Q1. _____ outlines the organization's purpose, premises, values, and directions.

a. A tactical goal
b. The mission
c. An operational plan
d. A strategic plan
Q2. _____ plans are set by the board of directors and top management.
a. Operational
b. Tactical
c. Strategic
d. Short-term
Q3. What is true of a tactical plan?
a. It involves front-line managers.
b. It has a longer time horizon than a strategic plan.
c. It is primarily concerned with deciding what to do.
d. It is developed to implement specific parts of a strategic plan
Q4. _____ goals are set by and for lower-level managers.
a. Operational
b. Long-term
c. Tactical
d. Strategic
Q5. One purpose of _____ is to provide a source of motivation for an organization's
employees.
a. goals
b. strategic plans
c. operational plans
d. A strategic plan
Q6. The planning process takes place within a(n) _____ context.
a. environmental
b. functional
c. planning
d. operational
Q7. An organization that competes in dozens or even hundreds of markets is called
a(n)_____.
a. enterprise
b. conglomerate
c. corporation
d. industry
Q8. _____ refers to the methods by which strategies are operationalized or executed
within the organization.
a. Strategy implementation
b. Business-level strategy
c. Strategy formulation
d. Resource deployment
Q9. _____ is an organizational strength possessed by only a small number of
competing firms.
a. A strategic goal
b. A distinctive competence
c. The scope
d. A strategy
Q10. An organizational _______is an area that increases the difficulty of an
organization performing at a high level.
a. weakness
b. strength
c. threat
d. strategy
Q11. In the context of SWOT analysis, which of the following would be considered
as an organization's weakness?
a. well-established distribution channels
b. deep pool of managerial talent
c. unique reputation
d. insufficient cash reserves
Q12. When devising a new strategy, it is best to start with what?
a. a tactical plan
b. a SWOT analysis
c. strategy formulation
d. an operational plan
Q13. The best strategies include all of the following EXCEPT what?
a. require resource deployment
b.exploit opportunities and strengths
c.support the mission
d.neutralize threats
Q14. In the growth stage of the product life cycle, _____.
a. the number of organizations producing the product drops
b. the sales of the product increase
c. the product is introduced for the first time in the market
d. the demand for the product begins to slow down

Q15. Overall demand growth for a product begins to slow down during the _____
stage of the product life cycle.
a. maturity
b. differentiation
c. growth
d. introduction
Q16. In a _____ strategy, an organization concentrates on a specific regional
market, product line, or group of buyers. (page 70)
a. differentiation.
b. product life cycle.
c. focus
d. overall cost leadership.
Q17. In a _____ strategy, an organization operates in several businesses that are
somehow linked with one another. (page 72)
a. unrelated diversification.
b. single-product.
c. diversification.
d. related diversification
Q18. Tactical plans are an organized sequence of steps designed to execute _____
plans.
a. strategic
b. diversification
c. short-term
d. operational
Q19. The ultimate success of a tactical plan depends on: (page 78)
a. the way it is carried out
b. the number of people involved.
c. whether a joint-venture is set up.
d. whether franchises are set up.
Q20. _____ is the set of procedures the organization uses in the event of a disaster or
other unexpected calamity. (page 80)
a. Crisis management
b. A policy
c. A standing plan
d. Contingency planning
Q21. What is a standing plan that specifies the organization's general response to a
designated problem or situation? (page 79, table 3.1)
a. policy
b. project
c. program
d. single-use plan

22. Steve has been tasked with the job of outlining decisions about resource
allocation,
priorities, and action steps that are necessary to reach one of his company's strategic
goals. What is Steve developing?
 strategic plan
 operational plan
 strategic mission
 tactical plan
23. What is true of a tactical plan?
 It involves front-line managers.
 It has a longer time horizon than a strategic plan.
 It is primarily concerned with deciding what to do.
 It is developed to implement specific parts of a strategic plan.
24. The planning process takes place within a(n) _____ context.
 environmental
 functional
 planning
 Operational
25. In Pleasantville, JJ's Auto Repair is where most residents go for any type of car
repair. Inspired by his entrepreneurial son, JJ has decided to open a detailing shop
on adjoining property. If JJ elected to open an auto repair shop in the neighboring
county, he would be expanding his _____.
 business scope
 operational goals
 distinctive competence
 effective strategies
26. _____ is the set of strategic alternatives from which an organization chooses as it
manages its operations simultaneously across several industries and several
markets.
 Business-level strategy
 Effective strategy
 Resource strategy
 Corporate-level strategy
26. Lighthouse Cinema has enjoyed a successful history in the town of Battle Ridge,
VA. Despite the growth of multiplex theaters in most population centers, Lighthouse
Cinema has remained a popular entertainment option for the surrounding area, but
sales have been stagnant over the past few years. A national theater chain recently
announced that it will build a 10-theater facility on the outskirts of Battle Ridge.
This development calls for Lighthouse Cinema to pursue a strategy that will _____.
 revise internal operating procedures
 pursue new investment opportunities
 narrow the target market
 neutralize the impending threat
27. An organizational _______is an area that increases the difficulty of an
organization performing at a high level.
 weakness
 strength
 threat
 strategy
28. When devising a new strategy, it is best to start with what?
 a tactical plan
 a SWOT analysis
 strategy formulation
 an operational plan
29. Lighthouse Cinema has enjoyed a successful history in the town of Battle Ridge,
VA. Despite the growth of multiplex theaters in most population centers, Lighthouse
Cinema has remained a popular entertainment option for the surrounding area, but
sales have been stagnant over the past few years. A national theater chain recently
announced that it will build a 10-theater facility on the outskirts of Battle Ridge.
The owner of Lighthouse Cinema has learned that the new competitor's prices will
be 20% higher than his theater admissions. Consequently, Lighthouse Cinema
should strongly consider a business-level strategy based on _____.
 differentiation
 product life cycle
 concentration on a specific market
 cost leadership
30.Product differentiation, low costs, and the development of new products or
services are key to a company's success at what stage of the product life cycle?
 introduction
 decline
 diversification
 growth
31.Lighthouse Cinema has enjoyed a successful history in the town of Battle Ridge,
VA. The movie theater has remained a popular entertainment option for the
surrounding area, but sales have been stagnant over the past few years. The theater
is currently in the _____ stage of the product life cycle.
 maturity
 differentiation
 growth
 introduction
32._____ describes the number of different businesses that an organization runs and
the extent to which these businesses relate to one another.
 Scope
 Differentiation
 Diversification
 Synergy
33.The market for memory chips for electronic devices is growing at an incredible
rate, and GloTech has the largest share of that market. According to the BCG
matrix, GloTech is a _____.
 question mark
 cash cow
 dog
 star
34.Camille's Coffee Shop has a very small share of the market and has no plans for
growth. According to the BCG matrix, this business is a _____.
 question mark
 cash cow
 dog
 star
35.Jones International is a large organization with holdings in the U.S., Europe, and
Southeast Asia. The corporation's mix of strategic business units (SBUs) allows the
company to exploit its strengths and capabilities in more than one line of business
and to exploit synergies across business lines. Jones International employs a(n)
_____ corporate-level strategy.
 related diversification
 differentiation
 single-product
 unrelated diversification
36.What is the first step that a manager should take in executing a tactical plan?
 integrate of activities must be present to minimize conflict and inconsistent activities
 monitor ongoing activities derived from the plan to make sure they are achieving the
desired results
 make sure that each decision maker has the information and resources necessary to get
the job done
 evaluate every possible course of action in light of the goal it is intended to reach
37.The ultimate success of a tactical plan depends on:
 the way it is carried out.
 the number of people involved.
 whether a joint-venture is set up.
 whether franchises are set up.
38.Tactical plans must flow from and be consistent with _____.
 a strategic plan
 the mission
 the SWOT analysis
 an operational plan
39.A _____ is developed for activities that recur regularly over a period of time.
 standing plan
 project
 program
 single-use plan
40.Carduci Corporation is a food processing company that specializes in a complete
line of artisan sausage products. The top leaders in the organization have
established a strategy that involves increasing the marketing budget to grow sales.
Neal is the head of the marketing department. Under his guidance, marketing
supervisors have developed a 3-stage operating plan to support the organization's
goals. Stage 3 involves launching an online ordering system for retail and restaurant
accounts. The new system simplifies and clearly outlines the steps to be followed
from sales inquiry to final order payment. Stage 3 is a _____, which is a standing
plan that is developed to enhance the ongoing efficiency of the order management
process.
 policy
 project
 standard operating procedure
 program
41.Leader Books Inc. sponsors the Fairfax Public Library's summer reading
program every year. The Fairfax Public Library holds a summer reading program
to encourage children to read, and gives prizes based on how many hours or pages
the participants read during each week of the program. The Fairfax regional
manager of Leader Books sends a check to the Fairfax Public Library in February
of each year in order for them to prepare for the reading program. The regional
manager's decision about when to send the check is a(n) _____ decision.
 computed
 programmed
 timed
 nonprogrammed
42.Light On! Power Company (LO!PO) is nearing capacity at its current St.
Doraldo plant. One option being considered by the general manager is the
acquisition and conversion of a nearby production facility to increase LO!PO's
output. To determine if this is a feasible option, he is currently calculating the costs
of acquiring and converting the property and estimating the power generation
potential of the new operation. At what stage of the decision-making process is the
general manager?
 Choosing the best alternative
 Executing the decision
 Identifying alternatives
 Defining the situation

43.A ___ refers to a condition in which the decision maker knows with reasonable
certainty what the alternatives are and what conditions are associated with each
alternative.
 state of uncertainty
 decision-making condition
 state of risk
 state of certainty
44.Light On! Power Company (LO!PO) is nearing capacity at its current St.
Doraldo plant. For the past three months, the general manager has been considering
the acquisition and conversion of a nearby production facility to increase LO!PO's
output. He is only partially aware of the risks and consequences associated with this
option and has not yet evaluated all of his options. The general manager is making a
decision under conditions of _____.
 uncertainty
 programmed decision-making
 risk
 certainty
45.The site manager for a company is negotiating for a new site to build an office
complex. After several counter-offers, the seller gave the company a final offer. The
manager has the option to accept or reject the offer. If the manager accepts the
offer, he gets a site in time to meet the relocation schedule, but at a price above
budget. If he rejects the contract, he may get a more favorable price if the seller is
bluffing, but he may lose out on the location and not be able to find another one in
time if it is not. The manager is making a decision in a state of _____.
 uncertainty
 ambiguity
 risk
 certainty
46.The decision-making process begins by _____.
 choosing the best alternative
 defining the decision situation
 putting the chosen alternative into action
 identifying alternatives
47.Janice is the owner of a beauty salon. Her shop operates in a leased property on
Main Street. The owner of the building plans to convert the property into a dog
grooming shop. Now Janice has to select a new location for her beauty salon. She is
using a rational decision making model to evaluate the alternatives before her. Each
of her four options is feasible and satisfies her decision criteria. Which of the
following options should Janice choose?
 Option B, which has high financial costs and low nonfinancial costs
 Option C, which has low financial costs and low nonfinancial costs
 Option D, which has high financial costs and high nonfinancial costs
 Option A, which has low financial costs and high nonfinancial costs
48.Which of the following is true of decision makers in the classical decision model?
 They can effectively eliminate certainty to achieve a decision condition of uncertainty.
 They evaluate all aspects of the decision situation intuitively.
 They have no information about the possible alternatives.
 They have complete information about the decision situation.
49.Blair works at a convenience store. One of the three slushy machines in the store
has clogged four times this week. Blair is weighing the advantages and
disadvantages of each of her three choices: repair the machine again, replace it, or
simply remove it and be left with only two machines. Blair is currently _____.
 evaluating alternatives
 recognizing and defining the decision situation
 implementing an alternative
 identifying alternatives
50.Which of the following is a recommendation made by the proponents of evidence
based management?
 Discourage experimentation.
 Avoid basing decisions on what has been done in the past.
 Discourage learning by doing.
 Avoid telling unpleasant truths.
51.What is escalation of commitment?
 the tendency to search for alternatives only until one is found that meets some
minimum standard of sufficiency
 the tendency of decision makers to become so committed to the courses of action
suggested by those decisions that they stay with them, even when the decisions appear to
have been wrong
 a concept suggesting that decision makers are limited by their values and unconscious
reflexes, skills, and habits
 an informal alliance of individuals or groups formed to achieve a common goal
52.WholePath Cereals introduced a new line of whole grain cereal for children. For
the second quarter in a row, sales are well below forecast. Formal surveys have
shown that customers do not like the taste of the cereal, and even those who bought
it once are not repeat customers. WholePath invested a lot of money in developing
the new recipe, as well as in marketing to roll out the new product line. They cannot
afford to lose that investment, so they have increased their advertising budget to try
to increase enthusiasm about the product and generate additional sales. Which of
the following concepts is illustrated in the scenario?
 escalation of commitment
 satisficing
 classical decision making
 rational decision making
53.Bishop must select a new supplier for ink before the next print run for the
product's packaging or risk missing a critical shipping deadline. He sent out
requests for bids to three vendors. The first bid he received met his price point and
he accepted the bid immediately, without waiting for the other bids to arrive or do
any further research. This is an example of _____.
 groupthink
 satisficing
 classical decision making
 rational decision making
54.What model reflects the subjective considerations that often impact decision
making and explain why, when a decision is made with little regard for logic, it can
still turn out to be correct?
 probabilistic
 classical
 administrative
 rational
55.Renee Ortiz, manager of Bath and Beauty Boutique, expects her staff to make a
certain amount of decisions based on their experience and the practice they have in
making decisions in similar situations. In other words, she wants them to, at times,
rely on _____.
 intuition
 satisficing
 escalation
 groupthink
56.A decision-making _____ has members who openly discuss, argue about, and
agree on the best alternative.
 Delphi group
 team
 nominal group
 coalition
57.One advantage of team decision making is that
 better decisions generally emerge.
 groupthink occurs in a team setting.
 one person can influence the entire group.
 compromise decisions may emerge.
58.When a group arrives at a decision that seems to not be in the best interest of the
organization but resulted from a process that avoided any conflict, it is likely that
_____ occurred.
 Delphi
 dominance
 groupthink
 satisficing
59.Taylor owns and manages a franchise sandwich shop in rural Texas. Most of his
employees earn minimum wage. Recently, there has been much attention on how
difficult it is for workers to support themselves on a minimum wage salary. The
organization is under public scrutiny nationally, and pressure to raise salaries for
lower-end employees is escalating. The corporate office has created a task force
made up of influential and engaged franchise owners. The goal of the task force is to
propose a national policy that will be presented to all franchise owners. Members of
the task force have been instructed to openly discuss and consider the ramifications
of increasing the minimum wage for all franchise employees. The group has two
months to agree upon the best course of action. The task force is an example of a(n)
_____ group.
 interacting
 coalition
 Delphi
 nominal
60.What type of group is a group in name only, as the members are brought
together in a face-to-face setting but do not talk to one another freely?
 interacting
 nominal
 Delphi
 coalition
61.The decision-making process ends by _____.
a. choosing the best alternative
b. defining the decision situation
c. putting the chosen alternative into action
d. identifying alternatives - c
62._____ is the act of choosing one alternative from among a set of alternatives.
a. The decision-making process
b. A nonprogrammed decision
c. Decision making
d. Risk - c
62.Once a decision situation is defined, the next step in the decision-making process
is to_____.
a. put the chosen alternative into action
b. choose the best alternative
c. recognize that a decision is needed
d. identify alternatives - d
63. In what situation is the decision maker most likely to make a mistake?
a. state of uncertainty
b. decision-making condition
c. state of risk
d. state of certainty - a
64. _____ is defined as a commitment to finding and using the best theory and data
available at the time to make decisions.
a. State of uncertainty
b. Bounded rationality
c. Evidence-based management
d. Classical decision making – c
65. Decisions that are relatively structured, or recur with some frequency, or both,
are_____ decisions.
a. computed
b. programmed
c. timed
d. nonprogrammed
66.The decision-making process begins by _____.
a. choosing the best alternative
b. defining the decision situation
c. putting the chosen alternative into action
d. identifying alternatives - b
67.Which of the following is NOT asked when evaluating alternatives in the
decisionmaking process?
a. Is the alternative satisfactory?
b. How will the alternative affect competitors?
c. Are the alternative's consequences affordable?
d. Is the alternative feasible? - b
68.Which of the following is a recommendation made by the proponents of evidence-
based management?
a. Discourage experimentation.
b. Avoid basing decisions on what has been done in the past.
c. Discourage learning by doing.
d. Avoid telling unpleasant truths. - b
69.The final step in the rational decision-making process is:
a. implementing the chosen alternative.
b. recognizing and defining the nature of a decision situation.
c. evaluating the results of the chosen alternative.
d. identifying alternatives. - c
70.A manager who relies heavily on intuition and reaches decisions quickly has the
characteristics of a person with
a. a high level of risk propensity.
b. a low level of risk propensity.
c. zero tolerance for risk propensity.
d. a moderate level of risk propensity. - a
71._____ suggests that decision makers are limited by their values and unconscious
reflexes, skills, and habits.
a. Structured decision making
b. Finite clarity
c. Bounded rationality
d. Evidence-based management – c
72.When a decision maker stays with a decision even when it appears to be wrong,
the behavioral process is called _________
a. risk propensity
b. intuition
c. escalation of commitment
d. satisficing - c
73.A decision-making _____ has members who openly discuss, argue about, and
agree on the best alternative.
a. Delphi group
b. team
c. nominal group
d. coalition - b
74.Which of the following is true of nominal groups?
a. The members only communicate ideas in writing.
b. Group members do not see one another.
c. There is very limited interaction among members.
d. The members represent a group in the true sense. - c