Question 1

The breadth of a plan refers to ________ concerns.
A) long-term versus short-term
B) strategic versus tactical
C) specific versus directional
D) single use versus standing

Accepted Answer

B) Breadth does not refer to how specific, long term, or repeatable a plan is, but rather whether it is tactical or strategic, making that the correct response. Strategic plans address overall organizational goals. Tactical plans provide details of how those strategic goals can be achieved.

Question 2

Top managers, for the most part, focus on this type of planning.
A) operational
B) strategic
C) tactical
D) short term

Accepted Answer

B) Tactical, short-term, and operational planning are typically reserved for lower-level or mid-level managers. Strategic planning is typically done by top managers, making "strategic" the correct response.

Question 3

The specificity of a plan refers to ________ concerns.
A) long-term versus short-term
B) strategic versus tactical
C) specific versus directional
D) single use versus standing

Accepted Answer

C) Specificity does not refer to the duration, goals, or repeatability of a plan. Rather, specificity addresses how flexible plans are, making "specific versus directional" the correct response. Specific plans are inflexible and leave little or no room for interpretation or modification. Directional plans are flexible and can be modified if the situation warrants.

Question 4

Strategic plans address ________.
A) overall organizational goals
B) goals for a single branch of the organization
C) how overall goals are to be achieved
D) how a single goal is to be achieved

Accepted Answer

A) Strategic plans have the broadest overall scope, addressing the larger, more general issues and goals that an organization has. This makes "overall organizational goals" the correct response and eliminates the other three choices because they all refer to more narrow objectives.

Question 5

A cell phone company might ask managers to do some environmental scanning of blogs that deal with electronics as a way to ________.
A) obtain new customers
B) identify emerging trends
C) obtain new advertisers
D) identify potential rivals

Accepted Answer

B) The purpose of environmental scanning is not to obtain customers, advertisers, or competitors, but rather to get a feel for the business environment that an organization functions in and detect emerging trends in its industry. This makes "identify emerging trends" the correct response.

Question 6

Which goal-setting sequence is correct for the following steps? 1. Evaluate resources.
2) Identify goals.
3) Review the mission and job tasks.
4) Communicate goals.
5) Link rewards to goals.
6) Build feedback mechanisms.
A) 1, 2, 4, 6, 3, 5
B) 4, 2, 5, 3, 1, 6
C) 3, 4, 2, 6, 5, 1
D) 3, 1, 2, 4, 6, 5

Accepted Answer

D) Only the correct choice (3, 1, 2, 4, 6, 5) gives the correct sequence: review the mission, evaluate resources, identify goals, communicate goals, build feedback, link rewards to goals.

Question 7

Most managers feel that formal, top-down plans created by corporate planning departments are ________.
A) very useful
B) usually unsatisfactory
C) indispensible
D) excellent

Accepted Answer

B) Rather than find plans created by specialized corporate planning departments useful, indispensible, or excellent, a survey shows that over 75 percent of managers were dissatisfied with formal planning department plans, making "usually unsatisfactory" the correct response.

Question 8

MBO programs usually are successful largely because they ________.
A) give employees a sense of ownership of goals
B) free managers from the responsibility of setting goals
C) give managers a sense of ownership of goals
D) free employees from responsibility if goals are not met

Accepted Answer

A) MBO goals do not free managers from the task of goal setting or give them any special sense of goal ownership, since in traditional situations managers alone set goals. MBO goals make employees more, not less, responsible. What MBO goals clearly do accomplish is to make employees more accountable and responsible for goals, giving them a sense of ownership of goals. This makes "give employees a sense of ownership" the correct response.

Question 9

Taco Rocket (Scenario)
Imagine that you are the president of Taco Rocket, a new and successful chain of 8 Mexican fast-food restaurants. The success you have experienced in the last 5 years has you thinking of what to do with the business next. Should you expand the business at the current rate? Open new and different restaurants? What?
-Up to now your success has been based on selling high-quality tacos and burritos at a price that others can't match. Your business is pursuing which of Porter's strategies?
A) differentiation strategy
B) cost leadership strategy
C) competitive advantage strategy
D) focus strategy

Accepted Answer

B) A focus strategy would have Taco Rocket trying to appeal to a narrow segment of the market, something that it clearly is not doing. A differentiation strategy would have Taco Rocket trying to make tacos that were superior in some way to all competitors, again something that it is not attempting to do. What Taco Rocket is doing is selling good quality food at low prices, so it is using a cost leadership strategy. A competitive advantage strategy is not one of Porter's recognized categories, so it is an incorrect response for this question.

Question 10

Directional plans ________.
A) leave no room for interpretation
B) are flexible general guidelines
C) are difficult to modify
D) must be short-term plans

Accepted Answer

B) The key to directional plans is flexibility, making "flexible general guidelines" the correct response. Flexible plans cannot be hard to modify, leave no room for interpretation, or be focused only on short-term goals. This rules out all of the other choices and confirms that "flexible general guidelines" is the correct response.

Question 11

Tactical plans are operational plans that identify ________.
A) overall organizational goals
B) how overall goals are to be achieved
C) the mission of an organization
D) specific goals for accomplishing a specific objective

Accepted Answer

B) Tactical plans do not address an organization's mission or its larger, overall goals. The focus of tactical plans is always how goals are to be achieved rather than specific goals themselves. This rules out specific goals and makes the choice regarding how overall goals are to be achieved the correct response.

Question 12

A politician whose ultimate goal is to get elected is planning campaign ads for TV. In planning the ads, the politician is functioning at a ________ level.
A) strategic
B) long-term
C) tactical
D) directional

Accepted Answer

C) In this situation, the politician's overall strategic goal is to get elected. His immediate goal is to plan effective TV ads. Since he is working on his immediate goal, the politician is functioning on a tactical, rather than a strategic, level, making "tactical" the correct response.

Question 13

The commitment concept states that plans should ________.
A) always stake out a longer time period than is estimated
B) always stake out a shorter time period than is estimated
C) stake out a time period that is neither too long nor too short
D) not include time periods because they are too confining

Accepted Answer

C) The commitment concept states that plans should extend to meet any commitments that they directly or indirectly specify. For example, a plan to finance only the construction of a bridge, but not its upkeep and maintenance, fails to meet its basic time commitment. The preceding ideas identify staking out a time period that is neither too long nor too short as the correct response. Staking out too long, too short, or no time periods all fail to meet time commitments and are therefore incorrect responses.

Question 14

In addition to being made by both managers and employees, MBO goals must be ________.
A) nonspecific and open-ended with regard to time
B) specific and open-ended with regard to time
C) specific and include an explicit time limit
D) nonspecific and include no time limit

Accepted Answer

C) To eliminate ambiguity and misunderstanding, MBO goals are required to be specific and include a time limit. That way parties can't come back later and say that they weren't warned with regard to what exactly was expected. This makes the choice regarding being specific and including an explicit time limit the correct response and eliminates the other three choices because they are either nonspecific or open-ended with regard to time.

Question 15

Taco Rocket (Scenario)
Imagine that you are the president of Taco Rocket, a new and successful chain of 8 Mexican fast-food restaurants. The success you have experienced in the last 5 years has you thinking of what to do with the business next. Should you expand the business at the current rate? Open new and different restaurants? What?
-You are thinking of buying a tortilla factory in a nearby state. This action would be an example of ________.
A) forward vertical integration
B) horizontal integration
C) backward vertical integration
D) forward diversification

Accepted Answer

C) Buying a tortilla factory is an attempt by the company to be its own supplier. This is an example of backward vertical integration. Forward vertical integration would involve some aspect of distribution rather than supply, so that choice is incorrect. The remaining choices (horizontal integration and forward diversification) describe situations in which the company is not trying to become its own supplier, so both choices are incorrect.

Question 16

Standing plans typically can be used ________.
A) only once
B) only in conjunction with specific, long-term plans
C) twice at most
D) repeatedly

Accepted Answer

D) Standing plans are not confined to being used only once, twice, or exclusively in conjunction with specific long-term plans. The key to a standing plan is that it is repeatable. This indicates that "repeatedly" is clearly the correct response for this question.

Question 17

The more uncertain a situation is, the more ________ plans must be.
A) unspecific
B) long term
C) flexible
D) short term

Accepted Answer

C) In a situation of high uncertainty, both flexibility and specificity are important. A plan must be specific but also flexible so it can be changed if the situation requires it. These requirements make "flexible" the correct response and eliminate "unspecific." Uncertainty has no bearing on whether a plan is long or short term, so these choices can be eliminated.

Question 18

Which of the following defines the time frame of a long-term plan?
A) over seven years
B) over three years
C) under three years
D) over one year

Accepted Answer

B) In the past, long-term plans were defined as plans that were seven years or longer in duration. This definition has been replaced by a new time duration that requires a long-term plan to be any plan that covers a time frame of over three years. This makes "over three years" the correct response and eliminates all other choices.

Question 19

Which of the following is NOT something that a company would be likely to do as a part of a competitive intelligence program?
A) buy competitors' products
B) attend trade shows
C) have employees evaluate competing products
D) buy stock in a competitor's company

Accepted Answer

D) A company would be likely to buy competing products, attend trade shows, or assess rival products as a part of a competitive intelligence program. It would not, however, buy stock in a rival company because the purchase would not provide any insight into the company's competitor. Since the company would not be likely to do this, "buy stock in a competitor's company" is the correct response.

Question 20

In the twenty-first century, managers increasingly need to consider their plans as ________.
A) highly explicit recipes that must be scrupulously followed
B) a vague philosophy that should not interfere with actions
C) flexible road maps with destinations that may change
D) rigid road maps with a single destination

Accepted Answer

C) In the unstable, fast-changing business environment of today, managers value flexibility over other qualities. They do not see plans as explicit recipes or rigid road maps. Though flexibility is key, managers do not want to go too far and get plans that are vague, so "a vague philosophy" can also be eliminated. In the end, managers see plans as road maps that are flexible because they allow paths and even final destinations to change if the situation requires it.

Quiz 7: Foundations of Planning

The breadth of a plan refers to ________ concerns.

Top managers, for the most part, focus on this type of planning.

The specificity of a plan refers to ________ concerns.

Strategic plans address ________.

A cell phone company might ask managers to do some environmental scanning of blogs that deal with electronics as a way to ________.

Which goal-setting sequence is correct for the following steps? 1. Evaluate resources. 2) Identify goals. 3) Review the mission and job tasks. 4) Communicate goals. 5) Link rewards to goals. 6) Build feedback mechanisms.

Most managers feel that formal, top-down plans created by corporate planning departments are ________.

MBO programs usually are successful largely because they ________.

Directional plans ________.

Tactical plans are operational plans that identify ________.

A politician whose ultimate goal is to get elected is planning campaign ads for TV. In planning the ads, the politician is functioning at a ________ level.

The commitment concept states that plans should ________.

In addition to being made by both managers and employees, MBO goals must be ________.

Standing plans typically can be used ________.

The more uncertain a situation is, the more ________ plans must be.

Which of the following defines the time frame of a long-term plan?

Which of the following is NOT something that a company would be likely to do as a part of a competitive intelligence program?

In the twenty-first century, managers increasingly need to consider their plans as ________.