Deck 8: The Manager As a Planner and a Strategist

Question 1

According to Henri Fayol, an effective plan should have four qualities, namely, unity, continuity, accuracy, and

A)sustainability.
B)flexibility.
C)accountability.
D)consistency.
E)synergy.

Answer 1

B
Explanation: Despite the need for continuity and accuracy, Fayol emphasized that the planning process should be flexible enough so plans can be altered and changed if the situation changes; managers must not be bound to a static plan.

Question 2

A winery decides to manufacture its own bottles instead of purchasing them from a bottle manufacturing company to reduce costs.The winery is employing a forward vertical integration strategy.

Answer 2

False
Explanation: Backward vertical integration is a corporate-level strategy in which a company expands its business operations backward into a new industry that produces inputs for the company's products.

Question 3

Corporate-, business-, and functional-level plans usually require similar time horizons.

Answer 3

False
Explanation: Plans differ in their time horizons, the periods of time over which they are intended to apply or endure.

Question 4

Planning is important for an organization since a plan can be used as a device for controlling managers within an organization.

Question 5

A(n) _____ is a group of related managerial decisions and actions to help an organization achieve one of its goals.

A)strategy
B)objective
C)motto
D)allocation
E)accomplishment

Question 6

A computer operating system software manufacturer invests its profits in creating newer versions of its operating system software to make best use of the continuous changes in computer hardware.This is called diversification.

Question 7

The first step in planning for an organization is

A)procuring raw materials and human resources.
B)analyzing situations and formulating strategies.
C)expanding the organization's business globally.
D)determining the organization's missions and goals.
E)allocating resources and responsibilities to achieve strategies.

Question 8

A(n) _____ broadly defines an organization's purpose-what it is seeking to achieve from its activities-identifies what is unique or important about its products to its employees and customers, and also distinguishes or differentiates the organization in some ways from its competitors.

A)business plan
B)mission statement
C)SWOT analysis
D)general advertisement
E)strategic plan

Question 9

Though a company's netbook prices are higher than other netbooks with the same configuration, the company offers features that are exclusive only to its netbooks.The company is following a differentiation strategy.

Question 10

Allocating appropriate resources to the responsible individuals or groups is the last step in implementing strategy.

Question 11

Selling the same standardized product and using the same basic marketing approach in each national market is called multidomestic strategy.

Question 12

Focused low-cost strategy serves a major segment of the overall market and tries to be the lowest-cost organization in the entire market.

Question 13

The first step in defining an organization's mission is to define its business.

Question 14

A brand of cereal attracts customers by offering the lowest prices among other brands of cereals.The company uses a differentiation strategy in this situation.

Question 15

When establishing goals, setting a time period to achieve a goal acts as a demotivator.

Question 16

The mission statements of organizations in the same market will typically be the same.

Question 17

It is impossible for an organization to have both low-cost and differentiated products.

Question 18

A strategy is the set of decisions that managers make to assist the organization in attaining its goals.

Question 19

According to Henri Fayol, _____ means that managers need to make every attempt to collect and use all available information in the organization's planning process.

A)unity
B)flexibility
C)continuity
D)accuracy
E)synergy

Question 20

To lower costs, the divisional head of an organization decides to set up the division's technical support center in another country.This is an example of a business-level strategy.

Question 21

Though not formally written, an organization allows its employees to dress casually on Fridays.This is a(n) _____ of the organization.

A)policy
B)rule
C)standard operating procedure
D)contingency plan
E)ethical code

Question 22

A _____ plan enables managers to make midcourse corrections if environmental changes warrant or to change the thrust of the plan altogether if it no longer seems appropriate.

A)standing
B)long-term
C)rolling
D)contingency
E)general

Question 23

In large organizations the functional level of management is also known as the _____ of management.

A)business level
B)corporate level
C)divisional level
D)departmental level
E)top level

Question 24

A __________ is a written set of instructions which describes the series of actions that a manager should take in a specific situation.

A)policy
B)standard operating procedure
C)heuristic
D)rolling plan
E)rule

Question 25

Typically ______-level goals and strategies require intermediate- and short-term plans.

A)functional
B)business
C)divisional
D)corporate
E)global

Question 26

A functional-level plan states the goals that the managers of each function will pursue to help their division attain its ______ goals, which, in turn, will allow the entire company to achieve its ______ goals.

A)departmental-level; functional
B)business-level; departmental
C)divisional-level; divisional
D)business-level; corporate
E)functional-level; corporate

Question 27

The managers of an organization develop a single, well-researched, and effective plan to complete a set of tasks.Which of the following qualities, according to Henri Fayol, does this plan have?

A)unity
B)flexibility
C)continuity
D)accuracy
E)synergy

Question 28

________ is the duration over which a plan is intended to be applied or endured.

A)An event compass
B)Goal duration
C)Plan endurance
D)Target visibility
E)A time horizon

Question 29

Policies, rules, and standard operating procedures (SOPs) are all types of _____ plans.

A)single-use
B)functional
C)rolling
D)standing
E)scenario

Question 30

There has been a rapid increase in the percentage of the population of a third-world nation switching to cellular technology in recent years.A major multinational telecommunication services company decides to take advantage of this change and plans to set up an industry in the country with the intention of dominating the country's telecommunication market.This is an example of a _______ strategy.

A)divisional-level
B)departmental-level
C)functional-level
D)corporate-level
E)business-level

Question 31

_____ strategy is a plan of action to improve the ability of each of an organization's functions to perform its task-specific activities in ways that add value to an organization's goods and services.

A)Business-level
B)Divisional-level
C)Corporate-level
D)Functional-level
E)Top-level

Question 32

Because of the hostile external environment, AKY Consulting treats its multiyear corporate-level plan as a _____ plan in order to maintain flexibility without losing sight of the need to plan for the long term.

A)fixed
B)general
C)standing
D)rolling
E)business

Question 33

A standing plan that acts as a general guide to action, or a(n)______, applies to the employees of an organization.

A)belief
B)rule
C)policy
D)standard operating procedure
E)scenario

Question 34

The SUV division of a major automobile corporation decides to release a new model a month ahead of its stated release and notifies all the departments associated with the division.The departmental managers must alter their _____ plan to accommodate the earlier release date.

A)functional-level
B)business-level
C)divisional-level
D)corporate-level
E)strategic-level

Question 35

Top management's decisions pertaining to the organization's mission, overall strategy, and structure constitute an organization's

A)corporate-level plan.
B)divisional-level plan.
C)functional-level plan.
D)business-level plan.
E)departmental-level plan.

Question 36

_______ plans are developed to handle nonprogrammed decision making in unusual or one-of-a-kind situations.

A)Standing
B)Single-use
C)General
D)Global
E)Rolling

Question 37

A firm has a formal, written guide regarding its zero-tolerance attitude toward sexual harassment and the consequences of its violation.By definition, this is a _____ of the firm.

A)standing plan
B)mission statement
C)policy
D)rule
E)norm

Question 38

A(n) _____ strategy indicates how a division intends to compete against its rivals in an industry.

A)corporate-level
B)business-level
C)functional-level
D)departmental-level
E)international-level

Question 39

Divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure is called an organization's _____ plan.

A)business-level
B)corporate-level
C)functional-level
D)departmental-level
E)global-level

Question 40

_____ are used in situations in which programmed decision making is appropriate.

A)Single-use plans
B)Functional plans
C)Rolling plans
D)Scenario plans
E)Standing plans

Question 41

Which of the following will most likely be an opportunity according to an organization's SWOT analysis?

A)The company can take over one of its bankrupt competitors.
B)The sales of the organization's products are the highest in the industry.
C)The organization is growing with a strong product line.
D)Consumers are familiar with the organization's logo and its strong reputation.
E)The organization faces increased competition in its market.

Question 42

In a first of its kind, a multinational tire manufacturer introduces a new range of premium tires that can handle extreme temperatures better at a higher price.The tires are designed keeping in mind the climatic conditions in the Middle East and products are marketed only in the Middle East.The manufacturer is pursuing

A)a focused differentiation strategy.
B)a focused low-cost strategy.
C)a general differentiation strategy.
D)a general low-cost strategy.
E)both a low-cost and a differentiation strategy.

Question 43

Another name for contingency planning is ________ planning.

A)single-use
B)ad-hoc
C)business
D)divisional-level
E)scenario

Question 44

Which of the following statements about simultaneously pursuing both a low-cost strategy and a differentiation strategy is true?

A)Organizations stuck in the middle tend to have higher levels of performance than those that pursue a low-cost or a differentiation strategy.
B)Focusing on the differentiation of a product will result in reduced costs for a company.
C)Extremely well managed companies may be able to keep low costs and differentiate their products.
D)Managers try to gain a competitive advantage by focusing only on driving the company's costs down below the costs of industry rivals.
E)Managers try to gain a competitive advantage by focusing only on distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service.

Question 45

Which of the following can be defined as a threat according to the five forces model?

A)The level of rivalry among organizations in an industry is low.
B)Brand loyalty is very high.
C)There are a large number of suppliers.
D)Only a few large customers are available to buy an industry's output.
E)Products are unique and cannot be substituted.

Question 46

To determine an organization's missions and goals, managers must first

A)perform a SWOT analysis.
B)apply the five forces model.
C)define its business.
D)develop a long-term plan.
E)develop a short-term plan.

Question 47

There is constant, fierce competition between telecommunication companies due to the continuous advances in mobile technology and a wide range of customer tastes.This is called

A)ultracompetition.
B)hypocompetition.
C)supercompetition.
D)hypercompetition.
E)extracompetition.

Question 48

In performing a SWOT analysis, a furniture company realized that the number of competing firms in its industry was increasing.The company would classify this as a(n)

A)strength.
B)weakness.
C)opportunity.
D)threat.
E)advantage.

Question 49

In performing a SWOT analysis, a firm realized that the manufacturing costs for its new division were rising.The firm would classify this as a potential

A)strength.
B)weakness.
C)opportunity.
D)threat.
E)advantage.

Question 50

In the five forces model, the _____ that companies compete against one another for customers, the _____ the level of profits is likely to be for that industry.

A)more; lower
B)more; higher
C)less; lower
D)less; equal
E)more; equal

Question 51

According to an organization's SWOT analysis, which of the following would be a potential strength?

A)The organization has the potential to overcome the barriers of entry to a new market.
B)The organization has the ability to manage strategic change.
C)Demographic factors reshape the target market.
D)The organization's customer preferences are changing.
E)The organization can expand vertically integrate forward.

Question 52

A toy manufacturing company which previously sold its products through a popular toy and juvenile-product retailer decides to enter the retail industry, quickly establishing several retail outlets exclusively for its products.The toy manufacturing company is engaging in

A)forward horizontal integration.
B)backward vertical integration.
C)forward vertical integration.
D)backward horizontal integration.
E)unrelated diversification.

Question 53

A group of managers analyze both the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment.What type of analysis is this?

A)mission analysis
B)SWOT analysis
C)functional analysis
D)diversification analysis
E)competition analysis

Question 54

The pharmaceutical industry is extremely dynamic.A company that releases a product to the general public with the intention of keeping prices high may see quick competition arising from other products made from different compounds that perform the same functions as the company's product.According to the five forces model, this type of threat is called

A)the level of rivalry among organizations in an industry.
B)the potential for entry into an industry.
C)the power of large suppliers.
D)the power of large customers.
E)the threat of substitute products.

Question 55

Employees tend to be motivated and perform better if they are taken in by the vision of the top managers of their organizations.It therefore becomes essential for top managers to develop a strong sense of

A)goal orientation.
B)strategic leadership.
C)strategy formulation.
D)business planning.
E)organizational affluence.

Question 56

A furniture company is trying to keep the costs of the company low by switching its suppliers and ordering materials in larger quantities to reduce overall costs.The company is employing a

A)focused differentiation strategy.
B)low-cost strategy.
C)high-cost strategy.
D)unifying strategy.
E)hypercompetition strategy.

Question 57

_____ is a corporate-level strategy in which a company expands its business operations into a new industry that produces inputs for the company's products.

A)Forward vertical integration
B)Forward horizontal integration
C)Unrelated diversification
D)Backward horizontal integration
E)Backward vertical integration

Question 58

_____ is a corporate-level strategy that emphasizes reinvesting a company's profits in strengthening its competitive position in its current industry.

A)Concentration on a single industry
B)Forward vertical integration
C)Diversification
D)Backward vertical integration
E)International expansion

Question 59

As a part of its yearly planning activities, PDQ Financial Services generates a list of possible future scenarios and creates a plan to respond to each of these forecasts.PDQ Financial Services is practicing

A)single-use planning.
B)ad-hoc planning.
C)divisional-level planning.
D)contingency planning.
E)functional planning.

Question 60

An organization attempting to succeed by distinguishing its products from those of the competition is most likely to use a(n)

A)differentiation strategy.
B)low-cost strategy.
C)diversification strategy.
D)stuck-in-the-middle strategy.
E)association strategy.

Question 61

Allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee is referred to as

A)licensing.
B)franchising.
C)strategic alliance.
D)exporting.
E)importing.

Question 62

A(n) _________ strategy is selling the same standardized product and using the same basic marketing approach in each national market.

A)unrelated diversification
B)multidomestic
C)national
D)focused differentiation
E)global

Question 63

The method of international expansion which presents managers with many threats and is the most expensive due to the high level of foreign investment is the method of international expansion through

A)joint ventures.
B)exporting and importing.
C)licensing.
D)franchising.
E)wholly owned foreign subsidiaries.

Question 64

Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson combining a part of their resources to manufacture mobile phones is an example of a(n)

A)joint venture.
B)acquisition.
C)wholly owned subsidiary.
D)merger.
E)hostile takeover.

Question 65

_____ are essential because they enable managers to make midcourse corrections when the plan is no longer suitable for the current conditions.

A)Standing plans
B)Single-use plans
C)Rolling plans
D)Contingency plans
E)Scenario plans

Question 66

________ is selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits.

A)Licensing
B)Franchising
C)Strategic alliance
D)Exporting
E)Importing

Question 67

_____ raises costs and forces companies to raise the prices of their products.

A)Vertical integration
B)Forward vertical integration
C)Backward vertical integration
D)Hypercompetition
E)Differentiation

Question 68

Two divisions of a company decide to use the same manufacturing facilities to capitalize on the organization's excess capacity and reduce fixed costs.This is an example of

A)concentration.
B)rivalry.
C)counteraction.
D)adversity.
E)synergy.

Question 69

In order to cater to local tastes and culinary traditions, and often in respect of particular laws or religious beliefs, McDonald's offers customized versions of its menu to suit different countries.This is an example of a(n) _______ strategy.

A)international
B)global
C)multidomestic
D)low-cost
E)unrelated diversification

Question 70

Managers at ANC Inc.operate with planning horizons greater than five years.The top managers are concerned about changing conditions in the external environment.It is difficult to predict competitive conditions five years in the future, so they implemented a plan that involves regular reviews and updates in all levels of the company.The plan enables the company to respond quickly and make adjustments as necessary.This is an example of a(n) _____ plan.

A)short-term
B)long-term
C)intermediate-term
D)rolling
E)annual

Question 71

In pursuing a _____ strategy, managers focus on driving the company's costs down below the costs of its industry rivals.

A)focused low cost
B)low-cost
C)differentiation
D)focused differentiation
E)hypercompetition

Question 72

Which method of international expansion causes the least amount of risk?

A)exporting
B)franchising
C)licensing
D)wholly owned subsidiary
E)joint venture

Question 73

Entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses is called

A)related diversification strategy.
B)international expansion strategy.
C)low-cost strategy.
D)concentration on a single industry.
E)unrelated diversification strategy.

Question 74

_____ is the final step in implementing strategy.

A)Drafting detailed action plans that specify how a strategy is to be implemented
B)Allocating responsibility for implementation to the appropriate individuals or groups
C)Establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan
D)Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals
E)Allocating appropriate resources to the responsible individuals or groups

Question 75

In a ____________, managers pool or share their organization's resources and know-how with a foreign company and the two organizations share the rewards and risks of starting a new venture.

A)takeover agreement
B)franchise sharing
C)license lending
D)strategic alliance
E)foreign subsidiary

Question 76

With a _____ strategy, managers distinguish the organization's products from those of competitors on dimensions such as quality and product design.

A)differentiation
B)focused differentiation
C)low-cost
D)focused low-cost
E)hypercompetition

Question 77

______ is the first step in implementing a strategy.

A)Drafting detailed action plans that specify how a strategy is to be implemented
B)Allocating responsibility for implementation to the appropriate individuals or groups
C)Allocating appropriate resources to the responsible individuals or groups
D)Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals
E)Establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan

Question 78

Cameo Ltd., a record label company, subsequently entered the airline industry to expand business.This example of a record label company entering the airline industry is an example of

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

Question 79

Nokia has established production operations in foreign countries to sell its phones in those regions.The production operations perform as separate entities without any local direct involvement.These production operations are _____ of Nokia.

A)joint ventures
B)acquisitions
C)wholly owned foreign subsidiaries
D)mergers
E)hostile takeovers

Question 80

Most electronic goods have the option of changing the operating language.This is done by manufacturers so that the same electronic device can be supplied and marketed around the world.The manufacturers in this case are applying a(n)

A)focused differentiation strategy.
B)global strategy.
C)related diversification strategy.
D)multidomestic strategy.
E)unrelated diversification strategy.