Question: 1 A manager can use power and authority to accomplish objectives.

The relationship between these two

important concepts is best explained as follows:
A. Power is the right to do things, while authority is the ability to do things.
B. Authority is the right to do things, while power is the ability to do things.
Answer (B) is correct.
Authority is the officially sanctioned privilege to direct others. A clear hierarchy of
authority enhances coordination and accountability. Power is the ability to marshal
organizational resources to obtain results. A manager may have both authority and
power or have one without the other.
C. Power and authority are both required to accomplish a task.
D. Power and authority are simply two words that describe the same concept -- how to
get things done in organizations.
 

Question: 2 A company’s decisions are made solely by one person, who is the CEO and major shareholder. Which of
the following powers is this person least likely to have?
A. Coercive power.
B. Legitimate power.
C. Referent power.
Answer (C) is correct.
A person who is the head of a company may exert influence through five types of
power. Referent power is the capacity of the individual’s personality and style to cause
others to identify with or like him or her. Thus, it is the one type of power not
necessarily held by a CEO and major shareholder. This person has the ability to reward
others and apply pressure. (S)he also has the right to expect cooperation.
D. Reward power.
 

Question: 3 Which of the following is true concerning generic influence tactics?

A. Consultation involves appealing to emotions, values, or ordeals.
B. Ingratiating tactics attempt to raise the other person’s self-esteem prior to a request.
Answer (B) is correct.
Management literature describes generic influence tactics that may be upward, lateral, or
downward. As noted by researchers, ingratiating tactics attempt to raise the other
person’s self-esteem prior to a request.
C. Coalition tactics try to convince others by reliance on a detailed plan, supporting evidence,
and reason.
D. Pressure tactics are based on the formal or informal support of higher management.
 

Question: 4 Which of the following is not an example of positive reinforcement of behavior?

A. Paying a bonus to employees who had no absences for any 4-week period.
B. Giving written warnings to employees after only every other absence.
Answer (B) is correct.
Positive reinforcement encourages a desired behavior by following it with the
presentation of a reward. Punishment, on the other hand, discourages an undesired
behavior by following it with a negative consequence. While punishment ideally should
follow every occurrence of an undesirable behavior, this is not always possible. Thus,
even though written warnings are given to employees only after every other absence, the
action is considered punishment, not positive reinforcement.
C. Assigning a mentor to each employee who exhibits a desire to develop leadership skills.
 D. Having a lottery every month where 10% of the employees with no absences receive a
US $200 bonus.
 

Question: 5 The director of internal auditing for a large company has established an excellent reputation because of her
strong professional credentials and tactful but firm handling of auditor-auditee relationships. With regard to
auditees, she must rely upon what sources of power?
A. Expert and coercive.
B. Referent and reward.
C. Referent and expert.
Answer (C) is correct.
The internal audit director has neither formal (legitimate or position) power over
auditees nor the power to coerce (punish) or reward them. Rather, her ability to exert
power (influence others) must derive from her specialized ability and knowledge and the
force of her personal qualities.
D. Legitimate and coercive.
 

Question: 6 The punishing of employees is made less effective by

A. Stating the offending behavior specifically.
B. Postponing the start of disciplinary procedures.
Answer (B) is correct.
The most effective discipline requires immediate corrective action to eliminate the
negative effects of the undesirable employee conduct and to establish and reinforce
appropriate behavior. Delay merely invites more serious consequences. Moreover, the
punishment should be commensurate with the offense, and the employee should clearly
perceive the relationship between the punishment and the behavior.
C. Permitting employees to challenge individual culpability.
D. Focusing the discussion on the offending behavior instead of the offender.
 

Question: 7 Power is synonymous with leadership. Simply put, it is the ability to influence other people. The sources of
power are various. For example, the kind of power arising from the strength of the leader’s personality is
known as
A. Coercive power.
B. Legitimate power.
C. Expert power.
D. Referent power.
Answer (D) is correct.
Power may be classified as reward power (the leader controls resources), coercive
power (the leader may punish the subordinate), legitimate power (the leader has the
right to lead), referent power (the leader has fame, charisma, etc.), and expert power
(the leader has specialized ability or knowledge).
 

Question: 8 A leader who is able to gain compliance from a group based solely on personal attraction is said to have
A. Reward power.
B. Coercive power.
C. Referent power.
Answer (C) is correct.
Referent power is based on identification of subordinates with a superior. Thus, personal
 magnetism (charisma) may be a basis for influencing others to comply with a manager’s
directives.
D. Legitimate power.
 

Question: 9 A manager believes that positive reinforcement is the most appropriate way to deal with employees. Which
of the following actions demonstrates the principle of positive reinforcement?
A. Employees are given 2-day suspension without pay if errors exceed a predefined level.
B. Employees are praised when the detected error rate in their work stays below a predefined
level.
Answer (B) is correct.
Positive reinforcement is a behavior modification technique that provides rewards for
certain responses. It focuses on desirable rather than undesirable behavior. The practice
of praising employees when the detected error rate in their work stays below a
predefined level demonstrates positive reinforcement.
C. Time budgets, which have forced employees to rush and consequently make errors, are
eliminated.
D. Employees are not required to work overtime if errors stay below a predefined level.
 

Question: 10 When supervising employees, the behavior most likely to attain long-term positive results for a manager
would be to
A. Discipline employees immediately using oral reprimands, written warnings, and
temporary suspensions.
B. Hold weekly meetings during which employees are reminded of work procedures and are
praised for the week’s accomplishments.
C. Praise employees on a random schedule and link rewards to performance.
Answer (C) is correct.
Variable-interval schedules of reinforcement lead to higher performance. Employees are
more alert because of the uncertainty involved, and performance and reward are
connected.
D. Tell employees that working overtime now will result in a better performance review in
6 months.
 

Question: 11 A production worker in a plant often speaks for the entire work force when problems arise between labor and
management. Although this individual has the same level of authority and expertise as the individual’s co-
workers, the worker seems to possess a degree of power that others do not have. What type of power does
this individual apparently have?
A. Coercive.
B. Referent.
Answer (B) is correct.
Referent power is based on identification of subordinates with a superior. Thus, personal
magnetism (charisma) may be a basis for influencing others to comply with a manager’s
directives.
C. Legitimate.
D. Reward.
 

Question: 12 Which of the following strengthens and increases acceptable behavior by termination or withdrawal of
undesirable consequences?
A. Positive reinforcement.
 B. Negative reinforcement.
Answer (B) is correct.
Negative reinforcement removes an existing unpleasant condition when the desired
behavior occurs. In contrast, positive reinforcement rewards the desired behavior. For
example, a crying child negatively reinforces a parent’s behavior when (s)he stops
crying after receiving what (s)he wants.
C. Reward.
D. Punishment.
 

Question: 13 Management literature describes generic influence tactics used to change the behavior of others in the
workplace. According to the relevant research,
A. Male managers are significantly more likely than female managers to use pressure tactics.
B. Female managers are significantly more likely than male managers to use consultation.
C. Influence tactics tend to be used laterally and downward, but not upward.
D. Influence tactics tend to vary with the leadership styles of superiors.
Answer (D) is correct.
Upward influence methods used by employees of authoritarian managers are most
likely to consist of ingratiating tactics and upward appeals. Rational persuasion is the
method used most often by employees of participative managers.
 

Question: 14 The use of power in an organization may be defined as the ability to influence employees to do what they
would not ordinarily do. The exercise of this power
A. Affects decisions, behavior, and situations.
Answer (A) is correct.
The exercise of power affects the decisions made by employees, for example, as the
result of advice offered by someone with expert power. It also affects behavior, for
example, as the result of a warning from someone with coercive power. Moreover, the
exercise of power affects situations, for example, a change in the nature or type of
resources used in operations effected by someone with any base of power.
B. Tends to be accepted by employees only when it is based on legitimate power.
C. Is most likely to be accepted by employees when a manager’s source of power is informal.
D. Requires the authority to manage.
 

Question: 15 Modern management theory devotes considerable attention to employee empowerment. Done
appropriately, employee empowerment
A. Increases managerial power.
Answer (A) is correct.
Modern management theory emphasizes employee empowerment. The question is not
whether employees should be empowered but the circumstances in which it should
occur. The paradox is that managers who appropriately surrender power by empowering
employees actually gain power. They have an increased ability to achieve desired
results.
B. Means lack of control.
C. Is independent of compensation.
D. Does not require full employee participation in decision making.
 

Question: 16 Behavior modification is the management of environmental factors to encourage desirable behavior and to
discourage undesirable behavior. Environmental factors include antecedents that
 A. Reward each occurrence of a behavior.
B. Ignore a behavior.
C. Withdraw an unpleasant condition when a desired behavior occurs.
D. Encourage a given behavior.
Answer (D) is correct.
Antecedents are cues that encourage but do not cause a given behavior. Managing
antecedents involves eliminating barriers to good performance and replacing them with
helpful aids. Barriers include unattainable objectives, poor training, confusing rules, and
conflicting directions from management. Aids include challenging but attainable
objectives, clear instructions, realistic plans, constructive suggestions, and acceptable
work rules.
 

Question: 17 Management literature describes generic influence tactics that may be used to influence superiors, peers, or
subordinates. Which of the following is the most commonly used influence tactic?
A. An upward appeal.
B. Exchange.
C. Rational persuasion.
Answer (C) is correct.
The most commonly used influence tactics are consultation, rational persuasion, and
inspirational appeals. The least commonly used are pressure tactics, upward appeals,
and exchange tactics. Rational persuasion tries to convince others by reliance on a
detailed plan, supporting evidence, and reason. Rational persuasion is the method used
most often by employees of participative managers.
D. Pressure.
 

Question: 18 According to the contingency theory of leadership, a manager will be most effective when the manager
A. Consistently initiates structure.
B. Adapts style to specific circumstances.
Answer (B) is correct.
Fred E. Fiedler’s contingency theory of management holds that no single style of
directing is best for all occasions. A successful director (leader) must, for each situation,
balance his/her formal authority, the task structure, and the leader’s relationships with
the pertinent group members.
C. Is task-oriented.
D. Is relationship-oriented.
 

Question: 19 Which of the following leadership types is best known as an agent of change?
A. Participative leader.
B. Traitist leader.
C. Transformational leader.
Answer (C) is correct.
A transformational leader is an agent of change who attempts to inspire the members of
the organization to aspire to, and to achieve, more than they thought was possible.
Transformational leadership emphasizes vision, development of the individual,
empowerment of the worker, and the challenging of traditional assumptions. The
transformational leader normally has charisma, is motivational, provides intellectual
stimulation to workers, and gives individualized consideration.
D. Free-rein leader.
 

Question: 20 Which of the following best describes the approach to leadership based on emotional intelligence?
A. It attempts to identify traits possessed by leaders.
B. It has produced such a long list of leadership traits that, in effect, the approach identifies
nothing.
C. It is based on scholarship, dependability, and social participation.
D. It is based on social skills, judgment, maturity, and emotional control.
Answer (D) is correct.
One traitist approach is based on the emotional intelligence of leaders, that is, their
social skills and judgment, maturity, and emotional control. These abilities can be
learned, especially when a manager or employee understands that immaturity, erratic
behavior, and uncontrolled negative emotions have a bad effect on the workplace.
 

Question: 21 Leadership situations vary with regard to the degree to which the leader can determine what subordinates
will do, how the subordinates will do it, and what the results will be. According to Fiedler’s contingency
theory, a leader with a relationship-oriented management style will be most effective when exerting
A. Great control.
B. Moderate control.
Answer (B) is correct.
A relationship-oriented manager is employee-centered. His/her self-esteem is strongly
affected by personal interactions with subordinates. Fiedler indicated that such a
manager is most effective when not faced with the extremes of high or low control
situations. High control follows from strong position power, a structured task, and good
leader-member relations. A low-control situation has just the opposite characteristics. In
a high-control environment, a concern for personal relations may be unimportant. In a
low-control situation, the relationship-oriented leader may be unable to provide the
needed task structuring. Thus, the moderate-control situation is best. An example is an
assembly-line situation (a structured task) in which leader-member relations are poor.
C. Little control.
D. Great or little control.
 

Question: 22 If a supervisor uses a supportive management approach, evidenced by positive feelings and concern for
subordinates, a problem might result because
A. An approach based on pure power makes it difficult to motivate staff.
B. This approach depends on material rewards for the worker.
C. This approach depends on people who want to work, grow, and achieve.
Answer (C) is correct.
Supportive management techniques orient workers toward performance rather than
obedience or happiness. The leader should have positive feelings for his/her employees
and should attempt to encourage participation and involvement. This approach is
effective when used with employees who are motivated to work, improve themselves
and their abilities, and accomplish goals.
D. The manager must believe in the teamwork approach.
 

Question: 23 Which of the following statements is true regarding authoritarian leadership styles?
A. The manager dictates all decisions to the employees, so communication is downward and
tasks are clearly defined in authoritarian leadership.
 Answer (A) is correct.
When a manager uses an authoritarian leadership style, (s)he dictates all decisions to the
employees, so communication is downward. Moreover, tasks are clearly defined. This is
considered the classical approach to leadership. Employees are not allowed to give
input.
B. Employees in a group are given the authority and responsibility to make individual
decisions in democratic leadership.
C. The leader delegates substantial authority and employees participate in defining and
assigning tasks in laissez-faire leadership.
D. None of the answers are correct
 

Question: 24 A leader who explains decisions and provides opportunity for clarification is described as having which
leadership style?
A. Selling.
Answer (A) is correct.
According to Hersey and Blanchard, a selling style of leadership provides a high degree
of task orientation and a high degree of relationship orientation. This type of leader
explains decisions and provides opportunities for clarification. Thus, upward and
downward two-way communication is active. This approach is more democratic than
authoritarian.
B. Telling.
C. Participating.
D. Delegating.
 

Question: 25 Which of the following constitute initiating structure behavior?

I. Defining duties
II. Planning and organizing work
III. Helping with work-related problems

A. I and II only.
Answer (A) is correct.
According to the Ohio State model, initiating structure behavior is directed towards
accomplishing tasks. Structure includes defining duties, establishing procedures, and
planning and organizing work. Consideration, on the other hand, is the establishment of
IV. a personal relationship between the leader and the subordinate. High consideration by
the leader includes warmth toward the employee as a person, psychological support for
the employee, and helpfulness with work-related problems.
B. I and III only.
C. II and III only.
D. I, II, and III.
 

Question: 26 A manager implementing the directive leader approach should

A. Closely supervise each employee.
Answer (A) is correct.
The situational approach to leadership (called path-goal theory) allows a manager to
choose one of four approaches for implementing his/her leadership style. Using the
directive leader approach, a manager provides close guidance to the employee through
the use of specific rules, policies, and procedures.
 B. Display confidence in each employee’s ability.
C. Work with the employee when developing goals.
D. Clearly signal that the employee is expected to be successful.
 
Fact Pattern: 1
The following question presents a scenario in which a • The directive leader lets subordinates know what is
manager needs to decide what leadership style to use to expected of subordinates, schedules work to be
obtain employee satisfaction and effective employee done, and gives specific guidance on how to
performance. For the purposes of this question, the manager accomplish tasks.
has a choice of four styles. • The supportive leader is friendly and shows concern
for the needs of the subordinates.
• The participative leader consults with employees
and considers their suggestions before making a
decision.
• The achievement-oriented leader sets challenging
goals and expects subordinates to perform at their
highest level.

Refer to Fact Pattern: 1 
Question: 27 The manager of a team of actuaries has been asked to develop the basic pricing structure for a new health
insurance product. The team has successfully designed other pricing structures in recent years. The
manager was assigned to the team 6 months ago. What is the best leadership style for the manager of this
team?
A. Directive.
B. Supportive.
C. Participative.
Answer (C) is correct.
The participative style is most useful when subordinates believe they control their own
destinies, that is, when they have an internal locus of control. Such individuals may be
resentful if they are not consulted.
D. Achievement-oriented.
 

Refer to Fact Pattern: 1 
Question: 28 The workers in a factory have been told that the current machines are obsolete and will be replaced by new,
computer-assisted machines. The workers must be retrained and are eager to learn everything about the
new machines. The manager was recently hired from a company where the new machines were extensively
used and is very familiar with them. In this case, what is the best leadership style for the manager?
A. Directive.
Answer (A) is correct.
According to path-goal theory, two groups of contingency factors affect the relationship
between leadership behavior and outcomes (performance and satisfaction):
environmental factors beyond subordinates’ control (task structure, the formal authority
system, and the work group) and subordinate factors. The latter include the
subordinate’s locus of control, experience, and perceived ability. A leadership style
should be chosen that complements but does not duplicate the factors in the
environment and is consistent with subordinates’ characteristics. A directive style is
most effective when the subordinate’s locus of control is external, tasks are ambiguous
or stressful, and substantial conflict exists in the work group. Thus, a directive style is
appropriate when subordinates do not have high perceived ability or experience.
B. Supportive.
C. Participative.
 D. Achievement-oriented.
 

Refer to Fact Pattern: 1 
Question: 29 A production team has been together for several years and has worked well together. However, severe
arguments have recently occurred between two members of the group, and other members have begun to
take sides. This problem has had a negative effect on production performance. The best leadership style for
the manager in this situation is
A. Directive.
Answer (A) is correct.
Directive leadership provides highest subordinate satisfaction when a team encounters
substantive internal conflict. Thus, directive leadership is the appropriate complement to
the environmental factors. The leader should intervene to compensate for the stress and
strife in the workplace.
B. Supportive.
C. Participative.
D. Achievement-oriented.
 

Refer to Fact Pattern: 1 
Question: 30 A manager in a government agency supervises a section of clerical employees who review license
applications for approval or denial. The clerical jobs are well defined procedurally and are covered by
government regulations. In this case, what is the best leadership style for the manager?
A. Directive.
B. Supportive.
Answer (B) is correct.
A supportive style is best when tasks are highly structured and the authority
relationships are clear and bureaucratic. This approach depends on people who want to
work, grow, and achieve. The supportive style may be best when tasks are unsatisfying.
C. Participative.
D. Achievement-oriented.
 

Question: 31 Which of the following is true regarding Fiedler’s studies of contingency theory?
A. The three dimensions of contingency theory are position power, task structure, and
relationship structure.
B. The two types of leaders that emerged from Fiedler’s studies include task-oriented style
and leader-member style.
C. Placement of leaders in the organization is not as important as the leaders’ leadership
skills.
D. People become leaders not only because of personality attributes, but also because of
various situational factors and the interaction between the leaders and the situation.
Answer (D) is correct.
According to Fred E. Fiedler’s contingency theory, people become leaders not only
because of personality attributes but also because of various situational factors and the
interaction between the leaders and the situation. Thus, the right person at the right time
may rise to a position of leadership if his/her personality and the needs of the situation
complement each other.
 

Question: 32 Which of the following is a benefit of implementing the achievement-oriented leader approach rather than
the directive leader approach?
 A. Employee development is enhanced.
B. The structured environment allows employees to better achieve the organization’s goals.
C. Closer supervision is provided for employees who perform better in a structured work
atmosphere.
D. Employees have more opportunities to develop creativity and meet challenges.
Answer (D) is correct.
The benefits to the company of the achievement-oriented leader approach include
(1) greater employee confidence and commitment, (2) more employee decision making,
(3) increased employee creativity, (4) more challenging objectives, and (5) reduced
supervision for employees who work best independently.
 

Question: 33 The leadership grid developed by Robert Blake and Jane Mouton has axes with a scale of 1 to 9. A primary
style of 9,9 indicates
A. Little concern for production or people (impoverished management).
B. Moderate concern for production and people to maintain status quo (middle-of-the-road
management).
C. Great concern for production and people, trust, teamwork, and commitment (team
management).
Answer (C) is correct.
A primary style of 9,9 is a maximum on both axes. Thus, this style indicates great
concern for production and great concern for people. This leadership style emphasizes
output, cost control, and profit in addition to friendship, aiding employees, and
addressing employee issues.
D. Primary concern for production, little concern for people (authority-compliance
management).
 

Question: 34 Which of the following is false regarding transformational leadership?

A. Transformational leadership emphasizes vision, development of the individual,
empowerment of the worker, and the challenging of traditional assumptions.
B. Transformational leaders use traditional thinking to monitor employees so that the
employees adhere to standards.
Answer (B) is correct.
Transformational leaders have charisma and provide intellectual stimulation to the
workers. In addition, they emphasize (1) vision, (2) development of the individual,
(3) empowerment of the worker, and (4) the challenging of traditional assumptions. A
transactional leader, on the other hand, would monitor employees to ensure that they
adhered to standards.
C. Transformational leaders have charisma and provide intellectual stimulation to the
workers.
D. Transformational leaders expect employees to achieve more than the employees thought
was possible.
 

Question: 35 A manager believes that positive employee attitudes are extremely important. The manager cooperates with
employees in solving problems. A likely effect on employee behavior of this leadership style is
A. Mistrust of the manager.
B. A lack of extraordinary performance.
C. High employee turnover.
D. Increased employee creativity.
 Answer (D) is correct.
When a manager works to maintain a positive attitude among employees and cooperates
with them in problem solving, employees are likely to be more motivated, confident,
and creative. This leadership style also should improve communication and decrease
absenteeism
 

Question: 36 A manager believes that the department’s most valuable resource is the employees’ time. The manager
enforces a set of rigid rules for employees. A characteristic of this leadership style is that
A. Employees are encouraged to participate in decision making.
B. Personal interaction among employees is limited.
Answer (B) is correct.
The characteristics of a leadership style based on deadlines and strict rules include an
emphasis on relatively inflexible congruence with the organization’s overall goals,
perceptions related to McGregor’s Theory X, and limitations on interaction and
communication among employees.
C. Organizational objectives are coordinated with each employee’s goals.
D. The manager’s perceptions are similar to McGregor’s Theory Y.
 

Question: 37 Leadership styles differ depending upon the personality type of the individual leader. A risk-averse leader
will generally
A. Make decisions more slowly.
Answer (A) is correct.
A risk-averse leader will avoid risky situations, make decisions more slowly, and seek
more information than a person who is described as a risk taker.
B. Require less information than a risk taker.
C. Maintain status differences between with others.
D. Work well in participative efforts where joint responsibility is assumed by several people.
 

Question: 38 Which of the following is the leadership style in which the leader and the followers make decisions on the
basis of consensus?
A. Autocratic.
B. Benevolent authoritative.
C. Consultative.
D. Participative.
Answer (D) is correct.
According to path-goal theory, the participative leader consults with employees and
uses their suggestions before making a decision. The participative style is most useful
when employees believe they control their own destinies, that is, when they have an
internal locus of control. Such individuals may be resentful if they are not consulted.
Thus, the participative (democratic) leader and his/her followers make the decision on a
democratic basis through consensus. Moreover, the leader has complete confidence in
subordinates.
 

Question: 39 Which of the following are conditions for a successful mentoring relationship?

I. The relationship should be aimed at improvement of the mentee.

II. The relationship should be based on growth of the mentee.
 III. The pairing of mentor and mentee should be voluntary.
IV. Mentoring requires a positive work environment.

A. I and II only.
B. III and IV only.
C. I, II, and III only.
Answer (C) is correct.
Mentoring is systematic development of leadership by providing career counseling and
social nurturing. It requires intensive tutoring, coaching, and guidance. Some
V. organizations have formal mentoring programs that assign mentors to junior employees.
However, some research indicates that a mentoring arrangement that occurs informally
may have better results. Moreover, mentoring serves both career and psychosocial
functions. Thus, goals should include improved job performance and career potential,
with growth, not dependency, as the desired outcome. Mentoring can be helpful in any
work environment.
D. I, II, III, and IV.
 

Question: 40 The belief that successful leadership occurs when the leader’s style matches the situation is the basis for
A. The contingency approach to leadership.
Answer (A) is correct.
According to Fred E. Fiedler’s contingency theory, people become leaders not only
because of personality attributes, but also because of various situational factors and the
interaction between the leaders and the situation. Thus, the right person at the right time
may rise to a position of leadership if his/her personality and the needs of the situation
complement each other. The same person might not become a leader in different
circumstances because of failure to interact successfully with that situation. The
contingency theory model has three dimensions. (1) Position power is a function of the
formal authority structure. It is the degree to which the position held enables a leader to
evaluate, reward, sanction, or promote the group members independent of other sources
of power, such as personality or expertise. (2) Task structure is how clearly and
carefully members’ responsibilities for various tasks are defined. Quality of
performance is more easily controlled when tasks are clearly defined. (3) Leader-
member relations reflect the extent to which group members like, trust, and are willing
to follow a leader.
B. The managerial-grid model of leadership.
C. A behavioral approach to leadership.
D. An achievement-oriented approach to leadership theories.
 

Question: 41 Which of the following is not an effective principle for guiding a manager’s use of leadership techniques?
A. Serve as a model of the behavior expected from others.
B. Value accountability.
C. Value differences.
D. Follow written procedures at all times.
Answer (D) is correct.
Leadership is the act or process of influencing, inspiring, and guiding people so they
will strive willingly toward the achievement of group objectives through common
effort. Much management research has been devoted to determining the traits of leaders,
leadership styles, and the situations in which particular styles are effective. However, a
blind focus on internal process is a habit of administration, not of leadership. A manager
of this type is called a bureaucratic leader. In the absence of a specific policy or
procedure, (s)he seeks guidance from the next level of management. In some situations,
 for example, when employees handle cash or highly delicate or dangerous equipment or
chemicals, bureaucratic leadership may be needed.
 

Question: 42 Which of the following leadership styles is least likely to consider input from employees in the decision
process?
A. Laissez faire.
B. Autocratic.
Answer (B) is correct.
Under the autocratic style, the manager dictates all decisions to employees. Employees
are not allowed to give input. Autocratic leaders rely on threats and punishment and do
not trust workers. Autocratic leadership can sometimes be the most effective form, such
as where there is limited time to make a decision or when workers do not respond to any
other leadership style.
C. Participative.
D. Consultative.
 

Question: 43 Paul Hersey and Ken Blanchard developed a situational leadership model with two dimensions: task and
relationship behaviors. In this model, a telling leadership style has which dimensions?
A. High task and high relationship.
B. High task and low relationship.
Answer (B) is correct.
A telling leadership style provides specific instructions to employees and closely
supervises performance. Thus, the leader tells followers what tasks to accomplish and
how to do them. Task-related behavior is high, and relationship-related behavior is low.
The telling leadership style is appropriate when followers have low maturity, that is,
when they are lacking in both competence and confidence, so that they are unable and
unwilling to do what is necessary.
C. Low task and high relationship.
D. Low task and low relationship.
 

Question: 44 Paul Hersey and Ken Blanchard developed a situational leadership model with two dimensions: task and
relationship behaviors. In this model, a participating leadership style has which dimensions?
A. High task and high relationship.
B. High task and low relationship.
C. Low task and high relationship.
Answer (C) is correct.
A participating leadership style encourages the sharing of ideas and facilitates decision
making. The leader must therefore be an effective communicator. The participating
leadership style is appropriate when followers have moderate to high maturity, that is,
when they are able but not willing to perform the desired actions.
D. Low task and low relationship.
 

Question: 45 Paul Hersey and Ken Blanchard developed a situational leadership model with two dimensions: task and
relationship behaviors. In this model, the delegating leadership style is appropriate when followers have
A. Low maturity.
B. Low to moderate maturity.
C. Moderate to high maturity.
D. High maturity.
 Answer (D) is correct.
The dimensions of the delegating leadership style are low task and low relationship.
Consequently, task- and relationship-related behaviors are low. The leader provides
little direction or support because the maturity of followers is high. They are willing and
able to do what is necessary.
 

Question: 46 Which approach to understanding leadership focuses on the social skills, judgment, and maturity of the
leader?
A. Behavioral styles theory.
B. Emotional intelligence.
Answer (B) is correct.
A recent traitist approach is based on the emotional intelligence of leaders, that is, their
social skills and judgment, maturity, and emotional control. These abilities can be
learned, especially when a manager or employee understands that immaturity, erratic
behavior, and uncontrolled negative emotions have a bad effect on the workplace.
According to Daniel Goleman, a leader can acquire social capital through exhibiting the
following leadership traits:

1. Self-awareness is knowing oneself.

2. Self-management is the ability to prevent one’s mood swings from
interfering with positive relationships.
3. Social awareness is understanding the actions and emotions of others.
This ability helps a person to adapt in a productive way.
4. Relationship management is an ability possessed by a person who
communicates and resolves conflict effectively. Humor and a benign approach
are characteristics of people who develop good relationships.

C. The Ohio State model.

D. Path-goal theory.
 

Question: 47 Identify the management technique in which employees assist in setting goals, making decisions, solving
problems, and designing and implementing organizational changes.
A. Total quality control.
B. Job enlargement.
C. Kanban.
D. Participative management.
Answer (D) is correct.
Participative management allows employees to participate in goal setting, decision
making, problem solving, and designing and implementing change. Subject to various
individual (values and attitudes), organizational (e.g., job design and company culture),
and environmental (such as technological change and competition) contingencies,
workers who participate in these ways should experience greater autonomy and find
their tasks more meaningful. In turn, this experience should lead to satisfaction,
challenge, security, and acceptance and commitment. Ultimate results are innovation
and improved performance and productivity.
 

Question: 48 A staff auditor is technically outstanding and works well with audit clients but is not good at leading an audit
team. To improve the auditor’s performance, the auditor should be
A. Put in charge of the biggest project; the only way to learn is by performing the task.
B. Put in charge of small projects with set milestones and a fully trained staff.
 Answer (B) is correct.
The auditor can learn to lead small teams, which will in turn prepare him or her to lead
larger projects.
C. Sent to school for management theory classes.
D. Left alone and given assignments that accentuate personal strengths and avoid personal
weaknesses.
 

Question: 49 Which of the following is true regarding the most recent traitist approach to leadership?
A. It attempts to identify traits possessed by leaders.
B. It has produced such a long list of leadership traits that, in effect, it identifies nothing.
C. It is based on scholarship, dependability, and social participation.
D. It is based on social skills, judgment, maturity, and emotional control.
Answer (D) is correct.
The most recent traitist approach is based on the emotional intelligence of leaders, that
is, their social skills and judgment, maturity, and emotional control. These abilities can
be learned, especially when a manager or employee understands that immaturity, erratic
behavior, and uncontrolled negative emotions have a bad effect on the workplace.
 

Question: 50 According to behavior-oriented researchers, which of the following statements is true regarding autocratic
leadership styles?
A. The manager dictates all decisions to the employees, so communication is downward and
tasks are clearly defined in autocratic leadership.
Answer (A) is correct.
When a manager uses an autocratic leadership style, (s)he dictates all decisions to the
employees, so communication is downward. Moreover, tasks are clearly defined. This is
considered the classical approach to leadership. Employees are not allowed to give
input.
B. Employees in a group are given the authority and responsibility to make their own
decisions in democratic leadership.
C. The leader delegates substantial authority, and employees participate in defining and
assigning tasks in laissez-faire leadership.
D. None of the answers are correct.
 

Question: 51 A manager that manages “by the book” exhibits which form of leadership style?
A. Autocratic.
B. Bureaucratic.
Answer (B) is correct.
A bureaucratic manager is characterized as one that must do everything according to
procedure and policy. If there is no policy to cover a situation, the manager refers to the
next level above him/herself.
C. Democratic.
D. Free-rein.
 

Question: 52 Leadership situations vary with regard to the degree to which the leader can determine what subordinates
will do, how they will do it, and what the results will be. According to Fiedler’s contingency theory, a leader
with a relationship-oriented management style will be most effective when (s)he exerts
A. Great control.
 B. Moderate control.
Answer (B) is correct.
A relationship-oriented manager is employee centered. His/her self-esteem is strongly
affected by personal interactions with subordinates. Fiedler indicated that such a
manager is most effective when not faced with the extremes of high- or low-control
situations. High control follows from strong position power, a structured task, and good
leader-member relations. A low-control situation has just the opposite characteristics. In
a high-control environment, a concern for personal relations may be unimportant. In a
low-control situation, the relationship-oriented leader may be unable to provide the
needed task structuring. Thus, the moderate control situation is best. An example is an
assembly-line situation (a structured task) in which leader-member relations are poor.
C. Little control.
D. Great or little control
 

Question: 53 Leaders of work groups tend to be primarily task-motivated (getting the job done) or relationship-motivated
(getting people to work effectively together). Studies have shown that either type of leader can be effective
in certain situations. In which of the following situations is the relationship-motivated leader likely to be more
effective than the task-motivated leader?
A. A highly favorable situation, in which group members enjoy working together and have
clearly defined tasks, and in which the leader exercises absolute authority over promotions
and other rewards.
B. A highly unfavorable situation, in which group members do not enjoy working together
and have vaguely defined tasks, and in which the leader lacks formal authority to control
promotions and other rewards.
C. A moderately favorable situation, with a combination of favorable and unfavorable
factors.
Answer (C) is correct.
According to the contingency approach, the effective leadership style or behavior
depends on the situational requirements. The situational factors are leader-member
relations, task structure, and position power. Hence, the leader’s style has to be matched
with the situation by either changing the leader or changing the leader’s behavior. The
task-motivated leader performs best when the situation is very favorable or unfavorable
(relations are very good or bad, tasks are well or poorly defined, and the leader has or
lacks clear formal authority). However, in a moderately favorable situation, the
relationship-motivated leader can build on the favorable factors and work to help group
members cope with the unfavorable factors.
D. All of the answers are correct.
 

Question: 54 The workers in a factory have been told that their machines are obsolete and will be replaced by new,
computer-assisted machines. The workers must be retrained and are eager to learn everything about the
new machines. The manager was recently hired from a company where the new machines were extensively
used and is very familiar with them. In this case, what is the best leadership style for the manager?
A. Directive.
Answer (A) is correct.
According to path-goal theory, two groups of contingency factors affect the relationship
between leadership behavior and outcomes (performance and satisfaction):
environmental factors beyond subordinates’ control (task structure, the formal authority
system, and the work group) and subordinate factors. The latter include the
subordinate’s center of control, experience, and perceived ability. A leadership style
should be chosen that complements but does not duplicate the factors in the
environment and is consistent with subordinates’ characteristics. A directive style is
most effective when the subordinate’s locus of control is external, tasks are ambiguous
 or stressful, and substantial conflict exists in the work group. Thus, a directive style is
appropriate when subordinates do not have high perceived ability or experience.
B. Supportive.
C. Participative.
D. Achievement-oriented.
 

Question: 55 A production worker in a plant often speaks for the entire work force when problems arise between labor and
management. Although this individual has the same level of authority and expertise as the individual’s
coworkers, the worker seems to possess a degree of power that others do not have. What type of power
does this individual apparently have?
A. Coercive.
B. Referent.
Answer (B) is correct.
Referent power is based on identification of subordinates with a superior. Thus, personal
magnetism (charisma) may be a basis for influencing others to comply with a manager’s
directives.
C. Legitimate.
D. Reward.
 

Question: 56 Which of the following is not one of the advantages of self-managed teams?
A. Motivation is improved because decision making is decentralized.
B. Improved processes of production if the teams are supported properly.
C. Managerial acceptance by tradition-oriented managers.
Answer (C) is correct.
Managerial resistance is often the primary obstacle of self-managed teams.
Organizational change is difficult, and tradition-oriented managers tend to regard self-
managed teams as a threat to their status.
D. Improved communication because all members understand the team’s activities better.
 

Question: 57 Which of the following is false with regard to quality circles and self-managed teams?
A. Managerial acceptance by tradition-oriented managers.
Answer (A) is correct.
Managerial acceptance is the primary obstacle to adoption of self-managed teams.
Tradition-oriented managers often perceive the loss of authority to a self-managed team
as a threat to their status.
B. Self-managed teams are assigned by management, and quality circle teams are voluntary.
C. Self-managed teams and quality circles often have better cohesion among members.
D. Self-managed teams and quality circles are often able to help the organization operate
more efficiently and effectively.
 

Question: 58 Which of the following is key to any plan to empower teams?

A. Give structure to team members.
B. Monitor progress and offer timely feedback on performance.
Answer (B) is correct.
Members of a team are empowered when they are properly trained and equipped, have
the relevant information they need, are fully involved in decision making, and receive
 fair compensation for their work. Monitoring and feedback are keys to maintaining
empowerment because they are necessary to team effectiveness. Team effectiveness is
reflected in achievement of objectives, innovation, adaptability, commitment, and
favorable evaluations by senior management.
C. Reduce authority of the team when mistakes are made.
D. Avoid tension and conflict within the team.
 

Question: 59 The sharing of important financial information with employees based upon a foundation of trust and
commitment to training is known as
A. A self-managed team.
B. Open-book management.
Answer (B) is correct.
Open-book management involves sharing important financial information with trained
and empowered employees. This approach is founded on trusting employees,
commitment to their training, and waiting patiently for results.
C. A quality circle.
D. Impression management.
 

Question: 60 Which of the following actions can management take to build trust with groups?
A. Disclose information, emotions, and opinions.
B. Engaging in timely and accurate communication.
C. Showing respect to the group.
D. All of the answers are correct.
Answer (D) is correct.
All three of the described actions show that management desires to build a trusting
relationship between the group and management.
 

Question: 61 Which of the following factors is critical for the success of participative management?
A. Trust.
Answer (A) is correct.
Trust is the key factor in any participative management approach. Management should
take action to build trust as soon as groups are formed. If there is a lack of trust, then
success is unlikely because both the team and management will act in their own self-
interest and not the interest of the organization.
B. Control.
C. Information.
D. Influence.
 

Question: 62 Which of the following is not an appropriate approach to team building?

A. Ensuring a balance of complementary team roles.
B. Choosing members who need to improve skills.
Answer (B) is correct.
A team is most likely to be effective when it is fully empowered. Empowerment follows
from properly training and equipping team members and providing them with all
necessary information. A team will not be effective if its members lack the needed
skills.
 C. Developing clear and shared values.
D. Selecting team members based on how the members are likely to relate to each other.
 

Question: 63 Which of the following statements regarding virtual teams is false?

A. Virtual teams may be able to work faster than a traditional team.
B. In-person interaction and team-building exercises are unnecessary.
Answer (B) is correct.
In-person and team-building exercises are often necessary to create the cohesion and
trust for a group to operate effectively. If there are no team-building exercises, the team
may fracture and become ineffective at achieving its objective.
C. Roles and objectives must be clearly communicated.
D. Team leaders should meet members in person before the members are chosen for
participation in the group.
 

Question: 64 The STEP model is consistent with which organizational philosophy?

A. Self-managed teams.
B. Open-book management.
Answer (B) is correct.
Open-book management involves sharing important financial information with trained
and empowered employees. The first step is to share (S) the financial information with
the employees. Next, management must teach (T) the employees how to understand the
information and use it to the benefit of the organization. Then, management empowers
(E) the employees to act on the information given. Finally, the employees are paid (P)
for their accomplishments.
C. Impression management.
D. Group development.
 

Question: 65 A team is a group whose members work together to achieve a specific common goal. Which of the following
is true with respect to teams?
A. All groups are teams, but not all teams are groups.
B. Teams improve organizational performance because teams are easy to form.
C. A team is similar to a group because team leadership often rotates and members are
accountable to each other.
D. Smaller teams are recommended.
Answer (D) is correct.
Normally, smaller teams are recommended. Two to nine members is recommended
because working in teams requires accepting a diversity of ideas and opinions. Larger
groups require more time for each of the members to develop trust in one another and to
work together productively.
 

Question: 66 Which of the following indicates a high-performance team?

A. Pride in the team leader.
B. Quick agreement on the first proposed solution for problems facing the team.
C. Care in risk taking.
D. Commitment to personal growth of team members.
Answer (D) is correct.
Team effectiveness is reflected in achievement of objectives, innovation, adaptability,
 commitment, and favorable evaluations by senior management. According to Hans
Thamhain, team effectiveness is determined by three sets of interdependent factors.
Team effectiveness requires that all factors need to be addressed continually. A high-
performance team is committed to the personal growth of its team members.
 

Question: 67 Which one of the following statements about quality circles is false?
A. A quality circle is typically comprised of a group of 8 to 10 subordinates and supervisors.
B. Part of the quality circle concept includes teaching participants communication skills,
quality strategies, and problem analysis techniques.
C. Quality circles meet on the company premises and on company time.
D. The quality circle has the final control over implementation of recommended solutions.
Answer (D) is correct.
Use of quality circles is a form of participative management. A quality circle is a group
of up to 10 individuals (managers and subordinates) who do similar work and who
volunteer to meet weekly to discuss and solve work-related problems. However,
management retains the right to make the final decisions.
 

Question: 68 Which of the following is an indicator of interpersonal skills that are necessary for members of a team?

I. Routinely keeps superiors, team members, and other appropriate parties informed of significant
developments.
II. Spends sufficient time cultivating contacts with peers to obtain timely information or resolve issues
outside formal channels.
III. Routinely assumes an appropriate amount of work or responsibility for group projects.

A. I only.
B. I and II only.
Answer (B) is correct.
Building trust is central to team effectiveness. Individuals build trust through use of
interpersonal skills that include interaction, cooperation, and ability to deal with other
people. Thus, trust is built through timely and accurate communication; supportive
behavior; showing respect, e.g., by delegation and effective listening; fairness of
evaluations; predictability of behavior and promise-keeping; and competence
IV. exemplified by sound judgment and technical proficiency. Thus, a trusted team member
routinely keeps superiors, team members, and other appropriate parties informed of
significant developments. (S)he also spends sufficient time cultivating contacts with
peers to obtain timely information or resolve issues outside formal channels. However,
routinely assuming an appropriate amount of work or responsibility for group projects is
indicative of team participation, not of the interpersonal skills required of team
members.
C. II and III only.
D. I, II, and III.
 

Question: 69 Teams may be built by all the following methods except

A. Participating in a series of outdoor challenges.
B. Incorporating a number of interdependent roles.
C. Rating group effectiveness.
D. Exerting direct pressure on dissenters.
 Answer (D) is correct.
Exerting direct pressure on dissenters is a symptom of groupthink. One of the perils of
cohesive groups is the tendency to conform and ignore relevant individual input that
varies from the group opinion.
 

Question: 70 Following a decision to change the composition of several work teams, management encounters significant
resistance to the change from members of the teams. The most likely reason for the resistance is
A. Possible inefficiencies of the new arrangement.
B. The breakup of existing teams.
Answer (B) is correct.
Commitment to a group depends on its attractiveness and cohesiveness. Attractiveness
is a favorable view from the outside. Cohesiveness is the tendency of members to
adhere to the group and unite against outside pressures. Group attractiveness and
cohesiveness are fostered by its prestige and status, cooperation among the members,
substantial member interaction, small size of the group, similarity of members, good
public image, and common external threat. Thus, members of cohesive work groups
often exert pressure to resist changes that threaten to break up the group.
C. Understaffing for the tasks involved.
D. The selection of a more costly approach to performing the assigned tasks.
 

Question: 71 A team member who focuses on the overall perspective and reminds others of the vision, mission, or goal of
the team informally assumes the role of a
A. Contributor.
B. Collaborator.
C. Communicator.
Answer (C) is correct.
A communicator is a people-oriented member. (S)he is process-driven and an effective
listener. Thus, a communicator plays the role of a facilitator and a consensus builder.
D. Challenger.
 

Question: 72 A problem with the effectiveness of teams is the concept of

A. Brainstorming.
B. Social loafing.
Answer (B) is correct.
Social loafing is the situation wherein a team member puts forth less effort in a group
than he or she would individually. To avoid social loafing, individual efforts should be
identifiable and subject to evaluation.
C. Synergy.
D. Role playing.
 

Question: 73 Which of the following types of work teams are most likely to be cross-functional?
A. Command group.
B. Virtual.
C. Research-and-development.
Answer (C) is correct.
A cross-functional team is one that includes members of different departments who have
 different areas of expertise. A research-and-development team is usually a cross-
functional team because many different skills are needed to identify and create a new
product.
D. Informal.
 

Question: 74 One division of a large manufacturing company has traditionally performed much better than any of the other
divisions. The management team of this division has risen through the ranks together and exhibits no signs
of conflict. Recently, earnings of the division have begun to decline, and market share has eroded. Senior
management of the parent company has asked the director of internal audit whether the introduction of
conflict by bringing in outside managers might help resolve the deteriorating situation. The most appropriate
response would be that
A. Conflict is dysfunctional and should not be risked under these circumstances.
B. All conflict can be beneficially controlled and should be encouraged in this situation.
C. The management team has been together for a long time and should be allowed to work
through its problems.
D. Varying the management team could introduce new ideas and be beneficial to the
division, and some conflict is not a problem.
Answer (D) is correct.
Conflict may be constructive as well as destructive because it encourages self-criticism,
creativity, and necessary change. Accordingly, managers may decide to stimulate
controlled conflict. Techniques for this purpose may include (1) ambiguous or
threatening communications; (2) hiring outsiders with different values, managerial
styles, attitudes, and backgrounds; (3) designating an individual to argue against the
majority opinions of the group; and (4) restructuring the organization to disrupt the
status quo. Thus, bringing in outside managers may stimulate conflict but also may
eliminate complacency and improve creativity
 

Question: 75 Upon completing an audit of a major operation of the company, the auditor is certain that a proposed
recommendation should be made in the audit report. However, the auditor also understands that the
recommendation will result in conflict between the auditee department and the accounting department. The
organization is not bureaucratic and encourages the development of informal relationships across
departments. Which of the following statements is true regarding the nature of conflict in organizations?
A. Conflict is more likely to be functional in a bureaucratic organization than in a less formal
(organic-type) organization.
B. Conflict reduces the likelihood that an acceptable solution can be implemented in highly
structured organizations; thus, the auditor should consider revising the recommendation in
order to avoid conflict.
C. Conflict should be viewed as a healthy way to facilitate growth in an organization; thus,
the auditor should accept conflict that may result from normal audit recommendations.
Answer (C) is correct.
The interactionist view holds that constructive or functional conflict is necessary for an
organization to perform effectively. Functional conflict fosters self-criticism,
innovation, and the ability to respond successfully to changing circumstances. It should
be promoted, not suppressed.
D. Conflict is healthy unless it clearly points out differences in the goals and objectives of the
organization’s operating units.
 

Question: 76 Which of the following conflict resolution techniques has the goal of maintaining harmonious relationships by
placing another’s needs and concerns above your own?
A. Accommodation.
 Answer (A) is correct.
The goal of accommodation is maintaining harmonious relationships by placing an
emphasis on another’s needs and concerns.
B. Compromise.
C. Collaboration.
D. Avoidance.
 

Question: 77 Time consumption is a disadvantage when managers address conflict by

A. Smoothing.
B. Forcing.
C. Problem solving.
Answer (C) is correct.
Problem solving is a way managers address conflicts, but it requires a large amount of
time to resolve.
D. None of the answers are correct.
 

Question: 78 Carling, a manager, resolves a conflict between two employees, Philip and John, by recommending
concessions to be made by both employees. The two employees agree to the concessions, and the conflict
is resolved. Both Philip and John gain and lose. Which of the following describes the way Carling addressed
the conflict?
A. Forcing.
B. Smoothing.
C. Compromise.
Answer (C) is correct.
Compromise entails negotiation by the parties in conflict. The conflict is resolved
through a process by which each side makes concessions. Thus, the parties both gain
and lose. Because Philip and John each made concessions, the conflict was resolved
through compromise.
D. Problem solving.
 

Question: 79 Which response to conflict allows the parties to address the problem instead of their positions?
A. Avoidance.
B. Forcing.
C. Interest-based bargaining.
Answer (C) is correct.
In interest-based bargaining, the parties realize that the conflict is between interests, not
their opposed positions. The interests underlying the positions may be both conflicting
and compatible. The strongest of these interests are basic human needs. By
acknowledging and understanding the others’ interests, the parties may be able to
address the problem by bypassing their positions and finding a new option that serves
their interests.
D. Smoothing.
 

Question: 80 Two subordinate internal auditors disagree on a particular substantive engagement observation. The best
long-term approach to resolving this conflict is to
A. Have them jointly identify the cause of their disagreement.
 Answer (A) is correct.
In the long run, problem solving is the only effective solution because it eliminates the
sources of conflict. Problem solving requires the parties to identify the actual sources of
conflict, focus on factual information, and seek creating solutions.
B. Tell them to settle down, that things will work themselves out.
C. Seek a middle ground that may satisfy both internal auditors.
D. Remind them this is a team effort and they should forget their differences.
 

Question: 81 During an internal audit, the auditor experienced difficulty obtaining required information from a specific
employee. When this situation continued for 1 week, the auditor requested a private meeting with the
employee for the purpose of identifying the problem and resolving the difficulty through open discussion.
Which conflict management technique was the auditor applying?
A. Problem solving.
Answer (A) is correct.
The conflict management technique that involves confronting the conflict and removing
its causes is problem solving. The emphasis is on facts and solutions, not personalities
and assignment of blame.
B. Expansion of resources.
C. Authoritative command.
D. Altering the human variable.
 

Question: 82 Auditor 1 and Auditor 2 are working on similar projects. After looking at Auditor 2’s work, Auditor 1 informs
Auditor 2 that Auditor 2’s project contains many errors and is not acceptable. Auditor 1 discusses with
Auditor 2 ways to improve to prevent the errors from happening again. Auditor 2 acknowledges the mistakes
and vows to work harder. Auditor 2 listens to Auditor’s 1 suggestions, corrects the errors on the current
project, and returns a high-quality project. This is an example of
A. Cooperative conflict.
Answer (A) is correct.
Auditor 1’s conflict with Auditor 2 is productive because dialogue between the two
workers is productive. The workers share the same goals for a high-quality project.
B. Competitive conflict.
C. Destructive conflict.
D. None of the answers are correct.
 

Question: 83 Conflict may be

I. Cooperative
II. Competitive

A. I only.
B. II only.
C. Both I and II.
III. Answer (C) is correct.
Conflict may be either cooperative or competitive. Cooperative conflict is constructive,
and competitive conflict is destructive.
D. Neither I nor II.
 

Question: 84 Which of the following conflict triggers is best resolved by reorganization?

A. Scarcity of people, funds, or other resources.
 B. Badly defined job descriptions.
Answer (B) is correct.
Job descriptions are, in effect, jurisdictional boundaries. If these boundaries are badly
designed, the best resolution is to redraw the boundaries (reorganization).
C. Failure of communication.
D. Deadlines.
 

Question: 85 Which of the following are conflict triggers?

A. Deadlines.
B. Policies, procedures, rules, or other standards viewed by employees as unfair.
C. Not meeting expectations.
D. All of the answers are correct.
Answer (D) is correct.
Deadlines are conflict triggers because time pressures may induce better performance
(constructive) or anger and frustration (destructive). Polices, procedures, rules, or other
standards viewed by employees as unfair are conflict triggers and should be changed to
avoid competitive conflict if very unpopular. Not meeting expectations is a conflict
trigger, but the problem can be avoided through clarifying in advance the expectations
employees have about their jobs.
 

Question: 86 Intentional stimulation of conflict can be triggered by

I. Making changes to the organizational structure

II. Hiring new employees with different values, attitudes, and backgrounds
III. Assigning an employee the role of opposing the majority view

A. I only.
B. I, II, and III.
Answer (B) is correct.
Intentional stimulation of conflict is triggered by (1) making changes in the
IV. organizational structure; (2) hiring new employees with different values, attitudes,
backgrounds, and managerial styles; and (3) assigning an employee to oppose the
majority view.
C. I and III only.
D. II only.
 

Question: 87 A manager resolves a conflict between two employees by recommending concessions to be made by both
employees. The two employees agree to the concessions and the conflict is resolved. Both employees gain
and lose. Which of the following describes the way the manager addressed the conflict?
A. Forcing.
B. Smoothing.
C. Compromise.
Answer (C) is correct.
Compromise involves negotiation by the parties in conflict. The conflict is resolved
through a process by which each side makes concessions. Thus, the parties both gain
and lose. Because both employees made concessions, the conflict was resolved through
compromise.
D. Problem solving.
 
Question: 88 Conflict arising as a result of a sales manager making delivery promises to customers that are incompatible
with the low inventory levels maintained by the production manager is an example of which of the following
types of interpersonal conflict?
A. Personal differences.
B. Information deficiency.
C. Role incompatibility.
Answer (C) is correct.
The sales manager has made promises that the production manager cannot keep. Their
interpersonal conflict arises from a common type of role incompatibility. The sales
manager’s role is to maximize sales, but the production manager’s role is, in part, to
achieve production efficiencies, for example, by maintaining low inventories. Thus,
individual and intergroup conflict has occurred because the functional responsibilities of
the managers are interdependent in an interfunctional organization.
D. Environmental stress.
 

Question: 89 Which of the following statements regarding approaches to conflict resolution is true?
A. Forcing is a style of managing conflict where the relationship is given more importance
than individual goals, and goals are conceded in order to preserve relationships.
B. Withdrawing is a style of managing conflict where personal goals and relationships are
relinquished. It is regarded as a temporary solution because the problem and conflict recur.
Answer (B) is correct.
The withdrawing or avoiding style ignores the issues and the people involved in the
conflict. Thus, avoidance is inaction. It withdraws from and suppresses the conflict but
does not solve the underlying problem.
C. Smoothing occurs when goals are highly important while the relationship is of minor
importance. Goals are achieved at any cost.
D. Compromising is a style that highly values goals and relationships. Conflicts are viewed as
problems to be solved, and negotiators seek a solution that both achieves goals and
improves relationships.
 

Question: 90 Keeping a conflict from surfacing at all is an example of following which conflict management strategy?
A. Avoidance.
Answer (A) is correct.
An avoidance strategy aims to resolve the conflict by ignoring it or imposing a solution.
It is appropriate if the conflict is trivial or if quick action is needed to prevent the
conflict from arising.
B. Diffusion.
C. Containment.
D. Confrontation.
 

Question: 91 As a conflict resolution strategy, optimizing (or a win-win strategy) is most appropriate when
A. The benefits being contested cannot be changed.
B. The relationship between the parties is likely to continue.
Answer (B) is correct.
Optimizing or problem solving entails addressing the source of conflict and finding
alternative strategies that benefit all parties. It promotes cooperative, positive attitudes
that transfer to other organizational behaviors. Hence, optimizing may be worth the
expenditure of more resources than other strategies because it improves the future
relationship of the parties.
 C. People are deeply committed to established habits and patterns.
D. Time is scarce and the manager’s patience is wearing thin.
 

Question: 92 Two managers have been arguing about the distribution of money for capital investment projects affecting
their respective production units. All of the projects are worthwhile and significantly exceed the
organization’s required rate of return. The approach that would create a win-win solution for the managers
under these circumstances would be to
A. Smooth the differences of the two managers by emphasizing their common interests.
B. Alter the attitudes and behaviors of the managers so that agreement can be reached.
C. Force the managers to compromise by asking each of them to give up something.
D. Expand the resources available so that both manager’s projects can be funded.
Answer (D) is correct.
Expanding the pool of scarce resources, in this case, the money available for capital
projects, permits both managers to achieve his/her objectives without having to give up
anything of value. Thus, each side wins.
 

Question: 93 Two managers have been informed that their units will be relocated to a new site. The units are to share
space at the new office location. The managers have been arguing for several weeks over the allocation of
space and the location of offices. This disagreement is threatening the relocation schedule and disrupting
other projects. The managers’ supervisor has now become involved in the conflict and must try to minimize
the potential for hurt feelings while resolving the problem quickly. Identify the supervisor’s best approach for
this situation.
A. Sit down with the managers and determine a solution.
Answer (A) is correct.
Problem solving is a means of confronting the conflict and removing its causes. The
emphasis is on facts and solutions, not personalities and assignment of blame. The
disadvantage is that problem solving takes time. In this situation, a three-party
negotiation stressing a win-win attitude is appropriate. Negotiation should be feasible
because the parties have overlapping interests.
B. Design a floor plan and tell the managers who occupies what space.
C. Remind the managers that the company needs their cooperation in this effort so that costs
can be reduced.
D. Tell the managers not to worry and that problems like this have a way of working
themselves out.
 

Question: 94 In a situation involving a disagreement between two parties, when one party’s interests are more important
than the other’s (for example, a customer believes one product is most suitable while the seller disagrees,
yet the seller’s primary goal is to keep the customer satisfied), the best conflict-resolution strategy is
A. Accommodating.
Answer (A) is correct.
Accommodating is a conflict-handling intention. The dimensions of conflict handling
intentions are assertiveness and cooperation. An intention is what mediates between
one’s actual behavior and one’s emotions and perceptions. Accommodating entails
placing another person’s interests above one’s own. It represents the minimum of
assertiveness and the maximum of cooperation. For example, the seller should
accommodate the customer by providing the product the customer wants.
B. Compromising.
C. Competing.
D. Challenging.
 
Question: 95 While conducting field work, a strong conflict arises between two of your subordinates regarding possible
scope expansion. You draw their attention to their shared views, downplaying the issues of contention. This
technique for resolving conflict is called
A. Superordinate goals.
B. Smoothing.
Answer (B) is correct.
Smoothing is a conflict resolution technique in which differences are deemphasized and
common interests of the parties are emphasized. It has the disadvantage of not solving
the underlying problems that created the conflict.
C. Problem solving.
D. Compromise.
 

Question: 96 Many people think that conflict is inherently detrimental to an organization. However, studies and actual
case experience demonstrate that some conflict is desirable if an organization is to thrive. Identify the
technique that management could use to stimulate conflict.
A. Authoritative command.
B. Restructuring the organization.
Answer (B) is correct.
The interactionist view is that conflict may be constructive as well as destructive
because it encourages self-criticism, creativity, and necessary change. Accordingly,
managers may decide to stimulate controlled conflict. Techniques for this purpose may
include ambiguous or threatening communications; hiring outsiders with different
values, managerial styles, attitudes, and backgrounds; designating an individual to argue
against the majority opinions of the group; and restructuring the organization to disrupt
the status quo.
C. Expansion of resources.
D. Creation of superordinate goals.
 

Question: 97 Which one of the following techniques is not generally recognized as an effective conflict resolution
technique for management to use in a dispute between employees?
A. Accommodation -- management encourages a high degree of cooperation and a low
degree of assertiveness.
B. Competition -- management encourages the parties to seek their own interests, regardless
of the effect on each other.
Answer (B) is correct.
Competition is a conflict-handling intention characterized by considerable assertiveness
(the degree to which the party seeks to achieve his/her goals) and a low degree of
cooperativeness (the degree to which the party attempts to satisfy the concerns of
others). Encouraging competition stimulates conflict.
C. Reorganization -- management transfers one of the disputants to another department.
D. Compromise -- management persuades each party to make concessions.
 

Question: 98 Which of the following would not be considered a conflict trigger?

A. Ambiguous jurisdictions.
B. Competition for scarce resources.
C. Status differential.
D. Superordinate goals.
Answer (D) is correct.
An appeal to superordinate goals is a means of resolving conflict. Superordinate goals
 are overriding, common goals of the parties. The conflict can be resolved if the
individuals involved understand that it is preventing them from achieving more
important, mutually held goals.
 

Question: 99 To market effectively the internal auditing function to management, auditors must recognize that their roles
may result in varying degrees of conflict. Conflict triggers must be understood and managed so that a
dysfunctional situation does not develop. Select the answer that is not a conflict trigger.
A. Communication breakdowns.
B. Superordinate goals.
Answer (B) is correct.
Conflict triggers include ambiguous jurisdictions (unclear job boundaries); competition
for scarce resources; status differentials; time pressures; personality clashes;
unreasonable standards, rules, etc.; communication breakdowns; and unrealized
expectations. However, an appeal to superordinate goals is a conflict resolution
technique, not a conflict trigger.
C. Personality clashes.
D. Status differentials.
 

Question: 100 The behavioral science literature identifies diffusion as an effective approach to resolving conflict. An auditor
effectively using diffusion in working with a confrontational auditee would
A. Set aside critical issues temporarily and try to reach agreement on less controversial issues
first.
Answer (A) is correct.
Diffusion temporarily leaves the conflict unresolved. Smoothing (downplaying
differences and emphasizing common interests) and compromise (requiring each party
to make concessions) are diffusion approaches to conflict management. The
disadvantage is that the underlying problems remain unresolved while the less
controversial issues are being addressed first.
B. Emphasize differences between the parties.
C. Avoid the conflict situation.
D. Identify the sources of conflict and address them directly.
 

Question: 101 Which of the following results is most likely to occur when public media are used to resolve disputes
between employees and management?
A. The company’s image may be improved.
B. Public opinion may pressure the parties to resolve the dispute.
Answer (B) is correct.
When public media are used as tools for resolving employee-management disputes,
communication is hindered because the issues are addressed to the public rather than
discussed with the other party. Moreover, compromise becomes difficult because the
stated conclusions are solidified by public opinion. However, the need for union support
is reduced because public pressure may help to resolve the negotiations.
C. Communication between employees and management is improved.
D. The need for support from a union is increased.
 

Question: 102 Which of the following is an example of a two-party negotiation?

A. A person sells a car to a used car dealer.
 Answer (A) is correct.
A person’s sale of a car to a used car dealer is an example of a two-party negotiation.
Only the seller and dealer are involved in the negotiations.
B. A person requests a financial institution to pay another person.
C. A person sells stock through a broker.
D. A person sells a house through a real estate agent.
 

Question: 103 A reasonable BATNA (best alternative to a negotiated agreement) protects against bad decisions caused by
the following:

I. Framing error
II. Escalation of commitment
III. Overconfidence

A. I and III only.

B. I, II, and III.
Answer (B) is correct.
A reasonable BATNA protects against bad decisions caused by the following: framing
error, escalation of commitment, and overconfidence. Framing error is a perceptual
IV. problem. The presentation or context of information may bias its interpretation and the
resulting decision. Escalation of commitment is adherence to a failing course of action
when a purely objective decision maker would abandon it. Overconfidence is the
common tendency to overestimate the chances of success.
C. I only.
D. II and III only.
 

Question: 104 In effective negotiation, a win-win attitude is characterized by

A. Seeking mutual benefit and satisfaction.
B. Cooperative.
C. It promotes support of, and commitment to, the agreement.
D. All of the answers are correct.
Answer (D) is correct.
In effective negotiation, a win-win attitude is characterized by seeking mutual benefit
and satisfaction, being cooperative, and promoting support of, and commitment to, the
agreement. In contrast to a win-win attitude, a win-lose attitude is competitive and is a
zero-sum game instead of a positive-sum game.
 

Question: 105 When planning for successful negotiations, the negotiator should
A. Understand the implications for both sides if the negotiation fails.
Answer (A) is correct.
Negotiators should assess the best alternatives for both themselves and the other parties
to determine their relative strengths in the negotiation process. If alternatives are not
readily available or are unattractive, a party is under additional pressure to make the
negotiation work.
B. Concentrate solely on the issues in the negotiation at hand.
C. Not deviate from stated positions.
D. Depend on the initial research prepared for the negotiation.
 
Question: 106 When negotiating with an analytical personality, the negotiator should
A. Present facts and precedents in an organized manner.
Answer (A) is correct.
An analytical person tends to be drawn to details and swayed by factual information.
B. Push the other party for quick closure of negotiations.
C. Focus on creating a bond with the other party.
D. Include unimportant items in the proposal for bargaining.
 

Question: 107 Which of the following is the acceptable minimum outcome if a negotiator cannot obtain the desired result?
A. Win-win attitude.
B. Cooperation.
C. Best alternative to a negotiated agreement (BATNA).
Answer (C) is correct.
BATNA is the acceptable minimum outcome if a negotiator cannot obtain the desired
result. The BATNA helps a negotiator to avoid accepting an unfavorable agreement and
rejecting a favorable agreement.
D. Win-lose attitude.
 

Question: 108 Understanding the best alternative to a negotiated agreement (BATNA) helps a negotiator to avoid which of
the following?

I. Accepting an unfavorable settlement.

II. Rejecting a favorable settlement

A. I only.
B. II only.
C. I and II.

III. Answer (C) is correct.

Accepting an unfavorable settlement and rejecting a favorable settlement are two
mistakes avoided by understanding the BATNA. The BATNA is the acceptable
minimum outcome if a negotiator cannot obtain the desired result.
D. Neither I nor II.
 

Question: 109 Which of the following is an example of framing error?

I. A job seeker may hope that the attractive appearance of a resume will sway the judgment of a
potential employer.
II. A glass still holds 50% of its capacity whether the glass is described as half full or half empty.
However, the former (latter) characterization may lead to a more (less) favorable opinion of the
content.

A. I only.
B. I and II.
Answer (B) is correct.
III. Framing error is a perceptual problem. The presentation or context of information may
bias its interpretation and the resulting decision. Thus, favorably (unfavorably)
presented information may be viewed more (less) favorably than its merits warrant.
Both I and II are examples of framing errors.
C. II only.
 D. Neither I nor II.
 

Question: 110 The negotiator, when encountering unexpected resistance from another party, should first
A. Attempt to determine the reason behind the resistance.
Answer (A) is correct.
The first step in overcoming unexpected resistance is to attempt to determine the reason
behind the resistance. Without knowing the reason, the negotiator is unable to counter it
effectively. For example, knowing whether the other party is concerned about a major
issue or a detail will affect the negotiator’s response.
B. Stop the meeting and address the other party’s concerns privately.
C. Restate the negotiator’s position regarding the issue.
D. Research the other party to determine the party’s views and requirements.
 

  

Question: 111 A parent wishes to sell a subsidiary for US $1.6 billion. A buyer wishes to acquire the subsidiary for US
$1.1 billion, with the best alternative to a negotiated agreement (BATNA) of US $1.4 billion. What is an
acceptable BATNA for the seller in order for negotiation to be feasible?
A. US $1.3 billion.
Answer (A) is correct.
US $1.3 billion is an acceptable BATNA because the BATNA of the buyer is US
$1.4 billion. Any amount over US $1.4 billion would cause negotiation not to be
feasible.
B. US $1.5 billion.
C. US $1.7 billion.
D. US $1.75 billion.
 

Question: 112 Two individuals negotiate the details and put a deal in written form. The individuals have developed a good
relationship, and future negotiations will benefit. Which step of the added-value negotiating process has
taken place?
A. Perfect the deal.
Answer (A) is correct.
The individuals performed step five of added-value negotiation by perfecting the deal.
This step is characterized by negotiating details and putting the deal in written form.
The process creates relationships that will benefit later negotiations.
B. Identify options.
C. Design alternative deal packages.
D. Select a deal.
 

Question: 113 Steps in a negotiation include clarifying interests, identifying options, designing alternative deal packages,
selecting a deal, and perfecting the deal. The type of negotiation described is
A. Two-party.
B. Three-party.
C. Added-value.
Answer (C) is correct.
In added-value negotiating, the two sides make multiple deals to add value to the
process. Clarifying interests, identifying options, designing alternative deal packages,
selecting a deal, and perfecting a deal are all steps in added-value negotiating.
 D. Ineffective.
 

Question: 114 What is a primary disadvantage of forcing another party to accept terms in a negotiation?
A. Damage of the relationship between the negotiators.
Answer (A) is correct.
In future negotiations, the opponent will be less likely to work with the negotiator to
achieve mutual goals. Negotiations in which one or both parties feel they must win at
the expense of the other party ultimately do not build a relationship of trust and
cooperation.
B. Lack of achievement of the negotiator’s goals.
C. Increased time involved in reaching an agreement.
D. Reduction in internal support for the negotiator’s tactics.
 

Question: 115 Added-value negotiation is characterized by

A. One party approaching another with a proposal.
B. A series of offers and counteroffers between the negotiating parties.
C. Two parties making multiple deals.
Answer (C) is correct.
The basic principle of added-value negotiation is that the parties make multiple deals to
add value to the process. The parties mutually clarify their common interests, identify
options or the range of values each side can offer the other, and design alternative deal
packages. Each package should be a win-win offer consisting of groups of the values
identified in the previous step.
D. One party quickly conceding to the demands of the other.
 

Question: 116 The method of principled negotiation is based on which of the following principles?

I. Separate the people from the problem.

II. Focus on positions, not interests.
III. Invent options for mutual gain.
IV. Insist on using subjective criteria.

A. I and II only.
B. I and III only.
Answer (B) is correct.
The principled negotiation method focuses on basic interests, mutually satisfying
V. options, and fair standards. The basic principles include (1) separating the people from
the problem; (2) focusing on interests, not positions; (3) inventing options for mutual
gain; and (4) insisting on using objective criteria.
C. I, II, and III only.
D. II, III, and IV only.
 

Question: 117 A construction manager is using a distributive-bargaining approach in negotiating the price of lumber with a
supplier. The construction manager will
A. Concede to the supplier’s asking price in order to maintain a positive working relationship.
B. Hire a mediator to negotiate the deal on behalf of the manager.
C. Attempt to get agreement on a price within the settlement range (that is, within both the
manager’s and supplier’s aspiration ranges).
 Answer (C) is correct.
When using a distributive-bargaining approach, the negotiator operates with a maximum
desired result (target point) and a minimum acceptable result (resistance point) in mind.
If the ranges of feasible outcomes (aspiration ranges) overlap, an agreement is possible.
D. State the resistance point (that is, the highest price acceptable) and ask the supplier to
concede.
 

Question: 118 Which of the following is a benefit of the communication link represented by negotiating employee-
supervisor differences?
A. Each employee perceives that management values his/her accomplishments.
B. A written communication link between the employees and management is provided.
C. Each employee is shown that management values his/her rights and needs.
Answer (C) is correct.
The benefits of negotiating employee-supervisor differences include communicating
both sides of an issue without litigation, recognizing employee concerns to indicate that
management values each subordinate’s needs and rights, and impartially treating
tensions in the work environment while finding compromise solutions.
D. The need for an informal grapevine is reduced.
 

Question: 119 There are many types of third-party negotiations available to parties facing disagreement. If the goal is to be
certain that settlement is reached, a negotiator with authority to make a decision should be selected. The
best negotiator to select, given this goal, would be a(n)
A. Mediator.
B. Arbitrator.
Answer (B) is correct.
An arbitrator has the authority to impose an agreement. Arbitration may be requested by
the parties or may be imposed by law or by the terms of a contract.
C. Consultant.
D. Conciliator.
 

Question: 120 Which of the following would be the best approach for negotiating the purchase of a large number of
microcomputers, assuming that both parties follow the same approach?
A. Review previous demands, concessions, and settlements (precedents).
Answer (A) is correct.
The best approach to negotiating a large purchase, assuming that both parties follow the
same approach, is to review previous settlements, demands, and concessions to
determine what can be achieved. The history of past practices and interactions tends to
define current standards of fairness in negotiations.
B. Attempt to get personal information about the opposing negotiators.
C. Enter without preconceived ideas about what should be accomplished.
D. Ask as few questions as possible during negotiations.
 

Question: 121 Two internal auditors have been assigned projects of equal priority and the same due date. Unfortunately,
support services are limited. The auditors have been directed to negotiate between themselves for the
available services. This type of negotiation is called
A. Distributive.
 Answer (A) is correct.
Distributive bargaining occurs in zero-sum conditions; that is, what one side gains, the
other loses. The parties are in fundamental opposition to each other, and their
relationship tends to be short-term.
B. Integrative.
C. Attitudinal structuring.
D. Intraorganizational.
 

Question: 122 An organization’s management perceives the need to make significant changes. Which of the following
factors is management least likely to be able to change?
A. The organization’s members.
B. The organization’s structure.
C. The organization’s environment.
Answer (C) is correct.
The environment of an organization consists of external forces outside its direct control
that may affect its performance. These forces include competitors, suppliers, customers,
regulators, climate, culture, politics, technological change, and many other factors. The
organization’s members are a factor that managers are clearly able to change.
D. The organization’s technology.
 

Question: 123 A major corporation is considering significant organizational changes. Which of the following groups
will not be responsible for implementing these changes?
A. Employees.
B. Top management.
C. Common shareholders.
Answer (C) is correct.
Common shareholders are not responsible for implementing decisions within the
organization. If members of the management team also are common shareholders, they
must make decisions consistent with their stewardship function. Thus, they must
separate their ownership interests from their managerial responsibilities. Organizational
change is conducted through change agents, who may include employees, managers, or
outside consultants.
D. Outside consultants.
 

Question: 124 An organization is changing to a quality assurance program that incorporates quality throughout the process.
This is very different from its years of dependence on quality control at the end of the process. This type of
change is a(n)
A. Cultural change.
Answer (A) is correct.
A cultural change involves a change in attitudes and mindset.
B. Product change.
C. Structural change.
D. Organizational change.
 

Question: 125 Lack of skills, threats to job status or security, and fear of failure all have been identified as reasons that
employees often
A. Want to change the culture of their organization.
B. Are dissatisfied with the structure of their organization.
 C. Are unable to perform their jobs.
D. Resist organizational change.
Answer (D) is correct.
Employees resist change for many reasons, for example, (1) surprise, (2) inertia,
(3) misunderstanding, (4) lack of skills, (5) emotional reactions, (6) lack of trust of
management, (7) fear of failure, (8) personality conflicts, (9) poor timing,
(10) management’s insensitivity, (11) threats to job status or security, and (12) breakup
of the work group. Resistance may be overcome by involving employees to gain
feedback and allay fears.
 

Question: 126 Of the following reasons for employees to resist a major change in organizational processes, which
is leastlikely?
A. Threat of loss of jobs.
B. Required attendance at training classes.
Answer (B) is correct.
Change management is important to all organizations. An appropriate balance between
change and stability is necessary if an organization is to thrive. Employee training
programs educate employees to perform jobs in a new or different way. Thus, they are a
means of coping with employee resistance to change through facilitation and support of
the change.
C. Breakup of existing work groups.
D. Imposition of new processes by senior management without prior discussion.
 

Question: 127 Employee resistance to change may be caused

A. Only by simple surprise or by inertia.
B. By manipulation of information or events.
C. By bad timing.
Answer (C) is correct.
Resistance may be caused by simple surprise or by inertia, but it also may arise from
(1) misunderstandings or lack of the needed skills; (2) lack of trust of, or conflicts with,
management; (3) emotional reactions when change is forced; (4) bad timing; (5)
insensitivity to employees’ needs; (6) perceived threats to employees’ status or job
security; (7) dissolution of tightly knit work groups; and (8) interference with
achievement of other objectives.
D. By coercion.
 

Question: 128 Organizational change must be considered in the light of potential employee resistance. Resistance
A. May occur even though employees will benefit from the change.
Answer (A) is correct.
Resistance to change may be caused by fear of the personal adjustments that may be
required. Employees may have a genuine concern about the usefulness of the change,
perceive a lack of concern for workers’ feelings, fear the outcome, worry about
downgrading of job status, and resent deviations from past procedures for implementing
change (especially if new procedures are less participative than the old). Social
adjustments also may be required that violate the behavioral norms of informal groups
or disrupt the social status quo within groups. Economic adjustments may involve
potential economic loss or insecurity based on perceived threats to jobs. In general, any
perceived deterioration in the work situation that is seen as a threat to economic, social,
and/or psychological needs will produce resistance. The various adjustments required
 are most likely to be resisted when imposed unilaterally by higher authority. However,
employees who share in finding solutions to the problems requiring change are less
likely to resist because they will have some responsibility for the change.
B. Will be greatest when informal groups are weakest.
C. Will be insignificant if no economic loss by employees is expected.
D. Is centered mostly on perceived threats to psychological needs.
 

Question: 129 An internal auditor is conducting an operational review that affects several different functional units. The
auditor believes that the process under review can be improved, but the operating managers are resistant to
suggestions for change. There are several methods the auditor could use to overcome the operating
managers’ resistance. Identify the technique that will produce the highest probability of success with the
fewest negative side effects.
A. Negotiation with the operating managers.
B. Participation by the managers in the decision process.
Answer (B) is correct.
Participation by the operating managers in the decision process can improve the overall
decision, reduce resistance, and secure their commitment to the change.
C. Coercion of the managers through threats.
D. Cooperation by approaching each manager individually.
 

Question: 130 Co-optation is a

A. Method of coping with employee resistance.
Answer (A) is correct.
Methods of coping with employee resistance include co-optation through allowing some
participation but without meaningful input.
B. Cause of resistance to change.
C. Model for categorizing organizational changes.
D. Way of allowing meaningful input by resistant employees.
 

Question: 131 A chief audit executive plans to make changes that may be perceived negatively by the audit staff. The best
way to reduce resistance would be to
A. Develop the new approach fully before presenting it to the audit staff.
B. Ask the chief executive officer (CEO) to approve the changes and have the CEO attend
the departmental staff meeting when they are presented.
C. Approach the staff with the general idea and involve them in the development of the
changes.
Answer (C) is correct.
Change management is important to all organizations. An appropriate balance between
change and stability is necessary. Organizational and procedural changes often are
resisted by the individuals and groups affected. Involving the staff in the change from
the beginning participation will reduce their resistance to change.
D. Get the internal audit activity’s clients to support the changes.
 

Question: 132 Organizational development (OD) is one of the major approaches to proactive management of change in
organizations. One of the major objectives of OD is to
A. Increase the power of leaders.
B. Align the organization’s and the employees’ goals.
 Answer (B) is correct.
The objectives of OD are to (1) deepen the sense of organizational purpose and align
individuals with it; (2) promote interpersonal trust, communication, cooperation, and
support; (3) encourage a problem-solving approach; (4) develop a satisfying work
experience; (5) supplement formal authority with authority based on expertise; (6)
increase personal responsibility; and (7) encourage willingness to change.
C. Attract better employees to the organization.
D. Provide the organization and its managers with ways to increase efficiency.
 

Question: 133 An organization has embarked on a program of process innovation and core process redesign. To counter
resistance, it has adopted an organizational development (OD) approach that includes
A. Inducing employees to share organizational purposes and values.
Answer (A) is correct.
The objectives of OD are to (1) deepen the sense of organizational purpose and values
and align individuals with them; (2) promote interpersonal trust, communication,
cooperation, and support; (3) encourage a problem-solving approach; (4) develop a
satisfying work experience; (5) supplement formal authority with authority based on
expertise; (6) increase personal responsibility; and (7) encourage willingness to change.
B. Incremental change of subsystems.
C. Focusing each division’s attention on its own objectives.
D. Manipulating information and events.
 

Question: 134 Internal auditors can be considered leading agents for change within an organization. Which of the following
isnot a good way to promote this concept?
A. A directive from top management, stating that internal auditors will be used for all
process-improvement projects.
Answer (A) is correct.
A directive does not promote, but requires, the use of internal auditors. The result may
be resentment towards the internal auditors and resistance to beneficial change.
Education, communication, participation in decisions by those affected, facilitation and
support, and negotiation are means of overcoming resistance to change.
B. A brochure describing what internal auditing can do and the qualifications of the internal
auditors.
C. Postengagement questionnaires to obtain information on how engagement clients perceive
the internal audit activity.
D. Bulletins that highlight widespread or universal applications of engagement observations.
 

Question: 135 A Gantt chart

A. Shows the critical path for a project.
B. Is used for determining an optimal product mix.
C. Shows only the activities along the critical path of a network.
D. Does not necessarily show the critical path through a network.
Answer (D) is correct.
The major advantage of a Gantt chart is its simplicity: It requires no special tools or
mathematics. However, it depicts only the interrelationships between tasks in a limited
way. Thus, trying to identify a project’s critical path from a Gantt chart may not be
feasible.
 
Question: 136 In the Gantt chart below, shaded bars represent completed portions of activities, bars depicted with broken
lines represent uncompleted portions, and blank bars represent activities not yet begun.

As of week 8, the Gantt chart shows that the project is

A. Complete.

B. Ahead of schedule.

C. On schedule.

Answer (C) is correct.

Activities B and C are the only activities that should be underway during week 8. Since both are underway and on
schedule, the project is on schedule.

D. Behind schedule.

Question: 137 The process of adding resources to shorten selected activity times on the critical path in project scheduling
is called
A. Crashing.
Answer (A) is correct.
Crashing is the process of adding resources to shorten activity times on the critical path
in project scheduling.
B. The Delphi technique.
C. ABC analysis.
D. A branch-and-bound solution.
 
Fact Pattern: 2
The network diagram and the corresponding activity cost chart for a manufacturing project at Networks, Inc., are presented
below. The numbers in the diagram are the expected times (in days) to perform each activity in the project.
 

  

Normal Crash Crash

Activity Cost Time Cost

AB US $3,000 3.50 days US $4,000

AC 5,000 4.50 5,250
AD 4,000 4.00 4,750
BE 6,000 5.00 7,000
CE 8,000 5.00 9,200
DE 6,000 6.50 6,750
BC 2,500 .50 3,500
BD 2,000 .25 2,500
 

Refer to Fact Pattern: 2 
Question: 138 The expected time of the critical path is
A. 12.0 days.
B. 13.0 days.
Answer (B) is correct.
The critical path is the longest path. The longest path in the diagram is A-D-E, which
requires 13 days (5.5 + 7.5) based on expected times.
C. 11.5 days.
D. 11.0 days.
 

Refer to Fact Pattern: 2 
Question: 139 To keep costs at a minimum and decrease the completion time by 1 1/2 days, Networks, Inc., should crash
activity(ies)
A. AD and AB.
Answer (A) is correct.
The critical (longest) path is A-D-E, which has an expected time of 13 days (5.5 + 7.5).
However, to decrease the project’s completion time by 1.5 days, paths A-B-C-E (4.5 + 1
+ 6.5 = 12 days) and A-B-D-E (4.5 + .5 + 7.5 = 12.5 days) as well as A-D-E must also
be shortened. Hence, A-D-E must be reduced by 1.5 days, A-B-C-E by .5 days, and A-
B-D-E by 1 day. The only way to decrease A-D-E by 1.5 days is to crash activity AD
(5.5 expected time – 4 crash time = 1.5 days). Crashing DE results in a 1-day saving
 (7.5 – 6.5) only. Crashing AB is the efficient way to reduce both A-B-C-E and A-B-D-E
by the desired amount of time because it is part of both paths. The incremental cost of
crashing AB is US $1,000 (US $4,000 crash cost – US $3,000 normal cost) to shorten
the completion time by 1 day (4.5 – 3.5). The alternatives for decreasing both A-B-C-E
and A-B-D-E are more costly.
B. DE.
C. AD.
D. AB and CE.
 

Question: 140 When making a cost-time tradeoff in CPM analysis, the first activity that should be crashed is the activity
A. With the largest amount of slack.
B. With the lowest unit crash cost.
C. On the critical path with the maximum possible time reduction.
D. On the critical path with the lowest unit crash cost.
Answer (D) is correct.
When making a cost-time tradeoff, the first activity to be crashed (have its completion
time accelerated) is one on the critical path. To select an activity on another path would
not reduce the total time of completion. The initial activity chosen should be the one
with the completion time that can be accelerated at the lowest possible cost per unit of
time saved.
 

Question: 141 In PERT, slack is the

A. Uncertainty associated with time estimates.
B. Difference between the latest starting time and earliest finishing time.
C. Path that has the largest amount of time associated with it.
D. Number of days an activity can be delayed without forcing a delay for the entire project.
Answer (D) is correct.
Slack is the amount of time that commencement of an activity can be delayed without
forcing a delay of the entire project.
 

Question: 142 The network below describes the interrelationships of several activities necessary to complete a project. The
arrows represent the activities. The numbers between the arrows indicate the number of months to complete
each activity
 

 
 
The shortest time
to complete the
project is
A. 5 months.
B. 6 months.
C. 8 months.
Answer (C) is correct.
The critical (longest) path through the network from node A to node F is path A-C-D-
F. All other paths are shorter than path A-C-D-F, so the activities along those paths can
be completed before the activities along path A-C-D-F. Thus, the shortest time to
complete the project is 8 months (3 + 3 + 2).
D. 14 months.
 

Question: 143 A shortest-route algorithm is used in network models to

A. Identify bottlenecks in a network and hence identify the longest path.
B. Minimize total travel time from one site to each of the other sites in a transportation
system.
Answer (B) is correct.
Network models are used to solve managerial problems pertaining to project scheduling,
information systems design, and transportation systems design. Networks consisting of
nodes and arcs may be created to represent in graphic form problems related to
transportation, assignment, and transshipment. The shortest-route, minimal spanning
tree, and maximal flow problems are other applications of network models. A shortest-
route algorithm minimizes total travel time from one site to each of the other sites in a
transportation system.
C. Maximize throughput in networks with distinct entry (source node) and exit (sink node)
points.
D. Identify the set of connecting branches having the shortest combined length.
 

Question: 144 The following information and diagram apply to a project:

Immediate

Activity Time (days) Predecessor

A 5 None

B 3 None

C 4 A

D 2 B
 E 6 C, D
The earliest completion time for the project is
A. 11 days.
B. 14 days.
C. 15 days.
Answer (C) is correct.
The two paths through the network are A-C-E (5 + 4 + 6 = 15 days) and B-D-E (3 + 2 +
6 = 11 days). The critical or longest path is thus A-C-E. Hence, the earliest completion
time is 15 days.
D. 20 days.
 

Question: 145 Which of the following terms is not used in project management?
A. Dummy activity.
B. Latest finish.
C. Optimistic time.
D. Lumpy demand.
Answer (D) is correct.
Project management concerns managing teams assigned to special projects. Lumpy
demand refers to periodic demand for a product or service that increases in large, lumpy
increments.
 

Question: 146 Activity scheduling information for the installation of a new computer system is given below.
Immediate Duration

Activity Predecessor (Days)

A - 4

B - 3

C A 9

D A 6

E B, D 5
For this project, the critical path is
A. A-C.
B. B-E.
C. A-D-E.
Answer (C) is correct.
The critical path is the longest path because it defines the minimum duration of the
project. A-D-E (4 + 6 + 5 = 15 days) is the critical path.
D. B-D-C.
 

Question: 147 In a critical path analysis, if slack time in an activity exists, the activity
 A. Is not essential to the overall project.
B. Is a backup activity to replace a main activity should it fail.
C. Could be delayed without delaying the overall project.
Answer (C) is correct.
Slack is the free time associated with activities not on the critical path. Slack represents
unused resources that can be diverted to the critical path.
D. Involves essentially no time to complete.
 

Question: 148 Various tools are employed to control large scale projects. They include all of the following except
A. PERT.
B. CPM.
C. Statistical process control.
Answer (C) is correct.
Statistical process (quality) control is not used to control large scale projects. Statistical
quality control is a method of determining whether the shipment or production run of
units lies within acceptable limits. It is also used to determine whether production
processes are out of control.
D. Gantt charts.
 

Question: 149 A bank is designing an on-the-job training program for its branch managers. The bank would like to design
the program so that participants can complete it as quickly as possible. The training program requires that
certain activities be completed before others. For example, a participant cannot make credit loan decisions
without first having obtained experience in the loan department. An appropriate scheduling technique for this
training program is
A. PERT/CPM.
Answer (A) is correct.
PERT/CPM is a network technique for scheduling interrelated time series activities and
identifying any critical paths in the series of activities. The critical path is the longest
path through the network.
B. Linear programming.
C. Queuing theory.
D. Sensitivity analysis.
 

Question: 150 When using PERT (Program Evaluation Review Technique), the expected time for an activity when given an
optimistic time (a), a pessimistic time (b), and a most likely time (m) is calculated by which one of the
following formulas?
A. (b – a) ÷ 2
B. (a + b) ÷ 2
C. (a + 4m + b) ÷ 6
Answer (C) is correct.
PERT was developed to aid managers in controlling large, complex projects. PERT
analysis includes probabilistic estimates of activity completion times. Three time
estimates are made: optimistic, most likely, and pessimistic. The time estimates for an
activity are assumed to approximate a beta probability distribution. PERT approximates
the mean of the beta distribution by dividing the sum of the optimistic time, the
pessimistic time, and four times the most likely time by six.
D. (4abm) ÷ 6