Management Chapter 5 Aacsb Analytic Strategic Plans Define What Specific Work Units Need Order For

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

c) fixed

d) zero-based

41. The process of predicting what will happen in the future is called:

a) contingency planning.

b) scenario planning.

c) forecasting.

d) zero-based budgeting.

42. Qualitative approaches to forecasting generally use:

a) statistical analysis of historical data.

b) mathematical models.

c) expert opinions.

d) surveys.

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

plan in case the new product’s demand increases beyond the production capacity. Ryan has

asked the managers to engage in __________.

a) scenario planning

b) financial planning

c) resource planning

d) contingency planning

46. The president of Virtual Products LLC is concerned about the next year’s economic outlook.

Even though next year’s plan has been laid out, he has requested his staff to generate another

plan that assumes a 10% reduction in sales. This is an example of __________.

a) contingency planning

b) forecasting

c) operation planning

d) budgeting

47. Which of the following terms can be best described as identifying possible future situations

and plans for dealing with them?

a) Contingency planning

b) Forecasting

c) Scenario planning

d) Budgeting

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

Ans: c

Bloom’s: Knowledge

Level: Easy

Learning Objective 3: Describe useful planning tools and techniques.

Section Reference: Scenario planning crafts plans for alternative future conditions.

AACSB: Analytic

48. __________ is a technique that makes use of external comparisons to evaluate current

performance.

a) Forecasting

b) Benchmarking

c) Allocating

d) Justifying

49. __________ are methods that lead to superior performance.

a) Best practices

b) Complacency traps

c) Operating procedures

d) Forecasting

53. Each level of the organization should create their plans independently in order to be

responsive to the varying needs at each level.

54. Short-range plans focus only on two to three months into the future.

55. The purpose of strategic plans is to support tactical plans.

56. Strategic plans define what specific work units need to do in order for the organization to

move ahead.

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

57. A policy describes exactly what actions should be taken in specific situations.

58. If a forecast is carefully created, it can be relied upon to accurately predict the future.

59. Contingency planning identifies alternate courses of action to be implemented in order to

meet changing circumstances.

60. One effective way to build commitment to the implementation of a plan is to involve the

people who will have to do the implementing in the creation of the plan.

Fill-in-the-Blank

61. __________ is the process of setting goals and objectives and determining how to

accomplish them.

62. __________ are specific results that one wishes to achieve.

63. The term __________ can be described as being lulled into inaction by current successes or

failures.

64. In order to get the best performance out of your organization, you should use __________

goals to encourage extra effort.

65. Effective planning ensures that each level’s goals support the goals of the next higher level,

thus fitting into a(n) _____ of objectives.

70. __________ plans deal with the requirements of selling and distributing goods or services.

71. A plan that commits resources to projects or activities is called a(n) __________.

72. A(n) __________ budget involves approaching each budget cycle as if it were new, starting

from scratch each time.

73. __________ is the process that attempts to predict the future.

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

74. __________ are the activation signals for implementing contingency plans.

75. A planning technique that utilizes external comparisons to better evaluate current internal

processes is called __________.

Essay

76. Explain the hierarchy of objectives.

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

Ans: Hierarchy of objectives is a means-ends chain in which lower-level objectives (the means)

lead to the accomplishment of higher-level objectives (the ends). Good planning facilitates

coordination by linking people and subsystems in a hierarchy of objectives.

Bloom’s: Knowledge

Level: Easy

Learning Objective 1: Understand how and why managers use the planning process.

Section Reference: Planning improves coordination and control.

AACSB: Analytic

77. Explain the concept of a zero-based budget.

78. What is scenario planning?

79. How does planning fit into the four basic functions of management?

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

80. What are the four functions of management? Describe each of them.

Ans: The four functions of management are planning, organizing, leading, and controlling.

Planning involves establishing stretch objectives, setting a time frame for achieving them and

81. State and discuss at least three reasons for planning and the benefits of each.

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

important to the company. This can be done by involving those key individuals that will

implement the plan in the planning process and presenting the plan to all who will

participate no matter what role they will play or what their position in the company.

3. Planning aids the progress of reviewing and controlling: Objectives are used to establish

milestones against which results can be evaluated and corrective actions taken. This is

critical to recognizing problems before they cause serious damage.

4. Planning improves time management: Planning allows managers to set priorities and to

manage their time according to those priorities.

Students may also include the following reasons:

5. Planning improves focus and action orientation: Planning can help sharpen focus and

increase flexibility, both of which improve performance. An organization with focus

knows what it does best and what it needs to do.

6. Planning improves coordination and control: It is hard to exercise control without

planning objectives. Without control, plans may fail because of a lack of follow-through.

With both, it is a lot easier to see when things are not going well and make the necessary

adjustments.

Bloom’s: Synthesis

Level: Hard

Learning Objective 1: Understand how and why managers use the planning process.

Section Reference: Planning is the process of setting objectives and identifying how to achieve

them.

Section Reference: Planning improves focus and attention.

Section Reference: Planning improves coordination and control.

Section Reference: Planning improves time management.

AACSB: Analytic

82. Distinguish between strategic plans and operational plans.