Deck 5: Planning and Decision Making

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

In the context of planning scenarios, a different contingency plan is attached to each scenario.

Answer 3

True

Question 4

An organization's mission statement describes the company's basic purpose and scope of operations.

Question 5

The formal planning model emphasizes a bottom-up approach.

Question 6

To be effective, the organization's strategic plans should focus on goals that are different from those of its tactical plans and operational plans.

Question 7

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

Question 8

An organization's mission statement focuses on long-term goals while its strategic vision focuses on short-term plans.

Question 9

Managers throughout an organization may be involved in developing the strategic plan and contributing critical elements.

Question 10

Resources are a source of competitive advantage only when they are valuable, rare, difficult to imitate, and organized.

Question 11

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

Question 12

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

Question 13

Situational analysis, as part of the formal planning process, focuses on internal forces at work within the organization and examines influences from the external environment.

Question 14

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

Question 15

Standing plans are designed to achieve a set of goals that are not likely to be repeated in the future.

Question 16

Stakeholders are only those groups and individuals who have a financial stake in the company.

Question 17

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

Question 18

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

Question 19

An organization's operational plans serve as the foundation for its strategic plans and tactical plans.

Question 20

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

Question 21

Discounting the future is a psychological bias that applies to students who do not study.

Question 22

Functional strategies are implemented only at the top levels of management.

Question 23

Managers usually face novel and unstructured problems, leaving them uncertain about how to proceed.

Question 24

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

Question 25

In the context of decision making in groups, the job of a devil's advocate is to create potentially destructive conflict.

Question 26

An advantage of using a group for decision making is that disagreement is unlikely to happen, and this phenomenon is called groupthink.

Question 27

In the context of the decision-making process in an organization, those who implement a decision must understand the choice and must be committed to its successful implementation.

Question 28

In the context of the planning process, implementation of selected plans will be most successful when:

A) only senior managers participate in the planning process.
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 29

According to the _____ plan of Widget 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 30

Which of the following steps in the formal planning process 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

Question 31

In today's complex business environment, some experts advise that significant problems should never be tackled by groups.

Question 32

A plan which focuses on ongoing activities designed to achieve an enduring set of goals and may become a more permanent policy or rule is called a _____.

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

Question 33

In brainstorming, group members generate as many ideas about a problem as they can.

Question 34

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

Question 35

In the context of managerial decision making, decision evaluation is useful only if the negative feedback has been received.

Question 36

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

Question 37

In which step of the planning process do 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 38

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 39

Which stage of the planning process is Axis 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 40

The outcome of 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.
E) proper implementation of a plan.

Question 41

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 42

In order to reduce production costs, Everlasting Tire decided to buy out a rubber plant and begin manufacturing their own rubber for their tires. The corporate strategy adopted by the company is known as:

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

Question 43

In the context of the planning process, which of the following statements is true of the final step that involves monitoring and controlling performance?

A) Monitoring and controlling performance is not as important as the other steps in the planning process.
B) Managers must continually monitor the performance of their work units against the unit's goals and plans.
C) It is the first step taken up by managers in the planning process.
D) Managers need to re-start the planning process if plans are implemented improperly.
E) Managers consider monitoring and controlling performance as the most important step in the planning process.

Question 44

Which of the following is true of the strategic goals of an organization?

A) Once the strategic goals have been set, the organization will automatically begin improving.
B) The strategic goals of an organization should be limited to top management.
C) Strategic goals include fostering quantity and quality of outputs as well as increasing productivity.
D) Setting high strategic goals eliminates the risk of failure.
E) In order to achieve the desired results, strategic goals must not be changed after documentation.

Question 45

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

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

Question 46

In the context of the levels of planning, an organization's strategic, tactical, and operational goals and plans must be _____ in order to be fully effective.

A) aligned
B) independent
C) mutually exclusive
D) focused on long-term gains only
E) focused on short-term benefits only

Question 47

Party Beverages Corp. had focused only on alcoholic beverages for the last two decades. Now, the company is considering entering the soft drink market. In the context of the above scenario, which of the following corporate strategies will the company adopt?

A) Vertical integration
B) Related diversification
C) Unrelated diversification
D) Concentration
E) Low-cost

Question 48

A(n) _____ 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) unrelated
C) uncertain
D) functional
E) corporate

Question 49

In the context of the levels of planning, strategic goals are:

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

Question 50

Resources are a source of competitive advantage only when they create customer value, are rare, are organized, and are:

A) historical.
B) difficult to imitate.
C) equally available.
D) commonplace.
E) expensive.

Question 51

In the context of the levels of planning, typical strategic goals involve:

A) updating equipment used.
B) increasing market share.
C) advertising expenditures.
D) compliance with civil rights laws.
E) human resource utilization.

Question 52

Which of the following is one of the four levels of planning?

A) Feasible
B) Synergistic
C) Tactical
D) Internal
E) Traditional

Question 53

Hot Pizza, a chain of full service pizzerias, 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 54

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) innovative
B) hierarchical
C) tactical
D) concentrated
E) uncertain

Question 55

The process of identifying the specific procedures and processes required at lower levels of the organization is known as:

A) strategic planning.
B) operational planning.
C) tactical planning.
D) contingency planning.
E) acquisition planning.

Question 56

A technique that helps managers summarize relevant and important facts from the internal and external analyses of an organization in order to formulate strategy is known as:

A) BCG matrix.
B) SWOT analysis.
C) benchmarking.
D) diversification.
E) functional strategy.

Question 57

In the context of resources and core capabilities, tangible assets include:

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

Question 58

Which of the following is true of the strategic vision of an organization?

A) The strategic vision provides a perspective on where the organization is headed.
B) The strategic vision describes the organization as it currently operates.
C) A strategic vision statement is a clear and concise expression of the organization's basic purpose.
D) An effective strategic vision statement must motivate all employees financially.
E) The strategic vision emphasizes short-term gains of an organization.

Question 59

The process of translating broad strategic goals and plans into specific goals and plans relevant to a particular portion of the organization is known as:

A) strategic planning.
B) operational planning.
C) tactical planning.
D) contingency planning.
E) feasibility planning.

Question 60

GR Real Estate 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. This corporate strategy is known as:

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

Question 61

A formal decision-making process has six stages. Which of the following is one of these stages?

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 62

Which of the following is true of strategic control systems?

A) They must rigidly enforce the strategic plan in the face of changing conditions.
B) Unlimited spending may be allowed as long as the organization is progressing according to its strategy.
C) Corrective action is taken when discrepancies exist between an organization's progress and its strategy.
D) The first component of the strategic management process is strategic control.
E) These systems are designed to help determine the organization's output by evaluating price competition.

Question 63

In the context of generating alternative solutions during the decision-making process, _____ solutions must be designed for specific problems.

A) realistic
B) goal-oriented
C) open-ended
D) adjustable
E) custom-made

Question 64

Pat has to decide which paper clips to purchase for her office. She looks at the office supply catalog and picks the first one that is priced reasonably. Which method of making a decision does she use?

A) Forecasting
B) Optimizing
C) Satisficing
D) Maximizing
E) Brainstorming

Question 65

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 is known as:

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

Question 66

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 67

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

A) certainty
B) maximization
C) risk
D) optimization
E) framing effects

Question 68

The manager of a restaurant noticed that the number of customers in the evening was decreasing. She promptly ordered the chef to rewrite 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.

Question 69

Shadow Blinds, 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 70

Anne 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. Anne is most likely searching for a(n) _____ solution to her problem.

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

Question 71

Which of the following best describes the preferred approach for managers confronted with risk?

A) They avoid it by any means necessary.
B) They eliminate it with a thorough understanding of the consequences of each option.
C) They anticipate it, minimize it, and control it.
D) They understand there is no way to manage it.
E) They thrive on taking risks.

Question 72

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 the problem.

Question 73

In the context of 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 their 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 74

In the context of 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) indecision.

Question 75

Which of the following is true of managerial decision making?

A) Most managerial decisions lack structure.
B) Managerial decisions are always free of risk.
C) Managerial decisions are taken under conditions of perfect certainty.
D) Managers show consistency in their decisions in response to novel problems.
E) A manager's decisions have the characteristics of programmed decisions.

Question 76

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

A) the first minimally acceptable alternative.
B) among those alternatives with 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 77

In the context of 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 78

In the context of formal decision making, which of the following is indicated by negative feedback?

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 79

When the problem is frequent, repetitive, 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 80

The O'Brien Corporation is evaluating the purchase of a small firm which manufactures doodads, a product involving advanced technology. Doodads are expected to revolutionize the home construction industry. The firm to be purchased has only a minor share of this growing market, but the market is expected to grow rapidly. In which of the following categories of business in the BCG matrix would this firm be placed?

A) Cash cows
B) Stars
C) Spinoffs
D) Question marks
E) Dogs