MBA 745 EXAM REVIEW QUESTIONS WITH
ACCURATE SOLUTIONS 2026
▶ Economic Crisis. Answer: Effect of culture on ethics and long-term
survival
▶ Guidelines for Organizational Culture Change. Answer: Asses current
culture and set goals
Hire outside personnel
Make changes from top down
Include employees in change
Take out reminders of previous culture
Expect problems and resistance to change
Move quickly and stay the course
▶ Money as a Reward. Answer: Money associated with achievement and
recognition, status and respect, freedom and control, and power
▶ Agency Theory. Answer: Explains how managers differ from owners in
using pay and other compensation to run the organization
Owners concerned with increasing stockholder value
Managers concerned with job tenure and short term performance
▶ Effectiveness of Pay. Answer: Money can be a motivator
The more people get, the more they want
Pay cut seen as insult and indication of low value
Monet means different things to different peoples
Rewarding team performance is effective
▶ Methods of Administering Pay. Answer: Base Pay
Merit Pay
Pay for performance
▶ Base Pay. Answer: Amount of money paid on regular basis
Often determined by market conditions
Typically coupled with merit pay for salary increases
, ▶ Merit Pay. Answer: Compensations ties to measures of performance
achievements during a specific time period
High pay achieved at high performance levels
Merit criteria can be hard to measure
Merit pay can be seen as catch up pay
▶ Pay for performance. Answer: Individual incentive plans
Group incentive plans
▶ Individual Incentive Plans. Answer: Pay people based on output or
quality
Incentive pay
Bonus
Stock options
▶ Group Incentive Plans. Answer: Pay everyone to work together to
reduce cost and increase productivity
Gain sharing
Profit sharing
Employee stock ownership plans
▶ Incentive Pay. Answer: People paid based on incentives met
Commissions
▶ Bonus. Answer: Extra pay for performance that meets certain criteria or
is at a level above expectations
Bonus pay forward over fixed pay increases
▶ Stock Options. Answer: Opportunity to buy shares of stock in the future
at a predetermined fixed price
Typically used with senior level managers
If executive increase organizational performance, value of company stock
will also increase
▶ Gain Sharing. Answer: Employees share with the group the net gains
from productivity improvements
▶ Profit Sharing. Answer: Employees share increased profits with other
employees
Not all increases are a direct result of efforts
ACCURATE SOLUTIONS 2026
▶ Economic Crisis. Answer: Effect of culture on ethics and long-term
survival
▶ Guidelines for Organizational Culture Change. Answer: Asses current
culture and set goals
Hire outside personnel
Make changes from top down
Include employees in change
Take out reminders of previous culture
Expect problems and resistance to change
Move quickly and stay the course
▶ Money as a Reward. Answer: Money associated with achievement and
recognition, status and respect, freedom and control, and power
▶ Agency Theory. Answer: Explains how managers differ from owners in
using pay and other compensation to run the organization
Owners concerned with increasing stockholder value
Managers concerned with job tenure and short term performance
▶ Effectiveness of Pay. Answer: Money can be a motivator
The more people get, the more they want
Pay cut seen as insult and indication of low value
Monet means different things to different peoples
Rewarding team performance is effective
▶ Methods of Administering Pay. Answer: Base Pay
Merit Pay
Pay for performance
▶ Base Pay. Answer: Amount of money paid on regular basis
Often determined by market conditions
Typically coupled with merit pay for salary increases
, ▶ Merit Pay. Answer: Compensations ties to measures of performance
achievements during a specific time period
High pay achieved at high performance levels
Merit criteria can be hard to measure
Merit pay can be seen as catch up pay
▶ Pay for performance. Answer: Individual incentive plans
Group incentive plans
▶ Individual Incentive Plans. Answer: Pay people based on output or
quality
Incentive pay
Bonus
Stock options
▶ Group Incentive Plans. Answer: Pay everyone to work together to
reduce cost and increase productivity
Gain sharing
Profit sharing
Employee stock ownership plans
▶ Incentive Pay. Answer: People paid based on incentives met
Commissions
▶ Bonus. Answer: Extra pay for performance that meets certain criteria or
is at a level above expectations
Bonus pay forward over fixed pay increases
▶ Stock Options. Answer: Opportunity to buy shares of stock in the future
at a predetermined fixed price
Typically used with senior level managers
If executive increase organizational performance, value of company stock
will also increase
▶ Gain Sharing. Answer: Employees share with the group the net gains
from productivity improvements
▶ Profit Sharing. Answer: Employees share increased profits with other
employees
Not all increases are a direct result of efforts
