Profitability ratios and total shareholder return are the most common metrics for the company performance.

Functional departmentalization groups work activities together by the functions employees perform. Product departmentalization groups resources according to specific products or services offered by an organization. Customer departmentalization targets specific customer classifications in order to serve the needs of identifiable customer groups. Geographic departmentalization is based on the geographic markets or the locations where work is done. Process departmentalization is used to divide the organizations according to production process of goods or services.

Political, social, technological and economic forces are among the environmental forces that affect management practices.

Profitability ratios measure the income or operating success of a company for a given period of time. Another profitability measure is return on total assets (ROA), which is a percentage representing what a company earned from its assets, computed as net income divided by total assets. ROA is a valuable measure for comparing a company’s ability to generate earnings with other investment opportunities. In basic terms, the company should be able to earn more by using its assets to operate the business than it could by investing the same amount in the bank.

• Management emerged with the Industrial Revolution.

• Management is based on position; leadership is about personal qualifications.

• Managers are appointed; a leader is a role model who earns the title and is embraced by the followers.

• Management aims at formal goals whereas leaders generate informal goals.

• Management is attaining goals through others; leadership is pursuing goals with others.

• Management is based on rules, leadership is spontaneous and inspirational.

• Managers focus on completing tasks efficiently; leaders focus on goals for development, improvement, and change.

• Management authority is based on legal authority; leadership power comes from followers.

• Management produces order and consistency; leadership produces change and movement. The correct answer is A.

Organizational culture is described as the shared values, principles, traditions, and ways of doing things that influence the way organizational members act. These shared values and practices evolve over time and determine to a large extent how “things are done around here”.

Controlling is most closely associated with planning, because goals and the methods for achieving them will be decided during the planning process.

“Operating budget” is the phrase that best completes the sentence above. For further study you can look at the page 241.

“Two-way communication” is one of the supportive behaviors.

“Inspires and empowers to get things accomplished” is the true statement about Leader manager’s managerial orientation.

Organizational structure is a system that consists of rules and policies to outline work roles, responsibilities and reporting relationships, and how they fit within the overall system.5 A visual representation of an organization structure is an organization chart. It shows the tasks or major activities and how employees and tasks are grouped, the line of authority (who people report to) including the flow of communication and the levels in the hierarchy. A simple organization chart for a manufacturing firm is illustrated in Figure 6.1. It shows an organization chart with four departments where the tasks are grouped by functions (Sales, Production, Finance, and HR). The sales department is further divided into three groups that focus on geographical location of customers (Asia, North America and Europe). 

The Managerial Grid consists of five managerial or leadership styles reflected in two dimensions which are concern for people (vertical) and concern for production (horizontal): (1,1) Impoverished management – low in both dimensions; (1,9) Country Club management – high in concern for people and low in concern for production; (9,9) Team management – high in both concerns; (9,1) Authority Compliance – high in concern for production and low in concern for people; and (5,5) Middle of the Road management – intermediate in both  dimensions.  "Empowering management" is not a component of this grid.

Goals are the desired outcomes or results that people intend to achieve while objectives are the measurable descriptions of how intentions will be put into practice.

“Visible in the organizational chart” is not one of the leader’s managerial roles.

Charismatic leadership is inspiring and motivating people beyond what they would normally do.

In oligopoly, a few producers—more than one but not a large number—sell products which may be either undifferentiated or differentiated such as mobile phone service in Turkey, cola beverages in the global market, and manufacturing of commercial airplanes with some pricing power in a consolidated market. Oligopolies have a couple of producers which sell a differentiated or an undifferentiated product with some pricing power in a consolidated market.

A divisional structure is made up of separate divisions according to similarities or demands of product, customers, or geography. Each division has its own functional departments therefore, allowing managers to focus on the specific products sold by the company. However, it also more expensive as the company needs multiple sets of support functions. Therefore, some central support functions can be used to provide support services for all divisions. For example, Information Technology and Finance departments may be centralized at the top (headquarters) such that all business units can make use of those functions.

According to LMX, in-group members’ performance is higher; they have more job satisfaction; mostly support the leader’s practices; devoted to the organizational goals; and generate less turnover.

Michigan studies introduce two main types of leadership behaviors: Task-oriented and people-oriented behaviors. Task-oriented behaviors indicate a focus on production and technical aspects of a job. People-oriented behaviors indicate a supportive approach to subordinates. Managers with this type of orientation dealt with high performance

goals and human needs.

Managers at all levels need to have delegation skills in order to enlist the help of others to efficiently and effectively complete the work activities. They can pass routine work activities to subordinates so they can focus on important issues. Delegation reduces the workload of managers.