Chapter 5 Planning and Goal Setting | Test Bank – Edition 11

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Fundamentals of Management, 11e (Robbins)

Chapter 5 Planning and Goal Setting

1) Which one of the following is NOT a function of planning?

A) defining goals

B) identifying a strategy for attaining goals

C) settling disputes between employees

D) coordinating organizational activities

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

2) Planning is concerned with ________.

A) both ends and means

B) ends only

C) means only

D) neither ends nor means

Diff: 1

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Concept

3) In informal planning, goals are usually ________ shared with others in the organization.

A) written, but little is

B) unwritten, and little is

C) written, and much is

D) unwritten, but much is

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Concept

4) Informal planning is ________.

A) written and distributed to employees

B) general and usually lacks continuity

C) performed exclusively by middle managers

D) more specific than formal planning

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Concept

5) In formal planning, ________.

A) specific goals covering a period of years are defined

B) to maximize flexibility, specific goals are never spelled out

C) very broad general goals are developed

D) goals may be written or unwritten

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Concept

6) Which of the following is NOT a reason for managers to plan?

A) to give direction to an organization

B) to deal with change

C) to establish goals

D) to establish responsibility for mistakes

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

7) Planning gives organizations direction that primarily helps them ________.

A) improve teamwork and coordinate activities

B) improve their image in the business community

C) improve morale of middle managers

D) improve morale of all employees

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

8) Planning gives organizations a way to deal with change that ________.

A) eliminates all uncertainty

B) reduces uncertainty

C) reduces certainty

D) increases ambiguity

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

9) Organizations that don't formally plan may be more likely to have ________.

A) corrupt managers

B) legal problems

C) multiple departments performing the same task

D) a single department carrying out all company functions

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

10) One effect of planning on managers is that it forces them to ________.

A) fear change

B) anticipate and consider the effect of change

C) work to prevent change

D) ignore any change that doesn't directly affect them

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

11) Managers who fail to plan may ________.

A) take advantage of change

B) stimulate change

C) be positively affected by change

D) be adversely affected by change

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

12) Which one of the following is a frequently cited criticism of formal planning?

A) Plans lock organizations into rigid goals and timetables.

B) Plans take too long to create.

C) Plans create resentment within different levels of the organization.

D) Formal planning works well only for smaller companies.

Diff: 3

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

13) One criticism of formal planning is that it focuses on how to beat the competition rather than how to ________.

A) have cordial relationships with the competition

B) focus on new opportunities

C) balance the organization's budget

D) cooperate with the competition

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

14) Failing to discard successful plans from the past is likely to lead to ________.

A) more success because conditions are unlikely to change in the future

B) failure because conditions are likely to change in the future

C) success because of the high quality of the plans

D) failure because of the low quality of the plans

Diff: 3

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

15) Studies of performance in organizations that plan have reached ________ with respect to the benefits of formal planning.

A) somewhat negative conclusions

B) no conclusion

C) extremely negative conclusions

D) generally positive conclusions

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

16) Studies of planning show that the key to successful planning is to make sure that the plans ________.

A) cover every possible detail

B) are high in quality

C) are exceedingly simple to follow

D) are not shared with employees

Diff: 3

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

17) In studies in which formal planning did not lead to higher performance, ________ usually the culprit.

A) unforeseen events in the environment were

B) demanding employees were

C) stubborn ownership was

D) lack of communication was

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

18) Formal planning typically leads to which one of the following?

A) higher profits

B) lower productivity

C) higher sales, but lower profits

D) tension between different management levels

Diff: 1

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

19) All managers plan in some way, either formally or informally.

Diff: 1

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

20) Informal plans are not recognized as true organizational plans and are rarely carried out by managers.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

21) At some point, all managers create formal plans.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

22) Planning provides direction to managers and non-managers alike.

Diff: 1

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

23) A key function of planning is to create goals.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

24) Informal planning typically works better in large organizations than in small organizations.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

25) The four reasons that organizations plan are to establish coordinated effort, set standards, minimize waste, and reduce uncertainty and the impact of change.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

26) Planning rarely improves teamwork and cooperation among employees.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

27) An organization that fails to plan will find it hard to assess progress.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

28) A major argument against formal plans is that they can't replace intuition and creativity.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

29) Formal planning can enhance creativity in an organization.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

30) A criticism of formal planning is that it focuses too much on groundbreaking visions and deals with ideas that are too innovative to work.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

31) A major strength of formal planning is that it reinforces past successes and incorporates them into the future.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

32) A major strength of formal planning is that it gives an organization rigidity.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

33) A major strength of formal planning is that it generally correlates with higher profits.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

34) Successful planning depends more on whether managers plan than on the quality of their planning.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

35) Research indicates that organizations that don't use formal planning always outperform organizations that do use formal planning.

Diff: 2

AACSB: Analytical thinking

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Analytical

36) In a short essay, define planning and compare formal and informal planning as they are used in various organizations.

All managers engage in some form of planning whether it is formal or informal. In informal planning, little or nothing is written down and there is little or no sharing of goals with others within the organization. This type of planning is often done in small businesses where the owner-manager has a vision of where he or she wants the business to go and how to get there.

In formal planning, goals and plans covering a specific period of time are developed. These goals and plans are written and shared with organizational members. Specific programs exist in formal planning to achieve planning goals; that is, managers clearly define the path they want to take and the actions they will carry out to reach their goals.

Diff: 3

AACSB: Application of knowledge

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Concept

37) In a short essay, list and discuss two reasons for planning.

Planning establishes coordinated effort. It gives direction to managers and non-managers alike. When employees know where the organization is going and what they must contribute to reach goals, they can focus their individual and collective efforts to accomplish those goals. Without planning, departments and individuals might end up working at cross-purposes, preventing the organization from moving efficiently toward its goals.

Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change, and develop appropriate responses to change. Even though planning can't eliminate change, managers plan in order to anticipate changes and develop the most effective response to them.

Planning reduces overlapping and wasteful activities. When work activities are coordinated around established plans, waste and redundancy can be minimized. Furthermore, when means and ends are made clear through planning, inefficiencies often become obvious and can be easily corrected or eliminated.

Planning establishes goals or standards that are used in controlling. If managers are unsure of what they are trying to accomplish, they will be unable to determine whether or not they have been successful. In planning, goals and standards are clearly developed and stated. Then actual performance can be compared against the goals and corrective action is taken, if necessary. Without the goals identified in a planning process, there is no way for an organization to assess its own progress.

Diff: 2

AACSB: Application of knowledge

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Critical thinking

38) In a short essay, identify criticisms of formal planning.

Another criticism of plans is that they cannot replace intuition and creativity, and in many cases are said to stifle these qualities. Many people advise planners to try to take intuition and creativity into account when they formulate their plans so their plans will enhance rather than undermine these qualities.

A third criticism of planning is that it often fixates on the current business climate, not on how the climate might change in the future. This can result in plans that are short-sighted and limited. Rather than look for new opportunities, managers keep trying to perfect what they did in the past.

Finally, plans often focus too much on successes of the past, forcing a company to stick to tried-and-true methods of operating rather than forging into new areas and blazing new trails.

Diff: 3

AACSB: Application of knowledge

LO: 5.1: Discuss the nature and purposes of planning.

Question Category: Critical thinking

39) The first step in the six-step strategic management process is to ________.

A) analyze the organization's strengths and weaknesses

B) identify the organization's mission

C) identify feasible strategies

D) analyze the opportunities the organization has

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

40) The first three steps of the strategic management process involve ________ strategies.

A) planning

B) implementing

C) evaluating

D) identifying

Diff: 2

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

41) A mission statement includes identification of an organization's ________.

A) strengths and weaknesses

B) purpose and basic philosophy

C) assets and resources

D) resources and strengths

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

42) A mission statement does NOT include which of the following?

A) the customers of a company

B) major competitors

C) why the company is in business and what it hopes to accomplish

D) the company's basic beliefs

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

43) An external analysis, the second step of the strategic management process, helps identify ________.

A) the products that a company makes

B) the long-term goals of a company

C) a company's opportunities and threats

D) a company's concern for its employees

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

44) An internal analysis, the third step of the strategic management process, helps identify ________.

A) opportunities and threats

B) resources and capabilities

C) opportunities and possibilities

D) values and philosophy

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

45) Which term refers to an organization's capital, workers, and patents?

A) resources

B) capabilities

C) abilities

D) core competencies

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

46) An organization's resources identify ________.

A) how the organization gets things done

B) where the organization operates

C) when the organization operates

D) what the organization has

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

47) An organization's capabilities identify ________.

A) what the organization knows

B) who the organization is

C) assets that the organization can rely on

D) what the organization can do

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

48) Together, an organization's resources and core competencies make up which one of the following?

A) core philosophy

B) competitive weapons

C) core assets

D) fundamental beliefs

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

49) SWOT analysis identifies and analyzes an organization's ________.

A) strengths, weaknesses, opportunities, and threats

B) strategy for competing in the market

C) human resource assets

D) long-term goals

Diff: 1

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

50) SWOT analysis combines ________.

A) a company's mission with its goals

B) external and internal analyses

C) a company's philosophy with its ethics

D) profit with productivity

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

51) Once SWOT analysis is complete, managers ________ to address the issues that came up during the analysis.

A) formulate strategies

B) implement strategies

C) evaluate strategies

D) eliminate strategies

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

52) Which one of the following do managers NOT typically use to formulate strategies?

A) finding ways to exploit the organization's strengths

B) finding ways to protect the organization from external threats

C) finding ways to rule out existing organizational opportunities

D) finding ways to correct organizational weaknesses

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

53) The three different types of strategies that managers implement are ________.

A) corporate, private, functional

B) corporate, competitive, functional

C) long-term, short-term, public

D) competitive, noncompetitive, corporate

Diff: 1

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

54) A corporate strategy focuses primarily on ________.

A) an organization's mission

B) an organization's strengths

C) an organization's weaknesses

D) an organization's people

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

55) Which one of the following makes up the three main types of corporate strategies?

A) growth, vertical integration, horizontal integration

B) growth, retrenchment, renewal

C) renewal, retrenchment, diversification

D) growth, stability, renewal

Diff: 1

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

56) Growth strategies include ________.

A) diversification, concentration, integration, stabilization

B) vertical integration, horizontal integration, concentration, diversification

C) vertical integration, horizontal integration, lateral integration, horizontal concentration

D) integration, renewal, horizontal diversification, vertical diversification

Diff: 1

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

57) General Mills expanding its line so that it sells several different types of Cheerios is an example of which one of the following?

A) concentration

B) horizontal integration

C) vertical integration

D) diversification

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

58) A salad dressing company that buys a large olive grove to produce olive oil is practicing which one of the following?

A) concentration

B) forward vertical integration

C) backward vertical integration

D) horizontal integration

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

59) A sneaker company creating its own stores where it sells only its own brand is an example of which of the following?

A) forward vertical integration

B) backward horizontal integration

C) forward horizontal integration

D) reverse vertical integration

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

60) In forward vertical integration, a company becomes its own ________, while in backward vertical integration, the company is its own ________.

A) supplier; distributor

B) supplier; customer

C) distributor; monitor

D) distributor; supplier

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

61) Two movie studios combining to form one larger studio is an example of which one of the following?

A) forward vertical integration

B) horizontal integration

C) backward vertical integration

D) diversification

Diff: 2

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

62) Which one of the following functional areas has become a new important strategic element for companies such as Walmart?

A) quality control

B) benchmarking

C) social media

D) big data

Diff: 2

AACSB: Information technology

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

63) When Google purchased YouTube, a company that featured different, but related products, Google was engaging in which of the following?

A) concentration

B) forward vertical integration

C) backward vertical integration

D) diversification

Diff: 2

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

64) Two companies that both sell fine timepieces combine. What are they doing?

A) diversifying, because they both sell the same products

B) integrating vertically, because they both sell the same products

C) integrating vertically in a backward direction, because they are sharing distribution

D) integrating horizontally, because they both sell similar products

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

65) A company whose goal is to retain its ideal size and market share is employing which kind of strategy?

A) noncorporate

B) growth

C) renewal

D) stability

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

66) Troubled companies seek ________ to address serious problems.

A) competitive strategies

B) corporate strategies

C) vertical and horizontal strategies

D) renewal strategies

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

67) To address minor performance problems, a company is most likely to employ a ________ strategy.

A) retrenchment

B) turnaround

C) doomsday

D) self-critical

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

68) A company that is on the verge of collapse or bankruptcy might employ this strategy.

A) retrenchment

B) incremental improvement

C) turnaround

D) hunker down

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

69) Remedies that all renewal strategies employ include which of the following?

A) hiring efficiency experts

B) new ad campaigns

C) emulating competitors

D) cutting costs

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

70) The ________ strategy occupies the level below the corporate strategy.

A) business unit

B) competitive

C) functional

D) performance

Diff: 1

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

71) A diversified corporation is likely to have ________.

A) multiple competitive strategies

B) a single competitive strategy

C) no more than two competitive strategies

D) thousands of competitive strategies

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

72) The thing that makes your product special is known as your ________.

A) assets

B) destruction device

C) competitive advantage

D) core device

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

73) Competitive advantages for a high-prestige, premium coffee franchise like Starbucks are likely to include all of the following EXCEPT ________.

A) high quality

B) lowest prices

C) well-trained employees

D) pleasant venues

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

74) A cost leadership competitive strategy focuses on which one of the following?

A) efficiency

B) innovation

C) elegant design

D) luxury

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

75) Which one of the following would you expect to find in a clothing store that follows a cost leadership strategy?

A) only the finest, most expensive materials

B) pampered, personalized service

C) state-of-the-art design

D) basic, no frills, practical items

Diff: 2

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

76) A company with a differentiation strategy focuses on making its products or services ________.

A) unique and special

B) similar to its competitors

C) familiar

D) affordable

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

77) A differentiation strategy ________.

A) usually focuses on price

B) must focus on price

C) can focus on a brand image

D) can focus on value, but not service

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

78) A company that looks for a niche in the market is following which strategy?

A) cost leadership

B) differentiation

C) focus

D) turnaround

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

79) Which one of the following describes a company that is following a focus strategy?

A) a software company that makes a wide variety of games and financial products

B) a software company that makes games for a wide audience

C) a software company that makes financial products for accountants, consumers, and businesses

D) a software company that makes financial products for accountants only

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

80) A company with good products that has no clear competitive advantage is said to be ________.

A) perfectly positioned

B) stuck in the middle

C) in the wheelhouse

D) outside of the box

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

81) All of the following are threats to a sustainable, long-term competitive advantage EXCEPT ________.

A) market stability

B) market instabilities and disturbances

C) evolution of the industry

D) new technology in the industry

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

82) To gain a sustainable competitive advantage, a pharmaceutical company might ________.

A) market aggressively

B) set high prices for its products

C) secure exclusive rights to produce a drug

D) produce as many generic drugs as possible

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

83) A company's strategic weapon is any product, service, or other attribute it has that ________.

A) gives it an edge over its competitors

B) identifies problems that the company has

C) identifies the potential of employees

D) helps diversify the company

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

84) To create a competitive advantage that is sustainable, a company can begin by focusing on quality, then ________.

A) make sure quality doesn't decline at too rapid a pace

B) make incremental improvements to keep quality levels high

C) change its entire product line frequently

D) slowly diminish quality and raise the prices of its products

Diff: 3

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

85) This term describes an electric shaver company that carefully observes its competitor's production line to look for ways to improve its own manufacturing process.

A) trademarking

B) benchmarking

C) quality engineering

D) reverse marketing

Diff: 2

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

Taco Rocket (Scenario)

Imagine that you are the president of Taco Rocket, a new and successful chain of eight Mexican fast-food restaurants. The success you have experienced in the last five years has you thinking of what to do with the business next. Should you expand the business at the current rate? Open new and different restaurants? What?

86) Up to now your success has been based on selling high-quality tacos and burritos at a price that others can't match. Your business is pursuing which competitive strategy?

A) differentiation strategy

B) cost leadership strategy

C) competitive advantage strategy

D) focus strategy

Diff: 2

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

87) You are thinking of buying a tortilla factory in a nearby state. This action would be an example of ________.

A) forward vertical integration

B) horizontal integration

C) backward vertical integration

D) forward diversification

Diff: 2

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

88) Recently, Taco Rocket has considered buying a local competitor and the two would combine under the Taco Rocket name. This is an example of which one of the following?

A) stability

B) vertical integration

C) horizontal integration

D) diversification

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

89) For a limited time, Taco Rocket is thinking of coming out with a new Fifth Degree Burrito that is so hot it "burns a hole in the plate." Catering to the small segment of the market that likes super-hot food is an example of a ________.

A) focus strategy

B) cost leader strategy

C) long-term strategy

D) differentiation strategy

Diff: 3

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

90) Strategic management is the act of figuring out how an organization will compete in the marketplace and attract loyal customers.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

91) The first step in the strategic management process is analyzing the external environment.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

92) A mission statement for a kayak manufacturer might be as follows: To make the highest-quality kayaks and sell them at a competitive price.

Diff: 2

AACSB: Application of knowledge

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Application

93) An external analysis will identify the threats to a company's well-being, but not opportunities for success.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

94) Core competencies include an organization's major capabilities and its resources.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

95) Capabilities are "what" an organization has; resources are "how" it uses what it has.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

96) SWOT analysis includes the identification of an organization's strengths, weaknesses, opportunities, and threats.

Diff: 1

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

97) The final three steps in the strategic management process involve the creation and implementation of strategies for realizing organizational goals.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

98) A corporate strategy may be a growth strategy, a stability strategy, or a renewal strategy.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

99) A diversification strategy focuses on a company becoming its own supplier of inputs.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

100) A company with a stability strategy will plan to dramatically increase market share in a highly competitive market.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

101) The most drastic renewal strategy an organization can carry out is a retrenchment strategy.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

102) "A distinctive edge" is a way of describing a competitive advantage.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

103) Innovation and super-high quality are typically the keys to a cost-leadership strategy.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

104) A focus strategy seeks to appeal to a narrow segment of a market.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

105) Customer service cannot be considered a strategic weapon for an organization.

Diff: 2

AACSB: Analytical thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

106) Xerox Corporation's study of Japanese competitors was the first effort by an American company at benchmarking.

Diff: 2

AACSB: Reflective thinking

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Analytical

107) In a short essay, describe the first two steps in the strategic management process.

The second step involves an external analysis. Managers need to know, for instance, what the competition is doing and how the current business environment is likely to affect the company. After analyzing the environment, managers need to assess what they have learned in terms of opportunities that the organization can exploit and threats that it must counteract or buffer against.

Diff: 3

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

108) In a short essay, describe the final four steps in the strategic management process.

The fourth step in the strategic management process is to put all of the information gathered together and use it to formulate strategies for putting the organization on the right track for the future. As managers formulate strategies, they have to consider the realities of the external environment and their available resources and capabilities and design strategies that will help the organization reach its goals.

After strategies are formulated, they must be implemented. A strategy is only as good as its implementation. The final step in the strategic management process is evaluating results. How effective have the strategies been? Have they helped the organization reach its goals? What adjustments, if any, are necessary?

Diff: 3

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

109) In a short essay, discuss the cost leadership strategy.

Diff: 3

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

110) In a short essay, discuss differentiation strategy.

The key to this competitive strategy is that whatever product or service attribute is chosen for differentiation must set the firm apart from its competitors and be significant enough to justify a price premium that exceeds the cost of differentiation. Many highly successful businesses can be identified as examples of the differentiation strategy: L.L. Bean (customer service), Intel (higher-quality chip technology), Maytag (reliability), and Mary Kay Cosmetics (distribution).

Diff: 3

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

111) In a short essay, discuss focus strategy.

Diff: 3

LO: 5.2: Explain what managers do in the strategic management process.

Question Category: Concept

112) Which one of the following best defines plans?

A) documents that identify company problems

B) documents that define goals

C) documents that describe how goals will be met

D) documents that identify how goals from the past were met

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

113) Which one of the following best defines goals?

A) likely outcomes for the future

B) unlikely outcomes for the future

C) desired outcomes for the future

D) short-term targets

Diff: 1

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

114) In reality, all organizations have ________.

A) a single goal

B) multiple goals

C) the same goals

D) the same single goal

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

115) In most cases, strategic goals include ________.

A) all financial objectives

B) all objectives that are not financial

C) all objectives, both financial and nonfinancial

D) some financial objectives

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

116) Which one of the following is an example of a strategic goal for a professional baseball team?

A) to increase attendance by five percent over the next three years

B) to increase television revenues over the next five years

C) to decrease payroll by 20 million over the next two years

D) to average over 90 wins a year for the next five years

Diff: 2

AACSB: Application of knowledge

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Application

117) An organization's real goals and priorities are best revealed by ________.

A) its official stated goals

B) its actions in the marketplace

C) its statements to the press

D) its mission statement

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

118) ________ are important because they provide the standards against which all organizational accomplishments are measured.

A) Goals

B) Guidelines

C) Models

D) Rules

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

119) In traditional goal setting, these individuals set goals.

A) top managers

B) middle and low-level managers

C) middle managers

D) managers and employees

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

120) In traditional goal setting, as they work their way from top management to employees, goals are likely to ________.

A) become more clear

B) be more rigorously followed

C) be unchanged

D) become more specific

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

121) In a means-ends chain, a goal at a lower level ________.

A) is the bridge to a goal at the next higher level

B) is attained only after higher level goals are fulfilled

C) is separate from the goal at the next higher level

D) is ignored if goals at higher levels are attained

Diff: 3

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

122) In management by objectives (MBO), goals ________.

A) must be easily accomplished

B) are jointly determined by employees and managers

C) are determined by top management

D) are developed by employees

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

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

A) nonspecific and open-ended with regard to time

B) specific and open-ended with regard to time

C) specific and include an explicit time limit

D) nonspecific and include no time limit

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

124) MBO programs are usually largely successful because they ________.

A) give employees a sense of ownership of goals

B) free managers from the responsibility of setting goals

C) give managers a sense of ownership of goals

D) free employees from responsibility if goals are not met

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

125) Which goal-setting sequence is correct for the following steps?

1. Evaluate resources.

2. Identify goals.

3. Review the mission and job tasks.

4. Communicate goals.

5. Link rewards to goals.

6. Build feedback mechanisms.

A) 1, 2, 4, 6, 3, 5

B) 4, 2, 5, 3, 1, 6

C) 3, 4, 2, 6, 5, 1

D) 3, 1, 2, 4, 6, 5

Diff: 3

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

126) The breadth of a plan refers to ________ concerns.

A) long-term versus short-term

B) strategic versus tactical

C) specific versus directional

D) single use versus standing

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

127) The specificity of a plan refers to ________ concerns.

A) long-term versus short-term

B) strategic versus tactical

C) specific versus directional

D) single use versus standing

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

128) Strategic plans address ________.

A) overall organizational goals

B) goals for a single branch of the organization

C) how overall goals are to be achieved

D) how a single goal is to be achieved

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

129) Tactical plans are operational plans that identify ________.

A) overall organizational goals

B) how overall goals are to be achieved

C) the mission of an organization

D) specific goals for accomplishing a specific objective

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

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

A) strategic

B) long-term

C) tactical

D) directional

Diff: 3

AACSB: Application of knowledge

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Application

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

A) over seven years

B) over three years

C) under three years

D) over one year

Diff: 1

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

132) Directional plans ________.

A) leave no room for interpretation

B) are flexible general guidelines

C) are difficult to modify

D) must be short-term plans

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

133) Standing plans typically can be used ________.

A) only once

B) only in conjunction with specific, long-term plans

C) twice at most

D) repeatedly

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

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

A) operational

B) strategic

C) tactical

D) short term

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

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

A) unspecific

B) long term

C) flexible

D) short term

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

136) The commitment concept states that plans should ________.

A) always stake out a longer time period than is estimated

B) always stake out a shorter time period than is estimated

C) stake out a time period that is neither too long nor too short

D) not include time periods because they are too confining

Diff: 3

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

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

A) very useful

B) usually unsatisfactory

C) very detailed

D) excellent

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

138) Goals are documents that outline how plans are to be carried out.

Diff: 1

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

139) Traditional goal setting requires top managers to set goals that are carried out by the organizational levels below.

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

140) The key to MBO, or management by objectives, is that managers and subordinates mutually agree on goals.

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

141) Goals should typically be reserved for managers only. Goals should not be shared with subordinates.

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

142) In the past, long-term plans referred to plans that covered a period of over three years, but now they refer to any time period over one year.

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

143) A six-month plan qualifies as a short-term plan.

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

144) Directional plans leave no room for interpretation.

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

145) In general, upper-level managers focus on tactical or operational planning.

Diff: 2

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Analytical

146) In a short essay, compare strategic plans and tactical plans.

Plans that specify the details of how the overall goals are to be achieved are called tactical or operational plans. Tactical plans tend to cover a shorter time frame and a more narrow view of an organization than strategic plans. Where strategic plans focus on identifying goals, tactical plans focus on how to reach those goals.

Diff: 3

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

147) In a short essay, compare specific plans and directional plans.

When uncertainty is high and managers must be able to respond to unexpected changes, directional plans are preferable. Directional plans are flexible plans that set out general guidelines but don't lock managers into overly specific goals or courses of action. However, the flexibility inherent in directional plans must be weighed against the loss of clarity provided by specific plans.

Diff: 3

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

148) In a short essay, define and discuss management by objectives (MBO).

Management by objectives consists of four elements: goal specificity, participative decision making, requiring an explicit time period, and performance feedback. MBO's appeal lies in its focus on employees working to accomplish goals they have had a hand in determining.

Diff: 3

AACSB: Analytical thinking

LO: 5.3: Compare and contrast approaches to goal setting and planning.

Question Category: Concept

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

A) highly explicit recipes that must be scrupulously followed

B) a vague philosophy that should not interfere with actions

C) flexible road maps with destinations that may change

D) rigid road maps with a single destination

Diff: 3

AACSB: Analytical thinking

LO: 5.4: Discuss contemporary issues in planning.

Question Category: Analytical

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

A) obtain new customers

B) identify emerging trends

C) obtain new advertisers

D) identify potential rivals

Diff: 2

AACSB: Application of knowledge

LO: 5.4: Discuss contemporary issues in planning.

Question Category: Application

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

A) buy competitors' products

B) attend trade shows

C) have employees evaluate competing products

D) buy stock in a competitor's company

Diff: 2

AACSB: Analytical thinking

LO: 5.4: Discuss contemporary issues in planning.

Question Category: Application

152) Buying a competitor's product for evaluation is a form of environmental scanning.

Diff: 2

AACSB: Application of knowledge

LO: 5.4: Discuss contemporary issues in planning.

Question Category: Application

153) In a short essay, discuss environmental scanning and competitive intelligence.

One of the fastest growing areas of environmental scanning is competitive intelligence. Competitive intelligence is a process by which organizations gather information about their competitors and get answers to questions such as Who are they? What are they doing? How will what they're doing affect us? Competitive intelligence doesn't have to involve spying. Advertisements, promotional materials, press releases, reports filed with government agencies, annual reports, want ads, newspaper reports, and industry studies are all examples of readily accessible sources of information for competitive intelligence. Many firms also regularly purchase and analyze competitors' products to learn about new technical innovations.

Diff: 3

AACSB: Analytical thinking

LO: 5.4: Discuss contemporary issues in planning.

Question Category: Concept