to its business units by opening a bank downtown near its original location.
Name the corporate strategy.

13.

Suggest a vision statement for Blossoms Furniture Company Sdn. Bhd.

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14.

Stacy, a manager of a women's fashion magazine company, is in the process of

launching a new Spring-Summer edition. For research purposes, she analyzed the past
and present conditions of the market and also forecasted future trends. Which step of
the formal planning process has Stacy performed?

15.

Jupiter Dollar Mart plans to open five new stores before 2015. However, if the
economy does not improve, and if consumer confidence does not rise as hoped, it
might open just two stores. What is this backup plan called?

16.

17.

Campbell Soup Co. a global food company producing high salt, processed soup.

(a)

Suggest an example of the organization's strength in the SWOT analysis.

(b)

Suggest an example of a differentiation strategy that the company can adopt.

Suppose a manager of a company has sold a defective piece of equipment to a

customer. Suggest ONE way how he should handle the matter.

18.

Home Depot supports Habitat for Humanity, a nonprofit that builds affordable
housing for those struggling with poverty, housing, or homelessness. Donation to such
an organization is an example of which category of Corporate Social Responsibility?

19.

Adrian and Clarke, managers from different departments at Clarion Bank, are
discussing the troubling behavior of a bank employee. Adrian says that it is the
responsibility of high-level managers to take steps and prevent offenses by punishing
wrongdoers. However, Clarke believes that every individual should take personal
responsibility for his behavior and that everyone needs to understand how to do the
right thing.
Which type of ethics program does Adrian prefer for the company?

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20.

Candace Apparel, a women's clothing manufacturer, assumes that people all over the
world will view and use its products in the same way. Therefore it produces
standardized versions of its apparel in several countries with attractive labor rates, and
offers them to all of its international markets. Which organizational model is used by
Candace Apparel ?

21.

In order to achieve cost economies, Apex Manufacturing bases its production plants
in Mexico and gets its engineering services from skilled workers in Germany. In this
case, Apex is using which organizational model?

22.

Quad Inc., a car manufacturer, has started to sell electric cars in response to the rising
fuel prices. Which factor in the external environment has Quad Inc. consider to spot
the opportunity?

23.

Nathan works as a materials scientist for a carpet manufacturer. He has developed a

material that does not work well in carpeting, but it could have applications in hard
flooring or other construction products. Nathan has been made the team lead for a
group of scientists tasked with determining some marketable uses for the new
material. Is this bootlegging ? Why?

24.

Chrometech Inc. pays Autechnic.com a commission to launch promotions on websites

associated with it. This is an example of the _____ model of the internet business.

ANSWERS-SECTIONS A AND B
1.F

2.T

3.T

4.T

5.D

6.B

7.B

8.B

9.B

10.E

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ANSWERS-SECTION C
11.Benchmarking

12.Conglomerate diversification

13. To become the best in Asia by year 2020.

14. Situational analysis

15. Contingency plan

16. a First rate R& D division capable of developing exciting new food products.OR
Enjoyed huge economies of scale because of the enormous quantity of food
products that it makes.OR
ANY OTHER POSSIBLE ONES AS WRITTEN BY STUDENTS

16. b Use quality mushroom/ no preservatives or any other possible answers

written by students
17. Disclose the defect and suggest alternatives because it is the honest thing to do.
18. Philanthrophic
19.Compliance based ethics program
20.global
21.Transnational
22.Economy
23.No, Skunkwork; formally formed.
24.Affiliate