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Chapter 6—Managerial Planning and Goal Setting
TRUE/FALSE
1. Because everything else stems from leading, of the four management functions, leading is
considered the most fundamental.
ANS: F PTS: 1 DIF: 2 REF: 159

NAT: AACSB Analytic | Leadership Principles TYP: F
2. Managers must understand no plan is perfect, but should grow and change to meet new conditions.
ANS: T PTS: 1 DIF: 2 REF: 159

3. A desired future state that the individual or organization attempts to realize is a goal.

NAT: AACSB Analytic | Strategy TYP: F
4. Goals specify today's means; plans specify future ends.

5. Goal setting is the act of determining the organization goals and the means for achieving them.

6. The mission is the basis for the strategic level of goals and plans, which in turn shapes the tactical
and operational level.
170
Chapter 6/Managerial Planning and Goal Setting 171

7. Tactical goals and plans are the responsibility of front-line managers and supervisors.

8. Tactical goals and plans are the responsibility of middle managers.

9. A broad definition of the organization's values, aspiration and reason for being, along with a
recognition of the scope and operations that distinguishes the organization refers to a Business
Strategic Statement.

10. Goals and plans are valuable to an organization because they provide legitimacy, rationale for
decisions, and an increase in motivation and commitment.

NAT: AACSB Analytic | Motivation Concepts TYP: F
11. A plan tells "why" to achieve the goal.

12. Goals help managers decide where they need to allocate resources.

13. Goals and plans provide a sense of direction and focus on specific targets and direct employee
efforts toward important outcomes.

14. Step 1 in the Operational Planning Process is to plan operations.

NAT: AACSB Analytic | Operations Management TYP: F
172 Chapter 6/Managerial Planning and Goal Setting
15. Plans provide a standard of assessment.

16. In step 1 of the Operational Planning Process, operational goals and plans are defined, and
measures and targets are selected.

17. Metacognitive awareness means to step back and see the big picture required for effective
planning, monitoring, and evaluating an organization.

18. An organization's mission describes its reason for existence.

19. Strategic plans and goals are those that focus on where the organization wants to be in the future
and pertain to the organization as a whole.

20. A broad statement of where the organization wants to be in the future refers to a mission statement.

21. Operational plans and goals are those that focus on the outcomes that major divisions and
departments must achieve in order for the organization to reach its overall goals.

22. Tactical plans are designed to help execute the major strategic plans and to accomplish a specific
part of the company's strategy.

23. Tactical goals are specific, measurable results expected from departments, work groups, and
individuals within the organization.

24. Top managers make the broad strategic plan and identify specific tactical plans.

25. The department manager's tool for daily and weekly operations is called the operational plan.

26. Operational planning specifies plans for department managers, supervisors, and individual
employees.

27. A visual representation of the key drivers of an organization's success and shows how specific
goals and plans in each area are linked is called an operations map.

28. Building good relationships with suppliers and partners would be considered customer service
goals.

29. Management by objectives, single-use plans, and standing plans are all management planning
approaches.

30. Specific and measurable goal characteristics apply only to the lower-level goals.

31. Goals are most effective when they are specific, measurable, challenging and linked to rewards.

32. Goals must be set for every aspect of employee behavior or organizational performance to be
effective.

33. The goals should be easy, for employees to feel motivated, so that they can achieve them easily
which in turn increases their motivation level.

34. MBO refers to managing by opportunity.

35. The final step in the MBO process is to review progress.

36. An action plan defines the course of action needed to achieve the stated goals.

37. The most difficult step in an MBO process is reviewing progress.

38. When a company faces rapid change, problems with MBO occur.

39. Managers believe they are better oriented toward goal achievement when MBO is used.

40. Standing plans define company responses to specific situations such as natural emergencies or
competitive setbacks.

41. Single-use plans are ongoing plans that are used to provide guidance for tasks performed
repeatedly within the organization.

42. Three critical planning methods are contingency planning, building scenarios, and crisis planning.

43. Crisis plans define company responses to be taken in the case of emergencies, setbacks, or
unexpected conditions.

44. If Renae, manager at Leak Free Roofing, wanted to develop a contingency plan for Leak Free, she
would need to look at factors such as new equipment, the economy, and the company workers'
compensation cases.

NAT: AACSB Analytic | Strategy TYP: A
45. Contingency plans can also be considered as scenarios.

46. Trend management is looking at trends and discontinuities and imagining possible alternative
futures.

47. Some firms engage in crisis planning to enable them to cope with unexpected events that are so
sudden and devastating that they have the potential to destroy the organization.

48. The first stage in crisis management planning includes building relationships and designating crisis
management team and spokesperson.

NAT: AACSB Analytic | Environmental Influence TYP: F
49. Prevention and preparation are the two stages of crisis management.

50. The ABC Corporation should create a crisis management group that is not cross-functional, but
does work together well under pressure.

NAT: AACSB Analytic | Group Dynamics TYP: F
51. The CEO of Andre's Autos, Inc. must do all of the planning for the company because that is the
way to do things in today's workplace.

52. Turtle Terrace should use traditional planning since that is the type of planning every company
uses.

53. In a complex and competitive business world, traditional planning done by a select few is the only
planning that works.

54. Managers work with planning experts to develop their own goals and plans in decentralized
planning.

55. In centralized planning, managers work with planning experts to develop their own goals and
plans.

MULTIPLE CHOICE
1. ____ refers to a desired future state that an organization attempts to realize?

a. Plan
b. Vision statement
c. Goal
d. Mission statement
e. Idea
ANS: C PTS: 1 DIF: 2 REF: 160
2. ____ specify future ends and ____ specify today's means.

a. Goals, plans
b. Plans, goals
c. Planning, organizing
d. Ideas, behaviors
e. Mission, vision
ANS: A PTS: 1 DIF: 2 REF: 160
3. A blueprint specifying the resource allocations schedules, and other actions necessary for attaining
goals is referred to as a(n)
a. goal.
b. plan.
c. mission.
d. vision.
e. objective.
ANS: B PTS: 1 DIF: 1 REF: 160
4. ____ is the act of determining the organization's goals and the means for achieving them.
a. Brainstorming
b. Organizing
c. Planning
d. Developing a mission
e. A blueprint
5. The planning process begins with which of these?

a. The development of operational goals
b. The development of a mission statement
c. Communication of goals to the rest of the organization
d. A company-wide meeting
e. Brainstorming
6. The ____ is the basis for the strategic level of goals and plans which in turn shapes the ____ and
____ level.
a. goal, mission, tactical
b. objective, operational, mission
c. operational goal, mission and tactical
d. mission, tactical, operational
e. tactical plan, operational, mission
ANS: D PTS: 1 DIF: 2 REF: 160
7. ____ is primarily responsible for strategic goals/plans.

a. Middle management
b. Board of directors
c. Consultants
d. Top management
e. Lower management
8. ____ is primarily responsible for operational goals/plans.

c. Consultants
d. Top management
e. Lower management
ANS: E PTS: 1 DIF: 1 REF: 160
9. Which of these is(are) primarily concerned with tactical goals/plans?

c. Consultants
d. Senior management
e. Lower management
10. Sherry is a first-line supervisor at Rooftop Corporation. She is most concerned with which level of
goals?
a. Operational goals
b. Tactical plans
c. Strategic goals
e. Vision
11. Which of the following symbolizes the legitimacy of the organization to external audiences?
b. Tactical plans
c. Strategic goals
e. Tactical goals
12. Roxanne is a manager at Geronimo Gaming. She recently attended a seminar on goal setting. She
wishes to use goals to provide a sense of direction to her staff. She is using goals as
a. a way to legitimize her department.
b. a source of motivation.
c. a standard of performance.
d. a guide to action.
e. impress others.
13. Which of the following is not an internal message in goals and plans?
a. Legitimacy for customers
b. Rationale for decisions
c. Resource allocation
d. Guides to action
e. Source of motivation and commitment
14. Which of the following is not a step in the organizational planning process?
a. Monitor and learn
b. Plan operations
c. Translate the plan
d. Develop the plan
e. Plan marketing tactics
15. Which of the following is NOT a tool for executing a plan?

a. Management by objectives
b. Strategic map
c. Performance dashboards
d. Single use plans
e. Decentralized responsibility
16. A statement that identifies distinguishing characteristics of an organization is known as

a. a goals statement.
b. a values statement.
c. an income statement.
d. a mission statement.
e. a competitive-edge statement.
17. Which of these are described by mission statements?

a. Corporate values
b. Company philosophy
c. Company purpose
d. All of these
e. Corporate values and company philosophy only

18. The organization's reason for existence is known as

a. the organization's value.
b. the organization's vision.
c. the organization's mission.
d. the organization's goal.
e. the organization's service.
19. "We respect our employees and value their diversity" is an example of a statement you are most
likely to find in the organization's
a. mission.
b. strategic goals.
c. tactical goals.
d. strategic plans.
e. tactical plans.
20. "We seek to become the premier business school in the west" is an example of a statement you are
most likely to find in the organization's
a. tactical goals.
b. operational goals.
c. mission.
d. tactical plans.
e. operational plans.
21. ____ refers to a broadly stated definition of the organization's basic business scope and operations
that distinguishes it from similar types of organizations.
a. Mission statement
b. Goal statement
c. Management by objective
d. Goal setting
e. Corporate competitive-value statement
22. At the top of the goal hierarchy is the

a. strategic goals.
b. tactical goals.
c. operational goals.
d. mission.
e. employee goals.
23. ____ are the broad statements of where the organization wants to be in the future.
b. Tactical goals
c. Strategic goals
d. Operational goals
e. Tactical plans
24. The official goals of the organization are best represented by the ____.
a. strategic goals
b. tactical goals
c. operational goals
d. competitive goals
e. none of these
25. A long-term time frame is most closely associated with

a. operational plans.
b. tactical plans.
c. strategic plans.
d. mission plans.
e. tactical goals.
26. ____ are called the action steps by which an organization intends to attain its strategic goals.
a. Tactical goals
b. Operational goals
c. Tactical plans
d. Operational plans
e. Strategic plans
27. ____ goals lead to the attainment of ____ goals, which in turn lead to the attainment of ____ goals.
a. Operational, strategic, tactical
b. Tactical, operational, strategic
c. Strategic, tactical, operational
d. Operational, tactical, strategic
e. None of these.
ANS: D PTS: 1 DIF: 3 REF: 164-165
28. Goals that define the outcomes that major divisions and departments must achieve in order for the
organization to reach its overall goals is called
a. strategic goals.
b. tactical goals.
c. operational goals.
d. a mission.
e. a plan.
29. Sarah is a middle manager at Stylin' Sneakers Corporation. She is most likely responsible for the
achievement of ____ goals.
a. operational
b. tactical
c. strategic
d. lower-level
e. top-level
30. Which of the following refer to specific results expected from individuals?
b. Tactical goals
c. Strategic goals
d. Operational plans
e. Mission statements
31. Which of the following represent plans developed at the organization's lower levels that specify
action steps toward achieving operational goals and that support tactical planning activities?
a. Tactical plans
b. Strategic plans
c. Operational plans
d. Supervisory plans
e. Organizational plans
32. The ____ is the department manager's tool for daily and weekly operations.
a. conventional goal
b. strategic goal
c. strategic plan
d. operational plan
e. targeted plan
33. Which of the following is a visual representation of the key drivers of an organization's success,
showing the cause-and-effect relationships among goals and plans?
a. Operational plan
b. Gantt chart
c. Strategy map
d. SWOT analysis
e. Strategic plan
34. According to the strategy map described in chapter 6, which of the following is NOT one of goal?
a. Financial performance goals
b. Customer service goals
c. Internal business process goals
d. Learning and growth goals
e. External business process goals
35. Managers use ____ to direct employees and resources toward achieving specific outcomes that
enable the organization to perform efficiently and effectively.
a. strategic goals
b. operational goals
c. growth goals
d. financial results
e. internal business process goals
36. Which of these is lacking in the goal "profits should be increased in the coming year?"
a. Specific and measurable
b. Challenging but realistic
c. Covers key result areas
d. Defined time period
e. None of these
37. Kate is a salesperson at a large retail chain. She was assigned a goal of $265,000 in sales for the
current quarter. She is unhappy because she knows that the most any salesperson has sold in one
quarter in the past is $150,000. Her goal of $265,000 is probably
a. not specific and measurable.
b. not realistic.
c. irrelevant.
d. lacking a specific time period.
e. does not cover key result area.
38. You are violating which of these goal characteristics when you attempt to create goals for every
aspect of employee behavior?
b. Linked to rewards
c. Defined time period
d. Cover key result areas
e. Challenging but realistic
39. Darren set goals for each of his employees. Each employee ended up with at least twenty-five
goals. This process violates which of the following criteria for effective goals?
b. Challenging but realistic
c. Covers key result areas
d. Defined time period
e. Linked to rewards
40. All of the following are characteristics of effective goal setting EXCEPT
a. goals should be challenging but not unreasonably difficult.
b. goals should be set for every aspect of employee behavior.
c. specific and measurable.
d. cover key results area.
e. linked to rewards.
41. The ultimate impact of goals depended on the extent to which goal achievement is linked to
a. rewards.
b. salary increases.
c. promotions.
d. all of these.
e. salary increases and promotions.
42. ____ is the first step in the MBO process.

a. Setting goals
b. Developing action plans
c. Appraising overall performance

d. Reviewing progress
e. None of these
43. Which of these is a method of management whereby managers and employees define goals for
every department, project, and person and use them to monitor subsequent performance?
a. Organizational planning
b. Management by objectives
c. Goal setting
d. Mission development
e. Vision development
44. High Fence Corporation is currently implementing an MBO program. Managers and employees
jointly set objectives and develop action plans, and goal achievement is evaluated on an annual
basis. High Fence is missing which major activity that must occur in order for MBO to be
successful?
a. Developing a mission statement
b. Developing tactical goals
c. Reviewing progress
d. Reviewing operational plans
e. None of these
ANS: C PTS: 1 DIF: 2 REF: 168-169
45. In using MBO, objectives should be set

a. by the supervisor.
b. by the employee.
c. jointly by the supervisor and the employee.
d. by the accounting department.
e. by top management.
46. Frostburg Fireplaces has used MBO for the past year. Top management just finished evaluating
overall performance. The next step in the MBO process should be
a. to develop new action plans.
b. to develop new objectives based on the review of last year's performance.
c. to begin a new MBO "cycle", using the same objectives as last year.
d. to wait several months to allow information to be digested.
e. none of these.
47. ____ is the final step in the MBO process.

a. Appraise overall performance

b. Develop an action plan
c. Review progress
d. Set goals
e. Conduct periodic checkups
48. One major problem with MBO is

a. it discourages individual creativity.
b. it does not work well in constantly changing environments.
c. it decreases employee motivation.
d. it does not work well in non-profit organizations.
e. none of these.
49. Which of the following is NOT one of the benefits of MBO?

a. Performance can be improved at all company levels.
b. Employees are motivated.
c. Efforts are focused on activities that will lead to goal attainment.
d. Operational goals are able to displace strategic goals.
e. Individual and department goals are aligned with company goals.
50. Which of these is true about single-use plans?

a. They are developed to achieve a set of goals that are unlikely to be repeated in the future.
b. They are used to provide guidance for tasks performed repeatedly within the organization.
c. They define plans that define company responses to specific situations, such as
emergencies or setbacks.
d. They are most important in the organizations.
e. None of these.
51. Standing plans are

a. plans that are developed to achieve a set of goals that are unlikely to be repeated in the
future.
b. plans that used to provide guidance for tasks performed repeatedly within the organization.
c. plans that define company responses to specific situations, such as emergencies or
setbacks.
d. most important in the organizations.
e. none of these.
52. A project is an example of a

a. policy.
b. standing plan.
c. procedure.
d. single-use plan.
e. rule.
53. Cheyenne Creamery requires that all absent employees bring a note from their doctor when
returning to work. This is an example of a
a. single-plan use.
b. standing plan.
c. program.
d. procedure.
e. project.
54. According to MANAGER'S SHOPTALK in Chapter 6, effective policies governing the use of e-
mail include all of the following EXCEPT:
a. make clear that all e-mail and its content are the property of the company.
b. tie the policy to the company's sexual harassment policy.
c. establish guidelines for deleting or retaining messages.
d. consider having policies pop up on users' screen when they log on.
e. all of these are recommended.
55. Numerous ____ are likely to be part of an overall ____.

a. programs, project
b. policies, project
c. standing plans, program
d. projects, program
e. programs, rule
56. ____ define boundaries within which to make a decision.

a. Programs
b. Policies
c. Rules
d. Procedures
e. Project
57. An example of a ____ is a statement supporting the organization's efforts in the area of sexual
harassment.
a. procedure
b. rule
c. policy
d. single-use plan
e. program
58. "No food and/or drinks in the classroom" is an example of a

a. procedure.
b. rule.
c. policy.
d. single-use plan.
e. project.
59. Which of these are true about contingency plans?

a. They are developed to achieve a set of goals that are unlikely to be repeated in the future.
b. They are used to provide guidance for tasks performed repeatedly within the organization.
c. They define company responses to specific situations, such as emergencies or setbacks.
d. They are most important in the organizations.
e. None of these.
60. Contingency plans are also referred to as

a. standing plans.
b. rules.
c. scenarios.
d. procedures.
e. operationally tactical plans.
61. ____ involves looking at trends and discontinuities and imagining possible alternative future to
build a framework within which unexpected future events can be managed.
a. Scenario building
b. Crisis planning
c. Contingency planning
d. Trend management
e. Caution planning
62. ____ enables firms to cope with unexpected events that are so sudden and devastating that they
have the potential to destroy the organization if managers aren't prepared with a quick and
appropriate response.
a. Incident planning
b. Contingency planning
c. Strategic planning
d. Crisis planning
e. Emergency planning
63. The crisis management plan should be a ____ that specifies the actions to be taken, and by whom,
if a crisis occurs.
a. vague, verbal plan
b. detailed, verbal plan
c. long, difficult to read plan
d. vague, written plan
e. detailed, written plan
64. Which of the following is NOT involved in the stages of crisis planning?
a. Setting up effective communication systems
b. Creating detailed crisis management plans
c. Investigating all stakeholders
d. Designating a crisis management team and spokesperson
e. Building relationships
65. Traditionally, if Stephanie, CEO of Butterfly Pillows, needed to conduct corporate planning, it
would be performed by all of the following EXCEPT
a. central planning departments.
b. decentralized planning groups.
c. top executives.
d. consulting groups.
e. the president of the company.
NAT: AACSB Analytic | Group Dynamics TYP: A
66. The traditional approach to corporate planning was to

a. have a decentralized planning staff.
b. have a centralized planning department.
c. set up a planning task force.

d. set up planning committees.
e. use TQM approach.
67. A group of planning specialists who develop plans for the organization as a whole is known as
a. management by objectives.
b. planning task force.
c. decentralized planning staff.
d. centralized planning department.
e. total quality management group.
NAT: AACSB Analytic | Group Dynamics TYP: F
68. Alabama Airlines has three planning specialists who help division managers develop their own
division plans. Serving as consultants to the divisions, the planning specialists give advice about
strengths, weaknesses, opportunities, and threats. Alabama Airlines is utilizing what approach to
the planning function?
a. Centralized planning department
b. Decentralized planning staff
c. Planning task force
d. Centralized planning committee
e. TQM
CASE
Scenario - Katelynn Kareem
The new program would be focused around MBO concepts. Katelynn Kareem had been a manager
at WXYZ for ten years and she was not all certain if this new MBO approach was going to fit her
department. She had strong commitment to achieving the company's objectives, but she also knew
her employees well enough to know that some didn't share the same commitment.
1. Katelynn can anticipate enjoying the advantages of MBO which include

a. increased orientation toward goal achievement.
b. performance can improve at all company levels.
c. employees are more motivated.
d. increased orientation toward goal achievement and motivation.
e. all of these.
ANS:
e
PTS: 1 DIF: 2 REF: 170

NAT: AACSB Analytic | Motivation Concepts KEY: Scenario Questions
TYP: A
2. Katelynn can anticipate and work to prevent the problems of MBO which include
a. increase in paperwork that leads to a reduction of energy.
b. a decrease in communication between managers and employees.
c. greater conflict because of opposing goals.
d. all of these.
e. none of these.
ANS:
a

NAT: AACSB Analytic | Strategy KEY: Scenario Questions TYP: A
3. In the MBO process, after the first step of setting objectives is accomplished, the next step that
Katelynn should expect is
a. reviewing progress toward company goals.
b. appraising overall performance.
c. developing action plans.
d. having a company party to celebrate.
e. none of these.
ANS:
c

NAT: AACSB Analytic | Strategy KEY: Scenario Questions TYP: A
COMPLETION
1. A(n) ____________________ is a desired future state that the organization attempts to realize.
ANS: goal

2. A(n) ____________________ is a blueprint for goal achievement and specifies the necessary
resource allocations, schedules, tasks, and other actions.
ANS: Plan

3. The act of determining the organization's goals and the means for achieving them is referred to as
____________________.
ANS: planning

4. ____________________ and plans are the responsibilities of middle managers.
ANS: Tactical goals

5. Operational plans that focus on specific tasks and processes that help to meet tactical and strategic
goals are developed by ____________________ managers and supervisors.
ANS: front-line

6. ____________________ and ____________________ facilitate employees' identification with the

organization and help motivate them, provide a sense of direction, and allow managers to learn
what the organization is trying to accomplish.
ANS:
Goals; plans
Plans; goals

7. ____________________ describes the organization's reason for existence.
ANS: Mission

8. A(n) ____________________ is a broadly stated definition of basic business scope and operations
that distinguishes the organization from others of a similar type.
ANS: mission statement

9. Broad statements describing where the organization wants to be in the future are called
____________________.
ANS: strategic goals

10. ____________________ define the action steps by which an organization intends to attain its
strategic goals.
ANS: Strategic plans

11. Goals that define the outcomes that major departments must achieve in order for the organization to
reach its overall goals are known as ____________________ goals.
ANS: tactical

12. ____________________ are designed to help execute major strategic plans and to accomplish a
specific part of the company's strategy.
ANS: Tactical plans

13. The specific results expected from departments, work groups, and individuals are the
____________________ goals.
ANS: operational

14. ____________________ plans are developed at the lower levels of the organization to specify
action steps toward achieving operational goals and to support tactical plans.
ANS: Operational

15. ____________________ is a method whereby managers and employees define goals for every
department, project, and person and use them to monitor subsequent performance.
ANS: Management by objectives

16. The most difficult step in MBO is ____________________.
ANS: setting goals

17. Managers believe that they are better oriented toward goal achievement when
____________________ is used.
ANS: management by objectives

18. ____________________ plans are used to provide guidance for work-related tasks that are
performed repeatedly within the organization.
ANS: Standing

19. ____________________ plans are developed to achieve a set of goals that are not likely to be
repeated in the future.
ANS:
Single-use
Single use

20. ____________________ are ongoing plans that are used to provide guidance for tasks performed
repeatedly within the organization.
ANS: Standing plans

21. Plans that define company responses to specific situations, such as emergencies, setbacks, or
unexpected conditions are called ____________________ plans.
ANS: contingency

22. A special type of contingency plan that is used when events are sudden and devastating and require
immediate response is called ____________________.
ANS: crisis management planning

23. The crisis management plan should be a(n) ____________________ that specifies the actions to be
taken, and by whom, if a crisis occurs.
ANS: detailed, written plan

24. ____________________ are groups of planning specialists who report directly to the CEO or
president of a company.
ANS: Central planning departments

25. Although ____________________ planning approaches are still popular with some organizations,
____________________ planning are being criticized as inappropriate for today's fast-paced
environment.
ANS: traditional; formal

26. A group of planning specialists assigned to major departments and divisions to help managers
develop their own strategic plans is called ____________________.
ANS: decentralized planning staff

SHORT ANSWER
1. List the five reasons explicit goals and plans are important.
ANS:
Explicit goals and plans can serve the following functions: legitimacy, source of motivation and
commitment, guide to action, rationale for decisions, and standard of performance.
PTS: 1 DIF: 2 REF: 160-162

2. List the five characteristics of effective goals.
ANS:
Goals should be (1) specific and measurable; (2) they should cover key result areas; (3) they should
be challenging but realistic; (4) they should have a defined time period; and (5) they should be
linked to rewards.

3. List the four major activities that must occur in order for MBO to succeed.
ANS:
(1) Set goals, (2) develop action plans, (3) review progress, and (4) appraise overall performance.
PTS: 1 DIF: 2 REF: 168-169

4. What are the three stages of crisis management?
ANS:
Prevention, Preparation, and Containment

ESSAY
1. In what ways do plans and goals benefit an organization?
ANS:
Plans and goals benefit the organization in several ways. First they provide legitimacy and a reason
for existence. They also provide a source of motivation and commitment, provide guides for action
and decision making, and they set a standard of performance.
PTS: 1 DIF: 2 REF: 160-161

2. Compare the four levels of goals and plans.
ANS:
The highest level is the mission statement, which defines the organization's basic business scope
and operations and specifies its reasons for existence. The second level is the level of strategic
goals and plans. Those pertain to the organization as a whole and specify where the organization
wants to be in the future. The third level is the tactical level, with a focus on outcomes that major
divisions and departments must achieve in order for the organization to reach its overall goals. The
fourth and lowest level is the operational level, involving specific measurable results for
departments, work groups, and individuals.

3. Describe the purposes of goals and plans.
ANS:
Legitimacy: An organization's mission symbolized legitimacy to external audiences.
Source of motivation and commitment: Goals and plans facilitate employees' identification with the
organization and help motivate them by reducing uncertainty and clarifying what they should
accomplish.
Resource allocation: Goals help managers decide where they need to allocate resources.
Guides to action: Goals and plans provide a sense of direction
Rationale for decisions: Through goal setting and planning, managers learn what the organization
is trying to accomplish.
Standards of performance: Because goals define desired outcomes for the organization, they also
serve as performance criteria.
PTS: 1 DIF: 2 REF: 160-161

4. Briefly define the characteristics of an effective goal.
ANS:
Effective goals are precisely defined and allow for measurable performance. They focus on the key
result areas that contribute most to desired performance. They should be challenging but not
unreasonably difficult. Finally, they should specify the time period that they cover and they should
be tied to valued rewards.

5. List and define the four major activities that must occur in order for management by objectives
(MBO) to succeed.
ANS:
The first step is setting goals. The setting of goals involves employees at all levels and should
incorporate the principles of effective goal setting. Goals should be jointly determined by manager
and employee, so as to increase the employee's level of commitment. The second step is developing
action plans. These action plans will specify how the goals are to be achieved. Next, a progress
review is important to make sure that the action plans are working. They may be formal or informal
and the action plan should be changed if necessary. The last step is to determine if the goals have
been achieved within the specified time period. This appraisal should factor into the setting of the
next period's goals, allowing for feedback into the setting of the next set of goals.
PTS: 1 DIF: 3 REF: 168-169

6. Describe the guidelines for planning in the new workplace.
ANS:
First, start with a strong mission. Next, set stretch goals. Third, embrace event-driving planning.
Fourth, use performance dashboards. Fifth, organize temporary task forces. And finally, top
managers show support and commitment.
PTS: 1 DIF: 2 REF: 175-177


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Chapter 6—Managerial Planning and Goal Setting

ANS: F PTS: 1 DIF: 2 REF: 159

ANS: T PTS: 1 DIF: 2 REF: 159

ANS: T PTS: 1 DIF: 1 REF: 160

4. Goals specify today's means; plans specify future ends.

ANS: F PTS: 1 DIF: 2 REF: 160

ANS: F PTS: 1 DIF: 1 REF: 160

ANS: T PTS: 1 DIF: 1 REF: 160

ANS: F PTS: 1 DIF: 1 REF: 160

8. Tactical goals and plans are the responsibility of middle managers.

ANS: T PTS: 1 DIF: 1 REF: 160

ANS: F PTS: 1 DIF: 2 REF: 160

ANS: T PTS: 1 DIF: 1 REF: 161

11. A plan tells "why" to achieve the goal.

ANS: F PTS: 1 DIF: 2 REF: 161

ANS: T PTS: 1 DIF: 1 REF: 161

ANS: T PTS: 1 DIF: 2 REF: 161

14. Step 1 in the Operational Planning Process is to plan operations.

ANS: F PTS: 1 DIF: 1 REF: 162

15. Plans provide a standard of assessment.

ANS: F PTS: 1 DIF: 2 REF: 162

ANS: F PTS: 1 DIF: 2 REF: 162

ANS: T PTS: 1 DIF: 2 REF: 163

18. An organization's mission describes its reason for existence.

ANS: T PTS: 1 DIF: 2 REF: 164

ANS: T PTS: 1 DIF: 1 REF: 164

ANS: F PTS: 1 DIF: 1 REF: 164

ANS: F PTS: 1 DIF: 2 REF: 164

ANS: T PTS: 1 DIF: 2 REF: 165

ANS: F PTS: 1 DIF: 2 REF: 165

ANS: F PTS: 1 DIF: 2 REF: 165

ANS: T PTS: 1 DIF: 1 REF: 166

ANS: T PTS: 1 DIF: 2 REF: 166

ANS: F PTS: 1 DIF: 2 REF: 166

ANS: F PTS: 1 DIF: 2 REF: 167

ANS: T PTS: 1 DIF: 2 REF: 167

ANS: F PTS: 1 DIF: 2 REF: 168

ANS: T PTS: 1 DIF: 2 REF: 168

ANS: F PTS: 1 DIF: 2 REF: 168

ANS: F PTS: 1 DIF: 2 REF: 168

34. MBO refers to managing by opportunity.

ANS: F PTS: 1 DIF: 1 REF: 168

35. The final step in the MBO process is to review progress.

ANS: F PTS: 1 DIF: 1 REF: 169

ANS: T PTS: 1 DIF: 1 REF: 169

37. The most difficult step in an MBO process is reviewing progress.

ANS: F PTS: 1 DIF: 2 REF: 170

ANS: T PTS: 1 DIF: 1 REF: 170

ANS: T PTS: 1 DIF: 2 REF: 170

ANS: F PTS: 1 DIF: 1 REF: 171

ANS: F PTS: 1 DIF: 2 REF: 171

ANS: T PTS: 1 DIF: 1 REF: 172

ANS: F PTS: 1 DIF: 2 REF: 172

ANS: T PTS: 1 DIF: 3 REF: 172

45. Contingency plans can also be considered as scenarios.

ANS: T PTS: 1 DIF: 1 REF: 173

ANS: F PTS: 1 DIF: 2 REF: 173

ANS: T PTS: 1 DIF: 2 REF: 173

ANS: F PTS: 1 DIF: 2 REF: 174

ANS: T PTS: 1 DIF: 1 REF: 174

ANS: F PTS: 1 DIF: 2 REF: 174

2. specify future ends and specify today's means.

55. Numerous are likely to be part of an overall .

6. and facilitate employees' identification with the