Chapter 5 Principles of Management
1. The process of making decisions about goals and activities that an
organization will pursue in the future is referred to asPLANNING
2. The planning process: Step 1- analyze the situation Step 2- generate alternative
goals and plans Step 3- Evaluate goals and plans Step 4- Select goals and plans Step 5-
implement the goals and plans Step 6- monitor and control performance.
3. What term describes the conscious, systematic process of making
decisions about goals and activities that an individual, group, or
organization will pursue in the future? PLANNING
4. Implementation of the plan comes after which step in the planning
process? Step 5 – goal and plan selection
5. Which action takes place during Step 3 of the planning process? Goals
and plans are evaluated
6. In order for a plan to be implemented successfully, managers and
employees must understand the plan, ______, and have the resources
to implement it. be motivated to carry out the plan
7. In the ______ stage, planners assemble and study all information
relevant to the planning issue in question. SITUATIONAL ANALYSIS
8. Why is Step 6 of the planning process so important? It is needed to
determine if the selected plan is working.
9. The first step in the planning process, situational analysis, summarizes
information relevant to the planning issue. In the second step, the
planners should use the findings from the first step to produce ______.
alternative goals
10. Which management levels are involved in planning? EVERY LEVEL
11. The goal and plan selection step of the formal planning process comes
after which action? Goal and plan evaluation
12. What type of plan involves making decisions about the organization's
long-term goals and how they intend to achieve the goals? STRATEGIC
13. As noted in Step 5 of the planning process, proper ______ is the key to
achieving goals. IMPLEMENTATION
14. Strategic goals are the major targets related to the long-term ______ of
the organization. VALUE, GROWTH, SURVIVAL
15. Which are necessary conditions for successful implementation of a
plan?
Employees must understand the plan.
Employees must have the proper resources.
Employees must be motivated to perform the plan.
16. The type of plan that translates broad strategic goals into
specific goals that are relevant to a particular organizational function is
known as a(n) ______ plan. TACTICAL
17. The monitor and control step of the planning process comes after
which step? STEP 5: PLAN IMPEMENTATION
18. Which type of planning identifies the procedures and processes,
such as delivery schedules, that are required from the lower levels of
the organization? OPERATIONAL PLANNING
19. Management in order from highest to lowest: STRATEGIC
MANAGERS, TACTICAL MANAGERS, OPERATIONAL MANAGERS AND
TEAM LEADERS.
20. Which managers are typically responsible for the development
and execution of strategic plans? TOP LEVEL MANAGERS
21. To be effective, an organization's strategic, tactical, and
operational plans must be ______. ALIGNED
22. What term is used to describe the major targets or end results
that relate to the long-term survival, value, and growth of an
organization? STRATEGIC GOALS
23. What process involves managers from all parts of the
organization in the formulation and implementation of strategic goals?
STRATEGIC MANAGEMENT
24. Which type of planning translates broad strategic goals and
plans into specific goals and plans relevant to particular organizational
units? TACTICAL PLANNING
25. Which step in the strategic management process involves
creating a mission, vision, and goals? FIRST STEP
26. What is an example of a process considered by operational
planning? PRODUCTION RUNS
27. What term describes a clear and concise expression of the basic
purpose of an organization? MISSION
28. Which management levels are involved in planning? EVERY
LEVEL
29. Which statement is true about aligning tactical, operational, and
strategic plans? THE PLANS MUST BE CONSISTENT AND MUTUALLY
SUPPORTIVE
30. The strategic ______ points to the future by providing a
perspective on where the organization is headed and what it can
become. VISION
31. Strategic management involves managers from ______ of the
organization in the formulation and implementation of strategic goals
and strategies. ALL LEVELS
32. A strategic vision helps a company understand its past so it can
succeed in the present. FALSE
33. Kandy's Koffee is engaging in the strategic management process.
The company is deciding whether or not to make its mission to provide
the most environmentally friendly and locally sourced coffee at the
best price to customers. Which step of the strategic management
process is Kandy's Koffee working on? THE FIRST STEP
34. What flows from the mission and vision of the organization?
STRATEGIC GOALS
35. What does it mean for an organization to be "mission
driven"?FOCUSING ON A PURPOSE BEYOND THEMSELVES (FOCUS ON
AGREATER PURPOSE), IT GIVES EMPLOYEES A “REASON TO BELIEVE”
36. What is the second step in the strategic management process?
a. First step: The Mission
b. The second step: analysis of the external environment
c. The third step: Assess the strengths and weaknesses of major
functional areas in their organization, (Internal resource analysis)
d. The Fourth Step: SWOT analysis (analysis of the organizations
strengths, weaknesses, opportunities, and threats.
37. Place the levels of management in order from highest to lowest.
a. STRATEGIC
b. TACTICAL
c. OPERATIONAL
d. TEAM LEADERS
38. Which elements are included in an environmental analysis?
(Choose every correct answer.)
a. Industry Growth –
b. Industry Forces –
c. Competitor analysis –
d. Legal Trends –
e. Political activity –
f. Social Issues –
g. Social Interest groups –
h. Labor issues –
i. Macroeconomic conditions –
j. Technological factors –
39. The _______________ describes the organization as it currently
operates, whereas the strategic vision points to the future. MISSION
40. Stakeholders are groups and individuals who impact and are
impacted by ______. ACHIEVEMENT OF THE ORGANIZATON’S MISSION,
GOALS, AND STRATEGIES.
41. What is the name given to the long-term direction and strategic
intent of a company? STRATEGIC VISION
42. Strategic goals evolve from the mission and vision of the
organization. TRUE
43. Which are components of the internal resource analysis?
a. FINANCIAL ANALYSIS –
b. HUMAN RESOUCES ASSESSMENT –
c. MARKETING AUDIT –
d. OPERATIONS ANALYSIS –
e. OTHER INTERNAL RESOURCE ANALYSES –
44. What drives the analysis of the external environment
(opportunities and threats)? MISSION AND VISION
45. _____ are inputs to production that can be accumulated over time
to enhance the performance of a firm. RESOURCES
46. What term describes a member of a group that affects or is
affected by the achievement of the organization's mission, goals, and
strategies? STAKEHOLDERS
47. The two types of resources are tangible and quantifiable. FALSE:
a. Tangible assets: real estate, production facilities, raw materials,
and so on.
b. Intangible assets: company reputation, culture, technical
knowledge, and patents, as well as accumulated learning and
experience.
48. A strategic vision helps a company understand its past so it can
succeed in the present. FALSE – Strategic vision is only focused on the
future.
49. Which is NOT a tangible asset? BRAND IMAGE
50. Which analysis is made up of components such as a financial
analyses and marketing audits? INTERNAL RESOURCE
51. What are inputs to a system that can enhance performance?
RESOURCES
52. Which are examples of intangible assets?
a. CORPORATAE CULTURE
b. CORPORATE REPUTATION
c. TECHNOLOGICAL KNOWLEDGE
53. When the resources of a firm create value for the customer, are
rare, are difficult to imitate, and are well organized, they become a
source of ______. COMPETITIVE ADVANTAGE
54. The two types of resources are ______ resources that are things
you can touch, such as buildings or machinery, and ______ resources
that are things you cannot touch, such as reputation or knowledge.
TANGIBLE; INTANGIBLE
55. Khalid likes shopping at the Serendipitea website because it
tracks his past tea orders, gives recommendations based on his past
orders, and allows him to keep a wishlist of teas he wants to try. All of
these features create ______. CUSTOMER VALUE
56. A resource is considered rare when it is not ____________ all
competitors. EQUALLY AVAILABLE TO
57. Zappos.com offers customer service that is practically unheard of
in business. Customer service representatives are allowed to take
whatever measures they feel are appropriate to make sure their
customers are happy. This feature gives Zappos a competitive
advantage because ______. IT IS DIFIFICULT TO IMITATE
58. Which is NOT an example of intangible resources? REAL ESTATE
59. Which four conditions are necessary for resources to be a source
of competitive advantage? MUST CREATE CUSTOMER VALUE, MUST BE
RARE, DIFFICULT TO IMITATE, WELL ORGANIZED
60. Just possessing a resource, even one that is rare and difficult to
imitate, may not be sufficient to attain a competitive advantage. In
order to create value for the customer, the resource must also be
______. ORGANIZED
61. ______ occurs when the customer gains an increase in benefit
from a good or service relative to its cost. CUSTOMER VALUE
62. Cosmetics company Skinnit offers a unique eye cream formula
that is touted by the industry as the best. Consumers are willing to pay
a lot of money for the eye cream, and many consider the cream's
benefits to be superior to all other eye creams. What is the term for
the resource Skinnit is offering? RARE
63. When competing firms cannot copy a company's business
practices or provide similar customer benefits, the company is said to
have a resource that is ______. DIFFICULT TO IMITATE
64. SWOT is an acronym that stands for ______, weaknesses,
opportunities, and threats. STENGTHS
65. Which are examples of intangible assets? CORPORATE
REPUTATION, CORPORATE CULTURE, TECHNOLOGICAL KNOWLEDGE
66. Strengths and weaknesses refer to ______ resources. INTERNAL
67. In order for a resource to be able to help a company attain a
competitive advantage it must create value for the customer, be rare,
be difficult to imitate, and be: WELL-ORGANIZED.
68. Khalid likes shopping at the Serendipitea website because it
tracks his past tea orders, gives recommendations based on his past
orders, and allows him to keep a wishlist of teas he wants to try. All of
these features create ______. CUSTOMER VALUE
69. In which general business environment do opportunities and
threats arise? EXTERNAL ENVIRONMENT
70. A resource is considered rare when it is not ____________ all
competitors.NOT EQUALLY AVAILABLE TO
71. The results of a SWOT analysis can identify organizational ______
that make it more difficult to pursue a preferred strategy because they
limit what a firm can do. WEAKNESSES
72. The process of assessing a company's internal strengths and
weaknesses, as well as determining external threats and opportunities
is known as a ___________ analysis. SWOT
73. What type of strategy identifies the set of businesses in which
the organization competes and the distribution of resources among
those businesses? CORPORATE STRATEGY
74. A successfully completed internal analysis of the firm will allow a
company to identify its strengths and ___________. WEAKNESSES
75. What kind of strategy is a company using when it focuses all
energies in a single industry? CONCENTRATION
76. Just possessing a resource, even one that is rare and difficult to
imitate, may not be sufficient to attain a competitive advantage. In
order to create value for the customer, the resource must also be
______. WELL ORGANIZED
77. What type of strategy involves expanding the domain of the
organization to include supply channels and distributors? VERTICAL
INTEGRATION
78. When conducting a SWOT analysis, _____________ and ___________
arise in the macroenvironment and competitive environments.
THREATS; OPPORTUNITIES
79. Once completed, a SWOT analysis can formulate a strategy to
capitalize on opportunities by leveraging organizational ___________.
STRENGTHS
80. A strategy of related diversification involves moving into new
businesses that are related to the company's ________ business. CORE
81. A ______ identifies the set of businesses, markets, or industries in
which the organization competes and the distribution of resources
among those businesses. CORPORATAE STRATEGY
82. A company that is a leader in the pet food category decides to
expand its operations into electric vehicles and cosmetics. What kind
of strategy is the company adopting? UNRELATED DIVERSIFICATION
83. What is the goal when companies concentrate on a single
industry? TO GAIN ENTRY INTO AN INDUSTRY
84. When a corporation has a business portfolio it has _____.
DIVERSIFIED BUSINESSES/OWNERSHIP OF A VARIETY OF BUSINESS
85. A vertical integration strategy involves expanding the domain of
the organization into _____ or to _____. SUPPLY CHANNELS;
DISTRIBUTORS
86. The ______ matrix is a popular technique for helping companies
analyze their strategy for managing their portfolio. BCG
87. In which general business environment do opportunities and
threats arise?EXTERNAL
88. What are the four categories of businesses identified by the BCG
matrix?STARS, QUESTION MARKS, DOGS, CASH COWS
89. What type of strategy involves moving into new businesses that
are similar to the company's original core business? VIRTICAL
INTEGRATION
90. Which statement about businesses that are question marks in
the BCG matrix is true? HIGH-GROWTH, WEAK COMPETITIVE POSITION
BUSINESSES REQUIRE SUBSTANTIAL INVESTMENT TO IMPROVE THEIR
POSITION, OR ELSE THEY SHOULD BE DIVESTED.
91. What kind of diversification is a company using when it expands
into different types of businesses in order to minimize risk?
UNRELATED DIVERSIFICATION
92. Businesses that need heavy investment but are able to perform
well and generate needed revenues due to their strong competitive
position in a high-growth market are ______. STARS
93. When a company employs an unrelated diversification strategy,
what term is used to describe the many businesses that make up the
resulting corporation?. PORTFOLIO
94. What are two generic business strategies? LOW COST;
DIFFERENTIATION
95. Each business in the corporation is plotted on the_____on the
basis of the growth rate of its market and the relative strength of its
competitive position in that market (market share). BCG MATRIX
96. In which type of business strategy do companies offer a
standard, no-frills product? LOW COST STRATEGY
97. The BCG matrix categorizes businesses with a conglomerate's
portfolio as dogs, stars, question marks, and __________. CASH COWS
98. To succeed in the low-cost strategy, companies generally need to
be the _______ in the market segment and offer a product that is
acceptable to the customers. COST LEADER
99. According to the BCG matrix, which term designates businesses
that have a weak competitive position in a high-growth market?
QUESTION MARKS
100. What strategy is a company using when it attempts to stand out
by focusing on high product quality, outstanding marketing, or superior
service? DIFFERENTIATION
101. According to the BCG matrix, what name is given to a company
with a strong competitive position in a high-growth market? STARS
102. Which risks are associated with technology leadership?
a. ADVANTAGES:
b. FIRST-MOVER ADVANTAGE
c. LITTLE OR NO COMPETITION
d. GREATER EFFICIENCY
e. HIGHER PROFIT MARGINS
f. SUSTAINABILITY ADVANTAGE
g. REPUTATION FOR INNOVATION
h. ESTABLISHMENT OF ENTRY BARRIERS
i. OCCUPATION OF BEST MARKET NICHES
j. OPPORTUNITITES TO LEARN
k. DISADVANTAGES:
l. GREATER RISKS
m. COST OF TECHNOLOGY DEVELOPMENT
n. COST OF MARKET DEVELOPMENT
o. COST OF CUSTOMER EDUCATION
p. INFRASTRUCTURE COSTS
q. COST OF LEARNING AND ELIMINATING DEFECTS
r. POSSIBLE CANNIBALIZATION OF EXISITING PRODUCTS
103. What type of strategy defines the major actions by which a
company builds or strengthens its competitive position in the
marketplace? BUSINESS STRATEGY
104. What type of strategies are implemented by each functional area
of the organization to support the company's business strategy?
FUNCTIONAL STRATEGY
105. What is a major focus of a company making use of a low-cost
business strategy? EFFICIENCY
106. What is the fifth step of the strategic management process?
STRATEGY IMPLEMENTATION
107. Even a company that has successfully implemented a(n) _______
strategy must still offer products with features that are acceptable to
customers compared to competitors' products. LOW-COST
108. Upon which factors is a unique or differentiated position within
the industry usual?
a. Excellent marketing and distribution
b. Hight product quality
c. Superior service
109. An organization's _____ must support its strategy. CULTURE
110. Which risk is NOT associated with technology leadership?
HIGHER PROFIT MARGINS
111. As a manager, you will constantly be making decisions. TRUE
112. What are examples of major functional areas? PRODUCTION,
HUMAN RESOURCES, MARKETING, RESEARCH AND DEVELOPMENT,
FINANCE AND DISTRIBUTION
113. The challenges associated with decision making include risk,
uncertainty, conflict, and ______. LACK STRUCTURE
114. After a strategy is formulated, strategic managers must help
make sure it is ______. IMPLEMENTED EFFICIENTLY
115. If you have all the information you need, and can predict
precisely the consequences of your actions, you are operating under a
condition of CERTAINTY
116. To succeed in the low-cost strategy, companies generally need to
be the _______ in the market segment and offer a product that is
acceptable to the customers. COST LEADER
117. Frank needs to make a decision but does not know the
probabilities of alternative outcomes. Future outcomes are also
unknown. What condition does this exemplify? UNCERTAINTY
118. In order to successfully ________ a business strategy, a
company's structure, technology, human resources, information
systems, and leadership style must all support the strategy.
IMPLEMENT
119. Managers are faced with tough decisions daily, and most
complex managerial decisions lack structure. Which factors add to the
difficulty and pressure managers experience when making tough
decisions? DEGREE OF RISK, POTENTIAL OF CONFLICT, LEVEL OF
UNCERTAINTY
120. What are common consequences of a manager making the
wrong decision?
a. A company could lose money.
b. A company could ruin its reputation.
121. What is the term to describe a novel and unstructured problem
that leaves a decision maker uncertain about how to proceed? LACK OF
STRUCTURE
122. What factors should managers compare current performance to
in order to find sources of discrepancies in performance? COMPARE
CURRENT PERFORMANCE AGAINST PAST PERFORMANCE, THE
CURRENT PERFORMANCE OF OTHER ORGANIZATIONS OR UNITS, OR
FUTURE EXPECTED PERFORMANCE AS DETERMINED BY PLANS AND
FORECASTS.
123. What name is given to the state that exists when decision
makers have accurate and comprehensive information? CERTAINTY
124. What is involved in the second stage of decision making?
DEVELOPMENT OF ALTERNATIVE SOLUTIONS
125. When a manager does not have adequate information to
understand the consequences of different actions, this is known as
______. UNCERTAINTY
126. Which stage in the formal decision-making process involves
determining the value or adequacy of the alternatives that were
generated? THE THIRD
127. An organization's _____ must support its strategy. CULTURE
128. In the fourth step in decision making, the decision will differ
according to the criteria and method used. What are the important
ways of thinking managers can use when choosing among the
alternatives they have evaluated? OPTIMIZING, SATISFICING, AND
MAXIMIZING
129. What exists when the probability of an action succeeding is less
than 100% and losses may occur? RISK
130. What is the first step in the ideal decision-making process?
IDENTIFYING AND DIAGNOSING THE PROBLEM
131. Mason has considered all possible consequences of his options.
Which statement best describes the behavior Mason would use to
maximize his decision? He would choose the option with the greatest
positive consequences and fewest negative consequences.
132. Which stage of the formal decision making process involves
generating alternative solutions? SECOND
133. Which decision strategy results in the greatest benefit, at the
lowest cost, with the largest expected total return? MAXIMIZING
134. In the decision-making process, which one of the following
actions comes directly AFTER the act of generating alternative
solutions? EVALUATING ALTERNATIVES
135. The formal decision-making process has six steps. Which step
involves implementing the decision? FIFTH
136. What is the fourth step in decision making, which occurs after all
the possible consequences of the options have been evaluated?
MAKING THE CHOICE
137. What actions should be taken during the sixth and final stage of
the decision-making process?
a. Collect information on how well the decision is working.
b. Compare collected information with specified goals.
c. Use feedback to either continue the decision or go back to the
first stage.
138. What are common consequences of a manager making the
wrong decision?
a. A company could ruin its reputation.
b. A company could lose money.
139. Which factors may be barriers to effective decision making?
PSYCOLOGICAL BASIES: ILLUSTION OF CONTROL, FRAMING EFFECTS,
DISCOUNTING THE FUTURE TIME PRESSURES: REAL TIME
INFORMATION, INVOLVE PEOPLE MORE EFFECTIVELY AND EFFFIVIENTLY
IN DECISION MAKING PROCESS, REALISTIC VIEW OF CONFLICT. SOCIAL
REALITIES
140. Efficiency occurs when a decision results in the best possible
outcome. FASLE
141. Josephine decided to go with option three because it resulted in
the lowest cost and provided the greatest benefits with the largest
expected total return. What decision strategy is Josephine using?
MAXIMIZING
142. What are some psychological biases that act as barriers to
effective decision making? FRAMING EFFECTS, DISCOUNTING THE
FUTURE, ILLUSION OF CONTROL
143. Once a choice is made in the decision-making process, managers
must put their choice into action. What term is used to describe this
process? IMPLEMENTING
144. What term describes the belief that one can influence events
even when one has no control over what will happen? ILLUSION OF
CONTROL
145. What name is given to the stage of decision making where
information is collected and compared to goals and plans to determine
success or failure? EVALUATING THE DECISION
146. Which are tactics employed by fast-acting firms to meet time
pressures without sacrificing quality? RELY ON HEAVILY TRUSTED
EXPERTS, FOCUS ON REAL-TIME INFORMATION, TAKE A REALISTIC
VIEW OF CONFLICT
147. Which factor is NOT a barrier to effective decision making? Full
execution of the six stages of decision making
148. Which factors should managers take into account when
considering the social realities of a decision?
149. What term is used to describe the decision-making strategy that
results in the best possible outcome? MAXIMIZING
150. What are potential advantages of using a group to make a
decision?
a. MORE INFORMATION
b. MORE PERSPECTIVS ON ISSUES
c. INTELECTUAL STIMULATION
d. BETTER UNDERSTANDING
e. HIGHER COMMITMENT
151. Personal biases that interfere with objective rationality in
decision making are called _______ biases. PSYCHOLOGICAL
152. Gambling is an example of the ______ in that some people believe
they have the skill to beat the odds, even though most of the time they
cannot. ILLUSION OF CONTROL
153. What are common potential problems associated with group
decision making?GOAL DISPLACEMENT, SATISFICING, GROUPTHINK
a. ONE GROUP MEMBER DOMINATES THE DISCUSSION
b. SATISFICING IS MORE LIKELY WITH GROUPS
c. PRESSURE TO AVOID DISAGREEMENT CAN LEAD TO A
PHENOMENON CALLED GROUP THINK – WHEN PEOPLE CHOOSE
NOT TO DISAGREE OR RAISE OBJECTIONS BECAUSE THEY DO
NOT WANT TO BREAK UP A POSITIVE TEAM SPIRIT.
Which tactics are generallyNOTemployed by fast-acting firms to meet time
pressures without sacrificing quality?
Rely on long-range planning
Take a long-term view of conflict
Focus on futuristic forecasts
How do social realities affect decision making? A manager must consider the
preferences and reactions of many people.
Important managerial decisions are marked by conflict among
interested parties.
Many decisions are the result of intensive social interactions,
bargaining, and politicking.
154. Which statement is true about using a group to make a decision?
Groups generally make higher-quality decisions than individuals.
155. Suhindra is in a work group that has a goal of coming up with a
proposal for workplace childcare. The group strives to work cohesively
as a team, and as a result Suhindra does not want to question
members' ideas. In fact, nobody in the group voices any disagreement.
What is Suhindra's group guilty of? GROUP THINK.
156. Which actions arerequirements for effectively managing group
decisions?APPROPRIATE LEADERSHIP STYLE, CONSTRUCTIVE CONFLICT
(DEVILS ADVOCATE OR DIALECTIC), CREATIVITY (BRAINSTORMING)
157. When using groups to make decisions, what is one of the
potential disadvantages? GOAL DISPLACEMENT
Which are tactics employed by fast-acting firms to meet time pressures
without sacrificing quality? Take a realistic view of conflict
Focus on real-time information
Rely on heavily trusted experts
158. Which factors should managers take into account when
considering the social realities of a decision?Social interactions,
bargaining, and politicking.
159. Which of the following are methods managers can implement for
encouraging different views? DEVILS ADVOCATE AND DIALECTIC
160. What term describes a phenomenon that occurs in decision-
making when group members avoid disagreement as they strive for
consensus? GROUPTHINK
161. What term is used to describe a person who takes the role of
criticizing ideas to ensure that their downsides are fully explored?
DEVILS ADVOCATE
What are three requirements for effectively managing group decisions?
The constructive use of disagreement and conflict
An appropriate leadership style
Enhancement of creativity
162. What are common potential problems associated with group
decision making? GOAL DISPLACEMENT, SATISFICING, GROUPTHINK
163. What is the name of the human-centered approach to innovation
that integrates customer needs, the potential of technology, and the
requirements for business success? DESIGN THINKING
164. What is one tool managers can use to encourage the airing of
different views? DEVILS ADVOCATE
165. One method for encouraging different views involves assigning
the role of ______ to criticize ideas to ensure the downsides are
exploited. DEVILS ADVOCATE
166. Which actions areNOTrequirements for effectively managing
group decisions?ENCOURAGING GOAL DISPLACEMENT, FACILITATING
SATISFICING
167. When using groups to make decisions, what is one of the
potential disadvantages? GOAL DISPLACEMENT
168. Which statement about the design thinking process is true? It
starts by developing an understanding of current and potential
customers.
