Business Degree Business Administration 2 — Questions and Answers
Question 1: Which organizational structure groups employees by function such as marketing, finance, and operations?
- Divisional structure
- Functional structure (Correct answer)
- Matrix structure
- Flat structure
Correct answer: Functional structure
A functional structure organizes employees into departments based on their specialized roles or functions within the company.
Question 2: A company's current ratio is 2.5. What does this indicate?
- The company has $2.50 in debt for every $1 of assets
- The company earns $2.50 profit per dollar of revenue
- The company has $2.50 in current assets for every $1 of current liabilities (Correct answer)
- The company's stock price is 2.5 times its book value
Correct answer: The company has $2.50 in current assets for every $1 of current liabilities
The current ratio measures short-term liquidity by dividing current assets by current liabilities; a ratio of 2.5 means the company can cover short-term obligations 2.5 times over.
Question 3: Which leadership theory suggests that effective leadership style depends on the situation and follower readiness?
- Transformational leadership
- Transactional leadership
- Situational leadership (Correct answer)
- Servant leadership
Correct answer: Situational leadership
Situational leadership theory, developed by Hersey and Blanchard, holds that no single leadership style is best and leaders should adapt based on follower maturity and task readiness.
Question 4: What is the primary purpose of a break-even analysis?
- To maximize profit margins
- To determine the point where total revenue equals total costs (Correct answer)
- To identify the best pricing strategy
- To forecast future sales volumes
Correct answer: To determine the point where total revenue equals total costs
Break-even analysis identifies the sales volume at which total revenues equal total costs, meaning the business neither profits nor loses money.
Question 5: Which of the following best describes the concept of 'span of control' in management?
- The range of products a manager oversees
- The number of subordinates a manager directly supervises (Correct answer)
- The degree of authority a manager holds
- The geographic area a manager is responsible for
Correct answer: The number of subordinates a manager directly supervises
Span of control refers to the number of employees a single manager can effectively supervise, which influences organizational hierarchy and structure.
Question 6: A company issues bonds to raise capital. From the company's perspective, these bonds are classified as:
- Assets
- Equity
- Liabilities (Correct answer)
- Revenue
Correct answer: Liabilities
Bonds represent money borrowed by the company that must be repaid, making them a liability on the company's balance sheet.
Question 7: What does SWOT analysis stand for?
- Sales, Workforce, Operations, Technology
- Strengths, Weaknesses, Opportunities, Threats (Correct answer)
- Strategy, Work, Objectives, Targets
- Systems, Workflow, Outcomes, Tactics
Correct answer: Strengths, Weaknesses, Opportunities, Threats
SWOT analysis is a strategic planning tool that evaluates internal Strengths and Weaknesses alongside external Opportunities and Threats.
Business Degree Business Administration 2
Which organizational structure groups employees by function such as marketing, finance, and operations?