Test Questions & Answers Planning And Decision Making Ch.5

M: Management, 6e (Bateman)

Chapter 5 Planning and Decision Making

1) In an organization, the process of planning moves in a linear fashion.

2) To be effective, goals should be measurable, specific, attainable, relevant, and time-bound.

3) Standing plans are designed to achieve a set of short-term goals.

4) Making decisions about an organization's short-term goals and tactics is known as strategic planning.

5) A strategic control system must encourage efficient operations while allowing flexibility to adapt to changing conditions.

6) Individuals usually make higher-quality decisions when compared to groups, provided there is enough time.

7) The step in the formal planning process known as ________ involves studying past events, examining current conditions, and forecasting future trends.

A) analyzing the situation

B) generating alternative goals and plans

C) evaluating goals and plans

D) selecting goals and plans

E) monitoring and controlling performance

8) The outcome of a situational analysis is the

A) evaluation of the merits and feasibility of a range of alternatives.

B) prioritization and elimination of goals.

C) identification and diagnosis of planning assumptions, issues, and problems.

D) selection of the most appropriate and feasible alternative among various goals.

E) proper implementation of a plan.

9) Situational analysis, as part of the formal planning process, focuses on

A) the internal forces at work within an organization and examines influences from the external environment.

B) the external forces at work within an organization and examines influences from the internal environment.

C) the internal forces at work within an organization and examines influences from the internal environment.

D) the external forces at work within an organization and examines influences from the external environment.

E) past conditions, current trends, and future events.

10) In the context of the planning process, ________ are the targets or ends a manager wants to reach.

A) goals

B) plans

C) scenarios

D) strategies

E) contingencies

11) Forge Right Inc., a manufacturing company, developed a strategic plan that assumed improved growth in its industry. Additionally, it generated several ________ for different economic settings. When a recession started, Forge Right Inc. quickly implemented the plan based on those conditions. As a consequence, it survived more easily than other firms in the industry.

A) financial reports

B) annual reports

C) roadmaps

D) projection statements

E) scenarios

12) Year in and year out, Coca-Cola outperforms in the soft drink industry. While this success is due in part to the quality of their products, it is also due to Coca-Cola's consistently strong marketing campaigns. These campaigns represent Coca-Cola's ongoing, or ________, plan to develop and execute a world-class marketing and promotion strategy.

A) operational

B) single-use

C) standing

D) contingency

E) subject

13) A plan to integrate employees into a new payroll system, assuming that it is not likely to be repeated in the foreseeable future, is an example of a ________ plan.

A) standing

B) single-use

C) start-up

D) contingency

E) subject

14) According to the ________ plan of Xenon Inc., if expansion to new markets in Australia does not materialize, the company will strive for expansion in Asia.

A) operations

B) internal

C) contingency

D) standing

E) start-up

15) Which stage of the planning process is Miteron Corp. involved in if it is assessing how well alternative plans meet high-priority goals while considering the cost of each initiative and the likely investment return?

A) implementing goals and plans

B) selecting goals and plans

C) analyzing the situation

D) monitoring and controlling performance

E) evaluating goals and plans

16) During the ________ step of the planning process, managers identify the priorities and trade-offs among goals and plans.

A) evaluation of goals and plans

B) selection of goals and plans

C) implementation of goals and plans

D) monitoring of goals and plans

E) generating alternative goals and plans

17) After Barb's department performed poorly two years, she reviewed her plan and saw that the flaws in it were inadequate funding and unclear priorities. The next year she acquired sufficient funds and incentivized her top managers with bonuses for goals met. The results made Barb ecstatic, showing how the implementation of plans is successful when

A) the planning process is limited to senior managers.

B) limited financial resources are made available to the manager.

C) they are linked to other organizational systems like budgets and rewards.

D) they are converted into strict rules for employees to follow.

E) they are projected as confidential issues concerning top management.

18) The ________ step in the formal planning process, monitoring and controlling performance, identifies the priorities and trade-offs among the goals and plans.

A) second

B) third

C) fourth

D) fifth

E) sixth

19) In the context of planning, if there is alternative generation, evaluation, and selection steps which reveal several different future scenarios, a different ________ plan is attached to each scenario.

A) evaluation

B) alternative

C) contingency

D) selection

E) decision

20) The planning step known as monitoring and controlling performance

A) identifies the priorities and trade-offs among the goals and plans.

B) involves managers continually monitoring the performance of their work units against the unit's goals and plans.

C) is the first step taken by managers.

D) suggests that managers need to restart the planning process after plans are implemented improperly.

E) is the most important step in the planning process.

21) Which level of manager is known as a tactical manager?

A) top-level

B) frontline

C) middle-level

D) team leaders

E) operational

22) Typical strategic goals involve

A) updating the equipment used.

B) increasing market share.

C) estimating advertising expenditures.

D) complying with civil rights laws.

E) utilizing human resources.

23) Strategic goals

A) translate broad tactical goals and plans into specific goals and plans relevant to a particular portion of the organization.

B) should be limited to top management.

C) include fostering quantity and quality of outputs as well as increasing productivity.

D) identify the specific procedures and processes required at lower levels of the organization.

E) focus on the major actions a unit must take to fulfill its part of the strategic plan.

24) Strategic goals are

A) the major targets that relate to the long-term survival of an organization.

B) specific to a functional area in an organization.

C) driven by operational plans.

D) focused on the major actions a unit must take.

E) the procedures and processes to get day-to-day work done.

25) The level of planning involving the longest time horizon, usually ranging from three to seven years, is ________ planning.

A) operational

B) missionary

C) tactical

D) departmental

E) strategic

26) ________ planning involves a process of translating broad strategic goals and plans into specific goals and plans relevant to a particular portion of an organization.

A) Strategic

B) Operational

C) Tactical

D) Contingency

E) Feasibility

27)

________ planning is the process of identifying the specific procedures and processes required at lower levels of an organization.

A) Strategic

B) Operational

C) Tactical

D) Contingency

E) Acquisition

28) In ________ planning, frontline managers usually focus on routine tasks such as production runs, delivery schedules, and human resource requirements.

A) acquisition

B) feasibility

C) tactical

D) operational

E) strategic

29) In the context of the levels of planning, the formal planning model is ________, with top-level strategies flowing down through the levels of the organization into more specific goals and plans.

A) horizontal

B) hierarchical

C) tactical

D) concentrated

E) uncertain

30) To be effective, an organization's strategic plans should focus on goals that are

A) different from those of its tactical plans and operational plans.

B) different from those of its tactical plans yet the same as the operational plans.

C) aligned with its tactical plans and operational plans.

D) aligned with its tactical plans yet different from the operational plans.

E) strategic yet differ from the operational plans.

31) All managers throughout an organization may be involved in

A) developing the strategic plan elements.

B) personally formulating the plan.

C) making decisions that shape strategies.

D) contributing minimal elements.

E) implementing the plan.

32)

The formal planning model emphasizes a ________ approach.

A) bottom-up

B) top-down

C) left-right

D) horizontal

E) vertical

33) An organization's mission statement describes all of the following EXCEPT

A) the company's basic purpose.

B) what the organization does.

C) its basic good or service.

D) its morals.

E) its values.

34) The senior managers of Acme Steel knew that a successful implementation of their business plan in the coming year was critical to the company's survival in a competitive industry. Acme could not afford for different parts of the organization to "stray" from the plan; in fact, each organizational unit needed to perform in sync with the goals of the unit above it and the units below it. Thus, it was critical that the individual plans of the corporation, each division, each department, and each section be

A) aligned.

B) independent.

C) mutually non-exclusive.

D) diverse.

E) provisional.

35) The strategic vision of an organization

A) provides a perspective on where the organization is headed.

B) describes the organization as it currently operates.

C) can be expressed as a clear and concise expression of the organization's basic purpose.

D) is expressed as strictly a financial statement.

E) emphasizes the short-term gains of the organization.

36) The tangible assets of an organization include

A) patents.

B) real estate.

C) company reputation.

D) technical knowledge.

E) learning and experience.

37) Resources provide competitive advantage only under certain circumstances, including when they are

A) archival.

B) difficult to imitate.

C) equally available.

D) sequential.

E) expensive.

38) EatWell Inc., a chain of sub shops, periodically compares the quality of its food and service with its competitors in order to continually improve its performance. This corporate strategy is known as

A) brainstorming.

B) diversification.

C) benchmarking.

D) vertical integration.

E) horizontal integration.

39) Jim's manager and mentor, Naomi, helped Jim develop his first business plan. Naomi said, "Jim, one of the most powerful tools that you can use in developing a strategic plan for your division is to analyze the external environment and your internal resources. I will help you formulate this strategy by using a technique called

A) the BCG matrix."

B) SWOT analysis."

C) benchmarking."

D) diversification."

E) vertical integration."

40) A ________ strategy identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses.

A) vertical

B) differentiation

C) low-cost

D) functional

E) corporate

41) In order to reduce production costs, Tryon Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as

A) concentration.

B) vertical integration.

C) related diversification.

D) unrelated diversification.

E) differentiation.

42) Sip Well Corp. had focused only on alcoholic beverages for the last two decades. Now, as part of a(n) ________ strategy, the company is considering entering the soft drink market.

A) vertical integration

B) related diversification

C) unrelated diversification

D) concentration

E) low-cost

43)

The ________ matrix is not a substitute for management judgment; it helps managers of businesses evaluate their strategy alternatives.

A) BCG

B) BGC

C) GBC

D) GCB

E) CGB

44) Karina viewed her staff as a competitive advantage. They had the necessary academic degrees, the necessary experience, and competitive salaries. Jean, her division manager, said, "Karina, until you have staff with rare and valuable academic research experience and corresponding degrees, and with talents that are world-class and in extremely high demand by your clients, such that they are willing to pay top dollar for that talent, your staff do not represent a competitive advantage. Your staff are too ________ by your competitors."

A) expensive to be recruited

B) academic to be desired

C) hard to replicate

D) easy to imitate

E) experienced to be sought

45) The goal of ________ is to thoroughly understand the "best practices" of other firms and to undertake actions to achieve better performance and lower costs.

A) satisficing

B) benchmarking

C) organizing

D) competition

E) SWOT analysis

46) The corporate strategy of ________ involves expanding the domain of an organization into supply channels and to distributors.

A) concentration

B) horizontal integration

C) vertical integration

D) benchmarking

E) satisficing

47) Pettigrew Inc. recently decided to expand from its original base in real estate to several wide-ranging industries such as trucking, lawn mower manufacturing, and catering. Pettigrew is using the ________ corporate strategy.

A) vertical integration

B) unrelated diversification

C) related diversification

D) concentration

E) low-cost

48) Rothan Corp. is evaluating the purchase of a small firm, Lemm Inc., which manufactures products involving advanced technology. These products are expected to revolutionize the home construction industry. Lemm has only a minor share of this growing market, but the market is expected to grow rapidly. Substantial investment will be required. In the BCG matrix, Lemm Inc. would be placed in the ________ category.

A) cash cows

B) stars

C) spinoffs

D) question marks

E) dogs

49) In the context of the strategic planning process, a critical task in environmental analysis is ________ future trends.

A) reporting

B) forecasting

C) avoiding

D) justifying

E) creating

50) All of the following are considered stakeholders EXCEPT those groups and individuals who

A) have only a financial stake in the company.

B) are buyers and suppliers.

C) are unions and employee groups.

D) are affected by the organization's mission.

51) If an organization's mission statement describes the organization as it currently operates then its strategic vision points to the

A) past.

B) production numbers.

C) future.

D) expectations.

E) profits.

52) In the BCG matrix, a star represents a company 

A) with high growth and a strong competitive position in the market.

B) that requires substantial investments to improve its position in the market.

C) with low growth and a strong competitive position in the market.

D) that generates excess revenues and funds other businesses.

E) that will be divested as soon as possible.

53)

Functional strategies are implemented

A) only at the top levels of management.

B) by each appropriate area or unit.

C) only at the employee level.

D) at one time by the organization as a whole.

E) by the stakeholders.

54) Businesses using a ________ strategy try to be efficient and offer a standard, no-frills product.

A) high return

B) low-cost

C) high-cost

D) low return

E) high profit

55)

The most effective strategy that can be adopted by strategy managers is one that

A) cannot be described in detail.

B) competitors are unable to imitate.

C) is based on the principle of rigidity.

D) cannot be deconstructed.

E) can be purchased at a reasonable cost.

56) The first step in strategy implementation involves articulating in simple language what a particular business must do to create or sustain a competitive advantage. This step involves

A) assessing organizational capabilities.

B) developing an implementation agenda.

C) defining strategic tasks.

D) creating an implementation plan.

E) developing a mission statement.

57) When a problem is frequent, repetitive, and routine, with much certainty regarding cause-and-effect relationships, a ________ decision may be taken.

A) qualitative

B) programmed

C) non-economic

D) risky

E) nonprogrammed

58) At Susan's retirement party, she reflected upon her long career in starting up successful companies. She said, "I salute my long-time mentor, Milton, who counseled me early in my career about risk. He told me, ‘Susan, when you are confronted with risk when making management decisions, you should

A) avoid it by any means necessary.'"

B) eliminate it with a thorough understanding of the consequences of each option.'"

C) anticipate it, minimize it, and control it.'"

D) understand there is no way to manage it.'"

E) not proceed without a liability insurance policy.'"

59) Management decisions typically

A) lack structure.

B) are always free of risks.

C) are made under conditions of perfect certainty.

D) are consistent in addressing novel problems.

E) have the characteristics of programmed decisions.

60) Larner Corp., an American company, is trying to decide whether to open its first international branch in Europe or Asia. The managers of the company are operating under a condition of

A) goal displacement.

B) illusion of control.

C) social reality.

D) uncertainty.

E) maximization.

61) In managerial decision making, when one can estimate the likelihood of various consequences but still does not know with certainty what will happen, he or she is facing

A) irresolution.

B) maximization.

C) risk.

D) optimization.

E) framing effects.

62) In managerial decision making, the state that exists when decision makers have insufficient information is known as

A) certainty.

B) uncertainty.

C) risk.

D) probability.

E) irresolution.

63) ________ is one of the six stages of formal decision making.

A) Thriving on the risks of taking a decision

B) Minimizing the consequences of a decision

C) Anticipating the outcome of a decision

D) Evaluating the decision

E) Controlling the damage caused by a wrong decision

64) The first step in an ideal decision-making process is to

A) make a choice.

B) evaluate alternatives.

C) implement the decision.

D) generate alternative solutions.

E) identify and diagnose the problem.

65) The manager of a restaurant noticed that the number of customers in the evening was decreasing. She promptly ordered the chef to revise the evening menu. Later, customer feedback indicated that the problem was not the menu but poor service from the waitstaff. The manager's decision to have the menu revised suggests that she failed to

A) identify and diagnose the problem.

B) evaluate alternatives.

C) generate alternative solutions.

D) evaluate the decision.

E) make a choice.

66) When generating alternative solutions during the decision-making process, ________ solutions must be designed for specific problems.

A) ready-made

B) approved

C) open-ended

D) adjustable

E) custom-made

67) Leona is evaluating a new customer relationship management software solution for her business. She knows several business owners and managers who have implemented the software in their organizations. Instead of conducting a trial in her own company, she asks them for their advice. Leona is most likely searching for a(n) ________ solution to her problem.

A) experimental

B) optimal

C) ready-made

D) statistical

E) custom-made

68) When making a choice, ________ requires searching thoroughly for a complete range of alternatives, carefully assessing each alternative, comparing one to another, and then choosing or creating the very best.

A) benchmarking

B) maximizing

C) forecasting

D) satisficing

E) optimizing

69) Belinda has to select the right paper clips to purchase for her office. She looks at the office supply catalog and picks the first one that is priced reasonably. Belinda is using the ________ method of decision making.

A) forecasting

B) optimizing

C) satisficing

D) maximizing

E) brainstorming

70) For the decision-making process in an organization, those who ________ a decision must understand the choice and must be committed to its successful implementation.

A) make

B) influence

C) implement

D) finalize

E) create

71) With managerial decision making, decision evaluation is useful

A) only if negative feedback has been received.

B) only if positive feedback has been received.

C) whether the conclusion is positive or negative.

D) whether the manager or the employee is involved.

E) only if the employee is involved.

72) Decision makers who search for ________ solutions use ideas they have tried before or follow the advice of others who have faced similar problems.

A) ready-made

B) custom-made

C) unique

D) original

E) rare

73) Managers who use the method of optimizing to make their decisions will attempt to choose

A) the first minimally acceptable alternative.

B) from those alternatives that have known results.

C) the least expensive alternative.

D) the alternative that produces the least conflict.

E) an alternative that achieves the best possible balance among several goals.

74) In the context of formal decision making, negative feedback indicates that

A) too much time has been dedicated in implementing the decision.

B) implementation of the decision may need more resources.

C) the decision has been made under undue pressure from top management.

D) the problem has been incorrectly diagnosed.

E) the decision has been unfairly beaten down by competitors.

75) ________ is a psychological bias that applies to students who do not spend sufficient time studying.

A) Illusion of control

B) Farming effects

C) Discounting the future

D) Time pressures

E) Social realities

76) The psychological bias known as illusion of control refers to a

A) decision bias influenced by the way in which a problem or decision alternative is phrased or presented.

B) belief that one can influence events even when one has no influence over what will happen.

C) bias weighting short-term costs and benefits more heavily than longer-term costs and benefits.

D) condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges.

E) phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus.

77) Illusion of control, discounting the future, and framing effects are examples of

A) social realities.

B) psychological biases.

C) strategic planning steps.

D) ready-made solutions.

E) time pressures.

78) ________ refer(s) to a decision bias influenced by the way in which a problem or decision alternative is phrased or presented.

A) Framing effects

B) Discounting the future

C) An illusion of control

D) Social realities

E) Time pressures

79) Discounting the future refers to

A) focusing on gains in the long run.

B) failing to consider inflationary costs.

C) underestimating the short-term effects of a decision.

D) weighing short-term benefits more heavily than long-term benefits.

E) failing to consider the effects of new entrants into the industry.

80) A company recently made changes to its organizational structure. While deciding upon the changes to be implemented, the company invited many employees to discuss the issue with the senior management. This enabled the employees to hear the relevant arguments both for the chosen alternative and against the rejected alternatives. An advantage of using employees in this group discussion was that

A) the employees dominated the discussions and promoted their ideas.

B) the phenomenon of groupthink was encouraged.

C) the satisficing method of decision making was employed.

D) goal displacement was furthered.

E) the employees understood why the decision was made.

81) An advantage in using a group for decision making is that it

A) leads to a higher level of commitment to the decision.

B) gives authority to one member in heading the discussion.

C) results in a phenomenon known as groupthink.

D) leads to a process of decision making known as satisficing.

E) results in conservation of precious time, money, and resources.

82) Carl wanted the advantage that comes with the collective wisdom of a management team participating in a decision. Carl's division had to decide if solar panel, wind turbine blade, or battery power research would be its next major investment. He brought together his managers in a meeting; however, Shinichi, used his strength of character and oratory skills to push for solar panel research. Unfortunately, the other managers were quiet, and Shinichi managed to overpower them with his views. Given the dynamics of the meeting and its outcome, ________ had prevented Carl's meeting from achieving what he had hoped it would.

A) groupthink

B) satisficing

C) domination

D) devil's advocacy

E) goal displacement

83) ________ is the phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus.

A) Goal displacement

B) Domination

C) Intuition

D) Groupthink

E) Brainstorming

84) When decision making is done in groups, the job of a devil's advocate is to create

A) potentially destructive conflict.

B) the likelihood of constructive conflict.

C) a structured debate.

D) a task-related conflict.

E) process-related problems.

85) Five executives attended a meeting that was being held at the company. A decision needed to be made about the following year's marketing campaign. Sam, an outspoken and aggressive person, insisted that his ideas be followed because there could not be a better alternative. No one else contributed to the discussion, and Sam's views were accepted. This group discussion suffered from

A) groupthink.

B) domination.

C) satisficing.

D) brainstorming

E) goal displacement.

86) In brainstorming, group members generate

A) as many ideas about a problem as they can.

B) a few ideas about a problem.

C) only three ideas about a problem.

D) criticism of each other's ideas.

E) pressure to conform

87) When a group accepts an alternative in order to end a meeting, the group has reached a(n) ________ decision.

A) maximizing

B) innovative

C) satisficing

D) constructive

E) optimizing

88) ________ is a condition that occurs when a decision-making group loses sight of its original purpose and a new, less important aim emerges.

A) Goal displacement

B) Illusion of control

C) Satisficing

D) Brainstorming

E) Groupthink

89) Leaders of decision-making groups who want to encourage constructive conflict should

A) discourage constructive conflict among the group members.

B) encourage groupthink to speed up decision making.

C) reach a decision by employing the satisficing method.

D) encourage multiple alternatives from a variety of perspectives.

E) discourage exploring new alternatives in order to reach a conclusion faster.

90) In an effort to combat groupthink and an overall lack of creativity, the group leader assigned Lucy the job of criticizing ideas, for the sake of argument, throughout the meeting. Lucy is playing the role of a

A) maximizer.

B) devil's advocate.

C) dialectic.

D) strategic planner.

E) dominator.

91) In an attempt to make a conflict between two employees less personal and emotional, their manager instructs them to approach the same problem from a different viewpoint. They have a structured debate and come to a conclusion that suits both employees. This is an example of using the ________ approach.

A) maximizing

B) satisficing

C) brainstorming

D) dialectic

E) goal displacement

92) In brainstorming,

A) a group is encouraged to say anything that comes to mind, except to criticize other people.

B) a time pressure is necessary to enhance creativity.

C) total and consistent agreement among group members can be useful.

D) innovative ideas must lead to immediate payoffs.

E) a task-related conflict cannot hurt performance.

93) The senior management of Jupiter Corporation has conducted a strategic planning meeting. Based upon the discussion, decisions were made regarding

A) the number of employees who should be hired for the cafeteria this month.

B) how the visibility of their marketing campaign can be increased over the next 6 months.

C) how the biggest trucks in the business can be deployed next week.

D) whether the company should allow employees to work from home.

E) whether the company should expand into a new region in the next 10 years.

94) Bret Nunnelly, lab manager, devised a schedule so that the lab chemists could run the experiments over the next two weeks. This decision is part of operational planning because it

A) translates broad strategic goals and plans into specific goals and plans relevant to a particular portion of the organization.

B) focuses on the major actions a unit must take to fulfill its part of the strategic plan.

C) involves a specific procedure that is required at lower levels of the organization.

D) involves making decisions about the organization's long-term goals and strategies.

E) has a strong external orientation and covers major portions of the organization.

95) As part of a strategic planning process, Midwest Power's senior executives determined positive findings from their SWOT analysis: (1) New regulations will provide tax credits for renewable ("green") power sources. (2) Their customers will pay higher prices for green power. (3) A competing power utility that owns renewable power sources is struggling and might be a target to be acquired by Midwest Power. (4) As compared to their competitors, Midwest Power's management team is one of the best in the industry. A strength of Midwest Power, per the SWOT analysis, is that

A) new regulations will provide tax credits for renewable power sources.

B) their customers will pay higher prices for green power.

C) a competing power utility is struggling.

D) the competing power utility might be a target to be acquired.

E) their management team is one of the most skilled in the industry.

96) Barbara Meyer, CEO of Luxury Living Corporation, said, "I like what I heard from our SWOT analysis. It found: (1) We have an excellent sales staff. (2) Our management team is one of the best in the industry. (3) Demand for our products in the underserved overseas market is projected to soar. (4) Our factories use the latest and most efficient equipment. (5) And our cost control system is world class." An opportunity for Luxury Living, per the SWOT analysis, is that

A) they have an excellent sales staff.

B) their management team is one of the best in the industry.

C) demand for their products in the underserved overseas markets is projected to soar.

D) their factories use the latest and most efficient equipment.

E) their cost control system is world class.

97) Don Jefferson, owner of Don's Fine Foods, a family-owned grocery store, said to his management team following their SWOT analysis, "We're in trouble. We have been the leading grocer in this geographical area, but Mega Box Store Groceries is opening a superstore a mile away. Our refrigeration system is 15 years old and needs replacing. Our store manager and produce manager are retiring this year. And our employee benefits package is not competitive." A threat to Don's Fine Foods, per the SWOT analysis, is that

A) they have been the leading grocer in their geographical area.

B) Mega Box Store Groceries is opening a superstore nearby.

C) their refrigeration system is old and needs replacement.

D) key personnel are retiring.

E) their employee benefits package is not competitive.

98) "Our business needs a steady supply of raw milk," said Beatrice Gomez, CEO of Bea's Ice Cream, "But Holly Dairy Farms is unable to deliver with certainty, and they keep raising prices. This year, I want us to expand our business by buying our own dairy farm." Beatrice is advocating a(n) ________ strategy.

A) operational

B) vertical integration

C) lateral integration

D) unrelated diversification

E) horizontal integration

99) "I am pleased to announce that we have acquired Halley's Fruit Juices, a premier producer of natural beverages," said Trent Lamb, CEO of Granddad's Root Beer. "This will allow us to take advantage of our strengths by applying them in a new business that is similar to our core business." Trent is speaking of a(n) ________ strategy.

A) operational

B) vertical integration

C) related diversification

D) lateral diversification

E) horizontal integration

100) "The last three years of severe drought conditions have been brutal to our lawn care business. We survived, but our business is too concentrated," said Rocco Camanetti, owner of Camanetti & Sons. "I propose that we expand in new areas—trucking, catering, and dry cleaning—to minimize our risks due to market fluctuations in one industry." Rocco is advocating a(n) ________ strategy.

A) lateral integration

B) vertical integration

C) related diversification

D) unrelated diversification

E) horizontal integration

101) The management team of True Care Medical Center is deciding whether to include more advanced, and substantially more costly, technologies. This is a nonprogrammed decision, because the underlying problem

A) is frequent, repetitive, and routine.

B) is novel and unstructured.

C) is trivial.

D) has a predetermined outcome.

E) is risk-free.

102) Jim Starnes, finance manager, told his boss, "Ben, just like last month, I have determined appropriate revenue recognition for each of the 55 projects this month, based upon company policy and our standard procedures. Each of the projects has routine revenue accrual. I have prepared financial affidavits for each of these 55 projects, and I recommend that you approve the revenues by signing the affidavits." Ben's decision to approve the revenues is an example of a programmed decision because the underlying problem

A) is frequent, repetitive, and routine.

B) is novel and unstructured.

C) is trivial.

D) has a predetermined outcome.

E) is risk-free.

103) "We have 125 qualified candidates for the quarterly training program but only 25 slots," said Bill Robbins, production manager. "In that case, randomly select 25, and we will train the other candidates later this year during the next rounds of training," said Jill Stern, division manager. By selecting the first 25 qualified candidates at random rather than examining each candidate's file to determine if more qualified candidates should be selected first, the managers are engaging in

A) ignoring.

B) satisficing.

C) favoring.

D) optimizing.

E) maximizing.

104) During a managers' meeting, there is difficulty reaching a conclusion on which project to fund in the upcoming year. In arguing for funding for her project, Vivian states that she has experience in making all projects succeed. She even states that she is immune to failure. Vivian is displaying

A) illusion of control.

B) framing effects.

C) discounting the future.

D) bargaining.

E) benchmarking.

105) "Karen, we must jump into this new business area now, or we will fall behind," argued Steven. "Let's price our product well below our competitors' prices, even if we don't make money at first. We will figure out how to make money later." Steven is displaying

A) illusion of control.

B) framing effects.

C) discounting the future.

D) bargaining.

E) benchmarking.

106) "Boss, you know that my plan will make us an absolutely unheard amount of money, and it's by far the best plan offered this week!" JB Lynfield exclaimed excitedly. Mateo Garcia, division manager, replied, "Yes, your statement is technically true. However, your plan has no data or facts, and the other two plans specified gains of 15 and 22 percent, respectively, and, as you know, they were submitted last week." JB was displaying ________ to sell his position.

A) illusion of control

B) framing effects

C) discounting the future

D) groupthink

E) devil's advocacy

107) New CEO Tony Sparks told his executive team, "Every two years, on a rolling basis, we will develop a new plan that will address our high-level mission, objectives, and approaches to conduct business for the next five years. The plan will guide decision making that is consistent with our long-term goals and strategies." The five-year plan is an example of a ________ plan.

A) strategic

B) single-use

C) standing

D) contingency

E) SWOT

108) "Roger, the operator's manual has a purpose—to allow the equipment to meet its performance goals and endure for a long time," said Chuck Nolan, plant manager. "You didn't perform scheduled maintenance on the equipment as specified in the manual, and now the equipment is ruined." The operator's manual is an example of a ________ plan.

A) strategic

B) single-use

C) standing

D) contingency

E) SWOT

109) "The dam is on the verge of failing, and the downstream residents are in danger!" cried the on-scene reporter. Tamara Johnson, the power plant manager, replied, "Stay calm. We implemented the emergency protocol over 24 hours ago, and we have evacuated all potentially affected residents." The emergency protocol is an example of a ________ plan.

A) strategic

B) single-use

C) standing

D) contingency

E) SWOT

110) To be effective, goals should have certain qualities, which can be recalled through the use of the acronym SMART. List and describe each of these qualities.

111) Compare and contrast strategic, tactical, and operational planning.

112) In the context of a SWOT analysis, describe at least five elements of an environmental analysis.

113) The two broad categories of resources typically considered during planning and SWOT analysis are tangible assets and intangible assets. List two examples of tangible assets and two examples of intangible assets available to or used by an organization. Describe under what circumstances resources can be a source of competitive advantage.

114) Describe low-cost and differentiation strategies, and how a business can achieve competitive advantage with either of them.

115) Differentiate between programmed and nonprogrammed decisions. Which type is more typical for managerial decisions?

116) List and describe the six steps of a formal decision-making process.

117) Explain the advantages and disadvantages of using a group to make decisions.

118) Situational analysis is the first step in the formal planning process. Next, a manager should generate alternative goals and plans based upon the findings of the situational analysis. Describe the benefits of generating these alternatives.

119) Bob's division posted sales of $10 million in the previous fiscal year, falling short of the budgeted $11 million. The shortfall was due to a variety of factors, including staffing turnover, client-directed work scope reductions, increased competition from new entrants to the marketplace, and an unfavorable economy. In Bob's annual performance review, Bob's manager directed Bob to develop two SMART goals for the coming year—one to address division sales, and one to address staffing turnover. Provide a hypothetical example of each.

120) In working with her management team to develop a business plan for her 15-person department for the next fiscal year, Jennifer notes that the corporate strategies for next year include: (1) expand into international markets; (2) broaden scope of services with key clients; and (3) leverage new technologies to increase sales. The corporation employing Jennifer and her team is large, employing over 20,000 staff. How do Jennifer and her management team use the corporate strategies in developing a business plan for their small department?

121) Business strategy based upon technology leadership has advantages and disadvantages. List three examples of each.

122) The four related steps involved in strategy implementation are: (1) define strategic tasks; (2) assess organization capabilities; (3) develop an implementation agenda; and (4) create an implementation plan. Implementing the strategy using these steps requires communication, involvement, training/coaching, and monitoring. What are some difficult situations that may develop in implementing strategy, and how would a manager address them?

123) List and explain the components of a strategic control system.

124) Explain how managers make decisions under time pressure that are timely and of high quality.