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Indicate whether the statement is true or false.
1. The CEO of Andre’s Autos, Inc. must do all of the planning for the company because that is the way to do things in
today’s workplace.
a. True
b. False
2. The dog, according to the BCG matrix, is a poor performer.
a. True
b. False
3. Goals are typically stated in quantitative terms.
a. True
b. False
4. The task environment sectors are the most relevant to strategic behavior and include the behavior of competitors,
customers, suppliers, and the labor supply.
a. True
b. False
5. If Renee, manager at Leak Free Roofing, wanted to develop a contingency plan for Leak Free, she would need to look
at factors such as new equipment, the economy, and the company workers’ compensation cases.
a. True
b. False
6. One of the limitations of setting goals and making plans is that they can get in the way of creativity.
a. True
b. False
7. Some companies hire competitive intelligence professionals to scan the external environment and provide data and
research on relevant domestic and global trends.
a. True
b. False
8. A desired future circumstance or condition that the organization attempts to realize is a goal.
a. True
b. False
9. The essence of formulating strategy is choosing how the organization will conform to become like its key competitors
in the industry.
a. True
b. False
10. Competitive advantage refers to the set of decisions and actions used to formulate and implement strategies.
a. True
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b. False
11. Executives acquire information about external opportunities and strengths from a variety of reports, including budgets,
financial ratios, profit and loss statements, and surveys of employee attitudes and satisfaction.
a. True
b. False
12. The BCG (Boston Consulting Group) matrix evaluates SBUs with respect to their business growth rate and
geographical location.
a. True
b. False
13. Research has shown that strategic thinking and planning positively affect a firm’s performance and financial success.
a. True
b. False
14. Prevention and preparation are the two stages of crisis management.
a. True
b. False
15. Defining operational goals and plans occurs in the execution phase of the organizational planning process.
a. True
b. False
16. Goals are most effective when they are specific, measurable, challenging, and linked to rewards.
a. True
b. False
17. Cost leadership is a type of competitive strategy with which the organization seeks to distinguish its products or
services from that of competitors.
a. True
b. False
18. Trend management is looking at trends and discontinuities and imagining possible alternative futures.
a. True
b. False
19. One of the biggest benefits of planning is that, in turbulent environments, plans create greater organizational
flexibility.
a. True
b. False
20. Front-line managers have the final responsibility for strategic planning.
a. True
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b. False
21. A broad definition of the organization’s values, aspirations and reason for being, along with a recognition of the scope
and operations that distinguishes the organization, refers to a business plan.
a. True
b. False
22. Goals should be easy for employees to feel motivated so that they can achieve them easily, which in turn increases
their motivation level.
a. True
b. False
23. Operational plans and goals are those that focus on the outcomes that major divisions and departments must achieve in
order for the organization to reach its overall goals.
a. True
b. False
24. Of executives whose companies had no formal strategic planning process, about half said they were dissatisfied with
the company’s development strategy.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
25. The plan of action that describes resource allocation and activities for dealing with the environment, achieving a
competitive advantage, and attaining the organization’s goals is known as a(n):
a. goal.
b. objective.
c. mission.
d. vision.
e. strategy.
26. Which of the following is NOT one of the benefits of MBO?
a. Performance can be improved at all company levels.
b. Employees are motivated.
c. Efforts are focused on activities that will lead to goal attainment.
d. Operational goals are able to displace strategic goals.
e. Individual and department goals are aligned with company goals.
27. The planning process begins with which of the following?
a. The development of operational goals
b. The development of a mission statement
c. Communication of goals to the rest of the organization
d. A company-wide meeting
e. Brainstorming
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28. Sarah is a middle manager at Stylin’ Sneakers Corporation. She is most likely responsible for the achievement of
__________ goals.
a. operational
b. tactical
c. strategic
d. lower-level
e. top-level
29. Fred has been assigned to conduct a SWOT analysis for his organization, Acme, Inc. As part of this assignment, Fred
will:
a. conduct an external wage survey.
b. search for the strengths, weaknesses, opportunities, and threats that impact his firm.
c. choose a grand strategy for his firm.
d. do a cost/benefit analysis.
e. develop a mission.
30. Which of the following is a commonly-cited limitation of planning?
a. Plans limit employee motivation and commitment.
b. Plans make resource allocation more difficult.
c. Plans make it more difficult to measure standards of performance.
d. Plans boost intuition and creativity.
e. Plans can create a false sense of security.
31. From where does the information about opportunities and threats come?
a. An analysis of the organization’s internal environment
b. A department-by-department study of the organization
c. Scanning the external environments
d. Employee grievances
e. Financial ratios of the organization
32. “We respect our employees and value their diversity” is an example of a statement you are most likely to find in the
organization’s:
a. mission.
b. strategic goals.
c. tactical goals.
d. strategic plans.
e. tactical plans.
33. Mingles, Inc. concentrates its efforts on its target market of 18– to 25-year-olds. It is using a(n) __________ strategy.
a. focus
b. differentiation
c. cost leadership
d. multidomestic
e. universal
34. Jeff is a top manager at a textile factory. He is developing a crisis plan in the event that the company has a toxic spill
or accident. Which of the following should Jeff undertake to prepare for such a crisis?
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a. Building relationships with neighboring businesses
b. Detecting signals from the natural environment
c. Polling employees on the likelihood of an environmental disaster
d. Designating a crisis management team in the event of an environmental disaster
e. Dismantling the company’s ties to the external media
35. Double Click, Inc. has a number of strategic business units. Its handheld computer unit has a large market share in this
rapidly growing industry. Its handheld computer business would be classified as:
a. a dog.
b. a star.
c. a question mark.
d. a cash cow.
e. stuck in the middle.
36. Of the strategic management functions, which of the following is considered the most fundamental?
a. Executing
b. Analyzing
c. Controlling
d. Planning
e. Leading
37. Which of the following strategies involves rewarding an employee’s innovation?
a. Cost leadership
b. Differentiation
c. Focus
d. Internal growth
e. Liquidation
38. Focusing manager and employee efforts on activities that will lead to goal attainment is a benefit of what management
method?
a. Tactical planning
b. Contingency planning
c. Single-use planning
d. Management-by-objectives
e. Management by walking around
39. Darren set goals for each of his employees. Each employee ended up with at least 25 goals. This process violates
which of the following criteria for effective goals?
a. Specific and measurable
b. Challenging but realistic
c. Covers key result areas
d. Defined time period
e. Linked to rewards
40. Alabama Airlines has three planning specialists who help division managers develop their own division plans. Serving
as consultants to the divisions, the planning specialists give advice about strengths, weaknesses, opportunities, and threats.
Alabama Airlines is utilizing which of the following approaches to the planning function?
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a. Centralized planning department
b. Decentralized planning staff
c. Planning task force
d. Centralized planning committee
e. TQM
41. When top executives work with managers in major divisions or departments to develop their own goals and plans, it is
known as __________ planning.
a. interdepartmental
b. crisis
c. focus
d. decentralized
e. competitive
42. A long-term time frame is most closely associated with:
a. operational plans.
b. tactical plans.
c. strategic plans.
d. mission plans.
e. tactical goals.
43. A blueprint specifying the resource allocations schedules, and other actions necessary for attaining goals is referred to
as a(n):
a. goal.
b. plan.
c. mission.
d. vision.
e. objective.
44. __________ refers to the use of managerial and organizational tools to direct resources toward achieving strategic
outcomes.
a. Strategy formulation
b. Strategy coordination
c. Strategy execution
d. Strategy control
e. Strategy planning
45. Which of the following is true about the cash cow?
a. It generates tremendous profits in a rapidly growing industry.
b. It has a small market share in a rapidly growing industry.
c. It has a small market share in a slow-growth industry.
d. It has a large market share in a slow-growth industry.
e. It is generally a dead business that should be divested.
Enter the appropriate word(s) to complete the statement.
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46. A group of planning specialists assigned to major departments and divisions to help managers develop their own
strategic plans is called __________.
47. Broad statements describing where the organization wants to be in the future are called __________.
48. __________ assess what is important to the organization and how well the organization is progressing toward
attaining its strategic goal.
49. __________ is the set of decisions and actions used to formulate and execute strategies that will provide a
competitively superior fit between the organization and its environment so as to achieve organizational goals.
50. A business activity that an organization does particularly well relative to its competition is known as a(n) __________.
51. The use of managerial and organizational tools to direct resources toward accomplishing strategic outcomes is known
as __________.
52. With a(n) __________ strategy, the organization aggressively seeks efficient facilities, cuts costs, and uses tight cost
controls to produce products more efficiently than competitors.
53. __________ is a system whereby managers and employees define goals for every department, project, and person and
use them to monitor subsequent performance.
54. Goals that define the outcomes that major departments must achieve in order for the organization to reach its overall
goals are known as __________ goals.
55. A(n) __________ is a blueprint specifying the resource allocations, schedules, and other actions necessary for
attaining goals.
56. A special type of contingency plan that is used when events are sudden and devastating and require immediate
response is called __________.
57. In the BCG matrix, the dog has __________ market share and __________ business growth rate.
58. __________ involves activities that managers undertake to try to prevent crises from occurring and to detect warning
signs of potential crises.
59. Plans that define company responses to be taken in the case of emergencies, setbacks, or unexpected conditions are
called __________ plans.
60. List the four components of a SWOT analysis.
61. List the four major activities that must occur in order for MBO to succeed.
62. List the five characteristics of effective goals.
63. In what ways do plans and goals benefit an organization?
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64. Compare the four levels of goals and plans.
65. Briefly discuss Porter’s three competitive strategies.
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Answer Key
1. False
2. True
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26. d
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