PROBLEM 1 Assume Venture Healthcare sold bonds that have a ten-year maturity, a 12 percent coupon rate with annual payments, and a $1,000 par value. a. Suppose that two years after the bonds were issued, the required interest rate fell to 7 percent. What would be the bond’s value?

PROBLEM 1
Assume Venture Healthcare sold bonds that have a ten-year maturity, a 12 percent coupon rate with
annual payments, and a $1,000 par value.
a. Suppose that two years after the bonds were issued, the required interest rate fell to 7 percent. What
would be the bond’s value?
b. Suppose that two years after the bonds were issued, the required interest rate rose to 13 percent. What
would be the bond’s value?
c. What would be the value of the bonds three years after issue in each scenario above, assuming that
interest rates stayed steady at either 7 percent or 13 percent?
ANSWER

PROBLEM 3
Tidewater Home Health Care, Inc. has a bond issue outstanding with eight years remaining to maturity,
a coupon rate of 10 percent with interest paid annually, and a par value of $1,000. The current market
price of the bond is $1,251.22.
a. What is the bond’s yield to maturity?
b. Now, assume that the bond has semiannual coupon payments. What is its yield to maturity in this
situation?
ANSWER

PROBLEM 2
Medical Corporation of America (MCA) has a current stock price of $36, and its last dividend (D0) was
$2.40. In view of MCA’s strong financial position, its required rate of return is 12 percent. If MCA’s
dividends are expected to grow at a constant rate in the future, what is the firm’s expected stock price in
five years?
ANSWER
Problem 5

Better Life Nursing Home, Inc. has maintained a dividend payment of $4 per share for many years. The
same dollar dividend is expected to be paid in future years. If investors require a 12 percent rate of
return on investments of similar risk, determine the value of the company’s stock.
ANSWER

Review “Simulation Case Study: Phoenix Boutique Hotel Group” for this topic’s case study, in which you provide guidance to Phoenix Boutique Hotel Group (PBHG) founder Bree Bristowe. 1. Creat a simulation model.

Review “Simulation Case Study: Phoenix Boutique Hotel Group” for this topic’s case study, in which you provide guidance to Phoenix Boutique Hotel Group (PBHG) founder Bree Bristowe.

1. Creat a simulation model. Use an Excel spreadsheet file for the calculations and explanations. Cells should contain the formulas (i.e., if a formula was used to calculate the entry in that cell). Students are highly encouraged to use the “Simulation Case Study: Phoenix Boutique Hotel Group Template” Excel resource to complete this assignment.

2. Prepare a 650-word recommendation for Bristowe’s best course of action. Explain your model and the rationale for your recommendations. Prepare the assignment according to the guidelines found in the APA Style Guide.

Simulation Case Study: Phoenix Boutique Hotel Group

Phoenix Boutique Hotel Group (PBHG) was founded in 2007 by Bree Bristowe. Having worked for several luxury resorts, Bristowe decided to pursue her dream of owning and operating a boutique hotel. Her hotel, which she called PHX, was located in an area that included several high-end resorts and business hotels. PHX filled a niche market for “modern travelers looking for excellent service and contemporary design without the frills.” Since opening PHX, Bristowe has invested, purchased, or renovated three other small hotels in the Phoenix metropolitan area: Canyon Inn PHX, PHX B&B, and The PHX Bungalows.

One of the customer service enhancements Bristowe has implemented is a centralized, toll-free reservation system. Although many customers book specific hotels online, the phone reservation system enables PBHG to find the best reservation match at all properties. It has been an excellent option for those customers who have preferences regarding the type of room, amenity options, and the best price across the four hotel locations.

Currently, three agents are on staff for the 6 a.m. to 2 p.m. call shift. The time between calls during this shift is represented in Table 1. The time to process reservation requests during this shift is in Table 2.

Table 1: Incoming Call Distribution

Time Between Calls (Minutes)

Probability

1

0.13

2

0.23

3

0.27

4

0.19

5

0.15

6

0.09

Table 2: Service Time Distribution

Time to Process Customer Inquiries (Minutes)

Probability

1

0.19

2

0.17

3

0.16

4

0.15

5

0.11

6

0.08

7

0.03

Bristowe wants to ensure customers are not on hold for longer than 2 minutes. She is debating hiring additional staff for this shift based on the available data. Additionally, Bristowe and PBHG will soon be featured in a national travel magazine with a circulation of over a million subscriptions. Bristowe is worried that the current operators may not be able to handle the increase in reservations. The projected increase for call distribution is represented in Table 3.

Table 3: Incoming Call Distribution

Time Between Calls (Minutes)

Probability

1

0.26

2

0.27

3

0.24

4

0.14

5

0.11

6

0.06

Bristowe has asked for your advice in evaluating the current phone reservation system. Create a simulation model to investigate her concerns. Make recommendations about the reservation agents.

1. Time Line: What are you calculating if you move a cash flow from left to right on the timeline?

1. Time Line: What are you calculating if you move a cash flow from left to right on the timeline? (P.V. or F.V.?) What do you use in your calculation? (Compounding interest?

Single interest? Yield to Maturity? Or others?)

2. How is annuity defined? What are the signatures that an annuity should have?

3. What is annuity due? How to calculate present value and future value of an annuity due if we know the value of the ordinary annuity?

4. What is perpetuity? What is the signature of perpetuity?

5. Bond’s Characteristics: (Drawing a timeline for a bond will help you on all following questions)

a. What is face value of a bond? What are the other names of face value? b. What is coupon payment? How to calculate coupon payment? c. What is time to maturity? How to calculate time to maturity? d. How does a typical cash flow for a bond look like? (Single C.F.? Annuity? Or both?)

6. What is the primary market and secondary? What is traded at primary market? What are the three main stock secondary market in the U.S.?

7. What is the relation between interest rates and bonds’ value (price)? If interest rates increase, what’s the impact on bond’s value? How about interest rate falls?

8. What do the profitability ratios/asset management ratios (working capital analysis)/ liquidity ratios measure? What are they?

9. What does the bid/ask price mean to investors/dealers?

10. A bond issued by a corporation on December 1, 1983 is scheduled to mature on December 1, 2006. If today is December 1, 1994, what is this bond’s time to maturity?

A. 12 years

B. 45 years

C. 23 years

D. 19 years

11. A 16-year annuity due pays $800 per year and interest rates are 12%, what’s the present value of the annuity due?

A. $12,800.00

B. $6,497.62

C. $6,248.69

D. $6,672.90

12. What is the future value of a $600 annuity payment over 8 years if the interest rates are 7.5%? Payments are made at the end of the periods.

A. $4,800.00

B. $5,450.57

C. $4,875.19

D. $6,267.82

13. What’s the current yield of an 6% coupon corporate bond quoted at a price of 112.3? A. 4.66%

B. 5.34%

C. 10.20%

D. 8.13%

14. A 9 percent coupon bond with 13 years left to maturity is offered for sale at $1,350. What yield to maturity is the bond offering? (Assume interest payments are paid semi-annually.)

A. 5.25%

B. 4.37%

C. 5.09%

D. 2.62%

15. A 6 percent coupon bond with 12 years left to maturity is priced to offer a 6.5 percent yield to maturity. If the yield to maturity falls to 6.25 percent. What is the change in price the bond

will experience in dollars?

A. Decrease $19.67

B. Increase $20.33

C. Coupon payment decreases $25.00

D. Coupon payment increases $41.22

16. What’s the present value, when interest rates are 15% percent, of a $165 payment made every year forever?

A. $1750.00

B. $1,100.00

C. $1,250.00

D. $1,675.00

17. What is the present value of a $1,300 deposit in year 1 and another $3,500 deposit at the end of year 5 if interest rates are 6 percent?

A. $3,662.66

B. $3,150.00

C. $3,841.82

D. $3,940.98

18. You are thinking of investing in NFL, Inc. You have only the following information on the firm at year-end 2008: net income = $18.5 million, total debt = $18 million, total debt ratio =

35%. What is NFL’s ROE for 2008?

A. 28.97%

B. 31.73%

C. 55.34%

D. 15.00%

19. Annual dividends grew from $0.30 in 2010 to $0.99 in 2016. What was the annual growth rate?

A. 47.93%

B. 22.02%

C. 18.24%

D. 35.56%

Long Questions:

Requirements for long questions:

a. Draw the time line of the question. Put down all T.V.M factors: Size of cash flows, time, and interest rate.

b. Show the formula you should use to solve the problems, and the corresponding numbers in the formula.

c. Show all the financial calculators inputs and outputs.

Question #5 and #6.

2. A 8.75 percent coupon bond with 30 years left to maturity is priced to offer a 5 percent yield to maturity. You believe that in one year, the yield to maturity will be 6.35 percent.

If this occurs, what would be the total rate of return for holding this bond for only one

year? The payments are made semi-annually.

3. Walmart’s earnings are $9.42 per share. The firm’s ROE is 13.32% and its plowback ratio is 23%. Required rate of return is 10%

a. What is Walmart’s dividend for the next year? b. What is the stock price?

For long-question #2 and #3, you can find the solution from the lecture notes. They are

exactly the same practice/example problems that we went through in class.

Quill Manufacturing Business makes two models of marking pens. An unlabeled graph for this problem and the requirements for each lot of pens in the three manufacturing departments are given below. All three departments are necessary in the production of both types of pens. The profit for either kind of pen is $1000 per lot. An unlabeled graph for this problem is given below. The dotted line represents the objective function line. Fliptop Model Tiptop Model Available production hrs. Ink Assembly 3 4 36 Molding Time 5 4 40 Plastic 5 2 30 27. What is the optimal production quantity of the Fliptop model?

Quill Manufacturing Business makes two models of marking pens. An unlabeled graph for this problem and the requirements for each lot of pens in the three manufacturing departments are given below. All three departments are necessary in the production of both types of pens. The profit for either kind of pen is $1000 per lot. An unlabeled graph for this problem is given below. The dotted line represents the objective function line.

Fliptop Model Tiptop Model Available production hrs.
Ink Assembly 3 4 36
Molding Time 5 4 40
Plastic 5 2 30

27. What is the optimal production quantity of the Fliptop model?
A. 5 lots
B. 4 lots
C. 2 lots
D. 7 lots
E. 6 lots

28. If all the constraint inequalities in the original problem were ≥, then the following is true:

A. The value of the objective function at the optimum solution is zero
B. There will be multiple optimal solutions
C. The problem will become unbounded
D. The problem has a unique solution
E. None of the above is true

29. Let M be the number of units to make and B be the number of units to buy of a certain product. If it costs $2 to make a unit and $3 to buy a unit and 4000 units are needed, the objective function of the LP model to minimize the cost of production would be,

A. Min 4000 (M + B)
B. Max 8000M + 12000B
C. Min 2M + 3B
D. Max 2M + 3B
E. Min 4000U -2M-3B

30. The Quiet Meadow Studio sells photographs and prints. It cost $20 to purchase each photograph and it takes 2 hours to frame it. It costs $25 to purchase each print and it takes 5 hours to frame it. The store has at most $400 to spend and at most 60 hours to frame.
It makes $30 profit on each photograph and $50 profit on each print. Determine the maximum profit.

A. 360
B. 600
C. 700
D. 740
E. 800

Questions 31 & 32 apply to this information: Quality Bike Maps has produced four map designs for the local area. A limited amount of time (in minutes) is allocated to the printing, cutting and folding of each map. Additionally, at least one thousand of map designs A, B, and C must be printed. The profit per map is $1 for A and B and $2 for C and D. The Excel output is provided below.
Max Profit = A + B + 2 C + 2 D
s.t.
A + 2 B + 3 C + 3 D < 15000 Print
2 A + 4 B + C + 3 D < 20000 Cut
3 A + 2 B + 5 C + 3 D 1000 Print A
B > 1000 Print B
C > 1000 Print C

Microsoft Excel 14.0 Sensitivity Report
Objective Function Value $10,166.67

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$18 Map A 1500 0 1 1 0.333333333
$C$18 Map B 1000 0 1 0.333333333 1E+30
$D$18 Map C 1000 0 2 0.333333333 1E+30
$E$18 Map D 2833.333333 0 2 1 0.5

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$B$24 Print 15000 0.5 15000 1000 5666.666667
$B$25 Cut 16500 0 20000 1E+30 3500
$B$26 Fold 20000 0.166666667 20000 7000 1000
$B$27 Print A 1500 0 1000 500 1E+30
$B$28 Print B 1000 -0.33333333 1000 1750 1000
$B$29 Print C 1000 -0.33333333 1000 500 1000

31. Answer the following question using the Excel output above. Which constraint(s) are binding?
A. Print and Fold
B. Cut and Print A
C. Print B and Print C
D. Print and Cut
E. Print, Fold, Print B and Print C

32. Answer the following question using the Excel output above. Keeping within the confines of the problem, the profit on Map A has increased by one dollar. Determine the new objective function value.

A. 1,500
B. 11,166.67
C. 11,500.67
D. 11,666.67
E. 12,566.67

33. Quentin Magic Brown manufactures sports shoes and wants to maximize the company’s profits. The company makes two types of sport shoe, Airwalkers and Bouncy Basketball shoes. The company earns $10 profit on each pair of Airwalkers and $18 profit on each pair of Bouncy Basketball shoes.
The manufacturing process includes cutting the materials on a machine and having workers assemble the pieces. Each pair of Airwalkers requires 3 minutes of cutting time and the Bouncy Basketball shoes require 2 minutes. The machines that cut the material can run at most 1200 minutes a week.
Each worker takes 7 hours to assemble a pair of Airwalkers and 8 hours to assemble a pair of Bouncy Basketball shoes; the maximum number of hours available is 3500 per week.
Determine the maximum profit for this problem?

A. $3200
B. $4000
C. $4280
D. $6295
E. $7875

Questions 34-37 apply to the Excel output for the Quantum Mo-Botics model is below. The company makes three types of machines and has limitations with regards to the amount of skilled and unskilled labor hours available and time on the assembly line.

MAX Profit = 800SemiAuto+1000Robotic + 500Manual
s.t.
30SemiAuto + 100Robotic + 45Manual < 4500 Skilled Labor
100SemiAuto + 70Robotic + 90Manual < 9000 Unskilled Labor
15SemiAuto + 20Robotic + 10Manual < 2000 Assembly Line

Microsoft Excel 14.0 Sensitivity Report
Objective Function Value $ 82,025.32

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$18 SemiAuto 74.05063291 0 800 628.5714286 432.4786325
$C$18 Robotic 22.78481013 0 1000 1666.666667 440
$D$18 Manual 0 -320.253164 500 320.2531646 1E+30

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$B$24 Skilled labor 4500 5.569620253 4500 3605.263158 1800
$B$25 Unskilled labor 9000 6.329113924 9000 3805.555556 5850
$B$26 Assembly line 1566.455696 0 2000 1E+30 433.5443038

34. Answer the following question using the Excel output above, determine the new objective function value if the profit on the second variable, Robotic, increases by $1000?

A. $22,785.00
B. $19,125.64
C. $33,800.00
D. $102,805.32
E. $104,810.32

35. Answer the following question using the Excel output above. Keeping within the confines of the problem, you are required to hire a full time (40 hours) person who is qualified to work in any department. Select the constraint where you will gain the most profit and determine the additional profit to be gained?

A. $253.16
B. $222.80
C. $341.00
D. $129.50
E. $119.50

36. Answer the following question using the Excel output above. Keeping within the confines of the problem, how many more hours of skilled workers could you add to the department?

A. 2875.33
B. 1280.56
C. 1550.56
D. 3805.56
E. 3605.26

37. Using the Excel output above, how much is each additional unit of unskilled labor worth?

A. $74.500
B. $22.790
C. $5.570
D. $6.329
E. $3.250

38. An ice cream plant make’s Chocolate and Strawberry ice cream.
There is $40 profit for a case of Chocolate and $32 for a case of Strawberry and has the following constraints:

32C + 8S < 4,800 Flavoring
28C + 32S < 14,000 Coloring

a. What is the optimal solution?
b. Now add a constraint: demand for Strawberry is always less than 200 cases and determine the optimal solution.
c. Add another constraint: demand for Chocolate is always less than 400 cases and determine the optimal solution.

Solution-
38a ( 52,392) $14,624
38b (100,200) $10,400
38c redundant constraint; no change

71. Encoding is MOST necessary to communication because it ________.

71. Encoding is MOST necessary to communication because it ________.

a. eliminates information distortion

b. entails modifying a message based on who is receiving it

c. provides specialized terminology

d. gives credibility to the message

72. Which of the following is enhanced by nonverbal communication?

a. a text message

b. an in-person meeting

c. a telephone message

d. a company’s annual reportChallenge Examination 21 BAM 515 Organizational Behavior

73. Personally addressed written communication BEST helps to ________.

a. provide nonverbal cues

b. promote instantaneous feedback

c. speed up communication

d. encourage the receiver to pay attention to it

74. ________ allows a sender to communicate with the largest number of receivers

simultaneously.

a. Voicemail

b. Instant messaging

c. Personally addressed written communication

d. Impersonal written communication

75. Organizational members often engage in ________; that is, they search for and choose

acceptable responses to opportunities and problems.

a. optimizing

b. rationalizing

c. satisficing

d. sacrificing

76. The only doctor in a small town had a problem. He wanted to see all of the people who

needed his care but he did not have enough time in the day to do so. He was especially

worried that if he did not see certain patients, they would not be able to afford the doctor in

the next town over. His problem is a(n) ________ one.

a. optimal

b. rational

c. ethical

d. financial

77. Heuristics are best described as ________.

a. helpful and effective in all situations

b. helpful in some situations and dangerous in others

c. harmful and nonproductive in all situations

d. harmful when used in nonprogrammed decision makingChallenge Examination 22 BAM 515 Organizational Behavior

78. The fact that decisions made by groups are more extreme than decisions made by individuals

is LEAST LIKELY associated with ________.

a. the diffusion of responsibility occurs

b. knowing that other group members support the same decision can cause group

members to become more confident in their position

c. as a group discusses alternatives, members of the group come up with persuasive

arguments to support their favored alternative and the group’s confidence in the chosen

alternative increases

d. the diversity found in groups that cannot exist within single individuals

79. ________ can become dysfunctional when individual members become more concerned about

winning the battle than in making a good decision.

a. Individual decision-making

b. Programmed decision-making

c. Nonprogrammed decision-making

d. Group decision-making

80. ________ is a spontaneous, participative, decision-making technique that groups use to

generate a wide range of alternatives from which to make a decision.

a. Producing

b. Brainstorming

c. Nominal group technique

d. Delphi technique

81. A company uses mass production to manufacture toilet paper. The organization MOST

LIKELY ________.

a. has an organic structure

b. has a mechanistic structure

c. uses nonroutine technology

d. carries high task analyzability

82. An example of ________ technology is the services rendered by a small group of auditors hired

to evaluate the accuracy of a firm’s financial statements.

a. mediated

b. functional

c. small-batch

d. assembly-line Challenge Examination 23 BAM 515 Organizational Behavior

83. ________ technology is based primarily on the use of automated machines that are

programmed to perform the same operations time and time again.

a. Process

b. Functional

c. Information

d. Mass-production

84. The principle of the ________ chain of command states that an organization should operate

with the fewest levels possible.

a. minimum

b. retractable

c. streamlined

d. hierarchical

85. Top management members do not want a tall organization, so they should ________.

a. follow the principle of maximum chain of command

b. stress the importance of low risk behaviors to employees

c. hire more managers to supervise lower level managers

d. offer training to employees to enable them to make more decisions

86. ________ is the ongoing communication among different people and functions that is

necessary for an organization to achieve its goals.

a. Instant messaging

b. Mutual adjustment

c. Divisional alignment

d. Functional integration

87. A company manufactures parts for military aircrafts. The process requires accuracy and

precision, and each job must be done in a certain way to ensure high quality. An

instrumental value of this company would MOST LIKELY be ________.

a. creativity

b. excellence

c. attention to detail

d. risk taking

88. If an organization has a terminal value of ________, it will MOST LIKELY have an instrumental

value of ________.

a. excellence; profitability

b. responsibility; creativity

c. conservation; innovation

d. morality; being honestChallenge Examination 24 BAM 515 Organizational Behavior

89. Which of the following is LEAST LIKELY a terminal value of innovativeness?

a. maintaining high standards

b. working hard

c. being creative

d. playing it safe

90. An organization develops ________ to encourage members to adopt certain terminal and

instrumental values and to behave in certain ways as they pursue their goals.

a. specific norms

b. regulatory frameworks

c. generalized expectations

d. organizational guidelines

91. Henry Ford said, “Learning together is a beginning. Keeping together is progress. Working

together is success.” Based on this, his organization MOST LIKELY had an instrumental value

of ________.

a. profitability

b. innovation

c. morality

d. cooperation

92. Which of the following would an innovative company be MOST LIKELY to do that an inert

company would not do?

a. promote from within the company

b. cut costs as low as possible

c. abide by the most rigid ethical standards

d. experiment with additional product lines

93. All of the following are common instrumental values in a company with an inert culture

EXCEPT ________.

a. laziness

b. noncooperation

c. output restriction

d. entrepreneurshipChallenge Examination 25 BAM 515 Organizational Behavior

94. According to Hofstede, ________ is the dimension of culture that focuses on the values

that govern the relationship between individuals and groups.

a. national ethos

b. power distance

c. individualism versus collectivism

d. achievement versus nurturing orientation

95. In a country with low power distance, the government would MOST LIKELY view programs to

equalize wealth amongst all citizens in a(n) _______ manner.

a. indifferent

b. unethical

c. positive

d. negative

96. An organization decided it wanted its members always to be looking for ways to make the

organization better through efficiency or product improvement. Employees attended a

meeting where the TQM strategy was explained. When the strategy was evaluated within a

month, it was determined to be ineffective. Which of the following is LEAST LIKELY a reason

for the poor evaluation?

a. It was too drastic of a change.

b. The managers did not empower the employees.

c. The strategy can take much longer than one month to be effective.

d. The employees were not behind the change.

97. A(n) ________ typically develops as an organization grows and is a principal source of inertia,

especially in large organizations.

a. matrix structure

b. organic structure

c. mechanistic structure

d. hyperbolic structure

98. Organizational change is MOST LIKELY to be resisted ________.

a. if it reinforces group norms

b. by a highly cohesive group

c. if the organizational culture is weak

d. by political coalitions who currently lack powerChallenge Examination 26 BAM 515 Organizational Behavior

99. Individuals within an organization are LEAST LIKELY to resist change because of ________.

a. uncertainty

b. force of habit

c. selective perception

d. profit motive

100. A ________ is any activity that is vital to quickly delivering goods or services to customers or

that promotes high quality or low cost.

a. function

b. business process

c. production scheme

d. operational method

41. According to the social information processing model, the social environment includes all of the following EXCEPT ________.

41. According to the social information processing model, the social environment includes all of

the following EXCEPT ________.

a. other work group members

b. supervisors

c. books and documentaries

d. employee’s own past behaviors

42. According to the social information processing model, workers’ past behaviors will MOST

LIKELY affect ________.

a. how they view their current jobs and work outcomes

b. how they currently view past experiences

c. their extrinsic motivation

d. their future earnings potential

43. Tom Siegmund joined Chrismer and Park Co. as a security guard 30 years ago and after many

years of hard work is now the company’s security manager. Tom has received several job offers

from other companies over the years, but has always chosen to stay with Chrismer and Park.

Jesse Black is also a 30-year veteran who works as a clerk at Chrismer and Park. Tom and

Jesse see each other only at the annual veteran’s awards ceremony. This year, Jesse told Tom

how unhappy he was in his work, but that he couldn’t do anything about it because he had

never received a job offer from another company. According to social information processing

theory, if all other things are equal, Tom’s job satisfaction is MOST LIKELY ________.

a. the same as Jesse’s, as they both joined the company at the same time

b. higher than Jesse’s, as Tom is a manager and Jesse is a clerk

c. higher than Jesse’s, based on Tom’s past choices and personal sacrifices

d. less than Jesse’s, because Tom has more responsibility

44. ________ advocates job simplification and job specialization, and its key goal is maximizing

performance.

a. Job enrichment

b. Job enhancement

c. Scientific management

d. The job characteristics model

45. A doctor is asked to improve her relationship with her patients. She usually has little time to

spend with them due to other obligations of her job. She is also expected to take on more

patients because another doctor is taking an extended leave. She will most MOST LIKELY

feel ________.

a. role conflict

b. underload

c. overload

d. role ambiguityChallenge Examination 16 BAM 515 Organizational Behavior

46. ________ is the uncertainty that occurs when employees are not sure about what is expected

of them and how they should perform their jobs.

a. Role ambiguity

b. Role conflict

c. Role distress

d. Role uncertainty

47. Sara Chan is unsure about what is expected of her and how she should perform her job.

Therefore, she is experiencing ________.

a. role ambiguity

b. role conflict

c. work-life balance stress

d. underload

48. ________ relates to the steps people take to deal with and control their stressful feelings.

a. Retroactive coping

b. Problem-focused coping

c. Solution-focused coping

d. Emotion-focused coping

49. When ________ is successful, stressful feelings generated by threats and opportunities do not

get out of hand.

a. emotion-focused coping

b. problem-focused coping

c. solution-focused coping

d. psycho-social coping

50. One technique for dealing with stress is to manage time better. This requires ________.

a. coming in earlier and leaving later

b. making and prioritizing lists of tasks

c. setting time limits for interactions with your boss

d. not attending meetings

51. Members of an organization form ________ when they have a common goal or objective that

they are trying to achieve by uniting their efforts.

a. interest groups

b. friendship groups

c. cross-functional teams

d. self-managed work teamsChallenge Examination 17 BAM 515 Organizational Behavior

52. The stages of group development include all of the following EXCEPT the ________ stage.

a. norming

b. adjourning

c. forming

d. conforming

53. The ________ stage of group development is characterized by considerable conflict.

a. norming

b. adjourning

c. forming

d. storming

54. Role ________ may be formally specified in a written job description or emerge informally over

time as members work out methods for getting the job done.

a. taking

b. norming

c. relationships

d. negotiations

55. The performance of responsibilities that are associated with an assigned role is referred to as

role ________.

a. taking

b. relating

c. norming

d. occupation

56. Which of the following is NOT an advantage that rules can offer for controlling and managing

the behavior and performance of group members?

a. They help ensure the performance of behaviors beneficial to organizational

effectiveness.

b. They allow comparison of actual behaviors to behaviors specified by the rules.

c. They eliminate the impact of group norms.

d. They help newcomers learn the right way to perform their roles.Challenge Examination 18 BAM 515 Organizational Behavior

57. A research team believed that an organization’s members would perform better when in a

group. They studied how much effort was exerted in a tug of war contest when individuals

were by themselves and when the individuals were on a team with others. They were MOST

LIKELY to find that ________.

a. individuals exerted the same amount of effort regardless of the situation

b. individuals exerted less effort when they knew they were being watched

c. individuals exerted more effort when in a group

d. individual exerted less effort when in a group

58. Every day his group meets, Mike shows up late, texts on his phone, and doesn’t exert much

effort. Kate is getting angry with Mike’s behavior. An example of the sucker effect would be if

Kate ________.

a. works harder to compensate for Mike

b. resigns from the group

c. reports Mike to the supervisor

d. starts showing up late

59. James Thompson’s “model of group tasks” suggests that as task interdependence within a

group ________ the degree and intensity of the interactions between group members who are

required to perform the group’s task ________.

a. increases; decrease

b. increases; increase

c. decreases; increase

d. decreases; remains unchanged

60. ________ groups tend to promote cohesiveness.

a. Large

b. Dysfunctional

c. Small

d. Diverse

61. Groups tend to be MOST cohesive when members are ________.

a. coherent

b. homogeneous

c. heterogeneous

d. amalgamatedChallenge Examination 19 BAM 515 Organizational Behavior

62. Competition between groups is LEAST LIKELY to promote organizational effectiveness when

________.

a. one group competes against another to see which group can maintain the highest-

quality standards

b. one group becomes more concerned with beating another group than with achieving

the organization’s goals

c. groups that are doing especially well receive public recognition

d. groups are given or adopt their own names

63. Sources of functional or divisional organizational power do NOT include ________.

a. visibility

b. centrality

c. ability to control contingencies

d. ability to control and generate resources

64. ________ is how vital or crucial the activities of a function or division are to the operation of

the entire organization and the degree to which it is positioned to gain access to important

information from other functions.

a. Centrality

b. Contingency

c. Relevance

d. Irreplaceability

65. Jim Bosley is a corporate manager for a large corporation. He has the authority to approve

projects of the organization’s subsidiaries. He knows that his PRIMARY source of power is his

________.

a. irreplaceability

b. control over contingencies

c. control over resources

d. referent power

66. According to Pondy’s model, as the parties in the ________ conflict stage assert their views,

the significance of the disputed issue is likely to be blown out of proportion.

a. felt

b. latent

c. manifest

d. perceived Challenge Examination 20 BAM 515 Organizational Behavior

67. According to Pondy’s model, during the ________ conflict stage, one party decides how to

react to or deal with the party that it sees as the source of the conflict and both parties try to

hurt each other and thwart each other’s goals.

a. latent

b. felt

c. perceived

d. manifest

68. Every conflict episode leaves a conflict ________ that affects the way both parties perceive

and respond to future episodes.

a. outcome

b. residue

c. resolution

d. aftermath

69. Grace is shopping for a computer when a salesman begins telling her why she should choose a

certain model. He is using technical terms that Grace doesn’t understand, so Grace loses

interest and leaves. In the future, the salesman should ________.

a. change how he encodes the message

b. change how he decodes the message

c. use more jargon

d. use non-verbal communication

70. The ________ provides paths of communication for delicate information, as well as for

potential and actual crises.

a. grapevine

b. advice network

c. trust network

d. communication network