1. D: Creator of company mission statement. A link between workers and management, a production supervisor is a frontline manager whose tasks most likely include conveying information and acting as a liaison between workers and upper management. A production supervisor also may be responsible for the direct allocation of certain resources or materials needed by workers to do their jobs. However, top-level management is responsible for a company’s overarching vision and goals, so a company’s mission statement would be created by senior executives, perhaps with the aid of a staff writer or PR person, and not by a production supervisor.
2. A: Social capital. Social capital is the goodwill that results from social relationships, whether personal or online at sites such as Facebook or LinkedIn. Spending a weekend building a house through Habitat for Humanity would be one way to build social capital. Human capital is the economic or strategic value of employees’ knowledge and abilities, while a leader with obvious knowledge and abilities is said to have expert power. Expert power induces people to comply because they believe they can learn or benefit from that expertise. Emotional intelligence, or EQ, is the set of skills that allows a person to know and manage himself and deal effectively with others. Although a supervisor who helps to build a house for Habitat for Humanity might well have a high degree of emotional intelligence and empathy for others, a weekend of volunteering would increase his social capital—and, most likely, that of his company.
3. B: Conceptual skills are more important than technical skills. Although successful managers are able to call upon a variety of skills, different levels of management emphasize different skill sets. Technical skills and the ability to perform assigned tasks are most important for nonmanagerial employees and frontline supervisors. As one rises in the management hierarchy, the ability to think broadly and make strategic decisions becomes more important; conceptual skills become more important than technical skills. Good people skills are important at every level.
4. C: Frontline. Top-level managers, or senior executives, are strategic managers who tend to focus on the big picture, outlining a company’s goals and vision. Middle-level managers bridge the gap between the two, conveying the goals of top management to lower-level management and relaying operational information and concerns to upper management. A supervisor who oversees the day-to-day work of non-management employees, as in this scenario, would be a frontline manager.
5. A: Encoding. In one-way communication, a sender encodes the information he wishes to convey into symbols, or words, which are then transmitted via a written, oral, or electronic channel to a receiver, who decodes and interprets the message. Errors can occur at all stages of communication. Encoding errors may include misused or ambiguous words and phrases and misstatement of fact. Transmission errors include lost or misplaced mail or a soft voice that’s difficult to hear. Decoding problems include misreading or not listening carefully. Misinterpretation may include jumping to a wrong conclusion or taking a humorous remark seriously. Communication problems are less apt to occur in two-way communication, which is when, after decoding and interpreting the information, the receiver provides feedback to the sender. In true two-way communication, the original sender is receptive to feedback, and this give-and-take helps to clarify the message.
6. D: Spokesperson. According to a study by Henry Mintzberg, managers fulfill 10 roles that fall into three basic categories: interpersonal, which includes the roles of figurehead, liaison, and leadership; informational, which includes the roles of monitor, disseminator, and spokesperson; and decisional, which includes the roles of entrepreneur, resource allocator, disturbance handler, and negotiator. When a manager represents the views of his department or organization—whether inside or outside the organization—that manager is acting in the informational role of spokesperson.
7. A: The right to seek damages. The Consumer Bill of Rights was enacted by President Kennedy in the 1960s and established four basic rights of the consumer. The right to safety means that consumers should be able to rely on the safety of the products they buy and use. The right to be informed means that consumers can receive information about a product before they buy it. The right to choose means that consumers can select from an array of competitively priced products. The right to be heard means that consumers can voice their opinion regarding policies and decisions that affect them. Although consumers certainly have the right to seek damages—and often do so in such cases as wrongful death or class action lawsuits—that right is separate from the Consumer Bill of Rights and is, therefore, not one of the four basic rights it establishes.
8. B: Utilitarian philosophy. Proponents of humanistic philosophy focus on the rights and values of individuals—customers and workers alike. Those who follow utilitarian philosophy espouse the greatest good for the greatest number, even if a product or process is flawed. The Japanese word “kaizen” (and its philosophy) emphasizes the continual improvement of an organization, as well as one’s life. A code of ethics is a set of written guidelines spelling out ethical behavior according to an organization’s values and standards. Managers for the plant in this problem are aware of a flaw in their process but justify it by pointing to a “greater” benefit. As such, they are obviously practicing a utilitarian philosophy.
9. A: Corporate social responsibility. Profit maximization—a tenet of capitalism espoused by Adam Smith and, later, Milton Friedman—maintains that the primary responsibility of managers is to increase the value of the company and thus increase profits for shareholders, on whose behalf they act. That view traditionally has been most at odds with corporate social responsibility, which maintains that business has an obligation toward society and should assume responsibility for the impact of its activities. However, companies today are realizing that behaving in a socially responsible manner need not preclude profitability. Ecocentric management (which seeks to benefit society worldwide by maximizing sustainable economic development) and sustainable growth (economic growth that meets current needs while preserving the environment so that future needs can be met) are examples of corporate environmental management, which offers increasing advantages and opportunities in today’s “green-conscious” world. Relativism is a moral philosophy which maintains that truth and values are relative rather than absolute and are based on the opinions and actions of others. “Everybody else cheats on their income taxes. Why shouldn’t I?” is an example of moral relativism.
10. D: Criminal penalties associated with white-collar crimes and conspiracies are reduced. The Sarbanes-Oxley Act of 2002—enacted in response to outrage over the scandals involving Enron, WorldCom, Adelphia, and other major corporations—established new or enhanced federal standards for the boards and management of publicly held U.S. companies and accounting firms. The legislation does not apply to privately held companies. In general, the act seeks to make management and auditors more financially accountable and thus bolster investor confidence. Among the act’s provisions, senior executives must personally sign off on company financial reports, and the CEO must sign the corporate tax return. Standards are set regarding the independence of auditors as well as the independence of boards of directors, which are not to consist solely of company insiders. Penalties—including fines and criminal prosecution—for white-collar crimes are increased, not reduced. Therefore, D is the correct answer.