Explanation: Lesson 19 of the handout explicitly lists the three necessary ingredients for creativity. It states, “Creativity has three necessary ingredients. 1. Domain-relevant skills are those associated with expertise in the relevant field. 2. Creativity-relevant skills include a cognitive style… 3. Task motivation is interest in the task for its own sake, rather than because of some external reward possibility.” Therefore, task motivation is the third element that intersects with expertise and creative skills to form creativity.

Explanation: Lesson 19 lists three necessary ingredients for creativity: “1. Domain-relevant skills are those associated with expertise in the relevant field. 2. Creativity-relevant skills include a cognitive style… 3. Task motivation is interest in the task for its own sake…”. The options “Task motivation,” “Expertise” (domain-relevant skills), and “Skills” (creativity-relevant skills) are all mentioned. “Consistency” is not listed as a necessary ingredient for creativity in the handout.

Explanation: Lesson 19 describes brainstorming as a technique that “encourages group members to generate as many novel ideas as possible on a given topic without evaluating them.” Withholding judgment or criticism is the fundamental rule that allows for the free flow of ideas. Lesson 41 reinforces this by defining it as a process that “encourages alternatives while withholding criticism.”

Explanation: Lesson 19 describes the Delphi Method under “Other Decision Making Methods.” It is defined as “a structured approach to gain the judgments of a number of experts on a specific issue relating to the future.” The process explicitly involves surveying “a panel of experts.”

Explanation: Lesson 20 defines environmental scanning as “the screening of large amounts of information to anticipate and interpret changes in the environment.” It then specifies that “Competitor intelligence is an environmental scanning activity that seeks to identify who competitors are, what they are doing, and how their actions will affect the organization.” The key purpose is to “anticipate,” which means to predict, allowing managers to be proactive rather than just reactive.

Explanation: Lesson 20 provides a comparison of different forecasting methods. Under the sub-heading for “Judgmental forecasting methods,” point ‘c’ states they “Have low development costs”. In contrast, “Quantitative forecasting methods” point ‘c’ states they “Often have high development costs,” and “Technological forecasting methods” point ‘c’ states they “Have medium development costs.” Thus, judgmental forecasting has the lowest development cost among the options.

Explanation: Lesson 21 covers budgeting as a resource allocation tool. A budget is created for a specific purpose and time period (e.g., an annual budget) and is not meant to be used repeatedly. Lesson 22, under “Describe each of the different types of plans,” defines a single-use plan as “a one-time plan specifically designed to meet the needs of a unique situation.” Budgets fit this description.

Explanation: Lesson 21, under “TECHNIQUES FOR ALLOCATING RESOURCES,” introduces “Scheduling.” It then lists the Gantt chart as a useful scheduling tool: “The Gantt chart, named after Henry Gantt, is a scheduling chart that visually shows actual and planned output over a period of time.”

Explanation: Lesson 21 describes different planning and decision aids. It defines PERT (Program Evaluation and Review Technique) as “a network planning method for managing and controlling large one-time projects. It is a technique for scheduling complicated projects comprising many activities, some of which are interdependent.” Opening a new store is a complex, one-time project with many interdependent steps, making PERT the most suitable tool.

Explanation: Lesson 21 details the “Project Management Process” in seven steps. The very first step listed is: “i. Define objectives.” This corresponds to defining the project’s goals. The other options, such as identifying activities (step ii), estimating time (step iv), and determining completion date (step v), all occur after the objectives have been defined.

Explanation: In Lesson 21, under the heading “OTHER PLANNING TECHNIQUES,” the first technique listed is “Queuing or waiting-line models”. The handout defines them as “mathematical models that describe the operating characteristics of queuing situations.” This directly matches the question’s description.

Explanation: Lesson 22 defines planning as defining goals, establishing strategy, and developing plans. While allocating resources is part of planning, developing a chain of communication is an element of the organizing function. Lesson 29 states that organizational design involves decisions about the “chain of command.”

Explanation: In Lesson 22, under “Purposes of Planning,” the handout states: “1. Planning gives direction to the organization.” By providing direction, planning ensures that efforts are “channeled” toward common goals rather than being wasted or working at cross-purposes.

Explanation: Lesson 22, under the heading “How do managers plan?”, explicitly states: “Planning involves two important elements: goals and plans.”

Explanation: Strategic plans, as defined in Lesson 22, “apply to the entire organization, establish the organization’s overall goals, and seek to position the organization in terms of its environment.” The strategic planning process (Lessons 25-26) explicitly involves analyzing internal resources and capabilities as well as the external environment to achieve alignment. This comprehensive, interdependent nature is the key characteristic of strategic plans.

Explanation: Lesson 22 describes the different types of plans. It defines strategic plans as those that “apply to the entire organization, establish the organization’s overall goals, and seek to position the organization in terms of its environment.” The process of creating these plans, as described in Lesson 26 (Strategic Management – II), involves analyzing the external environment and internal resources (SWOT analysis). This perfectly matches the description in the question.

Explanation: The handout describes a hierarchy of plans corresponding to managerial levels. Operational goals are “set by lower management that address specific, measurable outcomes required from the lower levels.” These plans detail how tactical goals will be achieved and are short-term in nature. This level corresponds to the functional level of an organization, where day-to-day operations occur.

Explanation: Lesson 22, under the heading “Linkage of goals and plans,” discusses tactical plans. Point 2.c states: “The time horizon tends to be intermediate in range 1 to 3 years.”

Explanation: Lesson 22, under “The Nature of organizational Goals,” describes the three levels of goals. Point 3 states: “Operational goals are those targets or future end results set by lower management that address specific, measurable outcomes required from the lower levels.”

Explanation: Lesson 22, under “Linkage of goals and plans,” defines different types of plans. In the section on Standing plans (point B.2.b), it states: “A procedure is a prescribed series of related steps to be taken under certain recurring circumstances.”

Explanation: In Lesson 22, under “Linkage of goals and plans,” the description of tactical plans includes point 2.a: “Tactical plans tend to be more specific and concrete than strategic plans.”

Explanation: Lesson 23 defines a goal as “a future target or end result that an organization wishes to achieve.” The statement “opening one hundred stores per year” is a specific, measurable, and time-bound target. This fits the definition of a goal perfectly.

Explanation: Lesson 23 defines the key components of the planning process. The handout states: “B. An organization’s mission is the organization’s purpose or fundamental reason for existence.” A mission statement is the broad declaration of this purpose.

Explanation: Lesson 23, under “The overall planning process,” defines a mission statement in point B.1 as: “A mission statement is a broad declaration of the basic, unique purpose and scope of operations that distinguishes the organization from others of this type.”

Explanation: The handout lists several key attributes that a mission statement typically defines. One of these is “Customers: Who are the organization’s customers?” The Johnson & Johnson statement explicitly lists “doctors, nurses, and patients, to mothers and all others who use our products,” which is a clear and direct identification of its customer base.

Explanation: According to the handout, plans can be categorized by their time frame. Lesson 23, under the heading “Types of Plans,” explicitly states, “Time frame: short-term versus long-term plans. Short-term plans are plans that cover one year or less. Long-term plans are those that extend beyond three years.” This definition directly matches the question.

Explanation: Lesson 23 discusses “How Goals Facilitate Performance.” The first point under this heading states: “1. Challenging goals usually lead to higher performance from individuals and groups.” This directly answers the question.

Explanation: Lesson 23, under “How Goals Facilitate Performance,” lists several factors that foster goal commitment: “1. Supervisory authority… 2. Peer and group pressure… 4. Incentives are offered during the goal-setting process; rewards occur upon goal achievement.” Motivation is the underlying drive that commitment helps to channel. Therefore, all the listed options influence goal commitment.

Explanation: Lesson 23, in the section “How Goals Facilitate Performance,” describes the hierarchy of goals. It states, “Strategic goals are broadly defined targets or future end results set by top management.” This indicates that strategic goals are the concern of top-level managers.

Explanation: Lesson 24 outlines the “Steps in Goals Setting.” The very first step listed is “(a) Review the organization’s mission.” This step provides the foundational context for all subsequent goals, ensuring they are aligned with the organization’s overall purpose.

Explanation: Lesson 24 outlines a five-step process for goal setting. While participation is mentioned and specifying deadlines is part of setting clear goals, linking rewards is discussed as part of the MBO process for appraising performance after goals are set, not as a step in the initial setting of objectives. In the MBO process description, it says, “Performance is appraised at the end of the goal-setting cycle… Praise, recognition, and rewards should be given for effective performance.” This makes linking rewards an outcome of the process, not a step within the goal-setting phase itself.

Explanation: Lesson 24 is titled “MANAGEMENT BY OBJECTIVE (MBO).” It defines MBO as “a process through which specific goals are set collaboratively for the organization as a whole and every unit and individual within it; the goals then are used as a basic for planning, managing organizational activities, and assessing and rewarding contributions.” This definition perfectly matches the scenario.

Explanation: Lesson 24 describes MBO as a process where goals are set collaboratively and then “used as a basic for planning, managing organizational activities, and assessing and rewarding contributions.” The assessment part implies that goals serve as a standard for control. The options that objectives are determined solely by management or reviewed only at completion are contrary to the MBO philosophy of participation and periodic review.

Explanation: Lesson 24, in the section on Management by objectives (MBO), point 1 explicitly states: “MBO was first described by Peter Drucker and consists of four elements…”

Explanation: Lesson 24 lists the strengths of MBO. Number 4 is that it “Fosters employee motivation.”

Explanation: Lesson 24 lists both the strengths (benefits) and weaknesses of MBO. “Facilitates vertical and horizontal communications” is listed as a strength. In contrast, “Tends to falter without strong, continual commitment from top management” is listed as a weakness. Therefore, requiring top management commitment is a necessary condition for MBO to succeed, not a benefit that MBO provides.

Explanation: Lesson 25 defines strategic management as “that set of managerial decisions and actions that determines the long-run performance of an organization.” The strategic management process, described in Lesson 26, is an eight-step process that encompasses planning (formulation), implementation, and evaluation. Therefore, strategic management is the comprehensive process that includes all the elements mentioned in the question.

Explanation: Lesson 25 defines Strategic Management under “The Concept of Strategic Management.” The text explicitly states: “It entails all of the basic management functions—planning, organizing, leading, and controlling.”

Explanation: Lesson 25 provides a clear definition under the section “The Concept of Strategic Management”: “Strategies are large-scale action plans for interacting with the environment in order to achieve long-term goals.”

Explanation: The handout defines competitive advantage directly in relation to this concept. It states that strategic management “Helps organizations identify and develop a competitive advantage, a significant edge over the competition in dealing with competitive forces.”

Explanation: The handout lists several reasons why strategic management is important. It: 1. “Provides a sense of direction so that organization members know where to expend their efforts.” 2. Helps organizations identify and develop a “competitive advantage.” 3. “Helps highlight the need for innovation and provides an organized approach for encouraging new ideas.” Since all three options are listed as benefits in the handout, “All of the given options” is the correct answer.

Explanation: Lesson 25 defines the components of the strategic management process. “Strategy formulation” is about developing the strategy. “Strategy implementation is the part of the strategic management process that focuses on: a. Carrying strategic plans. b. Maintaining control over how those plans are carried out.” Implementation is the stage concerned with “how the strategy is achieved.”

Explanation: Lesson 25 outlines the components of the strategic management process. It defines “Strategy formulation” as including: “a. Identifying the mission and strategic goals. b. Conducting competitive analysis c. Developing specific strategies”. It then defines a separate component, “Strategy implementation,” which focuses on “a. Carrying strategic plans.” Therefore, carrying out plans is part of implementation, not formulation.

Explanation: According to Lesson 25, “Strategy formulation is the part of the strategic management process that includes: a. Identifying the mission and strategic goals. b. Conducting competitive analysis c. Developing specific strategies”. This is the stage where the strategy itself is developed and defined.

Explanation: According to the handout, the strategic management process consists of two main parts: strategy formulation and strategy implementation. Strategy formulation involves identifying the mission, conducting analysis, and developing strategies. Strategy implementation is the subsequent step. As stated in Lesson 25, “Strategy implementation is the part of the strategic management process that focuses on: a. Carrying strategic plans. b. Maintaining control over how those plans are carried out.” This is the stage where strategies are operationalized and executed.

Explanation: Lesson 25 discusses strategic management and optimizing goal achievement. The handout states, “Strategic management is a process through which managers formulate and implement strategies geared to optimizing goal achievement…”. Optimizing means finding the best possible balance or outcome.

Explanation: The strategic management process is described in Lesson 26 as an eight-step process. Step 7 is “implementing strategies,” and the final step, Step 8, is “evaluating results.” The handout states for Step 8: “Managers must evaluate the results to determine how effective their strategies have been and what corrections are necessary.” Therefore, taking corrective action is part of the evaluation and control stage, which follows the implementation stage.

Explanation: The handout, in Lesson 26 (Strategic Management – II), explains the components of a SWOT analysis. It defines strengths as internal characteristics that an organization can use to its advantage. Specifically, under “Step 5 is identifying strengths and weaknesses,” it states, “Strengths are those activities the firm does well or the unique resources it controls.” A skill or capability that helps in implementing strategies is a positive internal factor, which aligns perfectly with the definition of a strength.

Explanation: Lesson 26 defines the components of a SWOT analysis. It states that “Threats are negative external environmental factors.” A threat is further described on page 68 as “an environmental condition that offers significant prospects for undermining an organization’s competitive situation,” which would make achieving high performance more difficult.

Explanation: The question itself provides the definition of an effective or successful strategy. In Lesson 26, the handout states, “A successful strategy is one that aligns well with the environment.” The entire strategic management process is about creating this alignment to achieve goals. Therefore, the term that describes such a strategy is an “effective strategy.”

Explanation: Lesson 26 introduces the SWOT analysis. While the handout does not explicitly state that “strength” is divided into “common” and “distinctive,” it defines “Strengths are those activities the firm does well or the unique resources it controls.” Lesson 27 then defines a “distinctive competence” as when a firm has “valuable, rare, and difficult to imitate resources and capabilities.” A distinctive competence is a unique type of strength that provides a competitive advantage, making it the logical counterpart to a “common” strength in this context.

Explanation: Lesson 26 defines core competencies as “an organization’s major value-creating skills, capabilities, and resources that determine its competitive advantage.” Lesson 27 builds on this, stating that a “distinctive competence” (valuable, rare, difficult to imitate resources) is what leads to a sustained competitive advantage.

Explanation: Lesson 27 explains the different levels of strategy. It defines corporate-level strategy as the strategy that “seeks to determine what businesses a corporation should be in or wants to be in.” This involves making decisions that span across multiple industries and markets, which is exactly what the question describes.

Explanation: Lesson 27 describes the three levels of strategy. It defines “Functional-level strategy” as focusing “on action plans for managing a particular functional area within a business in a way that supports the business-level strategy.”

Explanation: This concept is part of corporate-level growth strategies discussed in Lesson 27. Under vertical integration, the handout defines: “1) Backward integration occurs when a business grows by becoming its own supplier.” This is contrasted with forward integration, where a business grows by encompassing a customer role.

Explanation: In Lesson 27, while discussing how growth strategies can be implemented, the handout defines a merger as: “3) A merger is the combining of two or more companies into one organization.” This is distinct from an acquisition, which is the purchase of one organization by another.

Explanation: Lesson 27 describes the three “grand strategies”: Growth, Stability, and Defensive. It then lists Harvest, Divestiture, and Bankruptcy as types of defensive strategies. Stability is presented as a separate category of grand strategy, not a type of defensive strategy.

Explanation: The BCG matrix categorizes businesses based on market share and market growth. A business with a high market share in a slowly growing market (i.e., not expected to grow substantially) is defined as a Cash Cow.

Explanation: Lesson 27, under “Formulating Business-level strategy,” describes Michael Porter’s generic strategies. It defines a “differentiation strategy” as one that “involves attempting to develop products and services that are viewed as unique in the industry.” The text further clarifies that this uniqueness can be based on “features, quality, and election.” Distinguishing a product through its quality is a core element of the differentiation strategy.

Explanation: Lesson 27, under “An organizational assessment,” explains that for a firm to achieve sustained competitive advantage, its resources and capabilities must be “valuable, rare, and are difficult to imitate.” These are the characteristics of a distinctive competence, which is built upon core competencies.

Explanation: Lesson 28 defines “Entrepreneurship” as “the process where individuals or a group of individuals risk time and money in pursuit of opportunities to create value and grow through innovation regardless of the resources they currently control.” This matches the description in the question.

Explanation: Lesson 28, under “Preparing to Operate a Small Business,” defines a business plan: “A business plan is a document written by an entrepreneur or perspective owner that details the nature of business, the product or service, the customers, the competition, the production and marketing methods, the management, the financing and other significant aspects of proposed business venture.” This document summarizes strategy and structure.

Explanation: Lesson 28, under the heading “FORCES FOR CHANGE,” lists the sources of change. “Internal forces” are said to “originate primarily from the internal operations of the organization.” The examples provided include “Changes in the workforce” and “New equipment,” which are the exact changes mentioned in the question.

Explanation: Lesson 29 (Organizing), under the heading “The Nature of Organization Structure,” defines the key terms. It states, “Organization structure is the formal pattern of interactions and coordination designed by management to link the tasks of individuals and groups in achieving organizational goals. An organizational structure is the formal framework by which job tasks are divided, grouped, and coordinated.” This definition directly corresponds to the question.

Explanation: The fundamental purpose of an organization’s structure is explained in Lesson 29. The definition of organization structure is “the formal pattern of interactions and coordination designed by management to link the tasks of individuals and groups in achieving organizational goals.” The structure is the means to an end, and that end is the achievement of the organization’s goals.

Explanation: Lesson 29, under “The Nature of Organization Structure,” defines “Organization design” as “the process of developing or changing an organization’s structure. It involves decisions about six key elements: work specialization, departmentalization, and chain of command, span of control, centralization/decentralization, and formalization.” Therefore, the chain of command is a key element of organizational design.

Explanation: Lesson 29 lists the four primary elements of organization structure as: “a. Job design b. Departmentalization c. Vertical coordination d. Horizontal coordination.” Job design involves the assignment of tasks and responsibilities. The ability to compete on prices is a strategic outcome or competitive advantage, not an element of organizational structure itself.

Explanation: According to Lesson 29 (Organizing), the handout provides a clear definition of delegation. It states, “Delegation is assignment of part of manager’s work to others along with responsibility and authority.” This definition precisely matches the process described in the question, which involves assigning authority and responsibility to those at lower levels.

Explanation: As defined in Lesson 29 (Organizing), “Delegation is assignment of part of manager’s work to others along with responsibility and authority.” The assignment of responsibilities to a subordinate, whether new or additional, is a fundamental component of the delegation process.

Explanation: Lesson 29, under “The Nature of Organization Structure,” provides a clear definition: “Authority is the right inherent in a managerial position to tell people what to do and to expect them to do it, right to make decisions and carry out actions to achieve organizational goals.”

Explanation: Lesson 29 defines “Delegation” as the “assignment of part of manager’s work to others along with responsibility and authority.”

Explanation: Lesson 29 defines “Organization structure” as “the formal framework by which job tasks are divided, grouped, and coordinated.” The purpose of this structure is to create order and link the tasks of individuals and groups, thereby defining and guiding behavior. While the degree of structure varies, all organizations have some form of structure for this purpose. The statement is true.

Explanation: Lesson 30 defines various types of departmentalization. The handout states, “The functional structure groups jobs into units based upon similarity of expertise, skills, and work activities, e.g., marketing, accounting.” This directly answers the question.

Explanation: Lesson 30 describes the matrix structure under “Assessing Structural Alternatives.” It explicitly states, “Employees who work in a matrix organization report to two “bosses,” thus, the unity-of-command principle is violated.” The unique characteristic is having two bosses, not one. Therefore, the statement is false.

Explanation: Lesson 30 discusses types of departmentalization. In the section on “Divisional structure,” it describes “Geographic divisions are divisions designed to serve different geographic areas.” Dividing sales responsibilities by region is a classic example of geographic departmentalization.

Explanation: Lesson 30 discusses types of departmentalization. A divisional structure can be based on product, geography, or customer. The handout states, “Product divisions are divisions created to concentrate on a single product or service or at least a relatively homogeneous set of products or services.” Since “women’s footwear,” “men’s footwear,” and “apparel” are all distinct product categories, grouping activities this way is an example of product departmentalization.

Explanation: Lesson 30, under “Assessing Structural Alternatives,” defines the matrix structure. Point D states: “A matrix structure is a type of departmentalization that superimposes a horizontal set of divisional reporting relationships onto a hierarchical functional structure.”

Explanation: Lesson 30 defines functional departmentalization as grouping jobs based on “similarity of expertise, skills, and work activities.” This means grouping by the tasks or functions they perform (e.g., all marketing tasks together, all finance tasks together).

Explanation: Lesson 30 discusses “Assessing Structural Alternatives.” Under the section on Divisional structure (B), it defines product divisions: “Product divisions are divisions created to concentrate on a single product or service or at least a relatively homogeneous set of products or services.” Grouping activities by different product categories like footwear and apparel is a clear example of product departmentalization.

Explanation: The handout does not specifically list disadvantages for “Process departmentalization.” However, process departmentalization is a form of divisional structure. Lesson 30 lists the disadvantages of a divisional structure, including “a. Duplication of resources in each division often occurs.” This means that support functions like HR or finance might be duplicated across different process teams, which is a known inefficiency of this structure compared to a functional one.

Explanation: Lesson 30 defines various forms of departmentalization that serve different purposes. For instance, functional departmentalization allows for expertise and specific policies within a function. Divisional structures can facilitate decentralization by creating autonomous units. Customer departmentalization is explicitly used to better serve and monitor specific customer segments and their trends. Since all these are valid reasons for adopting different departmentalization strategies, all options are correct.

Explanation: Lesson 31 directly defines a tall structure. After explaining span of management, it states, “A tall structure is one that has narrow spans of management and many hierarchical levels in an organization.” This definition is an exact match for the question.

Explanation: The handout explains that the span of control can be broader under certain conditions. One such condition is when “Managers and/or their subordinates are highly competent.” Competent employees require less supervision, allowing a manager to oversee more people. This leads to a wide span of control and a flatter organization with fewer levels.

Explanation: Lesson 31 defines key terms related to vertical coordination. The handout states: “1. Centralization is the extent to which power and authority are retained at the top organizational levels.” This is the direct definition for the term.

Explanation: Lesson 31 discusses centralization and decentralization. “Decentralization is the extent to which power and authority are delegated to lower levels.” “Centralization is the extent to which power and authority are retained at the top organizational levels.” The degree to which authority is pushed down is a measure of the level of centralization/decentralization.

Explanation: Lesson 31 defines both centralization and decentralization. “Centralization is the extent to which power and authority are retained at the top organizational levels.” This means decision-making is confined to a single point or level.

Explanation: Lesson 31 defines decentralization as “the extent to which power and authority are delegated to lower levels.” This delegation of authority inherently involves allowing lower-level employees to participate in or make decisions.

Explanation: Lesson 31 defines decentralization as delegating power and authority to lower levels. The benefits listed include faster decision-making. This process inherently increases employee participation and makes the organization more flexible and responsive.

Explanation: Lesson 31 explains the difference between line and staff roles. The handout defines a line position as: “1. A line position is a position that has authority and responsibility for achieving the major goals of the organization.” In contrast, line authority is the right inherent in the position, not the position itself.

Explanation: Lesson 31, under “Promoting Innovation: Methods of Horizontal coordination,” defines the term: “Horizontal coordination is the linking of activities across departments at similar levels.”

Explanation: Lesson 32 defines the two generic models of organizational design. It states, “A mechanistic organization is an organizational structure that is characterized by high specialization, rigid departmentalization, narrow spans of control, high formalization…” These characteristics describe a rigidly controlled and efficient organization.

Explanation: Lesson 32 discusses the contingency factors for organizational design. A mechanistic organization is rigid and efficient, which works best in a predictable, stable environment. An organic structure is flexible and adaptive, better suited for a dynamic and uncertain environment.

Explanation: Lesson 32 defines an organic organization as “a structure that is highly adaptive and flexible with little work specialization, minimal formalization and little direct supervision of employees.” Minimal formalization is a key characteristic.

Explanation: Lesson 32 discusses how environmental uncertainty affects structure. Global competition, rapid product development, and changing customer demands create a dynamic and uncertain environment. The handout states, “The more uncertain the environment, the more flexible and responsive the organization may need to be.” An organic structure is described as “highly adaptive and flexible,” making it the appropriate choice for this environment.

Explanation: In Lesson 32, the handout defines a mechanistic organization as one “that is characterized by high specialization, rigid departmentalization, narrow spans of control, high formalization, a limited information network…” The option “It had narrow spans of control” is explicitly listed as a key characteristic.

Explanation: Lesson 32 discusses the contingency factors that influence organizational design. It explains that a mechanistic organization, with its efficiency, stability, and tight controls, is best suited for stable environments, whereas an organic structure is more appropriate for uncertain environments.

Explanation: Lesson 32 covers common organizational designs. In the section on “Traditional organizational designs,” it provides a clear definition: “1. A simple structure is an organizational design with low departmentalization, wide spans of control, authority centralized in a single person, and little formalization.”

Explanation: Lesson 32, under “Contemporary organizational designs,” describes the “matrix organization that assigns specialists from different functional departments to work on one or more projects being led by project managers.” This is a direct definition.

Explanation: Lesson 32, under “Contemporary organizational designs,” provides a direct definition: “One of the newer concepts in organizational design is the team-based structure, which is an organizational structure made up of work groups or teams that performs the organization’s work.”

Explanation: A manager’s role involves motivating their own employees and dealing with challenges like market demand, competition, and uncertainty. Motivating competitors is not a function or challenge for a manager; a manager competes with them. This is the logical exception.

Explanation: Lesson 33, under “FROM THEORY TO PRACTICE: SUGGESTIONS FOR MOTIVATING EMPLOYEES,” provides a list of ways to motivate. These include recognizing individual differences, using goals, individualizing rewards, linking rewards to performance, ensuring equity, and not ignoring money. Monetary incentives, promotions, and appreciation are all forms of rewards that can be used to motivate employees.

Explanation: The handout discusses Abraham Maslow’s hierarchy of needs in Lesson 34. It clearly defines the third level: “c. Belongingness needs involve the desire to affiliate with and be accepted by others.”

Explanation: The handout explicitly states that Abraham Maslow’s theory outlines a hierarchy of five need categories. These are: (1) Physiological, (2) Safety, (3) Belongingness, (4) Esteem, and (5) Self-actualization.

Explanation: Lesson 34 describes esteem needs as having two components: an internal one (positive self-image, self-confidence) and an external one (having contributions “valued and appreciated by others”). It lists “power, prestige, status” as satisfactions for this need. “Recognition” from others is a form of being valued and appreciated, fitting the external component.

Explanation: Lesson 34 outlines Maslow’s hierarchy of needs in ascending order: “a. Physiological needs… b. Safety needs… c. Belongingness needs [social]… d. Esteem needs… e. Self-actualization needs…” The correct order is physiological, safety, social (belongingness), esteem, and self-actualization.

Explanation: Lesson 34 describes Esteem needs as having two parts: a positive self-image (internal) and having our contributions valued by others (external). Self-respect is a core component of one’s positive self-image and is therefore an internal esteem need. Attention, recognition, and status are all granted by others and are external.

Explanation: Lesson 34 lists the “Analysis and Weakness of Theory.” It mentions that the order of needs is not fixed, the five levels are not always present, and that there are cultural differences. The statement that the theory “is applicable to everyone irrespective of cultural differences” is a claim that is actually considered a major weakness, as research has shown it is not culturally universal. Therefore, this statement is the exception as it describes a false claim about the theory, not a recognized weakness.

Explanation: Lesson 35, under the heading “McGregor’s Theory X and Theory Y,” states: “This theory was developed by Douglas McGregor and describes two distinct views of human nature. 1. Theory X was the assumption that employees dislike work, are lazy, seek to avoid responsibility, and must be coerced to perform.”

Explanation: Lesson 35 describes McGregor’s theories. It states that “Theory Y was the assumption that employees are creative, seek responsibility, and can exercise self-direction.” This matches the statement in the question.

Explanation: Lesson 35 describes McGregor’s Theory X and Theory Y. “Theory X was the assumption that employees dislike work, are lazy, seek to avoid responsibility, and must be coerced to perform.” Mr. Ali’s beliefs about his employees align perfectly with Theory X assumptions.

Explanation: This question refers to Frederick Herzberg’s Motivation-Hygiene Theory, detailed in Lesson 35. The handout explicitly states: “Hygiene factors are factors that eliminate dissatisfaction. They include things such as supervision, company policy, salary, working conditions, security and so forth—extrinsic factors associated with job context…”

Explanation: Lesson 33 defines intrinsic motivators as a “person’s internal desire to do something for his satisfaction.” Lesson 35, discussing Herzberg’s theory, lists “Achievement” and “Recognition” as intrinsic motivating factors that lead to job satisfaction. The feeling of satisfaction that comes from within after successfully completing a difficult task is a classic example of intrinsic satisfaction.

Explanation: This question relates to Clayton Alderfer’s ERG Theory, which is discussed in Lesson 35. The theory categorizes Maslow’s needs into three levels. The handout defines the third level as: “3. Growth needs impel creativity and innovation, along with the desire to have a productive impact on our surroundings.”

Explanation: Lesson 35 introduces several motivation theories. Under the heading “ERG Theory,” the first sentence states, “Clayton Alderfer’s ERG theory combines Maslow’s five needs into three need levels: existence, relatedness and growth.”

Explanation: Expectancy Theory includes a key component called Valence, which is defined as “the importance that the individual places on the potential outcome or reward that can be achieved on the job.” This directly addresses the idea that a reward’s motivational power depends on how much the individual values it.

Explanation: This question relates to the Expectancy Theory of motivation. Valence is defined as “the importance that the individual places on the potential outcome or reward.” Since Salman is happy with the award, it means he places a high importance or value on this type of recognition. “Fully valance value” or “high valence” would accurately describe this situation, as the reward is highly attractive to him.

Explanation: Lesson 36 discusses the contingencies in goal-setting theory. The handout explains, “E What contingencies exist in goal-setting theory? There are four contingencies we need to know about. A. Feedback influences the goal-performance relationship.” Feedback acts to guide behavior and is a critical element for goals to be effective.

Explanation: Lesson 36 states that “specific goals increase performance” and “difficult goals, when accepted, result in higher performance than do easy goals.” It also discusses “Goal commitment” as a key contingency factor. Therefore, specificity, acceptance, and commitment are all critical components for the goal-setting process to be effective.

Explanation: In Lesson 36, under the heading “Reinforcement Theory,” the very first sentence states: “Reinforcement Theory is counter to goal-setting theory. It proposes that behavior is a function of its consequences.”

Explanation: Lesson 36 introduces various contemporary motivational theories. Under the heading “Open Book Management,” the handout provides a clear definition: “This is a motivational approach in which an organization’s financial statements (the “books”) are opened to and shared with all employees.”

Explanation: Lesson 37 discusses motivating knowledge professionals. It states, “Money and promotions are typically low on the motivation priority list for professionals. Job challenge is usually ranked high…” It also notes “Special challenges in motivating professionals include their long-term commitment to their field of expertise, with greater loyalty to their profession than to their employer.” This commitment to their field is a key characteristic to consider.

Explanation: Lesson 37 discusses motivating the “new workforce.” It specifically notes the challenges with certain groups, stating, “Low-skilled minimum-wage workers typically have limited education and skills; offering higher pay is usually not an option.”

Explanation: While effective leaders also need to ensure things are done right, their primary function as described in the leadership chapters (e.g., Lesson 37, 39) is about vision, direction, and influence towards goals. This aligns with the concept of “doing the right things” (effectiveness). Management is more closely associated with “doing things right” (efficiency). This is a common distinction in management theory.

Explanation: Lesson 37, under the section “How leaders influence others,” provides a direct definition for power. It states: “Power is the capacity to affect the behavior of others.” Leadership is defined as the process of influencing others, but power is the capacity or ability to do so.

Explanation: In Lesson 37, under the heading “How leaders influence others,” the handout defines power as “the capacity to affect the behavior of others.” Since influencing decisions is a way of affecting behavior, power is the correct term.

Explanation: The handout defines different types of power. Legitimate power “stems from a position’s placement in the managerial hierarchy and the authority vested in the position.” As the president, the individual has the formal authority to issue orders and expect compliance with company rules. This is a direct exercise of legitimate power.

Explanation: Expert power is defined in Lesson 37 as power that is “based on the possession of expertise that is valued by others.” The shortlisted candidates influenced the interviewer because they possessed specialized knowledge and qualifications (diplomas of specialization) that were highly relevant and valued for the financial analyst role.

Explanation: Lesson 37 defines “Expert power is based on the possession of expertise that is valued by others.” An attorney’s power to influence comes from their specialized legal knowledge and skills, which is a form of expertise valued by the firm.

Explanation: Lesson 38 discusses early leadership behavior studies. It states, “University of Iowa researcher, Kurt Lewin, conducted some of the earliest attempts to identify effective leadership behaviors.” The handout specifies that these studies identified three styles: “a. Autocratic leaders…, b. Democratic leaders…, c. Laissez-faire leaders…”

Explanation: Lesson 38 describes three leadership styles from the University of Iowa studies. “Democratic leaders tend to involve the group in decision making, let the group determine work methods, make overall goals known, and use feedback as an opportunity for helpful coaching.” This style is also commonly referred to as participative.

Explanation: Lesson 38, under “Identifying Leader Behaviors,” point 2.a clearly attributes the study of autocratic, democratic, and laissez-faire styles to the “University of Iowa Studies—Kurt Lewin and associates”.

Explanation: Lesson 38 describes the University of Iowa leadership studies. It defines democratic leaders as those who “tend to involve the group in decision making, let the group determine work methods, make overall goals known, and use feedback as an opportunity for helpful coaching.”

Explanation: Lesson 38 describes the Ohio State Studies, which identified two key leadership behaviors. “Consideration is the degree to which a leader builds mutual trust with subordinates, respects their ideas, and shows concern for their feelings.” This directly matches the description in the question.

Explanation: In Lesson 38, under the “Ohio State Studies” section, the handout states: “The leader who is high in both initiating structure and consideration was thought to be the most effective, but further research indicated that such a generalization was too simplistic.” Although it adds a caveat, the core finding of the studies was that the “high-high” style was most effective.

Explanation: Lesson 38 is titled “BEHAVIORAL AND SITUATIONAL MODELS OF LEADERSHIP.” It clearly presents the University of Iowa, Michigan, and Ohio State studies as behavioral theories focused on identifying leader behaviors. The Path-Goal theory, however, is presented as a situational/contingency theory that explains how leader behavior is contingent on situational factors.

Explanation: The handout describes several leadership styles in Lesson 38. The Path-Goal theory defines participative leader behavior as being “characterized by consulting with subordinates, encouraging their suggestions, and carefully considering their ideas when making decisions.” This description perfectly matches Ali’s behavior.

Explanation: Lesson 39 provides a direct definition of transformational leaders. Under the heading “CUTTING-EDGE APPROACHES TO STRATEGIC LEADERSHIP,” the text states, “Transformational leaders are leaders who provide individualized consideration and intellectual stimulation and possess charisma.” The statement is true.

Explanation: Lesson 39 defines a transformational leader as one who provides “individualized consideration and intellectual stimulation and possess charisma.” It further explains they “motivate individuals to perform beyond normal expectations by inspiring subordinates to focus on broader missions that transcend their own immediate self-interests” and articulate “a sense of mission, or vision, that inspires followers.”

Explanation: Lesson 39 discusses charismatic leadership. When defining charisma, the handout notes historical perspectives on the concept: “– Charisma was once thought to be an inborn personality trait.” It then explains that recent research focuses on identifiable behaviors. The statement is therefore true.

Explanation: Lesson 39, after discussing charismatic leadership, defines visionary leadership. The text says: “Visionary leadership is described as going beyond charisma with the ability to create and articulate a realistic, credible, attractive vision of the future for an organization or organizational unit that grows out of and improves on the present.”

Explanation: Lesson 39 describes charismatic leaders as having a vision, being willing to take risks, and exhibiting “behaviors that are out of the ordinary.” This profile aligns with an agent of change and is contrasted with transactional leaders who manage the status quo.

Explanation: Lesson 39 provides a verbatim definition for charisma: “Charisma is the leader’s ability to inspire pride, faith, and respect; to recognize what is really important, and to articulate effectively a sense of mission, or vision, that inspires followers.”

Explanation: Lesson 39, under “CUTTING-EDGE APPROACHES TO STRATEGIC LEADERSHIP,” defines credibility. Point 1 states: “Credibility is the degree to which followers perceive someone as honest, competent, and able to inspire.”

Explanation: Lesson 39 provides a direct definition: “Credibility is the degree to which followers perceive someone as honest, competent, and able to inspire.”

Explanation: Lesson 39 discusses “Gender and Leadership.” Point 1.a states: “Women tend to adopt a more democratic or participative style and a less autocratic or directive style than men do.”

Explanation: Lesson 40 defines a formal group as “a group officially planned and created by an organization for a specific purpose.” Examples include command groups and task forces. In contrast, an informal group is one “that is established by employees, rather than by the organization, in order to serve group members’ interests or social needs.” A “welfare community” fits the description of an informal group.

Explanation: Lesson 40 defines an informal group as one that is “established by employees, rather than by the organization, in order to serve group members’ interests or social needs.” This is a direct match to the question’s description.

Explanation: Lesson 41’s header is “TURNING GROUPS INTO EFFECTIVE TEAMS”. While work groups share information, work teams engage in collective work that requires joint effort. A key difference is that teams generate positive synergy through coordinated effort.

Explanation: Lesson 41 defines different types of teams. It states, “A self-directed or self-managed team is one that operates without a manager and is responsible for a complete work process or segment that delivers a product or service…” Performing tasks like hiring, scheduling, and performance evaluation are characteristic of a self-managed team.

Explanation: Lesson 42 defines “Nonverbal communication” as communication transmitted without words, including “Body language refers to gestures, facial expressions, and other body movements that convey meaning.” Body position, distance, and clothing are all forms of non-verbal communication. A conference is a type of meeting that primarily involves verbal communication.

Explanation: The handout emphasizes the importance of feedback for effective communication, defining two-way communication as the process that “explicitly includes feedback.” Written communication, such as a memo or report, is often a one-way process and thus inherently lacks the immediate feedback that is possible in face-to-face communication. This is a significant drawback.

Explanation: The workers are communicating by “saying” something. The use of spoken words is a form of verbal communication. The handout further clarifies verbal communication into written and oral forms. Since they are speaking, this is oral communication.

Explanation: Lesson 42 defines “Nonverbal Communication” as “communication transmitted without words.” It explicitly lists “body language” and “verbal intonation” as the best-known types. Office size and clothing are also well-established forms of nonverbal cues that convey meaning.

Explanation: The handout provides a direct definition for this term under the barriers to effective communication. It states, “Filtering is the deliberate manipulation of information to make it appear more favorable to the receiver.”

Explanation: Lesson 42 first lists “Barriers to Effective Interpersonal Communication,” which include filtering, information overload and selective perception. It then has a separate section, “Overcoming the Barriers to Effective Interpersonal Communication,” which lists “Listen actively” as a solution. Therefore, active listening is a way to overcome barriers, not a barrier itself.

Explanation: Lesson 42, under the heading “Direction of Communication Flow,” defines the different ways communication travels within an organization. It states, “Downward communication—flows from a manager to employees and is used to inform, direct, coordinate, and evaluate employees.” This definition directly matches the question.

Explanation: Lesson 42, under the section “The communication process,” directly defines this concept: “One-way communication is the communication that results when the communication process does not allow for feedback.”

Explanation: Lesson 43 discusses organizational communication channels. It clearly defines upward communication: “2. Upward communication is the vertical flow of communication from a lower level to one or more higher levels in the organization.”

Explanation: Lesson 43 provides a very precise definition for this term under the section on “Informal communication.” It states, “Informal communication, better known as ‘the grapevine,’ is communication that takes place without regard to hierarchical or task requirements.”

Explanation: Lesson 43 details how technology affects managerial communication. Under the “Networked Systems” section, it defines various communication tools. The handout states: “2. Voice mail is the recording systems which enable senders to leave messages for receivers by telephone.” This definition precisely matches the question.

Explanation: The handout defines several forms of electronic communication. Videoconferencing is specifically described as “the holding of meetings with individuals in two or more locations by means of closed-circuit television.” This perfectly matches the question’s description.

Explanation: Lesson 43, under “Networked Systems,” defines different types of communication networks. It states, “Extranet systems are organizational communication networks that use Internet technology and allow authorized users inside the organization to communicate with certain outsiders such as customers and vendors.”

Explanation: Lesson 43 defines Intranet as being for internal employees only. An Extranet is defined as a network that uses internet technology to “allow authorized users inside the organization to communicate with certain outsiders such as customers and vendors.” A company website that allows customers to log in, place orders, or access specific information serves as a communication portal for outsiders (customers), fitting the definition of an extranet.

Explanation: This is the definition of the controlling function of management. Lesson 44, “Introduction and Overview of Controlling,” states: “Controlling is that process of regulating organizational activities so that actual performance conforms to expected organizational goals and standards.” It involves measuring, comparing, and correcting.

Explanation: Lesson 45 describes the different types of controls based on timing. For feedforward control, it lists several alternative names: “Other names for feed forward control are ‘preliminary control,’ ‘pre-control,’ ‘preventative control’ and ‘steering control.'” “Preliminary control” is one of the direct synonyms provided in the text.

Explanation: The handout defines three types of control based on timing. Feed forward control is specifically described as focusing on inputs to “ensure that they meet the standards necessary for the transformation process.” The text explicitly states, “The emphasis is upon preventing problems.”

Explanation: While the handout doesn’t explicitly state which control is “most popular,” feedback control is the most fundamental and universally applied type. It is defined as “regulation exercised after a product or service has been completed” to ensure output meets standards. Financial statements, performance reviews, and quality checks on finished goods are all forms of feedback control, making it a common practice in virtually all organizations.

Explanation: Business success is a multifaceted concept. Lesson 45 discusses various measures of organizational performance. “Organizational effectiveness” is defined as how well an organization is achieving its goals (goal attainment). The “Balanced Scorecard” approach, also mentioned in Lesson 45, explicitly includes customer perspective (customer satisfaction) and financial perspective (which includes profitability and cost management). Since all three options are valid measures of success, “All of the given options” is the most comprehensive answer.

Explanation: In Lesson 45, under “Traditional Financial Control Measures,” the handout describes four key categories of financial ratios. It specifies that “4) Profitability ratios measure how efficiently and effectively the firm is using its assets to generate profits.”

Explanation: Lesson 45 discusses tools for monitoring organizational performance. Under the section “Traditional Financial Control Measures,” the handout defines four key categories of financial ratios. It explicitly states that “Liquidity ratios measure an organization’s ability to meet its current debt obligations.”

Explanation: In Lesson 45, under “TOOLS FOR MONITORING AND MEASURING ORGANIZATIONAL PERFORMANCE,” the handout explicitly defines the balanced scorecard. It states, “The balanced scorecard is a performance measurement tool that looks at four areas— financial, customer, internal processes, and people/innovation/growth assets—that contribute to a company’s performance.”