Management: Social Responsibility and Page Ref

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Fundamentals of Management, 7e (Robbins/DeCenzo/Coulter)
Chapter 2 The Management Environment

True / False

1) The $10 test showed that clever management can benefit both workers and managers. Answer:
Explanation: The $10 test that gave housekeepers up to $10 for cleaning rooms impeccably was a success for both workers and managers. Workers earned extra pay. Managers got the high standards for cleaning that they were looking for Diff: 1 Page Ref: 29

Objective: 2.1

2) The $10 test was enthusiastically accepted by workers immediately. Answer:
Explanation: The $10 test was at first resented by workers. They didn't like being checked up on. As time passed, workers adjusted to the standards of the test and began to look forward to the extra money they could earn. Diff: 2 Page Ref: 29

Objective: 2.1

3) One area in which most global companies are cutting back is customer service. Answer:
Explanation: Most companies are recognizing that customer service is the key to their success. So they are increasing, rather than reducing, customer service efforts. Diff: 2 Page Ref: 29
Objective: 2.1

4) A major cause of the economic downturn that began in 2008 was too much debt taken on by both consumers and businesses. Answer:
Explanation: Cheap and available credit in the early 2000s ushered in an atmosphere in which consumers and businesses borrowed heavily. When things went bad in the fall of 2008, many people were left owing more than they could pay. Diff: 2 Page Ref: 30

AACSB: Globalizations
Objective: 2.1

5) The U.S. economy has been the primary model for economic systems around the world. Answer:
Explanation: The approach used by the U.S. economic system that features open markets, corporate ownership, mass production techniques, and hierarchical organization structures has been emulated around the world. Many nations have prospered using this approach or a modified version of the approach. Diff: 2 Page Ref: 31

AACSB: Globalizations
Objective: 2.1

6) Multinational corporations maintain significant operations in two or more countries simultaneously. Answer:
Explanation: A multinational corporation comes in three different formsthe multidomestic corporation, the global corporation, and the transnational corporation. All three forms maintain operations in multiple countries. Diff: 2 Page Ref: 33

AACSB: Globalizations
Objective: 2.2

7) Transnational corporations run their businesses from their home country. Answer:
Explanation: A transnational corporation is an MNC that has different operations in different countries but has no centralized "headquarters" or home country. Diff: 2 Page Ref: 33
AACSB: Globalizations
Objective: 2.2

8) When organizations go global, they often start by simply exporting products to one or more foreign countries. Answer:
Explanation: Before exporting, organizations often begin the globalization process by outsourcing labor or materials. An example of outsourcing is having a factory in Asia manufacture products for a U.S. based company. Diff: 2 Page Ref: 34

AACSB: Globalizations
Objective: 2.2

9) After the outsourcing stage, companies that are going global often turn to exporting and importing goods across international borders. Answer:
Explanation: Exporting and importing is often the second stage an organization passes through to go global. Diff: 2 Page Ref: 34
AACSB: Globalizations
Objective: 2.2

10) Licensing and franchising typically follow the export-import phase of globalization. Answer:
Explanation: An example of licensing would sell the rights to bottle a well-known soft drink to a plant in another country. A franchise might allow restaurants to use a well-known chain's name and products in another country. Diff: 2 Page Ref: 35

AACSB: Globalizations
Objective: 2.2

11) In a strategic alliance, companies join together to form a separate entity to produce a product....
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