Chapter 05 Planning: The Foundation of Successful Management
Answer Key
True / False Questions
1.
Getting a college degree is not only a big goal, it’s a hard goal—difficult, stressful,
expensive, and time-consuming.
2.
Research has proven that writing out goals does not necessarily help a person feel more
confident when entering a new group.
3.
Research suggests that when writing out and achieving a person’s biggest goals, it is
important to make a concrete plan, break goals into manageable bites, and seek social
support.
4.
When Joseph, a restaurant manager, plans, he sets goals and then decides how to achieve
them. This is the definition of planning.
5.
A business plan is a management tool that contains a list of the competition, along with
the competitors’ product strengths and prices.
6.
A business model outlines what customer needs the company will satisfy, the operations
of the business, the company components and functions, and the projected revenue and
expenses.
7.
A business model is a type of business plan.
8.
Strategic management involves all managers within the organization.
9.
A company’s mission and vision is the foundation of an organization’s planning and
strategic management.
10.
Almost everyone starting a new business is advised to write a business plan.
11.
When using MBO, managers should meet about once a year, either informally or formally,
to review progress on meeting objectives.
12.
One purpose of strategic planning is to “keep the eye on the plan” and avoid invention.
13.
Upper-level managers prepare the action plans for attaining objectives for all levels of
management.
14.
Every five years, the upper-level managers of ABC Technology meet to develop a new
large-scale action plan that will set the direction for the company for the next five years. In
that meeting the managers are developing a strategy.
15.
The upper-level managers of Deluxe Coffee are meeting to discuss the long-range goals
and vision of the company. Like any organization, an organization should adopt planning
and strategic management for two reasons: to provide direction and momentum and to
encourage retention of high-value employees.
16.
Quality Carwash is developing a new philosophy on company diversity. Like most
organizations, Quality Carwash’s reason for being is expressed in its diversity statement.
17.
What the organization wishes to become is expressed in a mission statement.
18.
The responsibility for the development of an organization’s mission statement, which
outlines the company’s competition and how it will ethically compete in the market, is the
responsibility of top management and the board of directors.
19.
When Holiday Inn Express stated that the organization strives to “be the primary source of
hospitality in the communities” it serves by providing its customers “the best possible
experience and by being good neighbors,” this is a code of ethics.
20.
Strategic planning determines goals for an organization for a period of 5 to 10 years.
21.
Alison, the vice president of marketing for a global company, is planning what
contributions she and her department will make to the organization over the next 24
months. This type of planning is operational planning.
22.
Tactical planning is a type of operational planning done by upper management.
23.
Paula is the store manager for a national grocery retailer, and she received the yearly
tactical plan from Greg, her district manager. Paula is meeting with her department
managers to plan how to implement the specific tasks outlined in Greg‘s plan for the next
year. This type of planning by Paula is operational planning.
24.
Peter, the night supervisor in a fast-food restaurant, was given the responsibility by Mr.
Jones, the general manager, of planning a number of the normal daily tasks by his workers
over the next 3 months. This type of planning by Peter is known as operational planning.
25.
Tom, the store manager in a hardware store, routinely sets specific sales and cost targets
for his store, which he promises to achieve in a certain period of time. These specific
objectives are known as goals.
26.
Like planning, goals are arranged in a hierarchy known as a means-end chain because in
the chain of management, the accomplishment of high-level goals is the means leading to
the accomplishment of low-level goals or ends.
27.
Strategic goals concentrate on objectives for handling competition and the competitive
environment.
28.
Tactical goals, a type of strategic goal, are determined by and for nonmanagerial
employees as part of the MBO process to help employees achieve organizational goals.
29.
Corporate has decided that each of the store managers needs to develop clear goals for
next year on how to increase revenue, cash flow, and market share. Geoff, like the other
store managers, is also required to develop a specific plan of action on how he plans to
accomplish these objectives in his local market. This is an example of an operating plan.
30.
Jerome’s Italian Pizza is in a very competitive industry, and its upper management believes
that by focusing on the strategy of lowering costs and prices, providing quicker delivery,
and providing good customer service, this will result in higher profits. This is an example of
a strategic goal.
31.
When the CEO of Tasty Coffee and Bakery dictated that all company districts needed to
increase their profitability, district managers across the country focused on improving
customer service ratings in their stores by offering customer service training. This goal by
the district managers of customer service ratings is an example of a tactical goal.
32.
Standing plans are plans developed for activities that occur repeatedly over a period of
time.
33.
When employees are hired by ABC Industries, the HR manager tells all new hires that their
workplace does not allow swearing or dirty jokes. This specific detail is an example of a
policy.
34.
The way a particular problem or circumstance is handled, such as the company policy of
always returning customer phone calls and e-mails within 24 hours, is a standard
operating procedure.
35.
Single-use plans are plans developed for activities that are not likely to be repeated in the
future.
36.
The production plant for Ace Manufacturing has been located in the same place for over
100 years. It has just completed its new factory, which includes its new corporate offices.
The planning required for moving of Ace into a new facility is a single–use plan.
37.
A SMART goal is one that is specific, multidimensional, accurate, and results-oriented,
and has target dates.
38.
When setting a SMART goal, it should be results-oriented.
39.
When Donna asked her sales representatives for their sales goals for the year, Al, one of
her salespeople, said, “I am going to sell more copiers next year than this year.” Donna’s
response to Al was, “Specifically, how many copiers do you plan on selling?” Al replied,
“I’m going to sell 90 copiers.” Al’s specific answer is an example of a SMART goal.
40.
Donna, the sales manager, asked Al, one of her sales representatives, “Why did you set
next year’s sales goal at only 90 copiers? This year you are on track to sell 85 copiers, and
I believe with your ability, selling 120 copiers would be challenging, but I believe it is
realistic and possible.” Donna’s belief about setting a challenging, yet realistic and
attainable goal for Al is an example of a SMART goal.