Chapter 5—Planning and Goal Setting
TRUE/FALSE
1. Because everything else stems from leading, of the four management functions, leading is considered
the most fundamental.
2. Managers must understand no plan is perfect, but should grow and change to meet new conditions.
3. A desired future state that the individual or organization attempts to realize is a goal.
4. Goals specify today’s means; plans specify future ends.
5. Goal setting is the act of determining the organization goals and the means for achieving them.
6. The mission is the basis for the strategic level of goals and plans, which in turn shapes the tactical and
operational level.
7. Tactical goals and plans are the responsibility of front-line managers and supervisors.
8. Tactical goals and plans are the responsibility of middle managers.
9. A broad definition of the organization’s values, aspiration and reason for being, along with a
recognition of the scope and operations that distinguishes the organization refers to a Business
Strategic Statement.
10. A plan tells “why” to achieve the goal.
11. Goals help managers decide where they need to allocate resources.
12. Step 1 in the organizational planning process is to review progress.
13. Plans provide a standard of assessment.
14. In step 1 of the organizational planning process, overall performance is appraised.
15. An organization’s mission describes its reason for existence.
16. Strategic plans and goals are those that focus on where the organization wants to be in the future and
pertain to the organization as a whole.
17. A broad statement of where the organization wants to be in the future refers to a mission statement.
18. 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.
19. Tactical plans are designed to help execute the major strategic plans and to accomplish a specific part
of the company’s strategy.
20. Tactical goals are specific, measurable results expected from departments, work groups, and
individuals within the organization.
21. Top managers make the broad strategic plan and identify specific tactical plans.
22. The department manager’s tool for daily and weekly operations is called the operational plan.
23. Operational planning specifies plans for department managers, supervisors, and individual employees.
24. Management by objectives, single-use plans, and standing plans are all management planning
approaches.
25. Specific and measurable goal characteristics apply only to the lower-level goals.
26. Goals are most effective when they are specific, measurable, challenging and linked to rewards.
27. Goals must be set for every aspect of employee behavior or organizational performance to be effective.
28. The goals should be easy, for employees to feel motivated, so that they can achieve them easily which
in turn increases their motivation level.
29. An action plan defines the course of action needed to achieve the stated goals.
30. Standing plans define company responses to specific situations such as natural emergencies or
competitive setbacks.
31. Three critical planning methods are contingency planning, building scenarios, and crisis planning.
32. Crisis plans define company responses to be taken in the case of emergencies, setbacks, or unexpected
conditions.
33. If Renae, 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.
34. Contingency plans can also be considered as scenarios.
35. Some firms engage in crisis planning to enable them to cope with unexpected events that are so sudden
and devastating that they have the potential to destroy the organization.
36. The first stage in crisis prevention includes setting up effective communication system.
37. Prevention and preparation are the two stages of crisis management.
38. The ABC Corporation should create a crisis management group that is not cross-functional, but does
work together well under pressure.
39. In a complex and competitive business world, traditional planning done by a select few is the only
planning that works.
40. Managers work with planning experts to develop their own goals and plans in decentralized planning.
41. In centralized planning, managers work with planning experts to develop their own goals and plans.
42. Planning cannot tame a turbulent environment.
43. Defining operational goals and plans occurs in the plan development phase of the organizational
planning process.
44. Strategic planning tends to be long-term and may define organizational action steps from two to five
years in the future.
45. Goals are typically stated in quantitative terms.
46. Managers use strategic goals to direct employees and resources toward achieving specific outcomes
that enable the organization to perform efficiently and effectively.
47. In order for goals to be effective, they should be challenging but realistic.
48. One of the biggest benefits of planning is that, in turbulent environments, plans create greater
organizational flexibility.
49. Crisis planning forces managers to mentally rehearse what they would do if their best laid plans
collapse.
50. When detecting signals from the external environment as a part of crisis planning, managers are in the
preparation stage.
51. Stretch goals are typically so far beyond the current levels that people have to be innovative to find
ways to reach them.
52. Goals and plans are valuable to an organization because they provide rationale for decisions, a guide to
action, and an increase in motivation and commitment.
53. Strategic management largely determines which organizations succeed and which ones struggle.
54. Research has shown that strategic thinking and planning positively affect a firm’s performance and
financial success.
55. Better-Than-The-Rest, Inc.’s ability to market its products better than its competitors is an example of
its core competence.
56. Core competence is the plan of action that prescribes resource allocation and other activities for
dealing with the environment.
57. The essence of formulating strategy is choosing how the organization will be identical to its key
competitors in the industry.
58. Competitive advantage refers to the set of decisions and actions used to formulate and implement
strategies.
59. The interaction of Production and Sales working together to produce profit greater than the total of
both working separately is an example of synergy.
60. The combination of benefits received and costs paid by the customer refers to value.
61. Value occurs when the organizational parts interact to produce a joint effect that is greater than the
sum of the parts acting alone.
62. The administration and implementation of the strategic plan is strategy execution.
63. SWOT analysis includes a review of the internal threats and opportunities.
64. Internal analysis examines overall organization structure, management competence and quality, and
human resource characteristics.
65. Threats are characteristics of the internal environment that may prevent the organization from
achieving its strategic goals.
66. The task environment sectors are the most relevant to strategic behavior and include the behavior of
competitors, customers, suppliers, and the labor supply.
67. The bargaining power of customers is one of Porter’s five competitive forces.
68. According to Porter, the bargaining power of the government is one of the five competitive forces
affecting an organization’s competitive environment.
69. The Internet tends to lower the bargaining power of suppliers.
70. With the leveling force of the Internet and information technology, it has become easier for many
companies to find ways to distinguish themselves from their competitors.
71. Differentiation, cost leadership, and focus are three of Porter’s competitive strategies.
72. For successful execution, alignment of everyone in the organization must occur.
73. The final stage of the strategic management process is execution of the strategy.
74. Opportunities are characteristics of the internal environment that have the potential to help the
organization achieve or exceed its strategic goals.
75. As a result of the growth of the Internet, barriers to entry into new markets are now much higher than
ever before.
76. The concentration of suppliers and the availability of substitute suppliers are significant factors in
determining supplier power.
77. Cost leadership firms are more likely to reward employee innovation than differentiation firms.
78. A top-down management style has been identified as a silent killer of strategy.
79. A firms’ leadership is responsible for recruiting, selecting, training, transferring, promoting, and laying
off employees.
80. Strategic thinking is more important for profit businesses than for non-profit organizations.
MULTIPLE CHOICE
1. ____ refers to a desired future state that an organization attempts to realize.
a.
Plan
b.
Vision statement
c.
Goal
d.
Mission statement
e.
Idea
2. ____ specify future ends and ____ specify today’s means.
a.
Goals, plans
b.
Plans, goals
c.
Planning, organizing
d.
Ideas, behaviors
e.
Mission, vision
3. 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.
4. ____ is the act of determining the organization’s goals and the means for achieving them.
a.
Brainstorming
b.
Organizing
c.
Planning
d.
Developing a mission
e.
A blueprint
5. The planning process begins with which of these?
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
6. The ____ is the basis for the strategic level of goals and plans which in turn shapes the ____ and ____
level.
a.
goal, mission, tactical
b.
objective, operational, mission
c.
operational goal, mission and tactical
d.
mission, tactical, operational
e.
tactical plan, operational, mission
7. ____ is primarily responsible for strategic goals/plans.
a.
Middle management
b.
Board of directors
c.
Consultants
d.
Top management
e.
Lower management
8. ____ is primarily responsible for operational goals/plans.
a.
Middle management
b.
Board of directors
c.
Consultants
d.
Top management
e.
Lower management
9. Which of these is(are) primarily concerned with tactical goals/plans?
a.
Middle management
b.
Board of directors
c.
Consultants
d.
Senior management
e.
Lower management
10. Sherry is a first-line supervisor at Rooftop Corporation. She is most concerned with which level of
goals?
a.
Operational goals
b.
Tactical plans
c.
Strategic goals
d.
Mission statement
e.
Vision
11. Which of the following symbolizes the legitimacy of the organization to external audiences?
a.
Operational goals
b.
Tactical plans
c.
Strategic goals
d.
Mission statement
e.
Tactical goals
12. Roxanne is a manager at Geronimo Gaming. She recently attended a seminar on goal setting. She
wishes to use goals to provide a sense of direction to her staff. She is using goals as
a.
a way to legitimize her department.
b.
a source of motivation.
c.
a standard of performance.
d.
a guide to action.
e.
impress others.
13. Which of the following is not a reason why planning positively affects a company’s performance?
a.
Goals and plans provide legitimacy for customers
b.
Goals and plans set a standard of performance
c.
Goals and plans guide resource allocation
d.
Goals and plans are a guide to action
e.
Goals and plans are a source of motivation and commitment
14. Which of the following is not a step in the organizational planning process?
a.
Monitor and learn
b.
Plan operations
c.
Translate the plan
d.
Develop the plan
e.
Plan marketing tactics
15. Which of the following is NOT a tool for executing a plan?
a.
Management by objectives
b.
Operations map
c.
Performance dashboards
d.
Single use plans
e.
Decentralized responsibility
16. A statement that identifies distinguishing characteristics of an organization is known as
a.
a goals statement.
b.
a values statement.
c.
an income statement.
d.
a mission statement.
e.
a competitive-edge statement.
17. Which of these are described by mission statements?
a.
Corporate values
b.
Product quality
c.
Location of facilities
d.
All of these
e.
None of these
18. The organization’s reason for existence is known as
a.
the organization’s value.
b.
the organization’s vision.
c.
the organization’s mission.
d.
the organization’s goal.
e.
the organization’s service.
19. “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.
20. “We seek to become the premier business school in the west” is an example of a statement you are
most likely to find in the organization’s
a.
tactical goals.
b.
operational goals.
c.
mission.
d.
tactical plans.
e.
operational plans.
21. ____ refers to a broadly stated definition of the organization’s basic business scope and operations that
distinguishes it from similar types of organizations.
a.
Mission statement
b.
Goal statement
c.
Management by objective
d.
Goal setting
e.
Corporate competitive-value statement
22. At the top of the goal hierarchy is the
a.
strategic goals.
b.
tactical goals.
c.
operational goals.
d.
mission.
e.
employee goals.
23. ____ are the broad statements of where the organization wants to be in the future.
a.
Operational goals
b.
Tactical goals
c.
Strategic goals
d.
Operational goals
e.
Tactical plans
24. The official goals of the organization are best represented by the ____.
a.
strategic goals
b.
tactical goals
c.
operational goals
d.
competitive goals
e.
none of these
25. 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.
26. ____ are called the action steps by which an organization intends to attain its strategic goals.
a.
Tactical goals
b.
Operational goals
c.
Tactical plans
d.
Operational plans
e.
Strategic plans
27. Goals that define the outcomes that major divisions and departments must achieve in order for the
organization to reach its overall goals is called
a.
strategic goals.
b.
tactical goals.
c.
operational goals.
d.
a mission.
e.
a plan.
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. Which of the following refer to specific results expected from individuals?
a.
Operational goals
b.
Tactical goals
c.
Strategic goals
d.
Operational plans
e.
Mission statements
30. Which of the following represent plans developed at the organization’s lower levels that specify action
steps toward achieving operational goals and that support tactical planning activities?
a.
Tactical plans
b.
Strategic plans
c.
Operational plans
d.
Supervisory plans
e.
Organizational plans
31. The ____ is the department manager’s tool for daily and weekly operations.
a.
conventional goal
b.
strategic goal
c.
strategic plan
d.
operational plan
e.
targeted plan
32. Managers use ____ to direct employees and resources toward achieving specific outcomes that enable
the organization to perform efficiently and effectively.
a.
strategic goals
b.
operational goals
c.
growth goals
d.
financial results
e.
internal business process goals
33. Which of these is lacking in the goal “profits should be increased in the coming year?”
a.
Specific and measurable
b.
Challenging but realistic
c.
Covers key result areas
d.
Defined time period
e.
None of these
34. You are violating which of these goal characteristics when you attempt to create goals for every aspect
of employee behavior?
a.
Specific and measurable
b.
Linked to rewards
c.
Defined time period
d.
Cover key result areas
e.
Challenging but realistic
35. Darren set goals for each of his employees. Each employee ended up with at least twenty-five 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
36. All of the following are characteristics of effective goal setting EXCEPT
a.
goals should be challenging but not unreasonably difficult.
b.
goals should be set for every aspect of employee behavior.
c.
specific and measurable.
d.
cover key results area.
e.
linked to rewards.
37. The ultimate impact of goals depended on the extent to which goal achievement is linked to
a.
rewards.
b.
salary increases.
c.
promotions.
d.
all of these.
e.
salary increases and promotions.
38. Which of these are true about contingency plans?
a.
They are developed to achieve a set of goals that are unlikely to be repeated in the future.
b.
They are used to provide guidance for tasks performed repeatedly within the organization.
c.
They define company responses to specific situations, such as emergencies or setbacks.
d.
They are most important in the organization.
e.
None of these.
39. Contingency plans are also referred to as
a.
standing plans.
b.
rules.
c.
scenarios.
d.
procedures.
e.
operationally tactical plans.
40. ____ involves looking at trends and discontinuities and imagining possible alternative future to build a
framework within which unexpected future events can be managed.
a.
Scenario building
b.
Crisis planning
c.
Contingency planning
d.
Trend management
e.
Caution planning
41. ____ enables firms to cope with unexpected events that are so sudden and devastating that they have
the potential to destroy the organization if managers aren’t prepared with a quick and appropriate
response.
a.
Incident planning
b.
Contingency planning
c.
Strategic planning
d.
Crisis planning
e.
Emergency planning
42. The crisis management plan should be a ____ that specifies the actions to be taken, and by whom, if a
crisis occurs.
a.
vague, verbal plan
b.
detailed, verbal plan
c.
long, difficult to read plan
d.
vague, written plan
e.
detailed, written plan
43. Which of the following is NOT involved in the stages of crisis planning?
a.
Setting up effective communication systems
b.
Creating detailed crisis management plans
c.
Investigating all stakeholders
d.
Designating a crisis management team and spokesperson
e.
Building relationships
44. Traditionally, if Stephanie, CEO of Butterfly Pillows, needed to conduct corporate planning, it would
be performed by all of the following EXCEPT
a.
central planning departments.
b.
decentralized planning groups.
c.
top executives.
d.
consulting groups.
e.
the president of the company.
45. 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 what approach to the
planning function?
a.
Centralized planning department
b.
Decentralized planning staff
c.
Planning task force
d.
Centralized planning committee
e.
TQM