Deck 5: Planning and Decision Making

Question 1

A strategic control system must encourage efficient operations while allowing flexibility to adapt to changing conditions.

Answer 1

True

Question 2

In the context of the planning process, ________ are the targets or ends a manager wants to reach.

A) goals
B) plans
C) scenarios
D) strategies
E) contingencies

Answer 2

A

Question 3

The step in the formal planning process known as ________ involves studying past events, examining current conditions, and forecasting future trends.

A) analyzing the situation
B) generating alternative goals and plans
C) evaluating goals and plans
D) selecting goals and plans
E) monitoring and controlling performance

Answer 3

A

Question 4

Individuals usually make higher-quality decisions when compared to groups, provided there is enough time.

Question 5

Making decisions about an organization's short-term goals and tactics is known as strategic planning.

Question 6

To be effective, goals should be measurable, specific, attainable, relevant, and time-bound.

Question 7

A plan to integrate employees into a new payroll system, assuming that it is not likely to be repeated in the foreseeable future, is an example of a ________ plan.

A) standing
B) single-use
C) start-up
D) contingency
E) subject

Question 8

Standing plans are designed to achieve a set of short-term goals.

Question 9

During the ________ step of the planning process, managers identify the priorities and trade-offs among goals and plans.

A) evaluation of goals and plans
B) selection of goals and plans
C) implementation of goals and plans
D) monitoring of goals and plans
E) generating alternative goals and plans

Question 10

After Barb's department performed poorly two years, she reviewed her plan and saw that the flaws in it were inadequate funding and unclear priorities. The next year she acquired sufficient funds and incentivized her top managers with bonuses for goals met. The results made Barb ecstatic, showing how the implementation of plans is successful when

A) the planning process is limited to senior managers.
B) limited financial resources are made available to the manager.
C) they are linked to other organizational systems like budgets and rewards.
D) they are converted into strict rules for employees to follow.
E) they are projected as confidential issues concerning top management.

Question 11

Forge Right Inc., a manufacturing company, developed a strategic plan that assumed improved growth in its industry. Additionally, it generated several ________ for different economic settings. When a recession started, Forge Right Inc. quickly implemented the plan based on those conditions. As a consequence, it survived more easily than other firms in the industry.

A) financial reports
B) annual reports
C) roadmaps
D) projection statements
E) scenarios

Question 12

The ________ step in the formal planning process, monitoring and controlling performance, identifies the priorities and trade-offs among the goals and plans.

A) second
B) third
C) fourth
D) fifth
E) sixth

Question 13

Year in and year out, Coca-Cola outperforms in the soft drink industry. While this success is due in part to the quality of their products, it is also due to Coca-Cola's consistently strong marketing campaigns. These campaigns represent Coca-Cola's ongoing, or ________, plan to develop and execute a world-class marketing and promotion strategy.

A) operational
B) single-use
C) standing
D) contingency
E) subject

Question 14

The outcome of a situational analysis is the

A) evaluation of the merits and feasibility of a range of alternatives.
B) prioritization and elimination of goals.
C) identification and diagnosis of planning assumptions, issues, and problems.
D) selection of the most appropriate and feasible alternative among various goals.
E) proper implementation of a plan.

Question 15

The planning step known as monitoring and controlling performance

A) identifies the priorities and trade-offs among the goals and plans.
B) involves managers continually monitoring the performance of their work units against the unit's goals and plans.
C) is the first step taken by managers.
D) suggests that managers need to restart the planning process after plans are implemented improperly.
E) is the most important step in the planning process.

Question 16

In the context of planning, if there is alternative generation, evaluation, and selection steps which reveal several different future scenarios, a different ________ plan is attached to each scenario.

A) evaluation
B) alternative
C) contingency
D) selection
E) decision

Question 17

In an organization, the process of planning moves in a linear fashion.

Question 18

Situational analysis, as part of the formal planning process, focuses on

A) the internal forces at work within an organization and examines influences from the external environment.
B) the external forces at work within an organization and examines influences from the internal environment.
C) the internal forces at work within an organization and examines influences from the internal environment.
D) the external forces at work within an organization and examines influences from the external environment.
E) past conditions, current trends, and future events.

Question 19

Which stage of the planning process is Miteron Corp. involved in if it is assessing how well alternative plans meet high-priority goals while considering the cost of each initiative and the likely investment return?

A) implementing goals and plans
B) selecting goals and plans
C) analyzing the situation
D) monitoring and controlling performance
E) evaluating goals and plans

Question 20

According to the ________ plan of Xenon Inc., if expansion to new markets in Australia does not materialize, the company will strive for expansion in Asia.

A) operations
B) internal
C) contingency
D) standing
E) start-up

Question 21

Jim's manager and mentor, Naomi, helped Jim develop his first business plan. Naomi said, "Jim, one of the most powerful tools that you can use in developing a strategic plan for your division is to analyze the external environment and your internal resources. I will help you formulate this strategy by using a technique called

A) the BCG matrix."
B) SWOT analysis."
C) benchmarking."
D) diversification."
E) vertical integration."

Question 22

Strategic goals

A) translate broad tactical goals and plans into specific goals and plans relevant to a particular portion of the organization.
B) should be limited to top management.
C) include fostering quantity and quality of outputs as well as increasing productivity.
D) identify the specific procedures and processes required at lower levels of the organization.
E) focus on the major actions a unit must take to fulfill its part of the strategic plan.

Question 23

The senior managers of Acme Steel knew that a successful implementation of their business plan in the coming year was critical to the company's survival in a competitive industry. Acme could not afford for different parts of the organization to "stray" from the plan; in fact, each organizational unit needed to perform in sync with the goals of the unit above it and the units below it. Thus, it was critical that the individual plans of the corporation, each division, each department, and each section be

A) aligned.
B) independent.
C) mutually non-exclusive.
D) diverse.
E) provisional.

Question 24

In the context of the levels of planning, the formal planning model is ________, with top-level strategies flowing down through the levels of the organization into more specific goals and plans.

A) horizontal
B) hierarchical
C) tactical
D) concentrated
E) uncertain

Question 25

A ________ strategy identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses.

A) vertical
B) differentiation
C) low-cost
D) functional
E) corporate

Question 26

In ________ planning, frontline managers usually focus on routine tasks such as production runs, delivery schedules, and human resource requirements.

A) acquisition
B) feasibility
C) tactical
D) operational
E) strategic

Question 27

________ planning is the process of identifying the specific procedures and processes required at lower levels of an organization.

A) Strategic
B) Operational
C) Tactical
D) Contingency
E) Acquisition

Question 28

The level of planning involving the longest time horizon, usually ranging from three to seven years, is ________ planning.

A) operational
B) missionary
C) tactical
D) departmental
E) strategic

Question 29

All managers throughout an organization may be involved in

A) developing the strategic plan elements.
B) personally formulating the plan.
C) making decisions that shape strategies.
D) contributing minimal elements.
E) implementing the plan.

Question 30

Resources provide competitive advantage only under certain circumstances, including when they are

A) archival.
B) difficult to imitate.
C) equally available.
D) sequential.
E) expensive.

Question 31

________ planning involves a process of translating broad strategic goals and plans into specific goals and plans relevant to a particular portion of an organization.

A) Strategic
B) Operational
C) Tactical
D) Contingency
E) Feasibility

Question 32

EatWell Inc., a chain of sub shops, periodically compares the quality of its food and service with its competitors in order to continually improve its performance. This corporate strategy is known as

A) brainstorming.
B) diversification.
C) benchmarking.
D) vertical integration.
E) horizontal integration.

Question 33

Typical strategic goals involve

A) updating the equipment used.
B) increasing market share.
C) estimating advertising expenditures.
D) complying with civil rights laws.
E) utilizing human resources.

Question 34

The formal planning model emphasizes a ________ approach.

A) bottom-up
B) top-down
C) left-right
D) horizontal
E) vertical

Question 35

To be effective, an organization's strategic plans should focus on goals that are

A) different from those of its tactical plans and operational plans.
B) different from those of its tactical plans yet the same as the operational plans.
C) aligned with its tactical plans and operational plans.
D) aligned with its tactical plans yet different from the operational plans.
E) strategic yet differ from the operational plans.

Question 36

The strategic vision of an organization

A) provides a perspective on where the organization is headed.
B) describes the organization as it currently operates.
C) can be expressed as a clear and concise expression of the organization's basic purpose.
D) is expressed as strictly a financial statement.
E) emphasizes the short-term gains of the organization.

Question 37

Strategic goals are

A) the major targets that relate to the long-term survival of an organization.
B) specific to a functional area in an organization.
C) driven by operational plans.
D) focused on the major actions a unit must take.
E) the procedures and processes to get day-to-day work done.

Question 38

An organization's mission statement describes all of the following EXCEPT

A) the company's basic purpose.
B) what the organization does.
C) its basic good or service.
D) its morals.
E) its values.

Question 39

The tangible assets of an organization include

A) patents.
B) real estate.
C) company reputation.
D) technical knowledge.
E) learning and experience.

Question 40

Which level of manager is known as a tactical manager?

A) top-level
B) frontline
C) middle-level
D) team leaders
E) operational

Question 41

The goal of ________ is to thoroughly understand the "best practices" of other firms and to undertake actions to achieve better performance and lower costs.

A) satisficing
B) benchmarking
C) organizing
D) competition
E) SWOT analysis

Question 42

The most effective strategy that can be adopted by strategy managers is one that

A) cannot be described in detail.
B) competitors are unable to imitate.
C) is based on the principle of rigidity.
D) cannot be deconstructed.
E) can be purchased at a reasonable cost.

Question 43

Management decisions typically

A) lack structure.
B) are always free of risks.
C) are made under conditions of perfect certainty.
D) are consistent in addressing novel problems.
E) have the characteristics of programmed decisions.

Question 44

In order to reduce production costs, Tryon Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as

A) concentration.
B) vertical integration.
C) related diversification.
D) unrelated diversification.
E) differentiation.

Question 45

Karina viewed her staff as a competitive advantage. They had the necessary academic degrees, the necessary experience, and competitive salaries. Jean, her division manager, said, "Karina, until you have staff with rare and valuable academic research experience and corresponding degrees, and with talents that are world-class and in extremely high demand by your clients, such that they are willing to pay top dollar for that talent, your staff do not represent a competitive advantage. Your staff are too ________ by your competitors."

A) expensive to be recruited
B) academic to be desired
C) hard to replicate
D) easy to imitate
E) experienced to be sought

Question 46

In the BCG matrix, a star represents a company

A) with high growth and a strong competitive position in the market.
B) that requires substantial investments to improve its position in the market.
C) with low growth and a strong competitive position in the market.
D) that generates excess revenues and funds other businesses.
E) that will be divested as soon as possible.

Question 47

The ________ matrix is not a substitute for management judgment; it helps managers of businesses evaluate their strategy alternatives.

A) BCG
B) BGC
C) GBC
D) GCB
E) CGB

Question 48

The corporate strategy of ________ involves expanding the domain of an organization into supply channels and to distributors.

A) concentration
B) horizontal integration
C) vertical integration
D) benchmarking
E) satisficing

Question 49

Businesses using a ________ strategy try to be efficient and offer a standard, no-frills product.

A) high return
B) low-cost
C) high-cost
D) low return
E) high profit

Question 50

All of the following are considered stakeholders EXCEPT those groups and individuals who

A) have only a financial stake in the company.
B) are buyers and suppliers.
C) are unions and employee groups.
D) are affected by the organization's mission.

Question 51

Rothan Corp. is evaluating the purchase of a small firm, Lemm Inc., which manufactures products involving advanced technology. These products are expected to revolutionize the home construction industry. Lemm has only a minor share of this growing market, but the market is expected to grow rapidly. Substantial investment will be required. In the BCG matrix, Lemm Inc. would be placed in the ________ category.

A) cash cows
B) stars
C) spinoffs
D) question marks
E) dogs

Question 52

At Susan's retirement party, she reflected upon her long career in starting up successful companies. She said, "I salute my long-time mentor, Milton, who counseled me early in my career about risk. He told me, 'Susan, when you are confronted with risk when making management decisions, you should

A) avoid it by any means necessary.'"
B) eliminate it with a thorough understanding of the consequences of each option.'"
C) anticipate it, minimize it, and control it.'"
D) understand there is no way to manage it.'"
E) not proceed without a liability insurance policy.'"

Question 53

Functional strategies are implemented

A) only at the top levels of management.
B) by each appropriate area or unit.
C) only at the employee level.
D) at one time by the organization as a whole.
E) by the stakeholders.

Question 54

Sip Well Corp. had focused only on alcoholic beverages for the last two decades. Now, as part of a(n) ________ strategy, the company is considering entering the soft drink market.

A) vertical integration
B) related diversification
C) unrelated diversification
D) concentration
E) low-cost

Question 55

The first step in strategy implementation involves articulating in simple language what a particular business must do to create or sustain a competitive advantage. This step involves

A) assessing organizational capabilities.
B) developing an implementation agenda.
C) defining strategic tasks.
D) creating an implementation plan.
E) developing a mission statement.

Question 56

If an organization's mission statement describes the organization as it currently operates then its strategic vision points to the

A) past.
B) production numbers.
C) future.
D) expectations.
E) profits.

Question 57

When a problem is frequent, repetitive, and routine, with much certainty regarding cause-and-effect relationships, a ________ decision may be taken.

A) qualitative
B) programmed
C) non-economic
D) risky
E) nonprogrammed

Question 58

Larner Corp., an American company, is trying to decide whether to open its first international branch in Europe or Asia. The managers of the company are operating under a condition of

A) goal displacement.
B) illusion of control.
C) social reality.
D) uncertainty.
E) maximization.

Question 59

Pettigrew Inc. recently decided to expand from its original base in real estate to several wide-ranging industries such as trucking, lawn mower manufacturing, and catering. Pettigrew is using the ________ corporate strategy.

A) vertical integration
B) unrelated diversification
C) related diversification
D) concentration
E) low-cost

Question 60

In the context of the strategic planning process, a critical task in environmental analysis is ________ future trends.

A) reporting
B) forecasting
C) avoiding
D) justifying
E) creating

Question 61

Decision makers who search for ________ solutions use ideas they have tried before or follow the advice of others who have faced similar problems.

A) ready-made
B) custom-made
C) unique
D) original
E) rare

Question 62

When generating alternative solutions during the decision-making process, ________ solutions must be designed for specific problems.

A) ready-made
B) approved
C) open-ended
D) adjustable
E) custom-made

Question 63

The psychological bias known as illusion of control refers to a

A) decision bias influenced by the way in which a problem or decision alternative is phrased or presented.
B) belief that one can influence events even when one has no influence over what will happen.
C) bias weighting short-term costs and benefits more heavily than longer-term costs and benefits.
D) condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges.
E) phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus.

Question 64

________ is a psychological bias that applies to students who do not spend sufficient time studying.

A) Illusion of control
B) Farming effects
C) Discounting the future
D) Time pressures
E) Social realities

Question 65

With managerial decision making, decision evaluation is useful

A) only if negative feedback has been received.
B) only if positive feedback has been received.
C) whether the conclusion is positive or negative.
D) whether the manager or the employee is involved.
E) only if the employee is involved.

Question 66

________ is one of the six stages of formal decision making.

A) Thriving on the risks of taking a decision
B) Minimizing the consequences of a decision
C) Anticipating the outcome of a decision
D) Evaluating the decision
E) Controlling the damage caused by a wrong decision

Question 67

Leona is evaluating a new customer relationship management software solution for her business. She knows several business owners and managers who have implemented the software in their organizations. Instead of conducting a trial in her own company, she asks them for their advice. Leona is most likely searching for a(n) ________ solution to her problem.

A) experimental
B) optimal
C) ready-made
D) statistical
E) custom-made

Question 68

Discounting the future refers to

A) focusing on gains in the long run.
B) failing to consider inflationary costs.
C) underestimating the short-term effects of a decision.
D) weighing short-term benefits more heavily than long-term benefits.
E) failing to consider the effects of new entrants into the industry.

Question 69

In managerial decision making, when one can estimate the likelihood of various consequences but still does not know with certainty what will happen, he or she is facing

A) irresolution.
B) maximization.
C) risk.
D) optimization.
E) framing effects.

Question 70

In the context of formal decision making, negative feedback indicates that

A) too much time has been dedicated in implementing the decision.
B) implementation of the decision may need more resources.
C) the decision has been made under undue pressure from top management.
D) the problem has been incorrectly diagnosed.
E) the decision has been unfairly beaten down by competitors.

Question 71

When making a choice, ________ requires searching thoroughly for a complete range of alternatives, carefully assessing each alternative, comparing one to another, and then choosing or creating the very best.

A) benchmarking
B) maximizing
C) forecasting
D) satisficing
E) optimizing

Question 72

For the decision-making process in an organization, those who ________ a decision must understand the choice and must be committed to its successful implementation.

A) make
B) influence
C) implement
D) finalize
E) create

Question 73

A company recently made changes to its organizational structure. While deciding upon the changes to be implemented, the company invited many employees to discuss the issue with the senior management. This enabled the employees to hear the relevant arguments both for the chosen alternative and against the rejected alternatives. An advantage of using employees in this group discussion was that

A) the employees dominated the discussions and promoted their ideas.
B) the phenomenon of groupthink was encouraged.
C) the satisficing method of decision making was employed.
D) goal displacement was furthered.
E) the employees understood why the decision was made.

Question 74

Managers who use the method of optimizing to make their decisions will attempt to choose

A) the first minimally acceptable alternative.
B) from those alternatives that have known results.
C) the least expensive alternative.
D) the alternative that produces the least conflict.
E) an alternative that achieves the best possible balance among several goals.

Question 75

________ refer(s) to a decision bias influenced by the way in which a problem or decision alternative is phrased or presented.

A) Framing effects
B) Discounting the future
C) An illusion of control
D) Social realities
E) Time pressures

Question 76

Illusion of control, discounting the future, and framing effects are examples of

A) social realities.
B) psychological biases.
C) strategic planning steps.
D) ready-made solutions.
E) time pressures.

Question 77

In managerial decision making, the state that exists when decision makers have insufficient information is known as

A) certainty.
B) uncertainty.
C) risk.
D) probability.
E) irresolution.

Question 78

The first step in an ideal decision-making process is to

A) make a choice.
B) evaluate alternatives.
C) implement the decision.
D) generate alternative solutions.
E) identify and diagnose the problem.

Question 79

Belinda has to select the right paper clips to purchase for her office. She looks at the office supply catalog and picks the first one that is priced reasonably. Belinda is using the ________ method of decision making.

A) forecasting
B) optimizing
C) satisficing
D) maximizing
E) brainstorming

Question 80

The manager of a restaurant noticed that the number of customers in the evening was decreasing. She promptly ordered the chef to revise the evening menu. Later, customer feedback indicated that the problem was not the menu but poor service from the waitstaff. The manager's decision to have the menu revised suggests that she failed to

A) identify and diagnose the problem.
B) evaluate alternatives.
C) generate alternative solutions.
D) evaluate the decision.
E) make a choice.