Deck 5: Planning: the Foundation of Successful Management

Question 1

"Increase profits by 15 percent a year for each of the next five years" is an example of a strategic goal.

Answer 1

True
Explanation: Strategic goals are set by and for top management and focus on objectives for the organization as a whole. For example, the goal of Southwest's top managers is to ensure that the airline is highly profitable, and for years it has followed the general strategy of (a) keeping costs and fares down, to appeal to budget rather than business travelers, (b) offering a superior on-time arrival record and squeezing more flights per day from every plane, and (c) keeping passengers happy with its cheerful cabin crew and staff.

Question 2

During her lunch break one afternoon, Alison set a goal of completing all required trainings in the next 90 days by taking two trainings a week. What is she doing?

A) planning
B) controlling
C) delegating
D) diversifying
E) synergizing

Answer 2

A
Explanation: Planning is defined as setting goals and deciding how to achieve them.

Question 3

Which of the following is NOT a reason for an organization to adopt planning and strategic management?

A) developing MBO
B) encouraging new ideas
C) developing a sustainable competitive advantage
D) providing direction and momentum
E) setting long-term goals.

Answer 3

A
Explanation: An organization should adopt planning and strategic management for three reasons: They can (1) provide direction and momentum, (2) encourage new ideas, and above all (3) develop a sustainable competitive advantage. A strategy sets the long-term goals and direction for an organization.

Question 4

The upper-level managers of Premium Java are meeting to discuss the company's long-range goals and vision. Like any organization, Premium Java should adopt planning and strategic management for just two reasons: (1) to provide direction and momentum and (2) to encourage retention of high-value employees.

Question 5

Candice, owner of Green Solar Panels, has found that some of her department managers were using management by objectives, but the accounting and sales managers were not. Candice can still expect that the MBO program she introduced will yield results.

Question 6

A business model outlines what customer needs the company will satisfy, the operations of the business, the company components and functions, and the projected revenue and expenses.

Question 7

The production plant for Ruby Manufacturing has been located in the same place for over 100 years. The company has just completed its new factory that includes its new corporate offices. The planning required for moving Ruby into a new facility is a single-use plan.

Question 8

An entrepreneur would create a business plan to outline which of the following?

A) plans for financing and reducing competition
B) mentoring plans
C) important details and a code of ethics
D) goals and strategies with success measures
E) code of business

Question 9

With increasing competition in the auto-parts business, Harrison, owner of Discount Tires, is dealing with growing uncertainty. He decides to ________, or meet with his managers to develop a future course of action to meet company goals.

A) plan
B) lead
C) control
D) define
E) diversify

Question 10

Taking a ________ action is setting a very challenging goal for yourself. It might be "I will double the number of hours I study next semester so that I can increase my GPA by at least half a point," keeping you motivated and focused on achievement.

A) performance objective
B) learning objective
C) cascading goal
D) practical action
E) behavioral objective

Question 11

When using MBO, managers should meet with employees reasonably often-either informally as needed or formally every three months-to review progress.

Question 12

When Amazon says, "we want to be Earth's most customer-centric company," it is stating its code of ethics.

Question 13

The profits of West Side Grocery have dropped significantly over the last several months. After investigating, the owner realizes that many of the store's departments are moving in the wrong direction. The owner recognizes that these departments need stronger and closer management, but she also knows she has not provided her managers with enough direction regarding her expectations for the store's goals and the employees' performance. This example shows how an organization can progress in the wrong direction as a result of

A) little company diversity.
B) no focus on JIT.
C) no code of ethics.
D) poor planning.
E) too much employee diversity.

Question 14

Leo is starting a company that leases shared workspaces, and he has approached SCORE, an SBA organization that assists small-business owners in setting up their companies. The SCORE counselors would probably advise Leo, as a new business owner, to

A) learn from experience, the best teacher, rather than a mentor.
B) avoid developing a business plan the first year of business.
C) try new things regardless of the risk.
D) get a new perspective by asking people who have failed.
E) write a business plan.

Question 15

Every five years, the upper-level managers of Zebra Technology meet to develop a new large-scale action plan that will set the direction for the company for the next five years. In that meeting the managers will work on developing a strategy.

Question 16

Tricia, the director of marketing for a global company, is planning the contributions she and her department will make to the organization over the next 24 months. This type of planning is called operational planning.

Question 17

Research suggests that when writing out a plan to achieve your biggest goals, it is important to

A) focus on broad rather than specific goals.
B) identify your options and track your progress.
C) make a general plan, which embeds your intentions firmly in your memory.
D) keep plans and goals private.
E) avoid specific goals because it increases stress.

Question 18

Prior to opening her new restaurant, Alice is deciding what items to offer on the menu, the anticipated profits and expenses, the tasks of various employees, and how those jobs will be handled. Alice is creating her

A) business model.
B) mentoring plan.
C) code of ethics.
D) risk statement.
E) code of business.

Question 19

An organization's ________ expresses the need the firm will fill, the operations of the business, its components and functions, and the expected revenues and expenses.

A) mentoring plan
B) code of ethics
C) risk statement
D) business model
E) code of business

Question 20

Heather is the store manager for a national grocery retailer, and she received the yearly tactical plan from Sanjay, her district manager. Heather is meeting with her department managers to plan how to implement the specific tasks outlined in Sanjay's plan for the next year. Heather is engaged in operational planning.

Question 21

One Fortune article states that "vision should describe what's happening to the world you compete in and what you want to do about it" and

A) "it should help reduce competition."
B) "it should guarantee organizational success."
C) "it should guide decisions."
D) "it should improve employee morale."
E) "it should reduce the glass ceiling."

Question 22

At the strategic level of planning, managers must pay attention to the environment outside the organization, be future oriented, and

A) have more stability than at other levels.
B) have more control over employee issues.
C) have less competition.
D) deal with uncertain and competitive conditions.
E) be more likely to understand the competition.

Question 23

The upper-level managers of One World Enterprises are meeting for the week to look at the long-term company goals and overall direction of the organization. The CEO has expressed his concern over the economy and has told his managers to look closely at the environment outside the organization before making decisions and to be future oriented. In this meeting, top managers of One World are

A) writing a belief statement.
B) developing their goals pact.
C) producing their code of ethics.
D) doing strategic planning.
E) doing management pledging.

Question 24

________ are goals set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals.

A) Lower-level objectives
B) Front-line goals
C) Tactical goals
D) Supervisory objectives
E) Operational goals

Question 25

The three levels of ________ are strategic, tactical, and operational.

A) planning
B) diversity
C) strategy
D) marketing
E) the environment

Question 26

Clothing maker The Gap states that its purpose as an organization is to "create emotional connections with customers around the world through inspiring product design, unique store experiences and competitive marketing." This is the company's

A) mission statement.
B) belief statement.
C) goals pact.
D) code of ethics.
E) management pledge.

Question 27

Those who manage the work on the front lines are most involved with what component of the planning process?

A) writing a belief statement
B) developing a goals pact
C) producing a code of ethics
D) management pledging
E) operational planning

Question 28

Denise owns several computer repair shops across the Northeast, and she has set a goal for her company of cutting costs in all her locations over the next three years. Denise has set a(n)

A) tactical goal.
B) management guideline.
C) business plan.
D) strategic goal.
E) operational goal.

Question 29

How often should a company revise its strategic plan?

A) every five years rather than every two years
B) every five years rather than every ten years
C) every ten years
D) continuously
E) closer to every one or two years

Question 30

What type of planning is completed by middle managers?

A) writing a belief statement
B) developing a goals pact
C) producing a code of ethics
D) tactical planning
E) management pledging

Question 31

During a management meeting, Lester, the CEO of Elite Office Equipment, reminded his management team of where the company wants to go as an organization: "Elite Office Equipment is the expert that customers should always call regarding all their office equipment needs because we strive to understand customer needs and provide the right answers for them." This statement is Top Office Equipment's

A) belief statement.
B) goals pact.
C) code of ethics.
D) management pledge.
E) vision statement.

Question 32

Cozy Café is a restaurant chain that offers a relaxing environment to enjoy quality coffees, teas, soups, and other menu items. A poster in the front of each restaurant reads, "We will always provide a quality product to help our customers better meet the challenges of their day and will always take the time to offer caring service one person at a time." This statement is Cozy Café's

A) belief statement.
B) goals pact.
C) mission statement.
D) code of ethics.
E) management pledge.

Question 33

A mission statement expresses the

A) expected profitability of an organization.
B) purpose of an organization.
C) code of ethics.
D) market for the product.
E) types of employees needed.

Question 34

Operational planning must be completed by first-line managers every ________, and tactical planning is done by middle management every

A) year; 2 to 10 years.
B) 6 to 24 months; 1 to 52 weeks.
C) 1 to 52 weeks; 6 to 24 months.
D) 1 to 12 weeks; year.
E) year, if necessary; 1 to 90 days.

Question 35

The three types of MBO objectives are

A) performance, behavioral, and motivational.
B) strategic, performance, and behavioral.
C) learning, motivational, and proactive.
D) performance, behavioral, and learning.
E) strategic, motivational, and performance.

Question 36

If you are tasked with writing employee schedules and to-do lists for managers, what level of planning are you involved in?

A) strategic planning
B) operational planning
C) delegation planning
D) human resource planning
E) tactical planning

Question 37

The first three steps in planning an organization are (in the correct order):

A) formulating strategic planning, creating a mission statement, and creating a vision statement.
B) formulating operational planning, creating a mission statement, and developing a hiring plan.
C) formulating strategic planning, implementing operational planning, and preparing a vision statement.
D) writing a mission statement, assessing the current reality, and formulating strategic planning.
E) formulating tactical planning, implementing operational planning, and writing a mission statement.

Question 38

The top management of Fresh, a food distribution company, has set strategic goals of increasing organizational market share and also decreasing corporate costs over the next three years. Charles, a division manager for Fresh, has looked at his resources, and he has decided how his division can contribute to the two strategic goals set by upper management: (1) by partnering with another company and (2) by hiring a procurement manager to negotiate lower prices from vendors. Charles' next step is to roll out his ________ to his staff.

A) vision statements
B) management guidelines
C) codes of ethics
D) tactical goals
E) operational goals

Question 39

The planning process begins with two attributes: a mission statement and a vision statement. What questions are answered with each of these?

A) What do we want to become?; What is our reason for being?
B) What are the costs?; How much money can I make?
C) What are the risks?; What is our reason for being?
D) What do we want to become?; What products do we offer at a profit?
E) What is our reason for being?; What do we want to become?

Question 40

The upper management of a large national insurance company has passed along the new goal of improving customer service to the district managers. The district managers will set goals to be achieved over the next 6 to 24 months as part of ________ planning.

A) working-level
B) tactical
C) middle-level
D) operational
E) strategic

Question 41

Luxottica, a manufacturer of fashionable prescription eyewear, notes on its website, "To see the beauty of life inspires its sustainable and ethical business approach and its corresponding pillars, including a commitment to excellence, visual well-being, social impact, and environmental protection." This excerpt from the company's website states Luxottica's

A) code of ethics.
B) business plan.
C) vision statement.
D) expense report.
E) marketing plan.

Question 42

________ is the process for motivating employee performance in which the manager and employee jointly set objectives for the employee, the manager develops action plans, the manager and employee periodically review the employee's performance, and the manager makes a performance appraisal and rewards the employee according to the results achieved.

A) Observation theory
B) MBAO
C) MBO
D) Strategic planning
E) An employee-management agreement

Question 43

Which of the following would be used to outline a response to a particular circumstance?

A) procedure
B) industry standard
C) norm
D) program
E) certified procedure

Question 44

We Deliver trains its truck loaders how to set the packages in the delivery vehicles, so that when delivery drivers are pulling packages off their trucks, they are organized in a specific order and with the label facing forward to reduce errors and save time. A(n) ________ is being implemented when directing that the trucks be loaded in this specific manner.

A) industry standard
B) norm
C) policy
D) rule
E) procedure

Question 45

This month, Susan, the branch manager of Intrepid Car Rentals, has heard several complaints from customers that Intrepid employees do not return calls. Today a good customer told Susan that "my phone calls and e-mails are returned after maybe a week or so." Hearing enough, Susan mandated that "all customer phone calls and e-mails must be returned within 24 hours." This new directive by Alice is an example of a(n)

A) office order.
B) policy.
C) norm.
D) value.
E) ethic.

Question 46

With setting SMART goals, you should choose only a few goals on which to focus. These goals should be results-oriented and

A) support the company's diversity plan.
B) align with the beliefs of the local community.
C) keep employees happy.
D) support the organization's vision.
E) meet low-cost goals.

Question 47

The Human Resources department of Superior Catering conducted a training workshop on setting and achieving organization goals. DeJohn, the store manager of the Miami location, has been working with his managers to set objectives that are clearly defined, focused on achieving specific results, and can be accomplished with a given amount of resources. Which aspect of SMART goals is missing?

A) Goals should be stated in specific rather than vague terms.
B) Whenever possible, goals should be measurable, or quantifiable.
C) Goals should be challenging, of course, but above all they should be realistic and attainable.
D) Goals should be results-oriented.
E) Goals should specify the target dates or deadline dates when they are to be attained.

Question 48

Francis, the plant manager, is interested in increasing the facility's productivity by utilizing MBO so that his managers and their employees are more focused on objectives. This month Francis asked his managers to concentrate on the two first steps of MBO, which are

A) for managers to develop an action plan and to give employees a performance appraisal.
B) for employees to develop an action plan and to study the competition.
C) to periodically review performance and to develop an action plan.
D) to review each employee's performance and to set an action plan based on performance.
E) to jointly set objectives with their employees and to have managers develop action plans.

Question 49

A ________ is a single-use plan encompassing a variety of projects or activities.

A) program
B) rule
C) policy
D) project
E) procedure

Question 50

Setting a ________, Joy wants to sell 80 percent of her old merchandise prior to the new arrivals shipping.

A) goal
B) vision
C) business plan
D) mission statement
E) norm

Question 51

The management of Computer Rescues, Inc. finalized the company's action plan for increasing its market share over the next few years. The management then set up a 12-month plan that defines how the organization will conduct its business based on the action plan, including clear sales targets for each week. The second plan is an example of a(n) ________ plan.

A) dependent
B) strategic
C) operating
D) facilities
E) typical

Question 52

Nick, a hotel general manager, has had great success using MBO. Vivian, his district manager, has found that Nick's employees are highly motivated. Because Nick ________, Vivian is able to discern that he is using MBO.

A) has increased training
B) rewards his employees with compliments, raises, and other benefits as they meet their goals
C) is big on discipline
D) gives few compliments, but is very honest with his employees
E) uses the Outward Theory that proposes discussing issues in open meetings

Question 53

Aliya is a front-line supervisor in a clothing store. She desires to decrease the time she spends working on doing her daily closing work by 45 minutes. Aliya has set herself a(n)

A) lower-level objective.
B) front-line goal.
C) tactical goal.
D) supervisory objective.
E) operational goal.

Question 54

Jared told his boss, Maggie, that he is going to start training for the upcoming marathon to be healthier and to have more energy for work. When Maggie asked him about his running history, Jared said, "I really have never run before and don't exercise much. I just know I need to do something." Maggie replied, "You should start slowly, maybe setting smaller, realistic exercise goals that are achievable." Maggie is helping Jared set a

A) single-use plan.
B) SMART goal.
C) standing plan.
D) simplistic goal.
E) focal point.

Question 55

If you want all your stores to only accept returns with receipts, this would be an example of a(n)

A) procedure.
B) industry standard.
C) rule.
D) policy.
E) certified procedure.

Question 56

________ are plans developed for activities that are not likely to be repeated in the future, such as plans for programs or projects.

A) Solo plans
B) Lone-use proposals
C) Individual arrangements
D) Single-use plans
E) Standing plans

Question 57

Harriet, the store manager, asked Lou to organize the prize giveaways for the store's grand reopening. Lou is organizing a(n)

A) program.
B) agenda.
C) policy.
D) project.
E) development.

Question 58

The head librarian issued a directive that "Absolutely no food or drink are allowed in the library." She issued this directive because several computers and keyboards in the computer labs, as well as several study cubes, were recently damaged by spilled drinks and food. This is a(n) ________ issued by the librarian.

A) procedure
B) industry standard
C) rule
D) level of certification
E) certified procedure

Question 59

Which of the following goals satisfies the SMART criteria?

A) "As a talented florist, I will sell $100,000 in flowers."
B) "This company will greatly improve its performance next year."
C) "Within the next six months, I will grow my sole proprietorship into a corporation that is larger than Google and Amazon combined."
D) "We will improve our customer-service ratings."
E) "In the next quarter, our Tucson sales rep will increase sales by 10 percent."

Question 60

________ can be another term used for a goal.

A) Task
B) Vision
C) Business plan
D) Objective
E) Norm

Question 61

You receive a memo that reads as follows: "In recent months, our customer evaluations have dropped, and our sales have decreased by 10 percent. To restore our business, we will do the following: (1) We will contact all of our customers and offer a 10 percent discount on their next purchase. (2) For the customers who spend more than $1,000 per year, we will invite them to join our Insiders' Club, which gives them discounted tickets to concerts and sporting events. (3) Effective immediately, we will begin staffing our call center 24 hours a day, 7 days a week.
(4) Customer-service personnel will be given more discretion in helping customers resolve problems, with minimal interference from supervisors." This memo is a(n)

A) mission statement.
B) VRIO analysis.
C) business model.
D) action plan.
E) a SMART goal.

Question 62

To ensure that plans are moving in the right direction, managers can use a(n)

A) means-ends chain.
B) synergy method.
C) efficiency plan.
D) planning/control cycle.
E) satisficing strategy.

Question 63

Lauren wants to develop her proactive learning skills in order to increase her career readiness. What would you advise her to do?

A) Write a letter to the editor about potholes in her town's streets.
B) Contribute to a LinkedIn conversation about trends in her industry.
C) Listen to a podcast about the job market for college graduates.
D) Plan a trip abroad.
E) Read an article about different résumé formats.

Question 64

The purpose of MBO is to

A) control subordinates.
B) control costs.
C) control lower-level management.
D) motivate subordinates.
E) increase market share and develop synergy.

Question 65

Greg, the owner of a lawn care service, likes to meet with his employees six months after their yearly evaluation to discuss how they are progressing on suggestions and plans to improve their yearly job evaluation. At this point, by comparing the six-month results with the past evaluation, Greg is in the ________ step of the planning/control cycle.

A) control
B) planning
C) organizing
D) observation
E) termination

Question 66

The planning/control cycle has two control steps: (1) control the direction by comparing results with the plan and (2) control the direction by taking corrective action in two ways-namely, by

A) receiving feedback, and, if needed, making new plans.
B) researching ways to plan better and increasing profits.
C) increasing organization synergy and diversity.
D) correcting deviations in the plan being carried out or improving future plans.
E) improving future plans, and, if needed, cutting costs.

Question 67

You have an idea for a company that sources fruits from local farms and makes fresh juices on a daily basis. You want to start a subscription-based service in which households within a 100-mile radius subscribe to your plan and receive two gallons of freshly squeezed juice (for example, cherry juice, apple juice, lemonade) twice a week. As you think about starting your business, you ask yourself: Am I being responsive to the customer? Is it innovative? Can I offer a quality product? After asking these questions, review and identify which question you forgot to ask that would give you a sustainable advantage.

A) Is the resource or capability valuable?
B) Is the resource or capability currently controlled by only a few firms or no other firms?
C) Is the firm organized to exploit the resource of capability?
D) What values should be emphasized?
E) What is its level of effectiveness?

Question 68

All the following are ways to increase your proactive learning skill except

A) focus on solutions rather than problems.
B) take the initiative and rely on yourself.
C) set realistic goals and don't overpromise.
D) compare yourself to others.
E) participate in and contribute to personal and professional conversations.

Question 69

For MBO to be successful, top management must be committed to the program, MBO must be applied organizationwide, and

A) objectives must cascade.
B) employees need to provide continuous feedback to each other.
C) objectives must remain fixed and unchanging.
D) objectives must be generated from the bottom up.
E) there must be community support.

Question 70

Research on MBO shows that people are impelled to set more difficult goals when

A) the goals have a significant impact on profitability.
B) employees can avoid personal development.
C) both management and subordinates participate.
D) the goals emphasize corporate social responsibility.
E) ethics are not a consideration.

Question 71

At the end of the company retreat, Dashaun had a blueprint for how to move forward for the year. His primary objective had been met. What do you think his primary objective was?

A) to have an outline of how the goals were going to be met
B) to have an explanation of the company's new slogan
C) to understand the financials so that he could explain them to the shareholders
D) to have a guide for ethical decision making
E) to have a set of research and development priorities

Question 72

MBO works by objectives moving through the organization; that is, top managers set general organizational objectives, which are translated into divisional objectives, which are translated into departmental objectives. The hierarchy ends in individual objectives set by each employee. This is an example of MBO working as objectives ________ through the organization.

A) move upward
B) move outward into the community
C) change significantly
D) cascade down
E) become less refined and more generalized

Question 73

Based on planning and strategic management principles, which of the following start-up companies has the LEAST potential to have a competitive advantage, to be profitable, and to grow?

A) a cat-sitting service, where you take care of people's cats when they are on vacation; you decide to advertise your services on Craigslist and the local newspaper
B) a "companionship" service for elderly people who live alone because their children are busy working full-time jobs; working adults say such a service would be extremely valuable
C) the only farm within a 100-mile radius that offers its customers organic beef and organic dairy products such as eggs and milk; no other local company offers these products
D) a portrait-painting service by a talented artist who is known for his ability to make all men look handsome and all women look beautiful; very few other artists in the local area have this talent
E) an enrichment program for children that hires talented people and sends each of them to a different school each day of the week; a web-based app helps the manager keep track of all the employees' schedules and locations

Question 74

The planning/control cycle has two planning steps. They are

A) (1) research planning, then (2) receive feedback.
B) (1) make the plan, then (2) set it aside for a period of time.
C) (1) make the plan, then (2) carry out the plan.
D) (1) review previous plans, then (2) evaluate plans.
E) (1) research planning, then (2) look for ways to cut costs.

Question 75

Which of the following is intended for one-time use and is not likely to be repeated in the future?

A) Bed, Bath and Beyond accepts coupons after they expire.
B) DSW will only issue store credit for returns without a receipt.
C) SpaceX put a car in space.
D) Once you have opened a DVD, Target will not accept it as a return.
E) Nordstrom's will accept returns for up to one year.

Question 76

A short-term goal usually spans ________ while a long-term goal typically spans ________.

A) 1 month; 3 months.
B) 3 months; 1 year.
C) 12 months; 1 to 5 years.
D) 2 weeks; 6 months.
E) 3 years; 10 years.

Question 77

The Publix chain of supermarkets has stated, "We will not knowingly disappoint you. If for any reason your purchase does not give you satisfaction, the full purchase price will be cheerfully refunded immediately upon request." This proclamation is Publix's

A) vision statement.
B) values statement.
C) mission statement.
D) corporate slogan.
E) company tagline.

Question 78

Which of the following is an example of a mission statement?

A) "to create a world where the family farm is valued over the large-scale production of agribusiness"
B) "to become a beacon of hope for those suffering from mental hardship"
C) "to make education accessible to everyone in the world"
D) "to engage in business practices that are not only legal but also ethical"
E) "to offer the lowest prices on new hardcover books, anywhere in the world"

Question 79

Charmaine, a district manager for a global retailer, is traveling to different stores in her district to discuss with store managers how to increase profitability for the rest of the fiscal year. What is Charmaine doing?

A) eliminating the planning/control cycle
B) avoiding the planning/control cycle
C) controlling the direction of the planning/control cycle
D) researching the planning/control cycle
E) forecasting the planning/control cycle

Question 80

You are reading a ________ that outlines your company's long-term goals and direction. These goals include "Reduce energy consumption in our offices by 20 percent," "Grow our market share in China from 3 percent to 10 percent," "Enter a strategic alliance with a partner in Australia to begin selling our products in Sydney and Brisbane," and "Equip all sales representatives with an app that allows them to provide an immediate quote when meeting with customers."

A) values statement
B) business plan
C) SMART goal
D) vision statement
E) strategic plan