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Management, 3e (Hitt)
Chapter 5 Planning
1) The speed of change and rapid flow of information increasingly require business plans that are
flexible and dynamic.
2) Effective planning at top organizational levels impacts a firm's performance more than
planning at middle and lower levels.
3) The setting of organizational objectives must be preceded by the development of
organizational plans.
4) Strategic plans often have longer time frames and are broader in scope than tactical plans.
5) Strategic plans translate tactical plans into specific goals and actions for small units of the
organization and focus on the near term.
6) Operational plans are more complex than strategic and tactical plans and have a direct effect
on other plans outside of the department or unit for which the plan was developed.
7) Managers at the functional level focus on how they can achieve the competitive plan of the
business.
8) The planning activities of functional managers are focused on how they can support the
business and corporate plans.
9) Business-level managers typically are not involved in developing operational plans.
10) Environmental analysis, actions, implementations, and outcomes are all elements of the
planning process.
11) The greater the environmental uncertainty, the more important it is for managers to stick to
their original plan.
12) Managers should assess the firm's internal resources immediately following the analysis of
the external environment.
13) One of the first challenges for managers as they set objectives is to determine priorities.
14) A Gantt chart tells us when actions should be started without showing how long actions are
expected to take for completion.
15) Knowing who is responsible for specific actions facilitates coordination, especially if
multiple people are involved in the execution of a plan.
16) A capital expenditure budget typically includes all primary activities on which the unit or
organization plans to spend money and the amount allocated for each item during the year.
17) The principal negative consequence of incremental budgeting is that money may be allocated
to a unit in the future merely because the unit had been allocated money in the past.
18) Zero-based budgeting assumes that all funding allocations must be justified from zero each
year.
19) One way to determine that a goal is specific enough is by checking whether its achievement
can be measured.
20) Contrary to popular belief, research shows that allowing employees to participate in the
development of the goals does not really improve their commitment to the goals.
21) Even goals that are easily achieved have a large effect on the overall results at the
organizational, unit, subordinate, or personal level.
22) Goals that are measured, specific, and realistic, and to which people are committed, need to
be free from time restraints in order to be effective.
23) ________ serve as the future "end states" targeted by its managers.
A) Tactics
B) Strategies
C) Objectives
D) Plans
24) ________ is a decision-making process that focuses on the future of an organization and how
it will achieve its goals.
A) Planning
B) Programming
C) Implementation
D) Budgeting
25) Which of the following is NOT a feature of tactical plans?
A) specificity
B) high complexity and broad scope
C) shorter time frames
D) focus on a single business within an organization
26) Which of the following statements is true about strategic plans?
A) They focus on the immediate functional aspects of an organization.
B) They have moderate interdependence and cross-functional relevance.
C) They have a narrow scope, a departmental focus, and a short time frame.
D) They focus on the broad future of the organization.
27) Which of the following statements is true regarding tactical plans?
A) They translate strategic plans into specific goals that apply to the entire organization.
B) They have longer time frames than strategic and operational plans.
C) They typically affect a single business within an organization and its product lines.
D) They are broader in scope than strategic plans.
28) Which of the following is the purpose of operational plans?
A) They focus on the broad future of the organization.
B) They translate tactical plans into specific goals/actions for small organizational units.
C) They underscore the interdependence of tactical and strategic plans.
D) They align tactical planning with the overall strategic direction of the company.
29) Which of the following business plans has the broadest scope?
A) strategic plans
B) tactical plans
C) operational plans
D) functional plans
30) Which of the following types of plans is the least complex and rarely has a direct effect on
other plans outside of the department or unit for which they were developed?
A) strategic plans
B) tactical plans
C) operational plans
D) directional plans
31) What are the primary organizational levels of a corporation?
A) production, marketing, and sales
B) corporate, business, and functional
C) finance, human resources, and operations
D) production, marketing, and administration
32) Which of the following organizational levels is also known as the strategic business unit?
A) corporate level
B) business level
C) operational level
D) functional level
33) Which of the following issues is unlikely to be addressed by a corporate-level executive?
A) the industries that the organization should get into or out of
B) the resources to be allocated to each of the businesses
C) the businesses in which the organization should invest money
D) the advantages held over the business' competitors
34) Identify the question that managers at the strategic business unit (SBU) level would attempt
to address.
A) "Who are our direct competitors?"
B) "What resources should be allocated to each of the businesses?"
C) "What industries should we get into or out of?"
D) "What activities does my unit need to perform well in in order to meet customer
expectations?"
35) A manager of a local flower franchise is investigating her own company's strengths and
weaknesses and comparing them with those of her competitors. She is operating at the ________
level.
A) corporate
B) business
C) functional
D) operational
36) Ted is a manager at the strategic business unit level of his organization. Which of the
following would be one of his responsibilities?
A) facilitating the achievement of the competitive plan of the business
B) determining the activities to be performed to meet customer expectations
C) deciding whether to expand operations in Brazil
D) ensuring coordination across different departments of business
37) Identify the organizational level where managers would focus on how to facilitate the
achievement of the competitive plan of a business.
A) strategic level
B) corporate level
C) functional level
D) business level
38) At the functional level of an organization, a manager would attempt to address the issue of:
A) evaluating the unit's strengths and weaknesses.
B) determining the advantages over competitors.
C) identifying the business' direct competitors.
D) assessing a competitor's strengths and weaknesses.
39) Ned heads the finance department of a business. At which organizational level is Ned
functioning?
A) corporate level
B) strategic level
C) functional level
D) business level
40) In large organizations, strategic plans are typically developed at the ________ level.
A) corporate
B) business
C) functional
D) operational
41) Developing tactical plans is typically the responsibility of ________.
A) functional-level managers
B) business-level managers
C) operational-level managers
D) corporate-level managers
42) The planning responsibilities of functional-level managers largely focus on the development
of ________ plans.
A) tactical
B) strategic
C) operational
D) corporate
43) Which of the following statements is true about the interrelationship between plan types and
levels?
A) Business-level managers may be involved in developing strategic plans for their business
units.
B) Corporate managers are usually involved in developing tactical plans for their businesses.
C) Business-level managers are involved in developing operational plans.
D) Functional-level managers largely focus on the development of tactical plans.
44) The manager of a residential construction business plans to build more houses next year
because interest rates are falling and more people will be able to afford new homes. This plan is
an example of ________.
A) benchmarking
B) contingency planning
C) forecasting
D) simulation
45) Prior to entering the Eastern European markets, Procter & Gamble assessed the strengths and
weaknesses of possible competitors and noncompetitors in those markets. Procter & Gamble's
actions can be classified as ________.
A) setting objectives and strategies
B) analyzing the external environment
C) determining corporate resources
D) monitoring contingent outcomes
46) ________ typically identify key factors that could affect the desired results and specify what
different actions will be taken if changes in key events occur.
A) Strategic plans
B) Operational plans
C) Contingency plans
D) Tactical plans
47) ________ involves investigating the best practices used by competitors and noncompetitors
and imitating those that can be done in the firm.
A) Benchmarking
B) Competitive intelligence
C) Forecasting
D) Corporate espionage
48) A manager of a local bookstore is trying to increase his store's productivity without hiring
additional employees. He has noticed that a competitor is flourishing with relatively few
employees and decides to investigate. This is an example of ________.
A) forecasting
B) benchmarking
C) competitive intelligence
D) contingency planning
49) Which of the following is an issue managers address when assessing the firm's internal
resources?
A) evaluation of the available human capital
B) study of best practices of competitors and noncompetitors
C) incorporation of environmental uncertainty into the firm's plans
D) assessment of value of the firm's products or services
50) A community college has to decide if more budget is to be allocated for hiring new
instructors or for developing new laboratory facilities. This is an example of ________.
A) determining priorities
B) forecasting
C) benchmarking
D) contingency planning
51) Which of the following statements regarding objectives is true?
A) Managers need to assign equal importance to all of the objectives.
B) Determining priorities for objectives is usually the final stage associated with setting
objectives.
C) The importance of some objectives varies with time.
D) A clear understanding of the sequence of priorities has no significant impact on employee
performance.
52) A Gantt chart can help managers devise an action plan in all of the following ways EXCEPT
________.
A) showing the sequence in which the actions will be completed
B) showing when actions will start and how long they require for completion
C) showing any expected overlap in the timing of specific actions
D) showing the course of action to be taken if plans need to be changed during the course of their
implementation
53) Which of the following is NOT a key element in developing an action plan?
A) accountability
B) sequence and timing
C) monitoring the implementation
D) making real-time adjustments
54) Implementing plans is an important stage in the planning process because ________.
A) the of the plan's implementation can affect the results achieved
B) this phase overlaps with the analysis of the firm's external environment
C) the prioritization of objectives is undertaken during this stage
D) the objectives to be achieved are determined during this phase
