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.

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.A

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.
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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.
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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.

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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.

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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.
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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.

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71. Differentiation, cost leadership, and focus are three of Porter’s
competitive strategies.

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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.CASE

Scenario – SendToMe.com

SendToMe.com is a large, diversified distributing company. The
company is organized into three divisions: personal products, diagnostic
equipment, and office equipment. The personal products division consists
primarily of toiletry products for the individual consumer. The products
include shampoos, conditioners, bath soaps, and mouthwash. All of the products
are sold under store brand labels; typically, the company signs an agreement
with a discount store, and the products are sold under the store’s label. Sales
of this division (and in the industry) have been relatively stable for the past
ten years, and the division enjoys a dominant market share. Due to increased
efficiencies in manufacturing and distribution, profits from the division have
risen.

The diagnostic equipment division specializes in developing and
marketing medical equipment, specifically equipment used in blood analysis.
National sales for medical diagnostic equipment have been growing over 20
percent per year for the last five years. However, sales for this division are
stagnant and there has been some discussion among senior management about
divesting this division.

The office equipment division manufactures a high quality line of
office furniture. The products are distributed through better office equipment
stores and interior design firms. Sales in this division have more than doubled
over the past five years.

1. Refer to the scenario above. To assess the
internal and external environmental forces that need to be addressed so the
company can remain profitable, SendToMe.com needs to conduct a:
a. strategic
intervention
b. SWOT analysis
c. value analysis
d. tactical
implementation
e. business
correlation study

2. Refer to the scenario above. Threats to the
diagnostic equipment division’s problems may lie in:
a. new entrants into
the field
b. the development of
nanotechnology
c .multiple core
competencies
d. growth in the
hospital industry
e. all of these

3. Refer to the scenario above. The
business-level strategy used by the office equipment division would be called:
a. cost leadership
b. differentiation
c. focus
d. portfolio
e. core competence

4. Refer to the scenario above. The
business-level strategy used by the personal products division would be called:
a. cost leadership
b. differentiation
c. focus
d. core competence
e. portfolio

COMPLETION

1. A(n) ____________________ is a desired future
state that the organization attempts to realize.

2. A(n) ____________________ is a blueprint for
goal achievement and specifies the necessary resource allocations, schedules,
tasks, and other actions.

3. The act of determining the organization’s
goals and the means for achieving them is referred to as ____________________.

4. ____________________ and plans are the
responsibilities of middle managers.

5. Operational plans that focus on specific
tasks and processes that help to meet tactical and strategic goals are
developed by ____________________ managers and supervisors.

6. ____________________ describes the
organization’s reason for existence.

7. A(n) ____________________ is a broadly stated
definition of basic business scope and operations that distinguishes the
organization from others of a similar type.

8. Broad statements describing where the organization
wants to be in the future are called ____________________.

9. ____________________ define the action steps
by which an organization intends to attain its strategic goals.

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10. Goals that define the outcomes that major departments must achieve
in order for the organization to reach its overall goals are known as
____________________ goals.

11. ____________________ are designed to help execute major strategic
plans and to accomplish a specific part of the company’s strategy.

ANS: Tactical plans

12. The specific results expected from departments, work groups, and
individuals are the ____________________ goals.

13. ____________________ plans are developed at the lower levels of
the organization to specify action steps toward achieving operational goals and
to support tactical plans.

14. Plans that define company responses to specific situations, such
as emergencies, setbacks, or unexpected conditions are called
____________________ plans.

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15. A special type of contingency plan that is used when events are
sudden and devastating and require immediate response is called
____________________.

16. The crisis management plan should be a(n) ____________________
that specifies the actions to be taken, and by whom, if a crisis occurs.

17. A group of planning specialists assigned to major departments and
divisions to help managers develop their own strategic plans is called
____________________.

18. ____________ is the set of decisions and actions used to formulate
and implement strategies that will provide a competitively superior fit between
the organization and its environment so as to achieve organizational goals.

19. The plan of action that prescribes resource allocation and other
activities for dealing with the environment and helping the organization attain
its goals is called a(n) __________.

20. A business activity that an organization does particularly well
relative to its competition is known as a(n) ________.

21. When organizational parts interact to produce a joint effect that
is greater than the sum of the parts acting alone, __________ occurs.

22. __________ includes the planning and decision making that lead to
the establishment of the firm’s goals and the development of a specific
strategic plan.

23. The use of managerial and organizational tools to direct resources
toward accomplishing strategic results is known as ___________.

24. The ability to influence people to adopt the new behaviors needed
for strategy implementation is called _________.

25. It is argued that ___________ is the most difficult and most
important part of strategic management.

SHORT ANSWER

1. List four reasons why planning generally
positively affects a company’s performance?

2. List the five characteristics of effective
goals.

3. What are the two stages of crisis management?

4. List the four components of a SWOT analysis.

5. List Porter’s competitive forces.

ESSAY

1. In what ways do plans and goals benefit an
organization?

2. Compare the four levels of goals and plans.

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3. Briefly define the characteristics of an
effective goal.

4. List three innovative approaches to planning.

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5. In order for companies to remain competitive,
their strategies must focus on three things. Describe these three focuses.

6. Differentiate between strategy formulation
and strategy execution.

7. Briefly describe the five competitive forces
identified by Michael E. Porter.

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8. Briefly describe the tools for putting
strategy into action.