Deck 5: Foundations of Planning

Question 1

A major strength of formal planning is that it reinforces past successes and incorporates them into the future.

Answer 1

False

Question 2

A mission statement for a kayak manufacturer might be as follows: To make the highest-quality kayaks and sell them at a competitive price.

Answer 2

True

Question 3

Managers who make formal plans are more likely to help an organization "break the mold" and carry out truly groundbreaking work that redefines an entire industry.

Answer 3

False

Question 4

Successful planning depends more on whether managers plan than on the quality of their planning.

Question 5

The first step in the strategic management process is analyzing the external environment.

Question 6

Strategic management is the act of figuring out how an organization will compete in the marketplace and attract loyal customers.

Question 7

At some point, all managers create formal plans.

Question 8

The four reasons that organizations plan is to provide direction, set standards, minimize waste, and reduce uncertainty and the impact of change.

Question 9

Informal plans are not recognized to be an effective form of planning.

Question 10

Informal planning typically works better in large organizations.

Question 11

A major strength of formal planning is that it generally correlates with higher profits.

Question 12

Research indicates that organizations that don't use formal planning always outperform organizations that do use formal planning.

Question 13

Planning provides direction to managers and nonmanagers alike.

Question 14

Planning rarely improves teamwork and cooperation among employees.

Question 15

A major strength of formal planning is that it gives an organization rigidity.

Question 16

All managers plan in some way, either formally or informally.

Question 17

An organization that fails to plan will find it hard to assess progress.

Question 18

A key function of planning is to create goals.

Question 19

Formal planning can increase creativity in an organization.

Question 20

A major argument against formal plans is that they can't replace intuition and creativity.

Question 21

Innovation and super-high quality are typically the keys to a cost-leadership strategy.

Question 22

Goals typically should be reserved for managers only.Goals should not be shared with subordinates.

Question 23

An external analysis will identify the threats to a company's well-being, but not opportunities for success.

Question 24

A corporate strategy may be a growth strategy, a stability strategy, or a renewal strategy.

Question 25

The final three steps in the strategic management process involve the creation and implementation of strategies for realizing organizational goals.

Question 26

Traditional goal setting requires top managers to set goals that are carried out by the organizational levels below.

Question 27

Goals are documents that outline how plans are to be carried out.

Question 28

A six-month plan qualifies as a short-term plan.

Question 29

Long-term plans used to refer to plans that covered a period of over three years, but now it refers to any time period over one year.

Question 30

Southwest Airlines studied race car pit crews as an example of benchmarking.

Question 31

Customer service cannot be considered a strategic weapon for an organization.

Question 32

The most drastic renewal strategy an organization can carry out is a retrenchment strategy.

Question 33

A company with a stability strategy will plan to dramatically increase market share in a highly competitive market.

Question 34

SWOT analysis includes the identification of an organization's strengths, weaknesses, opportunities, and threats.

Question 35

The key to MBO, or management by objectives, is that managers and subordinates mutually agree on goals.

Question 36

Capabilities are "what" an organization has; resources are "how" it uses what it has.

Question 37

Core competencies include an organization's major capabilities and its resources.

Question 38

A focus strategy seeks to appeal to a narrow segment of a market.

Question 39

A diversification strategy focuses on a company becoming its own supplier of inputs.

Question 40

"Build a better mousetrap" is a way of describing a competitive advantage.

Question 41

Which of the following is a frequently cited criticism of formal planning?

A)Plans lock organizations into rigid goals and timetables.
B)Plans take too long to create.
C)Plans create resentment within different levels of the organization.
D)Formal planning works well only for smaller companies.

Question 42

In formal planning, ________.

A)specific goals covering a period of years are defined
B)to maximize flexibility, specific goals are never spelled out
C)very broad general goals are developed
D)goals may be written or unwritten

Question 43

Planning gives organizations a way to deal with change that ________.

A)eliminates all uncertainty
B)reduces uncertainty
C)reduces certainty
D)increases ambiguity

Question 44

Buying a competitor's product for evaluation is a form of environmental scanning.

Question 45

Managers who fail to plan may ________.

A)take advantage of change
B)stimulate change
C)be positively affected by change
D)be adversely affected by change

Question 46

Studies of performance in organizations that plan have reached ________ with respect to the benefits of formal planning.

A)somewhat negative conclusions
B)no conclusion
C)extremely negative conclusions
D)generally positive conclusions

Question 47

One criticism of formal planning is that it focuses on how to beat the competition rather than how to ________.

A)have cordial relationships with the competition
B)focus on new opportunities
C)balance the organization's budget
D)cooperate with the competition

Question 48

In studies in which high-quality formal planning did not lead to higher performance, ________ usually the culprit.

A)unforeseen events or conditions were
B)demanding employees were
C)stubborn ownership was
D)lack of communication was

Question 49

Which of the following is NOT a function of planning?

A)defining goals
B)identifying a strategy for attaining goals
C)settling disputes between employees
D)coordinating organizational activities

Question 50

Which of the following is NOT a reason for managers to plan?

A)to give direction to an organization
B)to deal with change
C)to establish goals
D)to establish responsibility for mistakes

Question 51

One effect of planning on managers is that it forces them to ________.

A)fear change
B)anticipate and consider the effect of change
C)work to prevent change
D)ignore any change that doesn't directly affect them

Question 52

In general, upper-level managers focus on tactical or operational planning.

Question 53

Directional plans leave no room for interpretation.

Question 54

Failing to discard successful plans from the past is likely to lead to ________.

A)more success because conditions are unlikely to change in the future
B)failure because conditions are likely to change in the future
C)success because of the high quality of the plans
D)failure because of the low quality of the plans

Question 55

Planning gives organizations direction that primarily helps them ________.

A)improve teamwork and coordinate activities
B)improve their image in the business community
C)improve morale of middle managers
D)improve morale of all employees

Question 56

Informal planning is ________.

A)always performed at the lowest organizational level
B)general and usually lacks continuity
C)performed exclusively by middle managers
D)more specific than formal planning

Question 57

Planning is concerned with ________.

A)both ends and means
B)ends only
C)means only
D)neither ends nor means

Question 58

In informal planning, goals are usually ________ shared with others in the organization.

A)written, but little is
B)unwritten and little is
C)written and much is
D)unwritten, but much is

Question 59

Organizations that don't formally plan may be more likely to have ________.

A)corrupt managers
B)legal problems
C)multiple departments performing the same task
D)a single department carrying out all company functions

Question 60

Studies of planning show that the key to successful planning is to make sure that the plans ________.

A)cover every possible detail
B)are high in quality and insight
C)are exceedingly simple to follow
D)are not shared with employees

Question 61

Which of the following makes up the three main types of corporate strategies?

A)growth, vertical integration, horizontal integration
B)growth, retrenchment, renewal
C)renewal, retrenchment, diversification
D)growth, stability, renewal

Question 62

Together, an organization's resources and core competencies make up which of the following?

A)core philosophy
B)competitive weapons
C)core assets
D)fundamental beliefs

Question 63

Formal planning typically leads to which of the following?

A)higher profits
B)lower productivity
C)higher sales, but lower profits
D)tension between different management levels

Question 64

The first step in the six-step strategic management process is to ________.

A)analyze the organization's strengths and weaknesses
B)identify the organization's mission
C)identify strategies to reach the organization's goals
D)analyze the opportunities the organization has

Question 65

The three different types of strategies that managers implement are ________.

A)corporate, private, functional
B)corporate, competitive, functional
C)long-term, short-term, public
D)competitive, noncompetitive, corporate

Question 66

SWOT analysis identifies and analyzes an organization's ________.

A)strengths, weaknesses, opportunities, and threats
B)strategy for competing in the market
C)human resource assets
D)long-term goals

Question 67

An organization's resources identify ________.

A)how the organization gets things done
B)where the organization operates
C)when the organization operates
D)what the organization has

Question 68

General Mills expanding its line so that it sells several different types of Cheerios is an example of which of the following?

A)concentration
B)horizontal integration
C)vertical integration
D)diversification

Question 69

A mission statement does NOT include which of the following?

A)the customers of a company
B)strategy for success
C)why the company is in business and what it hopes to accomplish
D)the company's basic beliefs

Question 70

An organization's capabilities identify ________.

A)what the organization knows
B)who the organization is
C)assets that the organization can rely on
D)what the organization can do

Question 71

Once SWOT analysis is complete, managers ________ to address the issues that came up during the analysis.

A)formulate strategies
B)implement strategies
C)evaluate strategies
D)eliminate strategies

Question 72

Which of the following do managers NOT typically use to formulate strategies?

A)finding ways to exploit the organization's strengths
B)finding ways to protect the organization from external threats
C)finding ways to rule out existing organizational opportunities
D)finding ways to correct organizational weaknesses

Question 73

A mission statement includes identification of an organization's ________.

A)strengths and weaknesses
B)products and basic philosophy
C)assets and resources
D)resources and strengths

Question 74

An internal analysis, the third step of the strategic management process helps identify ________.

A)opportunities and threats
B)resources and capabilities
C)opportunities and possibilities
D)values and philosophy

Question 75

A corporate strategy focuses primarily on ________.

A)an organization's mission
B)an organization's strengths
C)an organization's weaknesses
D)an organization's people

Question 76

The first three steps of the strategic management process involve ________ strategies.

A)planning
B)implementing
C)evaluating
D)identifying

Question 77

Which term refers to an organization's capital, workers, and patents?

A)resources
B)capabilities
C)abilities
D)core competencies

Question 78

An external analysis, the second step of the strategic management process, helps identify ________.

A)the products that a company makes
B)the long-term goals of a company
C)a company's opportunities and threats
D)a company's concern for its employees

Question 79

SWOT analysis combines ________.

A)a company's mission with its goals
B)external and internal analyses
C)a company's philosophy with its ethics
D)profit with productivity

Question 80

Growth strategies include ________.

A)diversification, concentration, integration, stabilization
B)vertical integration, horizontal integration, concentration, diversification
C)vertical integration, horizontal integration, lateral integration, horizontal concentration
D)integration, allocation, horizontal diversification, vertical diversification