Deck 5: Planning and Decision Making

Question 1

Which stage of the planning process is Jekyll 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

Answer 1

E

Question 2

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

Answer 2

False

Question 3

Satisficing is less likely with groups.

Answer 3

False

Question 4

In the context of the planning process, _____ are the targets or ends a manager wants to reach.

A) goals
B) plans
C) scenarios
D) strategies
E) contingencies

Question 5

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

Question 6

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 7

According to the _____ plan of Neon 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 8

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

Question 9

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

Question 10

The outcome of a 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 among various goals.
E) proper implementation of a plan.

Question 11

Standing plans are designed to achieve a set of short-term goals.

Question 12

Sager Inc., a manufacturing company, developed a strategic plan that assumed improved growth in its industry. Additionally, it generated several _____ for different economic settings. When recession started, Sager Inc. quickly implemented the plan based on those conditions. As a consequence, it survived more easily than other firms in the industry.

A) financial reports
B) annual reports
C) roadmaps
D) projection statements
E) scenarios

Question 13

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 14

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

Question 15

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

Question 16

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

Question 17

Situational analysis, as part of the formal planning process,

A) focuses on the internal forces at work within an organization and examines influences from the external environment.
B) focuses on the external forces at work within an organization and examines influences from the internal environment.
C) focuses on the internal forces at work within an organization and examines influences from the internal environment.
D) focuses on the external forces at work within an organization and examines influences from the external environment.
E) focuses on past conditions, current trends, and future events.

Question 18

A _______ plan is one that focuses on ongoing activities designed to achieve an enduring set of goals.

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

Question 19

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

Question 20

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 21

The formal planning model emphasizes a _______ approach.

A) bottom-up
B) top-down
C) left-right
D) horizontal
E) vertical

Question 22

An organization's mission statement describes all of the following expect

A) the company's basic purpose.
B) what the organization does.
C) its basic good or service.
D) its morals.
E) its aspiration.

Question 23

To be effective, an organization's strategic plans should focus on

A) goals that are different from those of its tactical plans and operational plans.
B) goals that are different from those of its tactical plans yet the same as the operational plans.
C) goals that are aligned with its tactical plans and operational plans.
D) goals that are aligned with its tactical plans yet different from the operational plans.
E) goals that are strategic yet differ from the operational plans.

Question 24

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

Question 25

Senior managers throughout an organization may be involved in

A) developing the strategic plan elements.
B) personally formulating the plan.
C) making decisions that shape strategies.
D) contributing minimal elements.
E) implementing the plan.

Question 26

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

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

Question 27

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 non-exclusive
D) diverse
E) provisional

Question 28

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

A) second
B) third
C) fourth
D) fifth
E) sixth

Question 29

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 30

______ planning is the process of identifying the specific procedures and processes required at lower levels of an organization.

A) Strategic
B) Operational
C) Tactical
D) Contingency
E) Acquisition

Question 31

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 the top management.

Question 32

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

A) It identifies the priorities and trade-offs among the goals and plans.
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 by managers in the planning process.
D) Managers need to restart the planning process after plans are implemented improperly.
E) Managers consider monitoring and controlling performance as the most important step in the planning process.

Question 33

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

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

Question 34

______ planning involves a process of translating broad strategic goals and plans into specific goals and plans relevant to a particular portion of an organization.

A) Strategic
B) Operational
C) Tactical
D) Contingency
E) Feasibility

Question 35

Which of the following is one of the four levels of managers who use planning?

A) feasible
B) synergistic
C) tactical
D) internal
E) traditional

Question 36

In the context of planning, a different ___________ plan is created.

A) evaluation
B) alternative
C) contingency
D) selection
E) decision

Question 37

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

A) updating the equipment used.
B) increasing market share.
C) estimating advertising expenditures.
D) complying with civil rights laws.
E) utilizing human resources.

Question 38

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 is strictly a financial statement.
E) The strategic vision emphasizes the short-term gains of the organization.

Question 39

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

A) Strategic goals translate broad tactical goals and plans into specific goals and plans relevant to a particular portion of the organization.
B) 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) Strategic goals identify the specific procedures and processes required at lower levels of the organization.
E) Strategic goals focus on the major actions a unit must take to fulfill its part of the strategic plan.

Question 40

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 41

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 its 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 42

A _____ 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) differentiation
C) low-cost
D) functional
E) corporate

Question 43

Functional strategies are implemented

A) only at the top levels of management.
B) by each appropriate area or unit.
C) only at the employee level.
D) at one time by the organization as a whole.
E) by the stakeholders.

Question 44

Akins Corp. had focused only on alcoholic beverages for the last two decades. Now, the company is considering entering the soft drink market. Which of the following corporate strategies will most likely be adopted by the company?

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

Question 45

________ is a technique that helps managers summarize relevant and important facts from the internal and external analyses of an organization in order to formulate strategy.

A) The BCG matrix
B) A SWOT analysis
C) Benchmarking
D) Diversification
E) A functional strategy

Question 46

Resources are a source of competitive advantage except when they are

A) valuable.
B) rare.
C) organized.
D) easy to imitate.
E) instrumental.

Question 47

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

A) satisficing
B) benchmarking
C) organizing
D) competition
E) SWOT analysis

Question 48

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

A) BCG
B) BGC
C) GBC
D) GCB
E) CGB

Question 49

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

A) high return
B) low-cost
C) high-cost
D) low return
E) high profit

Question 50

Gallaway 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. Gallaway is using the _____ corporate strategy.

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

Question 51

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 involves

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

Question 52

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 53

All of the following are considered stakeholders expect those groups and individuals

A) who have only a financial stake in the company.
B) who affect achievement.
C) who are buyers and suppliers.
D) who are unions and employee groups.
E) who are affected by the organization's mission.

Question 54

In order to reduce production costs, Seuss Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as

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

Question 55

Kaplan Corp. is evaluating the purchase of a small firm, Pahl Inc., which manufactures ornamental gadgets, products involving advanced technology. These products are expected to revolutionize the home construction industry. Pahl 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

Question 56

Resources are a source of competitive advantage only when they are

A) archival.
B) difficult to imitate.
C) equally available.
D) sequential.
E) expensive.

Question 57

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

A) reporting
B) forecasting
C) avoiding
D) justifying
E) creating

Question 58

If an organization's mission statement describes the organization as it currently operates then its strategic vision points to the

A) past.
B) production numbers.
C) future.
D) expectations.
E) profits.

Question 59

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

A) concentration
B) horizontal integration
C) vertical integration
D) benchmarking
E) satisficing

Question 60

Submarines Inc., a chain of sub shops, 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 61

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 62

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

A) make
B) influence
C) implement
D) finalize
E) create

Question 63

Palin Corp., 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 64

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 65

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 66

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

A) ready-made
B) custom-made
C) unique
D) original
E) rare

Question 67

Which of the following is true of managerial decision making?

A) Most managerial decisions lack structure.
B) Managerial decisions are always free of risks.
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 68

The psychological bias known as illusion of control refers to

A) a decision bias influenced by the way in which a problem or decision alternative is phrased or presented.
B) a belief that one can influence events even when one has no influence over what will happen.
C) a bias weighting short-term costs and benefits more heavily than longer-term costs and benefits.
D) a condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges.
E) a phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus.

Question 69

When a problem is frequent, repetitive, and 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 70

In the context of managerial decision making, decision evaluation is useful

A) only if negative feedback has been received.
B) only if positive feedback has been received.
C) whether the conclusion is positive or negative.
D) whether the manager or the employee is involved.
E) only if the employee is involved.

Question 71

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 72

Pat has to select the right 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 73

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 74

The manager of a restaurant noticed that the number of customers in the evening was decreasing. She promptly ordered the chef to revise the evening menu. Later, customer feedback indicated that the problem was not the menu but poor service from the wait staff. 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 75

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

A) the first minimally acceptable alternative.
B) from those alternatives that have 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 76

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

A) ready-made
B) approved
C) open-ended
D) adjustable
E) custom-made

Question 77

Julia 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. Julia is most likely searching for an) _____ solution to her problem.

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

Question 78

________________ is a psychological bias that applies to students who do not spend sufficient time studying.

A) Illusion of control
B) Farming effects
C) Discounting the future
D) Time pressures
E) Social realities

Question 79

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, he or she is facing

A) irresolution.
B) maximization.
C) risk.
D) optimization.
E) framing effects.

Question 80

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) irresolution.