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Chapter 7—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: 178

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: 178

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.

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.

7-1
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7: Managerial Planning and Goal Setting
10. A plan tells "why" to achieve the goal.

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

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

13. Step 1 in Management by Objectives is to review progress

NAT: AACSB Analytic | Operations Management TYP: F
14. Plans provide a standard of assessment.

15. In step 1 of Management By Objectives, overall performance is appraised

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

17. 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.

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

7-2
19. 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.

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

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

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

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

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

25. 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.

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

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

7-3
28. Specific and measurable goal characteristics apply only to the lower-level goals.

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

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

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

NAT: AACSB Analytic | Motivation Concepts TYP: F
32. MBO refers to managing by opportunity.

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

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

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

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

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

7-4
38. Single-use plans are ongoing plans that are used to provide guidance for tasks performed repeatedly
within the organization.

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

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

41. 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
42. Contingency plans can also be considered as scenarios.

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

44. 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.

45. The first stage in crisis prevention includes setting up effective communication system.

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

7-5
47. 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
48. 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.

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

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

NAT: AACSB Analytic | Environmental Influence TYP: F
51. Managers work with planning experts to develop their own goals and plans in decentralized planning.

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

53. Planning cannot tame a turbulent environment.

54. Defining operational goals and plans occurs in the plan development phase of the organizational
planning process.

55. Strategic planning tends to be long term and may define organizational action steps from two to five
years in the future.

7-6
56. Goals are typically stated in quantitative terms.

57. Providing innovative solutions to customer needs is a goal that would be placed in the internal
business process category on a strategy map.

58. Managers use strategic goals to direct employees and resources toward achieving specific outcomes
that enable the organization to perform efficiently and effectively.

59. In order for goals to be effective, they should be challenging but realistic.

60. A key benefit of management by objectives is that it aligns individual and departmental goals with
company goals.

61. A major difference between rules and policies is that rules are broad in scope whereas policies are
narrow in scope.

62. One of the biggest benefits of planning is that, in turbulent environments, plans create greater
organizational flexibility.

63. Crisis planning forces managers to mentally rehearse what they would do if their best laid plans
collapse.

64. When detecting signals from the external environment as a part of crisis planning, managers are in the
preparation stage.

7-7
65. Stretch goals are typically so far beyond the current levels that people have to be innovative to find
ways to reach them.

66. Sales in relation to targets is an example of a balanced scorecard metric.

67. Intelligence teams are useful when an organization confronts a major intelligence challenge.

NAT: AACSB Analytic | Creation of Value TYP: F
68. Goals and plans are valuable to an organization because they provide rationale for decisions, a guide to
action, and an increase in motivation and commitment.

NAT: AACSB Analytic | Motivation Concepts TYP: F
69. When a company faces rapid change, problems with planning can occur.

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: 178
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: 178
7-8
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: 178
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: 179
7. ____ is primarily responsible for strategic goals/plans.

a. Middle management
b. Board of directors
c. Consultants
d. Top management
e. Lower management
7-9
8. ____ is primarily responsible for operational goals/plans.

c. Consultants
d. Top management
e. Lower management
ANS: E PTS: 1 DIF: 1 REF: 179
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.
7-10
13. Which of the following is not a reason why planning positively affects a company’s performance?
a. Goals and plans provide legitimacy for customers
b. Goals and plans set a standard of performance
c. Goals and plans guide resource allocation
d. Goals and plans are a guide to action
e. Goals and plans are a 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. Operations 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. Product quality
c. Location of facilities
d. All of these
e. None of these
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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.
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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: 182-184
7-13
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
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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 7, which of the following is NOT a type 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.
7-15
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
7-16
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
ANS: B PTS: 1 DIF: 1 REF: 186-187
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
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
7-17
48. 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.
49. 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.
50. Standing plans are

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

a. policy.
b. standing plan.
c. procedure.
d. single-use plan.
e. rule.
52. 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.
7-18
53. 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
54. ____ define boundaries within which to make a decision.

a. Programs
b. Policies
c. Rules
d. Procedures
e. Project
55. 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
56. "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.
57. 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.
7-19
58. Contingency plans are also referred to as

a. standing plans.
b. rules.
c. scenarios.
d. procedures.
e. operationally tactical plans.
59. ____ 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
60. ____ 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
61. 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
62. 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
7-20
63. 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
64. 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.
65. 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
66. Of the strategic management functions, which is considered the most fundamental?
a. Executing
b. Analyzing
c. Controlling
d. Planning
e. Leading
7-21
67. The planning process starts with:

a. A formal mission that defines the organization’s purpose
b. Tactical planning
c. Strategic planning
d. Operational planning
e. Controlling performance
68. Silver Star Automobiles holds monthly planning and operational reviews to ensure that it is on track
for meeting organizational goals. This involves which stage of the organizational planning process?
a. Developing the plan
b. Translating the plan
c. Plan operations
d. Executing the plan
e. Monitoring and learning
69. Which type of plan helps managers implement the overall strategic plan?
a. Operational
b. Contingency
c. Tactical
d. Crisis
e. Corporate-level
70. In developing a strategy map for her interior design business, Carla has decided to promote employee
development by providing online training tools. This involves goals in which strategy map category?
a. Financial performance goals
b. Learning and growth goals
c. Internal business process goals
d. Customer service goals
e. Supply chain goals
71. Focusing manager and employee efforts on activities that will lead to goal attainment is a benefit of
what management method?
a. Tactical planning
b. Contingency planning
c. Single-use planning
d. Management by objectives
e. Management by walking around
7-22
72. Eugene, a human resource manager of a medium-sized technology business, has learned that
employees are wasting valuable work time by visiting Facebook and other social media Web sites. As
a result, Eugene’s plans to establish a new company policy that limits use of social media to only those
tasks that are company related. This would be considered what type of plan?
a. Project plan
b. Single-use plan
c. Tactical plan
d. Operational plan
e. Strategic plan
73. Which of the following is a commonly-cited limitation of planning?

a. Plans limit employee motivation and commitment
b. Plans make resource allocation more difficult
c. Plans make it more difficult to measure standards of performance
d. Plans boost intuition and creativity
e. Plans can create a false sense of security
74. Jerrica, a finance manager at LRV industries, is asked by her boss to develop a plan in the event that
company sales drop by 20 percent or more. This type of plan is known as a(n):
a. Contingency planning
b. Financial planning
c. Crisis planning
d. Consumer protection
e. Environmental planning
75. The two stages of crisis planning include:

a. Prevention and control
b. Planning and leading
c. Prevention and preparation
d. Preparation and control
e. Leading and organizing
76. Jeff is a top manager at a textile factory. He is developing a crisis plan in the event that the company
has a toxic spill or accident. Which of the following should Jeff undertake to prepare for such a crisis?
7-23
a. Building relationships with neighboring businesses

b. Detecting signals from the natural environment
c. Polling employees on the likelihood of an environmental disaster
d. Designating a crisis management team in the event of an environmental disaster
e. Dismantling the company’s ties to the external media
77. ___________ are reasonable yet highly ambitious goals that are so clear, compelling, and imaginative
that they fire up employees and engender excellence.
b. Stretch goals
c. Strategic goals
d. Tactical goals
e. Bottom-up goals
78. Sam is in charge of strategy control at Lanser’s, a large clothing retailer. He regularly tracks sales in
relation to targets, number of products on back order, and percentage of customer service calls
resolved within specified time periods. These metrics are known as:
a. Financial indicators
b. Tactical goals
c. Performance dashboards
d. Balanced scoreboards
e. Operational standards
79. A(n) _________ is a cross-functional group of managers and employees who work together to gain a
deep understanding of a specific business issues, with the aim of presenting insights related to that
issue.
a. Espionage team
b. Functional team
c. Task force
d. Project team
e. Intelligence team
80. At Save-tech, Sophia, director of marketing, is a member of a cross-functional group of managers and
employees. The purpose of the group is to gain a deep understanding company’s competitive
environment and periodically present these findings to top management. Sophia is involved in what
type of team?
a. Intelligence team
b. Functional team
7-24
c. Task force
d. Project team
e. Espionage team
81. One major limitation of goals and plans is:

a. Goals and plans guide resource allocation
b. Goals and plans may cause rigidity in a turbulent environment
c. Goals and plans decrease employee motivation
d. Goals and plans decrease employee commitment
e. None of the above
CASE
Scenario - Katelynn Kareem
Managers at WXYZ just announced that the new management program would be focused around
MBO concepts. Katelynn Kareem had been a manager at WXYZ for ten years and she was not 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: 188

NAT: AACSB Analytic | Motivation Concepts KEY: Scenario Questions
TYP: A
2. What can Katelynn expect to be doing during the final step of the MBO process?
a. Setting goals
b. Reviewing progress
c. Appraising overall performance
d. Defining mission
e. Developing action plans
ANS: c
PTS: 1 DIF: 2 REF: 187 NAT: AACSB Analytic | Strategy

KEY: Scenario Questions TYP: A
7-25
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

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

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

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

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

TYP: F
7-26
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

TYP: F
6. ____________________ describes the organization's reason for existence.
ANS: Mission

TYP: F
7. 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

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

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

TYP: F
10. 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

TYP: F
7-27
11. ____________________ are designed to help execute major strategic plans and to accomplish a
specific part of the company's strategy.
ANS: Tactical plans

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

TYP: F
13. ____________________ 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

TYP: F
14. ____________________ 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

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

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

TYP: F
7-28
17. ____________________ plans are developed to achieve a set of goals that are not likely to be repeated
in the future.
ANS:
Single-use
Single use

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

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

TYP: F
20. 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

TYP: F
21. 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

TYP: F
22. 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

TYP: F
7-29
SHORT ANSWER
1. List four reasons why planning generally positively affects a company’s performance?
ANS:
Explicit goals and plans can serve the following functions: resource allocation, source of motivation
and commitment, guide to action, rationale for decisions, a guide to action, and set a standard of
performance

TYP: F
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.

TYP: F
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.

TYP: F
4. What are the two stages of crisis management?
ANS:
Prevention and Preparation
PTS: 1 DIF: 2 REF: 192-193 NAT: AACSB Analytic | Strategy

TYP: F
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.

TYP: F
7-30
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.

TYP: F
3. 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.

TYP: F
4. 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.

TYP: F
5. List three innovative approaches to planning.
ANS:
Set stretch goals for excellence, use performance dashboards, and deploy intelligence teams.
PTS: 1 DIF: 2 REF: 194-195 NAT: AACSB Analytic | Strategy

TYP: F
7-31
Another random document with
no related content on Scribd:
the planets, waiting for orders from the home-planets to fire when
ready.
"For the love of Heaven," he pleaded with a secretary to the
Karfiness, "they won't even wait for the ultimatum to elapse. There's
going to be a space-war in two hours if I don't get to see her Serene
Tentaculosity!" The title he bestowed on her was sheer whimsy; he
wasn't half as upset as he was supposed to be. It was all for effect.
He rushed away, distrait by the information that he couldn't possibly
see the Karfiness and aware that the munitions interests of Mars
would by now be rubbing their chelae with glee.
He reached a phone and rang up the Ambassador. "Okay," he
informed him. "Stop short!" The Ambassador, badly overworked and
upset, stopped short with the messages. Venus and Earth were
baffled again, this time because there was nothing to be baffled by.
The strange silence that had fallen on the F. O.'s was alarming in its
implications. The diplomatic mind had already adjusted itself to the
abnormal condition; restoration of normality created almost
unbearable strain. Messages rushed to the Embassy; the
Ambassador left them severely alone and went to bed. From that
moment anybody who touched a transmitter would be held for
treason, he informed his staff. It was as though the Mars Embassy
had been blown out of the ground.
"They are now," brooded Weems, "ready for anything. Let us hope
that Venus hasn't lost her common sense along with her temper."
With that he set himself to the hardest job of all—waiting. He got a
couple of hours of sleep, on the edge of a volcano, not knowing
whether the lined-up Venus fleet would fire on the opposite Earth
fleet before he woke. If he did it would be all over before he really got
started.
Even Weems hadn't imagined how well his plan was taking root.
Back on Earth the whole F. O. had gone yellow, trembling at the gills
lest they should actually have to fight. And it was perfectly obvious
that they would, for when planetary integrity directs no mere
individual might stand in the way.
There was a great dearth of news; there had been for the past few
hours of the crisis. Since that God-awful business from the Mars
Embassy stopped and the entire staff there had—presumably—been
shot in the backs while hard at work fabricating incredible dispatches
there was a mighty and sullen silence over the air, ether and sub-
etheric channels of communication.
On Venus things were pretty bad too. A lot of Earthmen had been
interned and the whole planet was sitting on edge waiting for
something to happen. It did happen, with superb precision after
exactly seven hours of silence and inactivity.
There was a frantic call from—Jupiter! Jupiter claimed that the whole
business was a feint and that the major part of the Earth fleet was
even now descending on the Jovians to pillage and slay.
The official broadcast—not a beam-dispatch—from Jupiter stated
this. Earth promptly denied everything, in a stiff-necked
communique.
Venus grinned out of the corner of its mouth. In an answering
communique she stated that since Venus was invariably to be found
on the side of the underdog the Venus Grand Fleet would depart
immediately for Jupiter to engage the enemy of her good friends, the
Jovians.
Earth, to demonstrate her good faith, withdrew her own fleet from
anywhere near the neighborhood of Jupiter, going clear around to
the other side of the Sun for maneuvers.
Lovers of peace drew great, relieved sighs. The face-to-face had
been broken up. The ultimatum had been forgotten in Earth's
righteous stand that she had not invaded Jupiter or intended to. This
made Venus look and feel silly. This made the crisis collapse as
though it had never been there at all.
And just after the Venus fleet had reported to its home F. O.—this
was three hours after the ultimatum had elapsed without being
noticed by anybody—there were several people in the Earth
Embassy on Mars acting hilariously. There was a Jovian who
gurgled over and over:
"I didn't know it would be this much fun! We would have got into the
game years ago if we'd known."
"And I," said the Ambassador, "have the satisfaction of knowing that
I've given a pretty headache to the best code experts in the system.
And all by the simple expedient of sending a code message that
means just what it says."
"And I," said Weems, upending a glass, "have aided the cause of
peace between the planets. If I can get to the Karfiness and let her
know that she's being played for a sucker by the munitions people—"
"Let it come later," said Dr. Carewe. "I wish I could live another eighty
years to read in the history books. But it really doesn't matter,
because they'll say something like this:
"'Toward the end of this year there arose a crisis between Earth and
Venus, seemingly over matters of trade. It actually reached a point of
ultimatums and reprisals. Fortunately the brilliant, calm and efficient
work of the Hon. Secretary of Recession, Jowett Osgood, saved the
day. He contracted a defensive alliance with Jupiter, the combined
might of the Earth-Jovian fleet crushing any idea of victory that may
have been the goal of the Venusians.'"
Dr. Carewe laughed loud and raucously as she refilled her glass.
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ANS: F PTS: 1 DIF: 2 REF: 178

ANS: T PTS: 1 DIF: 2 REF: 178

ANS: T PTS: 1 DIF: 1 REF: 178

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

ANS: F PTS: 1 DIF: 2 REF: 178

ANS: F PTS: 1 DIF: 1 REF: 178

ANS: T PTS: 1 DIF: 1 REF: 179

ANS: F PTS: 1 DIF: 1 REF: 179

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

ANS: T PTS: 1 DIF: 1 REF: 179

ANS: F PTS: 1 DIF: 2 REF: 181

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

ANS: F PTS: 1 DIF: 2 REF: 178

ANS: T PTS: 1 DIF: 1 REF: 190

ANS: T PTS: 1 DIF: 2 REF: 190

13. Step 1 in Management by Objectives is to review progress

ANS: F PTS: 1 DIF: 1 REF: 187

14. Plans provide a standard of assessment.

ANS: T PTS: 1 DIF: 2 REF: 190

15. In step 1 of Management By Objectives, overall performance is appraised

ANS: F PTS: 1 DIF: 2 REF: 187

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

ANS: T PTS: 1 DIF: 2 REF: 181

ANS: T PTS: 1 DIF: 1 REF: 182

ANS: F PTS: 1 DIF: 1 REF: 181

ANS: F PTS: 1 DIF: 2 REF: 184

ANS: T PTS: 1 DIF: 2 REF: 183

ANS: F PTS: 1 DIF: 2 REF: 183

ANS: F PTS: 1 DIF: 2 REF: 179

ANS: T PTS: 1 DIF: 1 REF: 184

ANS: T PTS: 1 DIF: 2 REF: 179

ANS: F PTS: 1 DIF: 2 REF: 184

ANS: F PTS: 1 DIF: 2 REF: 185

ANS: T PTS: 1 DIF: 2 REF: 186

ANS: F PTS: 1 DIF: 2 REF: 186

ANS: T PTS: 1 DIF: 2 REF: 186

ANS: F PTS: 1 DIF: 2 REF: 186

ANS: F PTS: 1 DIF: 2 REF: 186

32. MBO refers to managing by opportunity.

ANS: F PTS: 1 DIF: 1 REF: 186

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

ANS: F PTS: 1 DIF: 1 REF: 187

ANS: T PTS: 1 DIF: 1 REF: 187

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

ANS: F PTS: 1 DIF: 2 REF: 187

ANS: T PTS: 1 DIF: 2 REF: 187

ANS: F PTS: 1 DIF: 1 REF: 188

ANS: F PTS: 1 DIF: 2 REF: 188

ANS: T PTS: 1 DIF: 1 REF: 191

ANS: F PTS: 1 DIF: 2 REF: 191

ANS: T PTS: 1 DIF: 3 REF: 191

42. Contingency plans can also be considered as scenarios.

ANS: T PTS: 1 DIF: 1 REF: 191

ANS: F PTS: 1 DIF: 2 REF: 191

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

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