Question 1

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

Accepted Answer

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.

Accepted Answer

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.

Accepted Answer

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.

Accepted Answer

A plan can be used as a device for controlling managers within an organization.A good plan specifies not only which goals and strategies the organization is committed to but also who bears the responsibility for putting the strategies into action to attain the goals.When managers know they will be held accountable for attaining a goal, they are motivated to do their best to make sure the goal is achieved.

Question 5

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

Accepted Answer

A strategy is a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.

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.

Accepted Answer

The company is reinvesting its profits on its current product to strengthen its competitive position in its current industry.This is called concentration on a single industry.

Question 7

The first step in planning for an organization is

Accepted Answer

Planning is a three-step activity.The first step is determining the organization's mission and goals.

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.

Accepted Answer

A mission statement is a broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors.

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.

Accepted Answer

With a differentiation strategy, managers try to gain a competitive advantage by focusing all the energies of the organization's departments or functions on distinguishing the organization's products from those of competitors on one or more important dimensions, such as product design, quality, or after-sales service and support.

Question 10

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

Accepted Answer

Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals 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.

Accepted Answer

If managers decide that their organization should sell the same standardized product in each national market in which it competes, and use the same basic marketing approach, they adopt a global 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.

Accepted Answer

Managers pursuing a focused low-cost strategy serve one or a few segments of the overall market and aim to make their organization the lowest-cost company serving that segment.

Question 13

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

Accepted Answer

To determine an organization's mission-the overriding reason it exists to provide customers with goods or services they value-managers must first define its business so they can identify what kind of value customers are receiving.

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.

Accepted Answer

With a low-cost strategy, managers try to gain a competitive advantage by focusing the energy of all the organization's departments or functions on driving the company's costs down below the costs of its industry rivals.

Question 15

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

Accepted Answer

Time constraints are important because they emphasize that a goal must be attained within a reasonable period; they inject a sense of urgency into goal attainment and act as a motivator.

Question 16

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

Accepted Answer

A mission statement is a broad declaration of an organization's overriding purpose, what it is seeking to achieve from its activities.This statement also identifies what is unique or important about its products to its employees and customers.Finally, it distinguishes or differentiates the organization in some ways from its competitors.

Question 17

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

Accepted Answer

Although Porter's ideas may be valid in most cases, very well managed companies such as Southwest Airlines and Apple may pursue both low costs and differentiated products.

Question 18

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

Accepted Answer

A strategy is a cluster of related managerial decisions and actions to help an organization attain one of 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.

Accepted Answer

Accuracy means that managers need to make every attempt to collect and use all available information in the planning process.

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.

Accepted Answer

Business-level strategy is a plan that indicates how a division intends to compete against its rivals in an industry.By lowering the cost of support, it can hope to gain an advantage against its competitors.

Quiz 8: The Manager As a Planner and a Strategist