Ch8 Planning Processes and Techniques Test Bank Answers

Chapter 08: Planning Processes and Techniques

True/False

1. The management process involves planning, organizing, leading, and controlling the use of resources to achieve performance objectives.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Controlling is the process of setting objectives and determining how to accomplish them.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Leading refers to guiding the efforts of human resources to ensure high levels of task accomplishment.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Stretch goals are performance targets that we have to work extra hard to reach.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Plans alone don’t deliver results; implemented plans do.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. An organization with flexibility operates with an orientation toward the past rather than the future.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Planning helps us avoid simply being carried along by the flow of events, and focuses our attention on priorities.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Without planning, control lacks objectives and standards for measuring how well things are going and what could be done to make them go better.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. For effective time management, one must become calendar-bound by letting others control one’s schedule.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Long-term plans typically look one or more years into the future.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Short-term plans typically cover one year or less.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. As the time frames of planning are shrinking nowadays, top management is no longer responsible for setting longer-term plans and directions for the organization as a whole.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Strategic plans are focused only on a specific department of an organization.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Strategic plans ideally set forth the goals and objectives needed to accomplish the organization’s vision in terms of mission or purpose and what it hopes to be in the future.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In business, tactical plans often take the form of operational plans that indicate how different components of the enterprise will contribute to the overall strategy.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Operational plans include single-use plans like budgets that apply to one specific task or time period.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Policies set expectations for many aspects of employee behavior.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Procedures set broad guidelines for decisions.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Budgets are standing plans that are used over and over again.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. To be “over budget” is generally considered bad for a company or an individual; to come in “under budget” is generally good.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Operating budgets allocate resources like labor, equipment, and space.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A flexible budget allocates resources as if each budget were brand new.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Qualitative forecasting uses expert opinions to predict the future.

Learning Objective: 8.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Contingency planning identifies alternative courses of action to take when things go wrong.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Scenario planning is a short-term version of contingency planning.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The purpose of benchmarking is to find out what other people and organizations are doing very well, and then plan how to incorporate these ideas into one’s own operations.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Internal benchmarking encourages members and work units to learn from competitors and non-competitors alike.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. If staff planners are used, people may often lack commitment to implement the plans no matter how good they are.

Learning Objective: 8.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Great goals include a challenging stretch factor while still being realistic and possible to achieve.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Strategic goals set by top management cascade down the organization step by step to become quality management objectives for lower levels.

Learning Objective: 8.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Participatory planning includes in all planning steps the people who will be asked to help implement them and not the ones affected by the plans.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Even though participatory planning takes more time, it can improve results by improving implementation.

Learning Objective: 8.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

Multiple Choice

1. _____ is the process of setting objectives and determining how to accomplish them.
2. Directing
3. Controlling
4. Leading
5. Organizing
6. Planning

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Abasi, the supervisor at KNYA Inc., is in the process of setting certain specific goals for his team, and is deciding how his team can reach those goals. In this scenario, Abasi is involved in the process of _____.
   1. planning
   2. leading
   3. organizing
   4. controlling
   5. directing

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following management functions deals with the allocation and arrangement of resources to accomplish tasks?
   1. Planning
   2. Leading
   3. Organizing
   4. Controlling
   5. Directing

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ is a management function that guides the efforts of human resources to ensure high levels of task accomplishment.
   1. Leading
   2. Directing
   3. Resourcing
   4. Organizing
   5. Processing

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following management functions deals with monitoring task accomplishments and taking necessary corrective action?
   1. Coordinating
   2. Processing
   3. Controlling
   4. Leading
   5. Directing

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is the first step in the planning process?
2. Analyzing alternatives and making a plan
3. Defining the objectives
4. Implementing the plan and evaluating results
5. Determining where one stands vis-à-vis objectives
6. Developing premises regarding future conditions

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Yoonsuh, the chief technology officer at Namkoong Appliances, is in the process of identifying the results she wants her company to achieve next year. She knows where she wants her company to reach and also has an idea of how far off the desired mark the company will be along the way. She is most likely in the process of:
   1. developing premises regarding future conditions.
   2. defining her company’s objectives.
   3. analyzing her company’s alternatives and making a plan.
   4. implementing the plan and evaluating the results.
   5. determining where her company stands vis-à-vis objectives.

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. In which step of the planning process would one know where one is placed in reaching the goals, and what strengths work in one’s favor and what weaknesses may hold one back?
2. Implementing the plan and evaluating results
3. Defining the objectives
4. Developing premises regarding future conditions
5. Analyzing alternatives and making a plan
6. Determining where one stands vis-à-vis objectives

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. After evaluating the current sales of PCs in relation to the desired sales, Rehan, the marketing manager at Alfalah Inc., generates alternative campaigns that may affect the PC’s expected sales. He identifies, for each campaign, things that may help or hinder progress toward the company’s objectives. Rehan is currently in which phase of the planning process?
2. Defining the objectives
3. Determining where one stands vis-à-vis objectives
4. Developing premises regarding future conditions
5. Analyzing alternatives and making a plan
6. Implementing the plan and evaluating results

Learning Objective: 8.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. In which phase of the planning process would one choose the alternative to accomplish one’s objectives and describe what must be done to follow the best course of action?
2. Analyzing alternatives and making a plan
3. Defining the objectives
4. Implementing the plan and evaluating results
5. Determining where one stands vis-à-vis objectives
6. Developing premises regarding future conditions

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Roshan, the marketing manager at Kalx Inc., wants to check if the latest marketing campaign was successful in increasing the sales of PCs for the company. Which of the following steps must he take to measure the sales performance of the organization?
2. Determine where he stands vis-à-vis objectives
3. Define the objectives
4. Develop premises regarding future conditions
5. Evaluate results and revise plans if needed
6. Analyze alternatives and make a plan

Difficulty: Moderate

Learning Objective: 8.1

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. In which step of the planning process does one take action and carefully measure progress toward objectives?
   1. Define the objectives
   2. Determine where you stand vis-à-vis objectives
   3. Implement the plan and evaluate results
   4. Analyze alternatives and make a plan
   5. Develop premises regarding future conditions

Difficulty: Moderate

Learning Objective: 8.1

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In the planning process, _____ are the specific results or desired outcomes that one intends to achieve.
   1. objectives and goals
   2. beliefs and culture
   3. procedures
   4. policies
   5. guidelines

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Performance targets that we have to work extra hard to reach are called _____.
2. stretch goals
3. tactical goals
4. objectives
5. plans
6. missions

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) _____ is a statement of action steps to be taken in order to accomplish the objectives.
2. concept
3. objective
4. guideline
5. goal
6. plan

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Neehara, who is being given the responsibility to meet certain sales targets for next year, is preparing a list of measures she will take to reach these targets. Her list includes such specific action items as preparing a log, checking the quality of inputs and outputs, pricing, and details about his advertising strategy. In this scenario, which of the following is Neehara creating?
   1. Goal
   2. Policy
   3. Plan
   4. Concept
   5. Objective

Learning Objective: 8.1

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of planning?
   1. It is done by managers at scheduled times.
   2. It is a one-time process.
   3. It doesn’t need to be evaluated or monitored for viability.
   4. It can include the active participation of all employees.
   5. It can deliver results even without implementation.

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is an external source of organizational pressure?
   1. Quest for operating efficiencies
   2. Alternative work arrangements
   3. Government regulations
   4. Concerns for work–life balance
   5. New organizational structures

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is an internal source of organizational pressure?
   1. Government regulations
   2. Changing social norms and ethical expectations
   3. Changing technologies
   4. Greater workplace diversity
   5. Uncertainties of a global economy

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____occurs when an organization allows itself to be carried along by the flow of events.
   1. Coordination
   2. Organizational pressure
   3. Complacency trap
   4. Ecological fallacy
   5. Ethnocentrism

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) _____ oriented manager makes sure the most important things get first attention.
2. priority
3. result
4. advantage
5. change
6. innovation

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) _____ oriented manager ensures that all resources are used to the best interest and benefit.
2. result
3. change
4. relation
5. priority
6. advantage

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) _____ oriented manager anticipates problems and opportunities so they can be dealt with most effectively.
2. result
3. employee
4. priority
5. change
6. advantage

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The link between planning and controlling begins with _____.
2. anticipating problems and opportunities
3. setting objectives and standards
4. analyzing the alternatives
5. evaluating and monitoring the results
6. understanding the internal and external organizational threats

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about planning?
   1. Good planning improves rigidity.
   2. An organization with flexibility starts losing focus.
   3. Planning allows organizations to get into the complacency trap.
   4. Planning improves coordination.
   5. When planning is not done well, it facilitates control.

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. _____ focuses on measuring how well things are going and what could be done to improve things.
2. organizing
3. controlling
4. leading
5. goal setting
6. decision making

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Without control, the process of _____ lacks the follow-through needed to ensure that things work out as intended.
2. planning
3. goal setting
4. leading
5. problem solving
6. directing

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about long-range and short-range plans?
   1. There is a lot more permanency to long-term plans today than there was in the past.
   2. Long-term plans are not subject to frequent revisions today.
   3. Long-term plans typically look at least ten years or more into the future.
   4. The time frames of planning are shrinkingat present.
   5. Lower management is mainly responsible for creating short-term plans.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Even though the time frames of planning may be shrinking, _____ is/are still responsible for setting longer-term plans and directions for the organization as a whole.
2. lower management
3. middle management
4. shareholders
5. top management
6. consumers

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ are longer-term plans that set broad directions for the organization.
2. Procedural plans
3. Functional plans
4. Strategic plans
5. Tactical plans
6. Operational plans

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of strategic plans?
2. Plans at the middle and lower levels of the traditional organizational pyramid tend to be strategic.
3. They are focused only on a particular department or group of employees in the organization.
4. They are short-range plans to achieve an immediate goal.
5. They refer to the “tactical” plans of the organization.
6. They ideally set forth the goals and objectives needed to accomplish the organization’s vision.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. A _____ clarifies the purpose of the organization and expresses what it hopes to be in the future.
   1. vision
   2. mission
   3. policy
   4. procedure
   5. budget

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ are developed and used to implement strategic plans.
2. Tactical plans
3. Visions
4. Operational plans
5. Missions
6. Procedures

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The management of Khilona, a toy manufacturing company, decides that they will promote their products at the various shopping malls of the city. In order to do so, they prepare teams of employees to visit the shopping malls and promote its goods. The decision of the management to allocate the company’s human resources for promoting the toys can be regarded as a _____ plan.
2. tactical
3. strategic
4. top-down
5. production
6. visionary

Learning Objective: 8.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ indicate how different operations within the organization will help advance the overall strategy.
2. Operational plans
3. Policies
4. Budgets
5. Functional plans
6. Missions

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In order to help implement its corporate strategy, the managers of an organization would most likely develop a(n) _____ plan for the marketing department.
2. functional
3. operational
4. single-use
5. production
6. zero-based

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following functional plans deal with work methods and technologies?
2. Human resource plans
3. Marketing plans
4. Facilities plans
5. Financial plans
6. Production plans

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Functional plans dealing with money and capital investments are called _____ plans.
2. marketing
3. logistics
4. financial
5. human resource
6. facilities

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Nakatomi Inc. wants to open a new automobile manufacturing unit in Kasnia. Kaoruko’s team is assigned the task of planning the layout of the new factory in Kasnia. In this scenario, Kaoruko is dealing with the _____ plan.
2. facilities
3. financial
4. operational
5. marketing
6. inventory

Learning Objective: 8.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. As Hazel Inc.’s original suppliers have suddenly shut down, it is now making plans to find alternate suppliers to provide resources for its manufacturing plant. Such plans are referred to as _____ plans.
   1. production
   2. facilities
   3. marketing
   4. logistics
   5. financial

Learning Objective: 8.2

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ plans are functional plans that deal with suppliers and acquiring resource inputs.
2. Human resource
3. Logistics
4. Marketing
5. Production
6. Facilities

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ plans deal with selling and distributing goods or services.
2. Production
3. Financial
4. Facilities
5. Logistics
6. Marketing

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following functional plans deal with building a talented workforce?
2. Human resource plans
3. Logistics plans
4. Marketing plans
5. Production plans
6. Facilities plans

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) _____ plan identifies short-term activities to implement the broad plans of the company, and includes standing plans and single-use plans.
2. forecast
3. functional
4. strategic
5. operational
6. tactical

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a standing plan?
2. A policy
3. A budget
4. A vision
5. A mission
6. A forecast

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A policy of zero-tolerance toward sexual harassment at workplace is an example of _____ plans used by organizations.
2. facilities
3. financial
4. single-use
5. standing
6. logistics

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is a single-use plan?
2. A procedure
3. A policy
4. A budget
5. A mission
6. A vision

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A _____ communicates broad guidelines for making decisions and taking action in specific circumstances.
2. vision
3. procedure
4. policy
5. tactical plan
6. budget

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. What is the primary difference between a policy and a procedure?
2. A policy focuses on the organization as a whole, but a procedure focuses only on a single department.
3. A policy sets a broad guideline, but a procedure defines precise actions to be taken.
4. A policy is a single-use plan, but a procedure is a standing plan.
5. A policy identifies short-term directions for the organization, but a procedure identifies long-term directions.
6. A policy guides fair employment, but a procedure guides ethical principles.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Procedures are stated in employee handbooks and often called _____.
2. bureaucratic procedures
3. contingency procedures
4. standard operating procedures
5. experimental procedures
6. catalogued procedures

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ are single-use plans that commit resources for specific time periods to activities, projects, or programs.
2. Procedures
3. Policies
4. Guidelines
5. Budgets
6. Forecasts

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Financial budgets:
2. project cash flows and expenditures.
3. plot anticipated sales or revenues against expenses.
4. allocate resources like labor, equipment, and space.
5. allocate a stated amount of resources for a specific purpose.
6. allow resources to vary in proportion with various levels of activity.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ budgets allocate resources like labor, equipment, and space.
2. Financial
3. Operating
4. Nonmonetary
5. Zero-based
6. Flexible

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following types of budgets plot anticipated sales or revenues against expenses?
2. Zero-based budgets
3. Nonmonetary budgets
4. Financial budgets
5. Operating budgets
6. Fixed budgets

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A fixed budget:
2. allocates a stated amount of resources for a specific purpose.
3. allocates resources as if each budget were brand new.
4. allows resources to vary in proportion with various levels of activity.
5. allocates resources like labor, equipment, and space.
6. always has equal expenditures and revenue.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Morrison Manufacturing (MM) creates a budget for projects or activities in each new budget period as if it were brand new. It does not renew any of the past funding. MM is using a(n) _____ budgeting approach.
2. nonmonetary
3. operating
4. zero-based
5. fixed
6. flexible

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. _____ is the process of predicting what will happen in the future.
2. Benchmarking
3. Scenario planning
4. Contingency planning
5. Staff planning
6. Forecasting

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The current issue of a popular business periodical predicted a global economic downturn. The periodical attributed the downturn to a predicted increase in the inflation rate. This report is an example of _____.
2. benchmarking
3. scenario planning
4. contingency planning
5. staff planning
6. forecasting

Learning Objective: 8.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Qualitative forecasting uses _____ to predict future events.
2. budgets
3. expert opinions
4. mathematical models
5. statistical analyses
6. surveys

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Maria, a marketing manager at Kurt Consulting, predicts a 15% drop in the sales of their premium packages. She used correlation and regression analyses of previous years’ sales records to arrive at the conclusion. Maria is using _____.
2. contingency planning
3. qualitative forecasting
4. quantitative forecasting
5. internal benchmarking
6. external benchmarking

Learning Objective: 8.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ identifies alternative courses of action to take when things go wrong.
2. Internal benchmarking
3. Contingency planning
4. External benchmarking
5. Goal setting
6. Staff planning

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a long-term version of contingency planning?
   1. Benchmarking
   2. Scenario planning
   3. Forecasting
   4. Staff planning
   5. Operationalizing

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ involves identifying several possible future situations or states of affairs and then making plans to deal with each situation should it actually occur.
2. Scenario planning
3. External benchmarking
4. Forecasting
5. Staff planning
6. Internal benchmarking

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ is the use of external and internal comparisons to better evaluate one’s current performance and identify possible ways to improve for the future.
2. Qualitative forecasting
3. Quantitative forecasting
4. Scenario planning
5. Contingency planning
6. Benchmarking

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The purpose of benchmarking is to _____.
2. identify alternative future scenarios and make plans to deal with each scenario
3. identify alternative courses of action to take when things go wrong
4. plan how to incorporate the good, profitable ideas of other organizations into one’s own operations
5. use expert opinions to predict the future
6. use mathematical models and statistical analyses of historical data and surveys to predict future events

Learning Objective: 8.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Riveras, a chain of discount stores, utilized the best retailing strategies of another successful retail chain to create a market for itself. By learning from the retail chain, Riveras has used _____.
2. qualitative forecasting
3. quantitative forecasting
4. scenario planning
5. external benchmarking
6. internal benchmarking

Learning Objective: 8.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true about the use of staff planners?
2. It can lead to a communication gap between planners and implementers.
3. It can lead to an increase in commitment to implement the plans.
4. The use of staff planners can lead to a short-term rather than a long-term focus.
5. Very few organizations use staff planners as they don’t bring any expertise to the planning process.
6. The use of staff planners always reduces the focus of the planning team.

Learning Objective: 8.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. _____ refer to things done by people and organizations that enable them to achieve superior performance.
2. Missions
3. Scenario plans
4. Noncompetitive objectives
5. Best practices
6. Operating activities

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a characteristic of a “great goal”?
2. It has no precise timetable.
3. It is general and not too specific.
4. It is almost impossible to accomplish.
5. It can be measured easily.
6. It is not challenging.

Learning Objective: 8.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of “great goals”?
2. They are impossible to achieve.
3. They are challenging.
4. They are difficult to measure.
5. They are very generic in nature.
6. They are not bound by timetables.

Learning Objective: 8.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. When job performance is difficult to quantify, performance objectives can be stated as _____.
2. short-range plans
3. benchmarks
4. verifiable work activities
5. measurable end products
6. deliverables

Learning Objective: 8.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Silver Finance requires that its interest rate planning process include its employees, managers, some customers, and others who will be affected by the resulting plans and/or will be asked to help implement them. Silver Finance is utilizing _____.
2. contingency planning
3. scenario planning
4. management by objectives
5. participatory planning
6. benchmarking

Learning Objective: 8.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of participatory planning?
2. It reduces the time needed for planning.
3. It has less need for forecasting.
4. It pays greater attention to contingency situations.
5. It can improve results by improving implementation.
6. It decreases the creativity of planning.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. The planning team at Abdullah and Sons has thoroughly examined all possible situations that may be encountered in the current year. They have also addressed various factors that may provide assistance or act as barriers to objectives. Which of the following steps in the planning process has been completed by the planning team at Abdullah and Sons by taking these actions?
2. Defining objectives
3. Determining where one stands vis-à-vis objectives
4. Developing premises regarding future conditions
5. Measuring performance
6. Implementing the plan and evaluating results

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Aziza is an assistant manager at a popular retail outlet. She likes to keep her employees motivated and she insists that the sales team meet their daily sales target and strive to go beyond their targets for extra bonuses. Aziza can be regarded as a(n) _____ manager.
2. change oriented
3. results oriented
4. priority oriented
5. relational oriented
6. complacency oriented

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Sahoko, the manager of a construction company, is in charge of allocating equipment and construction workers to different construction projects. She allocates the majority of equipment and workers to high priority projects. In this scenario, Sahoko creates a _____ budget.
2. financial
3. operating
4. nonmonetary
5. zero-based
6. personal

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. LazyMart, an online retailer, hopes to be one of the most popular, highly efficient, and biggest e-tailers in the country. It wishes to excel in all its endeavors to serve customers. This is an example of a:
2. policy.
3. functional plan.
4. code of conduct.
5. vision.
6. tactical plan.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Laura is the owner of a boutique. She comes up with a new plan to improve the sale and distribution of the merchandise of her boutique. Which functional plan did Laura employ in this scenario?
2. Human resource plan
3. Logistics plan
4. Marketing plan
5. Production plan
6. Facilities plan

Learning Objective: 8.2

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Morrison Associates, a law firm, encourages its lawyers to learn from each other about how they can handle their cases better. It encourages the lawyers to share their best practices and collectively work toward meeting the objectives of the firm. This is an example of _____.
2. internal benchmarking
3. forecasting
4. functional planning
5. tactical planning
6. external benchmarking

Learning Objective: 8.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Javier and his team of engineers have gone through the blueprint of a new commercial complex and have underlined major issues that could crop up when work starts at the site. They have also thought of possible fixes to the issues. This is an example of _____.
2. benchmarking
3. operational planning
4. functional planning
5. tactical planning
6. contingency planning

Learning Objective: 8.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A magazine publishes forecasts of industry conditions, interest rates, unemployment trends, and national economies every quarter. It uses expert opinion to predict the future. This method of forecasting the future falls under the category of _____ forecasting.
2. specific
3. attainable
4. timely
5. measurable
6. qualitative

Learning Objective: 8.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. ____ set targets to create the knowledge and skills required for performance.
   1. Functional plans
   2. Learning goals
   3. Outcome goals
   4. Strategic plans
   5. Tactical plans

Learning Objective: 8.3

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. ____ set targets for actual performance results.
   1. Functional plans
   2. Learning goals
   3. Outcome goals
   4. Strategic plans
   5. Tactical plans

Learning Objective: 8.3

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. ____ make(s) sure that goals everywhere in the organization are linked together to advance its overall mission or purpose.
   1. Functional plans
   2. Goal alignment
   3. Hierarchy of goals
   4. Strategic plans
   5. Tactical plans

Learning Objective: 8.3

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. ____ help(s) link tactical goals in means-end fashion with the accomplishment of strategic goals.
   1. Functional plans
   2. Goal alignment
   3. Hierarchy of goals
   4. Outcome goals
   5. Participatory planning

Learning Objective: 8.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Synthesis

1. The team leader of an IT firm has called for a meeting of all software engineers to view and discuss the course of action for a new software creation project. This is an example of _____.
2. participatory planning
3. performance appraisal
4. contingency planning
5. benchmarking
6. zero-based budgeting

Learning Objective: 8.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Sujata works for RLB financial services, a mortgage company. The company has opened a new branch in a developing country and Sujata has been assigned the task of identifying all kinds of risks the company might face in that country. She identifies several possible events such as political unrest, ethnic riots, and natural calamities that would endanger the business continuity of the organization. She makes plans to deal with each of these events. Sujata is involved in the process of _____.
2. scenario planning
3. performance appraisal
4. contingency planning
5. benchmarking
6. zero-based budgeting

Learning Objective: 8.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

Essay

1. Identify and describe the steps in the planning process.

• 1. Define your objectives––Identify desired outcomes or results in very specific ways. Know where you want to go; be specific enough so that you will know you have arrived when you get there, or know how far off the mark you are at various points along the way.
• 2. Determine where you stand vis-à-vis objectives––Evaluate current accomplishments relative to the desired results. Know where you stand in reaching the objectives; know what strengths work in your favor and what weaknesses may hold you back.
• 3. Develop premises regarding future conditions––Try to anticipate future events. Generate alternative “scenarios” for what may happen; identify for each scenario things that may help or hinder progress toward your objectives.
• 4. Analyze alternatives and make a plan––List and carefully evaluate the possible actions that may be taken. Choose the alternative(s) most likely to accomplish your objectives; decide step by step what must be done to follow the chosen course of action.
• 5. Implement the plan and evaluate results––Take action and carefully measure your progress toward objectives. Do what the plan requires; evaluate results; take corrective actions and revise plans as needed.

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Describe the benefits of planning for individuals and organizations.

• Planning improves focus and flexibility. Focus and flexibility are important to the performance of both people and organizations in highly competitive and dynamic environments.
• Planning improves action orientation. Planning keeps people and organizations focused on the actions that are needed to stay competitive and to become better at what they are doing. Planning helps make people and organizations more oriented toward results, priorities, advantages, and change.
• Planning improves coordination. Planning helps individuals, groups, and subsystems within organizations make meaningful contributions to the organization as a whole, even as they pursue their specific tasks and objectives.
• Planning improves control. Planning facilitates control by defining objectives and desired performance results and identifying specific actions through which they are to be pursued.
• Planning improves time management. Each day, managers are bombarded by a multitude of tasks and demands. They work in a setting of frequent interruptions, crises, and unexpected events. Consequently, it can be easy to lose track of objectives and fall prey to “time wasters.”

Learning Objective: 8.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Compare and contrast strategic and tactical plans.

Tactical plans are developed and used to implement strategic plans. They tend to be intermediate term plans that specify step-by-step means for using the organization’s resources to put strategies into action. In business, tactical plans often take the form of functional plans that indicate how different components of the enterprise will contribute to the overall strategy. Such functional plans might include:

• Production plans—dealing with the methods and technologies needed by people in their work;
• Financial plans—dealing with money and capital investments;
• Facilities plans—dealing with facilities and work layouts;
• Logistics plans—dealing with suppliers and the flow of raw materials and other product inputs.

Learning Objective: 8.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Identify and briefly describe each of the five major planning tools and techniques that managers use.

• Forecasting is the process of predicting what will happen in the future.
• Contingency planning involves identifying alternative courses of action that can be implemented, if and when an original plan proves inadequate because of changing circumstances.
• Scenario planning is a long-term version of contingency planning that involves identifying several alternative future scenarios or states of affairs that may occur, and then making plans to deal with each scenario should it actually occur.
• Benchmarking is a technique that makes use of internal and external comparisons to better evaluate current performance and identify possible actions to improve the future.
• Staff planners are persons who take responsibility for leading and coordinating the planning function for the total organization or one of its major components.

Learning Objective: 8.3

Difficulty: Hard

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. What are the five characteristics that great goals tend to have?
2. Specific—clearly targeted key results and outcomes to be accomplished.
3. Timely—linked to specific timetables and “due dates.”
4. Measurable—described so results can be measured without ambiguity.
5. Challenging—include a stretch factor that moves toward real gains.
6. Attainable—although challenging, realistic and possible to achieve.

Learning Objective: 8.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

Text Entry

125. ___ is the process of setting objectives and determining how to accomplish them.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

126. Objectives and goals are ____ results that one wishes to achieve.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

127. Stretch ___ are performance targets that one must work extra hard and stretch to reach.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

128. A plan is a statement of ____ means for accomplishing objectives.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

129. The ____ trap is being carried along by the flow of events.

Learning Objective: 8.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

130. ____ plans typically look three or more years into the future.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

131. A tactical plan helps to implement all or parts of a(n) ____ plan.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

132. A __________ is a standing plan that communicates broad guidelines for decisions and action.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

133. A(n) ____ is a plan that commits resources to projects or activities.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

134. A(n) ____-based budget allocates resources as if each budget were brand new.

Learning Objective: 8.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

135. ____ attempts to predict the future.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

136. Contingency planning identifies ____ courses of action to take when things go wrong.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

137. Scenario planning identifies alternative ____ scenarios and makes plans to deal with each.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

138. ____ uses external and internal comparisons to plan for future improvements.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

139. Best practices are things people and organizations do that lead to ____ performance.

Learning Objective: 8.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

140. ____ goals set targets to create the knowledge and skills required for performance.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

141. Outcome goals set targets for ____ performance results.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

142. Goal ____ makes sure that goals throughout the organization are linked together to advance the mission.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

143. In a(n) ____ of goals, lower-level goals and objectives support accomplishment of higher-level goals and objectives.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

144. _____ planning includes the persons who will be affected by plans and/or those who will implement them.

Learning Objective: 8.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge