Deck 7: Principles of Planning

Question 1

The affirmative purpose of planning is to minimize risk by reducing the uncertainties surrounding business conditions and clarifying the consequences of related management actions.

Answer 1

False

Question 2

Premises are the assumptions upon which alternatives to reaching organizational objectives are based.

Answer 2

True

Question 3

Organizational objectives are the targets toward which the open management system is directed.

Answer 3

True

Question 4

The last step in the planning process focuses on developing plans to pursue the chosen alternative for reaching organizational objectives.

Question 5

Short-term objectives are targets to be achieved within five to seven years.

Question 6

A drawback of the management by objectives (MBO)program is that it can be time consuming.

Question 7

Organizations exist for various purposes but have the same types of objectives.

Question 8

PERT is a network of project activities showing both the estimates of time necessary to complete each activity and the sequence of activities that must be followed to complete the project.

Question 9

Of the four primary management functions,organizing usually precedes planning.

Question 10

Plans fail when management fails to grasp the overall planning process.

Question 11

Suboptimization is the process of assigning subobjectives to the various people or units in the organization based on the organizational objectives.

Question 12

Managers should establish performance objectives that are within easy reach for employees.

Question 13

The jury of executive opinion method is a sales forecasting technique that predicts future sales by analyzing the opinions of customers as a group.

Question 14

The management by objectives (MBO)approach has been found to be ineffective for nonprofit organizations.

Question 15

A potential disadvantage of planning is that it can take up too much managerial time.

Question 16

An organization's vision is what the organization exists to do,given a particular group of customers and customer needs.

Question 17

Planning is the process of determining how the organization can get where it wants to go and what it will do to accomplish its objectives.

Question 18

One of the primary guidelines for establishing quality objectives is that management should set objectives only in relation to other organizational objectives.

Question 19

A key element of any management by objectives (MBO)program is top management support and commitment.

Question 20

According to Drucker,management should set objectives that indicate the company's responsibilities to its customers and society but should not specify the extent to which the company intends to live up to these responsibilities.

Question 21

It is important for an organization to ensure that the objectives set for its employees are ________.

A)unrealistically high
B)within easy reach
C)low
D)within reach,but not easy reach
E)out of reach

Question 22

According to John F.Mee,which of the following points is an organizational objective for businesses?

A)Service to society is the motivating force for managers.
B)The people responsible for attaining objectives should have a voice in setting them.
C)Managers are not bound by the ethical codes of the society in which the business operates.
D)Managers should establish performance objectives that they know are within reach for employees.
E)Service to customers by the provision of desired economic values justifies the existence of the business.

Question 23

The first step in the planning process is to ________.

A)list alternative ways of reaching objectives
B)state organizational objectives
C)develop the premises upon which each alternative is based
D)develop plans to pursue the chosen alternative
E)put plans into action

Question 24

________ refers to what a firm exists to do,given a particular group of customers and customer needs.

A)An operational plan
B)A unique selling proposition
C)An organizational purpose
D)A long-term goal
E)A vision statement

Question 25

After identifying the alternative ways in which the organization can reach its objectives,a manager should ________.

A)develop plans for each alternative
B)choose the best alternative for reaching objectives
C)rank each alternative according to complexity
D)develop premises on which to base each alternative
E)choose the alternative which is most cost effective

Question 26

The affirmative purpose of planning is to ________.

A)increase the degree of organizational success
B)increase the level of workplace diversity
C)optimize the use of organizational resources
D)refine work methods and reduce production costs
E)improve organizational compliance with industry standards

Question 27

The protective purpose of planning is to ________.

A)ensure integration among the organization's various business units
B)increase the degree of organizational success
C)optimize the use of organizational resources
D)minimize risk by reducing the uncertainties surrounding business conditions
E)maximize the organization's ability to leverage environmental opportunities

Question 28

Which of the following steps in the planning process should precede the others?

A)develop premises upon which each alternative is based
B)develop plans to pursue the chosen alternative
C)list alternative ways of reaching objectives
D)choose the best alternative for reaching objectives
E)put plans into action

Question 29

Which of the following is the fundamental purpose of planning?

A)eliminating risk
B)helping the organization reach its objectives
C)optimizing the use of resources
D)identifying organizational objectives
E)organizing work processes

Question 30

The targets toward which an open management system is directed are known as ________.

A)organizational purposes
B)operational plans
C)organizational objectives
D)business processes
E)objective indicators

Question 31

________ is the primary management function.

A)Organizing
B)Influencing
C)Controlling
D)Planning
E)Staffing

Question 32

The process of determining how an organization can get where it wants to go and what it will do to accomplish its objectives is known as ________.

A)organizing
B)influencing
C)planning
D)controlling
E)analyzing

Question 33

The last step in the planning process is to ________.

A)put the plans into action
B)evaluate the organizational goals
C)choose the best alternative for reaching objectives
D)develop the premises upon which each alternative is based
E)state the organizational objectives

Question 34

Alternatives to reach an organizational objective are based on assumptions known as ________.

A)objectives
B)missions
C)goals
D)premises
E)priorities

Question 35

________ is a standing plan that designates specific required action.

A)A resource
B)A rule
C)A budget
D)A strategy
E)A responsibility

Question 36

A disadvantage of planning is that it ________.

A)causes managers to focus on the future
B)reduces organizational flexibility once plans are set
C)requires organizational resources
D)can take up too much managerial time
E)involves planning for situations that may not occur

Question 37

A single-use financial plan that covers a specified length of time is known as a(n)________.

A)offshoot
B)microsystem
C)spinoff
D)subsystem
E)budget

Question 38

________ is the key to a successful planning process.

A)Classification
B)Repetition
C)Implementation
D)Evaluation
E)Standardization

Question 39

Which of the following is an advantage of planning?

A)It eliminates all risks.
B)It enhances decision coordination.
C)It emphasizes immediate goals.
D)It suboptimizes the use of resources.
E)It promotes individual performance.

Question 40

Which of the following is an example of a statement of organizational purpose?

A)to increase the company's market share by 20 percent by 2011
B)to execute all projects in a timely and professional manner
C)to be the leading provider of professional health care services
D)to provide our employees with a challenging and rewarding work environment
E)to build long-lasting customer relationships based on trust

Question 41

A sales manager sets the following performance objective for members of his sales team: To increase customer sales by 10 percent within the next 6 months.Which of the following is a valid criticism of this objective?

A)It does not pinpoint expected results.
B)It is not stated in simple fashion.
C)It is not achievable.
D)It does not relate to specific actions.
E)It is not related to other organizational objectives.

Question 42

At Enviro Corp employees do not have to infer what they should do to accomplish their goals.Which of the following guidelines does this refer to?

A)Pinpoint expected results.
B)Specify when goals are expected to be achieved.
C)Set goals high enough that employees will have to strive to meet them.
D)Relate objectives to specific actions whenever necessary.
E)Set objectives only in relation to other organizational objectives.

Question 43

Which of the following is NOT a guideline for establishing quality objectives?

A)Let people responsible for attaining objectives have a voice in setting them.
B)State objectives as specifically as possible.
C)Pinpoint expected results.
D)Set objectives that are not related to other organizational objectives.
E)Specify when goals are expected to be achieved.

Question 44

One of the organizational objectives of Valpo Industries,a pharmaceutical firm,is "to develop a new line of drugs for the treatment of life-threatening diseases such as cancer and AIDS,through the use of patented technology and processes." According to Drucker,this objective relates to ________.

A)market standing
B)innovation
C)productivity
D)profitability
E)public responsibility

Question 45

According to Drucker,which of the following goal areas relates to a tangible,impersonal characteristic of organizational operations?

A)number of employees
B)innovation
C)managerial performance and development
D)worker performance and attitude
E)public responsibility

Question 46

One of the corporate objectives of Supra Inc.is "to enrich the quality of life in the community by providing education,training,and employment opportunities." According to Drucker,this organizational objective relates to ________.

A)managerial performance and development
B)innovation
C)public responsibility
D)worker performance and attitude
E)market standing

Question 47

One of the short-term objectives of Alport Corporation,a manufacturer of construction equipment,is "to achieve a 15 percent return on investment (ROI)by September 2011." According to Drucker,this objective relates to ________.

A)innovation
B)productivity
C)market standing
D)managerial performance
E)profitability

Question 48

Intermediate-term objectives are targets to be achieved in ________.

A)one year or less
B)one to five years
C)three to seven years
D)five to seven years
E)five to ten years

Question 49

HomeTurf is a retailer of wooden furniture.The firm currently has three stores and has plans to set up two more within the next eight months.This is an example of a(n)________.

A)intermediate-term objective
B)short-sighted objective
C)long-term objective
D)short-term objective
E)suboptimal objective

Question 50

Which of the following is the rationale behind letting the people responsible for attaining certain objectives have a voice in setting them?

A)Employees are more capable than managers and are better at establishing objectives.
B)Managers are motivated when their employees are allowed to have a say in goal setting.
C)Employees can showcase their managerial potential when they are allowed to set their own goals.
D)Managers tend to set objectives that are often easily achievable and do not challenge employees.
E)The people responsible for attaining the objectives know their job better than the managers do.

Question 51

Targets to be achieved in one year or less are called ________.

A)time-bound actions
B)departmentalized goals
C)short-term objectives
D)long-term objectives
E)intermediate-term plans

Question 52

According to Drucker,which of the following key areas for organizational objectives is more personal and subjective in nature,and hence likely to arouse managerial opposition?

A)productivity
B)innovation
C)worker performance and attitude
D)physical and financial resources
E)market standing

Question 53

Tandem Industries is a cycle manufacturer.As part of its planning activities,it sets an objective to increase its market share by 5 percent within 3 years.This is an example of a(n)________.

A)short-term objective
B)intermediate-term objective
C)long-term objective
D)suboptimal objective
E)principled objective

Question 54

Which of the following is NOT one of the key areas in which Drucker advised managers to set management system objectives?

A)market standing
B)profitability
C)government regulation
D)innovation
E)public responsibility

Question 55

According to Drucker,which of the following statements is an example of an organizational objective related to productivity?

A)to reduce overall inventory management costs by 15 percent
B)to increase the use of environmentally friendly workplace practices
C)to lower the rate of attrition in the organization within the next 6 months
D)to increase the unit's monthly output by 10 percent within the next 12 months
E)to reduce total overhead costs by 5 percent by the end of the year

Question 56

In order to increase the quality of their objectives,managers should ________.

A)set employees' goals as high as possible
B)ensure that they set objectives entirely by themselves
C)establish goals that are within easy reach
D)let the people responsible for attaining the objectives have a voice in setting them
E)avoid relating objectives to specific actions

Question 57

When setting objectives,managers should state objectives as specifically as possible because ________.

A)it ensures that employees have explicit directions for what they should do
B)it ensures that employee productivity will vary according to the needs of the situation
C)it allows employees to make inferences about what they should do to accomplish their goals
D)it allows them to set the pace for employees' work
E)it reduces the risk of suboptimization

Question 58

A management guideline that recommends managers to clearly determine,understand,and state organizational objectives before initiating any action is known as the ________.

A)management-by-objectives approach
B)hierarchy of needs
C)principle of the objective
D)hierarchy of objectives
E)concept of suboptimization

Question 59

Plaxo Industries is a large-scale manufacturer of commercial kitchen equipment.Its products are currently sold in Europe and the Middle East.Plaxo wants to foray into the Asian market,and the company's management has set a target of entering the Chinese market by 2018.This is an example of a(n)________.

A)short-term objective
B)intermediate-term objective
C)long-term objective
D)medium-term objective
E)operational objective

Question 60

Which of the following refers to targets to be achieved within a time frame of five to seven years?

A)short-term objectives
B)intermediate-term plans
C)long-term objectives
D)operational goals
E)medium-term objectives

Question 61

________ is the process of formulating a detailed listing of activities that must be accomplished to attain an objective,allocating the resources necessary to attain the objective,and setting up and following timetables for completing the objective.

A)Forecasting
B)Interacting
C)Regression
D)Scheduling
E)Networking

Question 62

________ method utilizes historical data to predict future sales levels.

A)Resource allocator
B)Disturbance handler
C)Salesforce estimation
D)Regression
E)Moving average

Question 63

In line with the organization's objectives,the sales managers at MagnaCorp must ensure that all products are sufficiently stocked so that customer orders are fulfilled and stockout situations do not arise.The operations managers,on the other hand,were instructed to lower inventory costs and hence,prefer to keep stock levels to a minimum.This situation is an example of ________.

A)management by objectives
B)secondary objectives
C)intermediate-term plans
D)planning subsystems
E)suboptimization

Question 64

Which of the following is the first step in the management by objectives (MBO)process?

A)set worker objectives
B)review organizational objectives
C)develop performance evaluation criteria
D)evaluate past performance
E)establish rewards

Question 65

One of the disadvantages of management by objectives (MBO)is that ________.

A)the program is very quick and informal
B)the process has no effect on worker commitment
C)the program only emphasizes what should be done in an organization
D)the process is time consuming and requires additional paperwork
E)the process is a mere duplication of other management practices

Question 66

Which of the following is NOT a necessary factor for a successful management by objectives (MBO)program?

A)Management must follow through on employee performance evaluations by rewarding employees accordingly.
B)Top management must be committed to the MBO process and set appropriate objectives for the organization.
C)Managers and subordinates together must develop and agree on each individual's goals.
D)Employee performance should be conscientiously evaluated against established objectives.
E)Managers must conclude automatically that employees have produced at an acceptable level because they have reached their objectives.

Question 67

Which of the following guidelines for establishing quality objectives helps in keeping the risk of suboptimization to a minimum?

A)relating objectives to specific actions whenever necessary
B)stating objectives as specifically as possible
C)setting objectives only in relation to other organizational objectives
D)specifying when goals are expected to be achieved
E)stating objectives clearly and simply

Question 68

One of the primary advantages of management by objectives (MBO)is that ________.

A)it saves time
B)it is an easy process
C)it gains employee commitment
D)it reduces the volume of paper work
E)it places the responsibility of goal attainment solely on managers

Question 69

Which of the following management writers popularized management by objectives (MBO)?

A)Tom Peters
B)Frederick Taylor
C)Peter Drucker
D)Abraham Maslow
E)Henry Fayol

Question 70

Introduction,growth,maturity,saturation,and decline are stages of ________.

A)product allocation
B)product history
C)product lifecycle
D)service methods
E)resource allocation

Question 71

________ is the process of predicting future environmental happenings that will influence the operation of the organization.

A)Forecasting
B)Disturbance
C)Planning
D)Scheduling
E)Monitoring

Question 72

Which of the following guidelines helps employees know exactly how managers will determine whether an objective has been reached?

A)Let people responsible for attaining objectives have a voice in setting them.
B)State objectives as specifically as possible.
C)Pinpoint expected results.
D)Set objectives only in relation to other organizational objectives.
E)Specify when goals are expected to be achieved.

Question 73

In a management by objectives program (MBO),why must managers be careful not to conclude automatically that employees have produced at an acceptable level simply because they have reached their objectives?

A)The objectives may have been set too low in the first place,and managers may have failed to recognize it at the time.
B)The MBO framework is naturally flawed and requires managers to use subjective criteria to evaluate performance.
C)The employees may have reached their objectives by means that the organization had not considered.
D)The MBO approach is merely on goal attainment and not on the level of effort expended.
E)The objectives set for employees may not be aligned with the overall organizational objectives.

Question 74

"To lower the rate of employee attrition within the organization by 5 percent through the use of effective employee retention and motivation techniques." Which of the following is a valid criticism of this objective?

A)It is not stated in a simple fashion.
B)It does not provide a time frame for achieving objectives.
C)It is not related to specific actions.
D)It is not achievable.
E)It does not pinpoint expected results.

Question 75

It is important to provide employees with a time frame for accomplishing their objectives because ________.

A)it instills a sense of urgency in employees
B)it allows employees to pace themselves accordingly
C)it make the goals more meaningful
D)it reduces the risk of suboptimization
E)it motivates employees to improve their performance

Question 76

Which of the following is an accurate statement in reference to management by objectives (MBO)?

A)Rewards are given to workers independent from their objective attainment.
B)Managers and workers meet to agree on worker objectives.
C)Managers and workers do not meet to monitor progress.
D)Managers set objectives for workers without their input.
E)Rewards are given on the basis of the manager's effort.

Question 77

Which of the following methods of sales forecasting is the most straightforward?

A)jury of executive opinion method
B)salesforce estimation method
C)moving average method
D)regression method
E)disturbance handler method

Question 78

Which of the following is the last step in the management by objectives (MBO)process?

A)review performance objectives
B)evaluate performance
C)give rewards
D)monitor progress
E)set performance goals

Question 79

________ are techniques managers can use to help develop plans.

A)Departmental planners
B)Organizational planners
C)Sales forecasts
D)Planning tools
E)Product stages

Question 80

After setting worker objectives,the next step in a management by objectives (MBO)program is to ________.

A)develop performance evaluation criteria
B)review organizational objectives
C)establish rewards
D)monitor progress
E)evaluate past performance