BUAD 304 | BUAD304 Exam 3: Organizational
Behavior and Leadership Updated and Latest
Questions and Correct Answers with Rationale -
University of Southern California
1. A CEO is trying to transition a stagnant company by creating a vision that inspires
employees to transcend their personal interests for the sake of the organization. According to
leadership theory, which style is this CEO primarily utilizing?
A. Transactional Leadership
B. Autocratic Leadership
C. Laissez-faire Leadership
D. Transformational Leadership
Correct Answer: D
Explanation: Transformational leadership is characterized by the ability to inspire
followers to commit to a shared vision. It focuses on changing the internal motivations of
employees rather than just rewarding specific behaviors. This style is particularly effective
during periods of organizational change or stagnation. The leader acts as a role model and
encourages innovative thinking among staff. By transcending self-interest, employees
contribute more significantly to long-term organizational success.
2. According to the Situational Leadership Theory (SLT), if a follower is ‘unable and unwilling’
(R1), which leadership style should the manager adopt?
A. Selling (S2)
B. Participating (S3)
C. Delegating (S4)
D. Telling (S1)
Correct Answer: D
Explanation: The Telling style (S1) is high in task behavior and low in relationship
behavior. When followers lack both competence and commitment, they require clear and
specific directions. The leader must provide close supervision to ensure tasks are
completed correctly. This directive approach helps build the necessary skills before moving
to more supportive styles. It is the most appropriate response for followers at the lowest
readiness level.
,3. A manager focuses on clarifying roles and task requirements while providing rewards to
employees who meet performance goals. This describes which component of transactional
leadership?
A. Management by Exception (Active)
B. Individualized Consideration
C. Idealized Influence
D. Contingent Reward
Correct Answer: D
Explanation: Contingent reward is a transactional leadership behavior where the leader
sets clear expectations. In this model, the leader provides tangible or intangible rewards in
exchange for meeting those expectations. It establishes a psychological contract between
the leader and the subordinate. This process ensures that employees understand the
benefits of achieving organizational objectives. While effective for performance, it does not
necessarily inspire the same level of commitment as transformational leadership.
4. In Fiedler’s Contingency Model, if a leader has a high Least Preferred Coworker (LPC) score,
they are considered to be:
A. Task-oriented
B. Relationship-oriented
C. Achievement-oriented
D. Power-oriented
Correct Answer: B
Explanation: Fiedler’s model suggests that a high LPC score indicates a leader who
describes their least preferred coworker in positive terms. This reflects a fundamental
underlying orientation toward maintaining good interpersonal relationships. Relationship-
oriented leaders are most effective in situations of moderate control. They prioritize team
harmony and mutual trust over strict task completion. Conversely, low LPC leaders are
task-oriented and excel in extreme situations of high or low control.
5. When a leader emphasizes transparency, shares their true feelings, and acts on their core
values, they are demonstrating:
A. Servant Leadership
B. Authentic Leadership
C. Charismatic Leadership
D. Path-Goal Leadership
Correct Answer: B
, Explanation: Authentic leadership focuses on the moral and ethical aspects of leader
behavior. Such leaders are self-aware and stay true to their personal values regardless of
external pressure. This transparency helps build trust and credibility with their followers.
Employees are more likely to respond positively to leaders who are seen as genuine and
honest. It promotes an open organizational culture where ethical behavior is prioritized
over short-term gains.
6. Which element of Transformational Leadership involves the leader challenging followers to
be creative and to question traditional assumptions?
A. Inspirational Motivation
B. Individualized Consideration
C. Intellectual Stimulation
D. Idealized Influence
Correct Answer: C
Explanation: Intellectual stimulation is a key pillar of transformational leadership. It
involves encouraging followers to think for themselves and approach problems in new
ways. The leader supports a culture where it is safe to take risks and challenge the status
quo. This behavior helps develop the problem-solving capabilities of the team. Ultimately, it
leads to higher levels of innovation and employee engagement within the organization.
7. Leader-Member Exchange (LMX) theory suggests that leaders develop different
relationships with subordinates. Which of the following characterizes the ‘in-group’
relationship?
A. Formal authority and strictly defined roles
B. High levels of trust, interaction, and support
C. Unidirectional communication from leader to follower
D. Low employee turnover and high job dissatisfaction
Correct Answer: B
Explanation: LMX theory posits that leaders form unique dyadic relationships with each
subordinate. In-group members enjoy higher trust, more attention, and better access to
resources. These employees often take on extra responsibilities and perform better as a
result. The relationship is based on mutual influence rather than just formal authority. In
contrast, out-group members have formal, strictly transactional relationships with the
leader.
8. According to the Path-Goal Theory, a leader who sets challenging goals and expects
followers to perform at their highest level is using which style?
A. Supportive Leadership
Behavior and Leadership Updated and Latest
Questions and Correct Answers with Rationale -
University of Southern California
1. A CEO is trying to transition a stagnant company by creating a vision that inspires
employees to transcend their personal interests for the sake of the organization. According to
leadership theory, which style is this CEO primarily utilizing?
A. Transactional Leadership
B. Autocratic Leadership
C. Laissez-faire Leadership
D. Transformational Leadership
Correct Answer: D
Explanation: Transformational leadership is characterized by the ability to inspire
followers to commit to a shared vision. It focuses on changing the internal motivations of
employees rather than just rewarding specific behaviors. This style is particularly effective
during periods of organizational change or stagnation. The leader acts as a role model and
encourages innovative thinking among staff. By transcending self-interest, employees
contribute more significantly to long-term organizational success.
2. According to the Situational Leadership Theory (SLT), if a follower is ‘unable and unwilling’
(R1), which leadership style should the manager adopt?
A. Selling (S2)
B. Participating (S3)
C. Delegating (S4)
D. Telling (S1)
Correct Answer: D
Explanation: The Telling style (S1) is high in task behavior and low in relationship
behavior. When followers lack both competence and commitment, they require clear and
specific directions. The leader must provide close supervision to ensure tasks are
completed correctly. This directive approach helps build the necessary skills before moving
to more supportive styles. It is the most appropriate response for followers at the lowest
readiness level.
,3. A manager focuses on clarifying roles and task requirements while providing rewards to
employees who meet performance goals. This describes which component of transactional
leadership?
A. Management by Exception (Active)
B. Individualized Consideration
C. Idealized Influence
D. Contingent Reward
Correct Answer: D
Explanation: Contingent reward is a transactional leadership behavior where the leader
sets clear expectations. In this model, the leader provides tangible or intangible rewards in
exchange for meeting those expectations. It establishes a psychological contract between
the leader and the subordinate. This process ensures that employees understand the
benefits of achieving organizational objectives. While effective for performance, it does not
necessarily inspire the same level of commitment as transformational leadership.
4. In Fiedler’s Contingency Model, if a leader has a high Least Preferred Coworker (LPC) score,
they are considered to be:
A. Task-oriented
B. Relationship-oriented
C. Achievement-oriented
D. Power-oriented
Correct Answer: B
Explanation: Fiedler’s model suggests that a high LPC score indicates a leader who
describes their least preferred coworker in positive terms. This reflects a fundamental
underlying orientation toward maintaining good interpersonal relationships. Relationship-
oriented leaders are most effective in situations of moderate control. They prioritize team
harmony and mutual trust over strict task completion. Conversely, low LPC leaders are
task-oriented and excel in extreme situations of high or low control.
5. When a leader emphasizes transparency, shares their true feelings, and acts on their core
values, they are demonstrating:
A. Servant Leadership
B. Authentic Leadership
C. Charismatic Leadership
D. Path-Goal Leadership
Correct Answer: B
, Explanation: Authentic leadership focuses on the moral and ethical aspects of leader
behavior. Such leaders are self-aware and stay true to their personal values regardless of
external pressure. This transparency helps build trust and credibility with their followers.
Employees are more likely to respond positively to leaders who are seen as genuine and
honest. It promotes an open organizational culture where ethical behavior is prioritized
over short-term gains.
6. Which element of Transformational Leadership involves the leader challenging followers to
be creative and to question traditional assumptions?
A. Inspirational Motivation
B. Individualized Consideration
C. Intellectual Stimulation
D. Idealized Influence
Correct Answer: C
Explanation: Intellectual stimulation is a key pillar of transformational leadership. It
involves encouraging followers to think for themselves and approach problems in new
ways. The leader supports a culture where it is safe to take risks and challenge the status
quo. This behavior helps develop the problem-solving capabilities of the team. Ultimately, it
leads to higher levels of innovation and employee engagement within the organization.
7. Leader-Member Exchange (LMX) theory suggests that leaders develop different
relationships with subordinates. Which of the following characterizes the ‘in-group’
relationship?
A. Formal authority and strictly defined roles
B. High levels of trust, interaction, and support
C. Unidirectional communication from leader to follower
D. Low employee turnover and high job dissatisfaction
Correct Answer: B
Explanation: LMX theory posits that leaders form unique dyadic relationships with each
subordinate. In-group members enjoy higher trust, more attention, and better access to
resources. These employees often take on extra responsibilities and perform better as a
result. The relationship is based on mutual influence rather than just formal authority. In
contrast, out-group members have formal, strictly transactional relationships with the
leader.
8. According to the Path-Goal Theory, a leader who sets challenging goals and expects
followers to perform at their highest level is using which style?
A. Supportive Leadership
