Management 8th Edition By Kinicki - Test Bank

Management 8th Edition By Kinicki – Test Bank

Instant Download – Complete Test Bank With Answers

Sample Questions Are Posted Below

Chapter 05

Test Bank

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.

TRUE

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Business Model

Feedback: A business model outlines the need the firm will fill, the operations of the business, its components and functions, and the expected revenues and expenses.

When using MBO, managers should meet about once a year, either informally or formally, to review progress on meeting objectives.

FALSE

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: Managers should meet with their employees reasonably often—either informally as needed or formally every three months—to review progress. Frequent communication is necessary so that everyone will know how well he or she is doing in meeting the objectives.

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 work on developing a strategy.

TRUE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategy

Feedback: A strategy is a large-scale action plan that sets the direction for an organization.

The upper-level managers of Deluxe Coffee are meeting to discuss the company’s long-range goals and vision. Like any organization, Deluxe Coffee should adopt planning and strategic management for just two reasons: (1) to provide direction and momentum and (2) to encourage retention of high-value employees.

FALSE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

Feedback: An organization should adopt planning and strategic management for three reasons: They can (1) provide direction and momentum, (2) encourage new ideas, and (3) develop a sustainable competitive advantage.

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,” it is stating its code of ethics.

FALSE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Vision Statement

Feedback: Holiday Inn is not stating a code of ethics here. Rather, it is offering its vision statement. A vision statement answers the question, “What do we want to become?” or “Where do we want to go?” Here is Amazon’s vision statement: “Our vision is to be Earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

Alison, the director of marketing for a global company, is planning the contributions she and her department will make to the organization over the next 24 months. This type of planning is called operational planning.

FALSE

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Tactical Planning

Feedback: Tactical planning is determining what contributions middle managers and their departments or similar work units can make with their given resources during the next 6 to 24 months.

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. Paula is engaged in operational planning.

TRUE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Operational Goals

Feedback: Middle managers pass along their tactical plans to first-line managers to do operational planning, whereas first-line managers determine how to accomplish specific tasks with available resources within the next 1 to 52 weeks.

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.

FALSE

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goal Setting

Feedback: Goals are arranged in a hierarchy known as a means-end chain because in the chain of management, the accomplishment of low-level goals is the means leading to the accomplishment of high-level goals or ends.

Jerome’s Italian Pizza is in a very competitive industry, and its upper management believes that it can achieve higher profits by focusing on a strategy of lowering costs and prices, providing quicker delivery, and providing good customer service. “Increase profits by 15% a year for each of the next five years” is an example of a strategic goal.

TRUE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Strategic Goals

Feedback: Strategic goals are set by and for top management and focus on objectives for the organization as a whole. For example, top managers of Dallas-based Southwest Airlines ensure that the airline is highly profitable by following the general strategy of (1) keeping costs and fares down, (2) offering a superior on-time arrival record, and (3) keeping customers happy.

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 Ace into a new facility is a single-use plan.

TRUE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A program is a single-use plan encompassing a range of projects or activities. For example, the U.S. government space program had several projects, including the space shuttle project and the Hubble Telescope project. Ace’s program will encompass a range of activities needed to move all of its operations into the new factory.

When utilizing MBO, the manager and employee jointly set objectives for the employee, the manager develops action plans, the manager and employee periodically review the employee’s performance, and the manager makes performance appraisals and rewards the employee according to the results.

TRUE

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives

Feedback: When utilizing MBO, the manager and employee jointly set objectives for the employee, the manager develops action plans, the manager and employee periodically review the employee’s performance, and the manager makes a performance appraisal and rewards the employee according to the results.

Greg, owner of Comfortable Home Heating and Air, has been having problems with employee morale. After investigating, he found that some of his department managers were using management by objectives, but the accounting and sales managers were not utilizing MBO in their departments. For the MBO program to be successful, Greg must be sure that it is implements throughout his entire organization.

TRUE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives

Feedback: To be effective, an MBO program must be put in place throughout the entire organization. That is, it cannot be applied in just some divisions and departments; it must be in all of them.

The planning/control cycle has two control steps: (1) control the direction by comparing results with the plan and (2) control the direction by increasing organization diversity and synergy.

FALSE

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 3 Hard

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: The planning/control cycle has two control steps: control the direction by comparing results with the plan and control the direction by taking corrective action in two ways, namely by correcting deviations in the plan being carried out or by improving future plans (see Figure 5.6).

In the planning/control cycle, managers take corrective action by correcting deviations in the plan being carried out or by improving future plans.

TRUE

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 3 Hard

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: In the planning/control cycle, managers take corrective action by correcting deviations in the plan being carried out or by improving future plans (see Figure 5.6).

Mr. Smith, CEO of an auto dealership, has been working on the two planning steps of the planning/control cycle with his managers. To do this, Mr. Smith and his managers need to make their plan and then carry out the plan.

TRUE

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: In Figure 5.6, the two planning steps are (1) make the plan, and (2) carry out the plan.

Setting a very challenging goal for yourself, such as “I will double the number of hours I study next semester so that I can increase my GPA by at least half a point,” can keep you motivated and focused on achievement. This type of goal, which involves pushing yourself beyond what you mind might think is safe is known as a(n)
increased-state mindset.
push goal.
stress goal.
inclining goal.
E. stretch goal.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Goal Setting

Feedback: If you have outsize ambitions, you might set yourself a really hard goal (for example, “increase study time by 20%”). This stretch goal “propels you beyond what your mind might think is safe.”

Research suggests that when writing out a plan to achieve your biggest goals, it is important to
focus on broad rather than specific goals.
B. make a concrete plan and break goals into manageable bites.
make a general plan, which embeds your intentions firmly in your memory.
keep plans and goals private.
avoid specific goals because it increases stress.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Goal Setting

Feedback: Research suggests the advice for writing out and achieving a person’s biggest goals are to (1) make a concrete plan, (2) break your goals into manageable bites, (3) put something of value on the line, (4) bundle your temptations or rewards to your efforts, and (5) seek social support.

While sitting at her desk, Ann is setting goals and deciding how to achieve them. She is
A.
controlling.
delegating.
diversifying.
synergizing.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Goal Setting

Feedback: Planning is defined as setting goals and deciding how to achieve them.

With increasing competition in the restaurant business, Sal, owner of Mom’s Pizza, is dealing with growing uncertainty. He is meeting with his managers to develop a future course of action to meet company goals. This process is known as
A.
leading.
controlling.
defining.
diversifying.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Planning

Feedback: Planning is coping with uncertainty by formulating future courses of action to achieve specified results. When you make a plan, you make a blueprint for action that describes what you need to do to realize your goals.

______ can help workers focus on critical problems, choices, and opportunities.
Diversity planning
MBO
C. Planning and strategic management
An effective synergy policy
A strong value system

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Management

Feedback: Planning and strategic management can help people focus on the most critical problems, choices, and opportunities.

The profits of ABC Grocery have dropped significantly over the last several months. After investigating, the owner realizes that many of the store’s departments are moving in the wrong direction. The owner realizes that these departments need stronger and closer management, but she also realizes that she has not provided her managers with enough direction regarding her expectations for the store’s goals and the employees’ performance. This example shows how an organization can progress in the wrong direction as a result of
little company diversity.
no focus on JIT.
no code of ethics.
D. poor planning.
too much employee diversity.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Planning

Feedback: A poor plan can send an organization in the wrong direction.

Deon is opening a car wash, and he has approached SCORE, an SBA organization that assists small-business owners in setting up their companies. As a new business owner, the SCORE counselors would probably advise Deon to
learn from experience, the best teacher, rather than a mentor.
avoid developing a business plan the first year of business.
try new things regardless of the risk.
get a new perspective by asking people who have failed.
E. write a business plan.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Business Plan

Feedback: Organizations that assist entrepreneurs often encourage them to write a business plan.

An organization’s _______ expresses the need the firm will fill, the operations of the business, its components and functions, and the expected revenues and expenses.
mentoring plan
code of ethics
risk statement
D. business model
code of business

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Business Model

Feedback: The business model outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses.

Prior to opening her new restaurant, Nia is determining what items to offer on the menu, the anticipated profits and expenses, the tasks of various employees, and how those jobs will be handled. Nia is creating her
A. business model.
mentoring plan.
code of ethics.
risk statement.
code of business.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Business Model

Feedback: The business model outlines the need the firm will fill, the operations of the business, its components and functions, and the expected revenues and expenses.

________ is the primary reason for an organization to adopt planning and strategic management.
A. Developing MBO
Encouraging new ideas
Developing a sustainable competitive advantage
Providing direction and momentum
Increasing organization diversity

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Planning

Feedback: An organization should adopt planning and strategic management for three reasons: They can (1) provide direction and momentum, (2) encourage new ideas, and above all (3) develop a sustainable competitive advantage.

_______ is the primary reason that entrepreneurs create business plans.
To get financing and reduce competition
To develop a mentoring plan
To think through important details and focus on a code of ethics
D. To get financing and think through important details
To develop a code of business and succeed

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Business Plan

Feedback: There are several advantages to writing a business plan. The reasons: Creating such a plan helps entrepreneurs get financing (“If you want us to invest our money, show us your plan”). It helps you think through important details (“Don’t rush things; it’s best to get the strategy right”). Finally, it increases the changes that the firm will succeed. (A study of 396 entrepreneurs in Sweden found that a greater number of firms that failed never had a formal business plan.)

The first three steps in planning his organization are (in the correct order)
strategic planning, creating a mission statement, and creating a vision statement
operational planning, creating a mission statement, and developing a hiring plan
strategic planning, operational planning, and preparing a vision statement
D. writing a mission statement, creating a vision statement, and strategic planning
tactical planning, operational planning, and writing a mission statement

According to Figure 5.1, the correct order of the steps are mission statement, vision statement, strategic planning, tactical planning, and operational planning.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Planning

The planning process begins with two attributes: a mission statement and a vision statement. What questions are answered with each of these?
What do we want to become?; What is our reason for being?
What are the costs?; How much money can I make?
What are the risks?; What is our reason for being?
What do we want to become?; What products do we offer at a profit?
E. What is our reason for being?; What do we want to become?

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Mission Statement

Feedback: The planning process begins with two attributes: a mission statement (which answers the question “What is our reason for being?”) and a vision statement (which answers the question “What do we want to become?”).

A mission statement expresses the
expected profitability of an organization.
B. purpose of an organization.
code of ethics.
market for the product.
types of employees needed.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Mission Statement

Feedback: A mission statement expresses the purpose of the organization.

Clothing maker Patagonia states that its purpose as an organization is to “build the best product, cause no unnecessary harm, [and] use business to inspire and implement solutions to the environmental crisis.” This is the company’s
A. mission statement.
belief statement.
goals pact.
code of ethics.
management pledge.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Mission Statement

Feedback: A mission statement expresses the purpose of the organization. The mission statement for clothing maker Patagonia is to “build the best product, cause no unnecessary harm, [and] use business to inspire and implement solutions to the environmental crisis.”

Elite Coffee and Bakery, a café that offers a relaxing environment to enjoy quality coffees, teas, soups, and other menu items, has a poster in the front of its restaurants that reads, “We will always provide a quality product to help our customers better meet the challenges of their day and always take the time to offer caring service one person at a time.” This statement is Elite’s
belief statement.
goals pact.
C. mission statement.
code of ethics.
management pledge.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Mission Statement

Feedback: A mission statement expresses the purpose of the organization. Whether the organization is for-profit or nonprofit, the mission statement identifies the goods or services the organization provides and will provide. Sometimes it also gives the reasons for providing them (to make a profit or to achieve humanitarian goals, for example).

During a management meeting, Dave, the CEO of Top Office Equipment, reminded his management team of where the company wants to go as an organization: “Top Office Equipment is the expert whom customers should always call regarding all their office equipment needs because Top Office strives to understand customer needs and provide the right answers for them.” This statement is Top Office Equipment’s
belief statement.
goals pact.
code of ethics.
management pledge.
E. vision statement.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Vision Statement

Feedback: A vision statement expresses what the organization should become, where it wants to go strategically.

One Fortune article states that “vision should describe what’s happening to the world you compete in and what you want to do about it” and
“it should help reduce competition.”
“it should guarantee organizational success”
C. “it should guide decisions.”
“it should improve employee morale.”
“it should reduce the glass ceiling.”

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Vision Statement

Feedback: One Fortune article reads that “vision should describe what’s happening to the world you compete in and what you want to do “about it” and “it should guide decisions.”

The ______ are strategic, tactical, and operational.
A. three levels of planning
three levels of diversity
three strategic levels
three levels of marketing
three phases of the environment

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Planning

Feedback: The order of planning is strategic, then tactical, then operational.

At the strategic level of planning, managers must pay attention to the environment outside the organization, be future oriented, and
have more stability than at other levels.
have more control over employee issues.
have less competition.
D. deal with uncertain and competitive conditions.
be more likely to understand the competition.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Strategic Planning

Feedback: According to Figure 5.3, strategic planning includes long-term decisions about the overall direction of the organization. At the strategic level of planning, managers must pay attention to the environment outside the organization, be future oriented, and deal with uncertain and competitive conditions.

A company’s strategic planning may have to be done _____ due to frequently changing competition and technology.
every five years rather than every two years
every five years rather than every ten years
every ten years
continuously
E. closer to every one or two years than every five years

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Strategic Planning

Feedback: Strategic planning determines what the organization’s long-term goals should be for the next one to five years with the resources it expects to have available. Today, because of the frequency with which world competition and information technology alter marketplace conditions, a company’s strategic planning may have to be done closer to every one or two years than every five years.

The upper management of a large national retail grocery store has passed along the new goals of improving customer service to the district managers. At this point, the district managers need to determine how the stores in their district will achieve top management’s goal with the given resources during the next 6 to 24 months. The district managers are developing ______ planning.
working-level
B. tactical
middle-level
operational
strategic

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Tactical Planning

Feedback: When the strategic priorities and policies are passed down to middle managers, the middle managers must do the tactical planning.

Operational planning must be completed by first-line managers every ____, and tactical planning is done by middle management every
year; 2 to 10 years.
6 to 24 months; 1 to 52 weeks.
C. 1 to 52 weeks; 6 to 24 months.
1 to 12 weeks; year.
year, if necessary; 1 to 90 days.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Operational Goals

Feedback: First-line managers do operational planning, which means they determine how to accomplish specific tasks with available resources within the next 1 to 52 weeks. Tactical planning by middle management, where the managers determine what contributions their departments or similar work units can make with their given resources, must be done during every 6 to 24 months.

The upper-level managers of Synergy Technology are meeting for the week to look at the long-term company goals and overall direction of the organization. The CEO has expressed her concern over the economy and has told her managers to look closely at the environment outside the organization before making decisions and to be future oriented. In this meeting, top managers of Synergy are
writing a belief statement.
developing their goals pact.
producing their code of ethics.
D. doing strategic planning.
doing management pledging.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Strategic Planning

Feedback: According to Figure 5.3, strategic planning includes long-term decisions about the overall direction of an organization. Managers need to pay attention to the environment outside the organization, be future oriented, and deal with uncertain and highly competitive conditions.

_______ is planning done by middle managers to determine what contributions their departments or similar work units can make with their given resources during the next 6 to 24 months.
Writing a belief statement
Developing a goals pact
Producing a code of ethics
D. Tactical planning
Management pledging

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Tactical Planning

Feedback: Tactical planning is done by middle managers to determine what contributions their departments or similar work units can make with their given resources during the next 6 to 24 months.

______ is planning done by first-line managers to determine how to accomplish specific tasks with available resources within the next 1 to 52 weeks.
Writing a belief statement
Developing a goals pact
Producing a code of ethics
Management pledging
E. Operational planning

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Planning

Feedback: Operational planning is done by first-line managers to determine how to accomplish specific tasks with available resources within the next 1 to 52 weeks.

Suppose you manage an upscale restaurant in New York City. __________ would involve writing employee schedules and a list of things to do for the chef and other kitchen staff.
Strategic planning
B. Operational planning
Delegation management
Human resource management
Tactical planning

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Operational Goals

Feedback: According to Figure 5.3, operational planning is done by first-line management and directs the daily tasks of nonmanagerial personnel. Decisions are often predictable, following routine procedures.

Strategic planning should communicate not only general goals about growth and profits but also
how to pay for them
ways to increase organizational synergy
how to increase market share
D. ways to achieve them
methods related to MBO

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Strategic Planning

Feedback: “Strategic planning requires visionary and directional thinking,” says one authority. It should communicate not only general goals about growth and profits but also ways to achieve them.

The top management of Tasty Foods, a food distribution company, has set strategic goals of increasing organizational market share and also decreasing corporate costs over the next three years. Greg, a division manager for Tasty Foods, has looked at his resources, and he has decided how his division can contribute to the two strategic goals set by upper management: (1) by partnering with another company and (2) by hiring a procurement manager to negotiate lower prices from vendors. Greg’s next step is to roll out his ____ to his staff.
vision statements
management guidelines
codes of ethics
D. tactical goals
operational goals

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Tactical Goals

Feedback: Tactical goals are set by and for middle managers and focus on the actions needed to achieve strategic goals.

Dave owns several computer repair shops across the Midwest, and he has set a goal for his company of cutting costs in all his locations over the next three years. Dave has set a(n)
tactical goal.
management guideline.
business plan.
D. strategic goal.
operational goal.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Strategic Goals

Feedback: Strategic goals are set by and for top management and focus on objectives for the organization as a whole.

_______ are goals set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals.
Lower-level objectives
Front-line goals
Tactical goals
Supervisory objectives
E. Operational goals

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Operational Goals

Feedback: Operational goals are set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals.

A ______ is a specific commitment to achieve a measurable result within a stated period of time.
A. goal
vision
business plan
supervisory objective
norm

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goal Setting

Feedback: A goal is a specific commitment to achieve a measurable result within a stated period of time.

_____ can be another term used for a goal.
task
vision
business plan
D. objective
norm

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goal Setting

Feedback: A goal, also known as an objective, is a specific commitment to achieve a measurable result within a stated period of time.

Susan is a front-line supervisor in a grocery retailer. She desires to decrease the time she spends working on doing her daily closing work by 45 minutes. This objective set by Susan and for her is an example of a(n)
lower-level objective.
front-line goal.
tactical goal.
supervisory objective.
E. operational goal.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Operational Goals

Feedback: Operational goals are set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals.

Warby Parker, a manufacturer of fashionable prescription eyewear, notes on its website, “Warby Parker was founded with a rebellious spirit and a loft objective: to offer designer eyewear at a revolutionary price, while leading the way for socially-conscious business.” This excerpt from the company’s website states Warby Parker’s
code of ethics.
business plan.
C. vision statement.
expense report.
marketing plan.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goal Setting

Feedback: The goal should be followed by an action plan, which defines the course of action needed to achieve the stated goal, such as a marketing plan or sales plan.

The management of Quality Carpet Cleaning finalized the company’s action plan for increasing its market share over the next few years. The management then set up a 12-month plan that defines how the organization will conduct its business based on the action plan, including clear sales targets for each week. The second plan is an example of a(n) _____ plan.
dependent
strategic
C. operating
facilities
tactical

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goal Setting

Feedback: The operating plan, which is typically designed for a one-year period, defines how you will conduct your business based on the action plan; it identifies clear targets such as revenues, cash flow, and market share.

This month, Alice, the branch manager of Quality Computer Sales, has heard several complaints from customers that Quality employees do not return calls. Today a good customer told Alice that “my phone calls and e-mails are returned after maybe a week or so.” Hearing enough, Alice mandated that “all customer phone calls and e-mails must be returned within 24 hours.” This new directive by Alice is an example of a(n)
office order.
B.
norm.
value.
ethic.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A policy is a standing plan that outlines the general response to a designated problem or situation.

Fast Delivery trains its truck loaders how to set the packages in the delivery vehicles, so that when delivery drivers are pulling packages off their trucks, they are organized in a specific order and with the label facing forward to reduce errors and save time. A(n) _______ is being implemented when directing that the trucks be loaded in this specific manner.
industry standard
norm
policy
rule
E. procedure

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A procedure (or standard operating procedure) is a standing plan that outlines the response to particular problems or circumstances. For example, White Castle specifies exactly how a hamburger should be dressed, including the order in which the condiments are applied.

A ______ is a standing plan that outlines the response to particular problems or circumstances.
A. procedure
industry standard
norm
program
certified procedure

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A procedure (or standard operating procedure) is a standing plan that outlines the response to particular problems or circumstances.

A ______ is a standing plan that designates specific required action.
procedure
industry standard
C. rule
policy
certified procedure

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A rule is a standing plan that designates specific required action.

The department chair of the IT department issued a directive that “Absolutely no food or drink are allowed in any computer lab.” She issued this directive because several computers and keyboards in the computer labs were recently damaged by spilled drinks and food. This is a(n) ___________ issued by the department chair.
procedure
industry standard
C. rule
level of certification
certified procedure

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A rule is a standing plan that designates specific required action.

_____ are plans developed for activities that are not likely to be repeated in the future, such as plans for programs or projects.
solo plans
lone-use proposals
individual arrangements
D. single-use plans
standing plans

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: Single-use plans are plans developed for activities that are not likely to be repeated in the future. Such plans can be programs or projects.

Paula, the store manager, asked Tom to organize the prize giveaways for the store’s grand reopening open house. Tom is organizing a(n)
program
agenda
policy
D. project
development

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A project is a single-use plan of less scope and complexity than a program. For example, the space shuttle project, one of several projects in the government’s space program, consisted of three shuttles: Discovery, Endeavour, and Atlantis.

59.A _____ is a single-use plan encompassing a variety of projects or activities.

A. program
rule
policy
project
procedure

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

Feedback: A program is a single-use plan encompassing a range of projects or activities.

The Human Resources department of French Quarter Seafood conducted a training workshop on setting and achieving organization goals. Alex, the store manager of the New Orleans location, has been working with his managers to set objectives that are clearly defined, focused on achieving specific results, and can be accomplished with a given amount of resources. Which aspect of SMART goals is missing?
Goals should be stated in specific rather than vague terms.
Whenever possible, goals should be measurable, or quantifiable.
Goals should be challenging, of course, but above all they should be realistic and attainable.
Goals should be results-oriented.
E. Goals should specify the target dates or deadline dates when they are to be attained.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: SMART Goal

Feedback: A SMART goal is one that is SMART: Specific, Measurable, Attainable, Results-oriented, and has Target dates.

Which of the following goals satisfies the SMART criteria?
“As a talented florist, I will sell $100,000 in flowers.”
“This company will greatly improve its performance next year.”
“Within the next six months, I will grow my sole proprietorship into a corporation that is larger than Apple and IBM combined.”
“Improve our customer-service ratings.”
E. “In the next quarter, our Houston sales rep will increase sales by 10%.”

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: SMART Goal

Feedback: A SMART goal is one that is Specific, Measurable, Attainable, Results-oriented, and has Target dates (SMART). “In the next quarter, our Houston sales rep will increase sales by 10%” is the only goal that satisfies all five criteria.

Billy told his boss, Gwen, that he is going to start training for the upcoming marathon to be healthier and to have more energy for work. When Gwen asked him about his running history, Billy said, “I really have never run before and don’t exercise much. I just know I need to do something.” Gwen told Billy, “You should start slowly, maybe setting smaller, realistic exercise goals that are achievable.” Gwen is helping Billy set a
single-use plan.
B. SMART goal.
standing plan.
simplistic goal.
focal point.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: SMART Goal

Feedback: A SMART goal is Specific, Measurable, Attainable, Results-oriented, and has Target dates. Whenever possible, goals should be achievable.

With setting SMART goals, you should choose only a few goals on which to focus. These goals should be results-oriented and
support the company’s diversity plan.
align with the beliefs of the local community.
keep employees happy.
D. support the organization’s vision.
meet low cost goals.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: SMART Goal

Feedback: A SMART goal is one that is Specific, Measurable, Attainable, Results-oriented, and has Target dates. Whenever possible, goals should be achievable. With SMART Goals only a few goals should be chosen—say, five for any work unit. And they should be results-oriented, supporting the organization’s vision.

____ is the process for motivating employee performance in which the manager and employee jointly set objectives for the employee, the manager develops action plans, the manager and employee periodically review the employee’s performance, and the manager makes a performance appraisal and rewards the employee according to the results achieved.
Observation theory
MBAO
C. MBO
Strategic planning
An employee-management agreement

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: Management by objectives (MBO) is a four-step process for motivating employee performance.

André, the plant manager, is interested in increasing the facility’s productivity by utilizing MBO so that his managers and their employees are more focused on objectives. This month André asked his managers to concentrate on the two first steps of MBO, which are
for managers to develop an action plan and to give employees a performance appraisal.
for employees to develop an action plan and to study the competition.
to periodically review performance and to develop an action plan.
to review each employee’s performance and to set an action plan based on performance.
E. to jointly set objectives with their employees and to have managers develop action plans.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: Management by objectives (MBO) is a four-step process in which (1) the manager and employee jointly set objectives for the employee, (2) the manager develops action plans, (3) the manager and employee periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results.

Steve, a hotel general manager, has had great success using MBO. Hannah, his district manager, has found that Steve’s employees are highly motivated. Because Steve _________, Hannah is able to discern that he is using MBO.
has increased training
B. rewards his employees with compliments, raises, and other benefits as they meet their goals
is big on discipline
gives few compliments, but is very honest with his employees
uses the Outward Theory that proposes discussing issues in open meetings

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: Because the purpose of MBO is to motivate employees, performance that meets the objectives should be rewarded with compliments, raises, bonuses, promotions, or other suitable benefits.

The purpose of MBO is to
control subordinates.
control costs.
control lower-level management.
D. motivate subordinates.
increase market share and develop synergy.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Management by Objectives (MBO)

Feedback: The purpose of MBO is to motivate rather than control subordinates.

Research on MBO shows that people are impelled to set more difficult goals when
the goals have a significant impact on profitability.
employees can avoid personal development.
C. both management and subordinates participate.
the goals emphasize corporate social responsibility.
ethics are not a consideration.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: With MBO, research shows people are impelled to set more difficult goals—to raise the level of their aspirations, which may have a positive effect on their performance—if there is joint participation by management and subordinates.

For MBO to be successful, top management must be committed to the program, MBO must be applied organizationwide, and
A. objectives must cascade.
employees need to provide continuous feedback to each other.
objectives must remain fixed and unchanging.
objectives must be generated from the bottom up.
there must be community support.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: For MBO to be successful, top management must be committed to MBO, MBO must be applied organizationwide, and objectives must cascade.

MBO works by objectives moving through the organization; that is, top managers set general organizational objectives, which are translated into divisional objectives, which are translated into departmental objectives. The hierarchy ends in individual objectives set by each employee. This is an example of MBO working as objectives ______ through the organization.
move upward
move outward into the community
change significantly
D. cascade down
become less refined and more generalized

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: MBO works by cascading objectives down through the organization; that is, objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization.

When utilizing SMART goals or MBO, deadlines can help you keep your eye on the ______ while simultaneously paying attention to ______.
task at hand; ethical standards
customer; the employees
profitability; details you may be missing
D. big picture; the necessary details
profits; employee satisfaction.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: Deadlines can help you keep your eye on the “big picture” while simultaneously paying attention to the details that will help you realize the big picture.

To ensure that plans are moving in the right direction, managers can use the
means-ends chain.
synergy method.
efficiency plan.
D. planning/control cycle.
satisficing strategy.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: The planning/control cycle describes a constant feedback loop designed to ensure plans stay headed in the right direction.

The planning/control cycle has two planning steps. They are
(1) research planning, then (2) receive feedback.
(1) make the plan, then (2) set it aside for a period of time.
C. (1) make the plan, then (2) carry out the plan.
(1) review previous plans, then (2) evaluate plans.
(1) research planning, then(2) look for ways to cut costs.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: The planning/control cycle has two planning steps: (1) make the plan and then (2) carry out the plan.

Alicia, a district manager for a global retailer, is traveling to different stores in her district to discuss with store managers how to increase profitability for the rest of the fiscal year. What is Alicia doing?
eliminating the planning/control cycle
avoiding the planning/control cycle
C. controlling the direction of the planning/control cycle
researching the planning/control cycle
forecasting the planning/control cycle

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: Controlling the direction includes comparing the results with the plan, improving future plans, and correcting deviations in the plan being carried out.

John, the owner of a lawn care service, likes to meet with his employees six months after their yearly evaluation to discuss how they are progressing on suggestions on and plans to improve their yearly job evaluation. At this point, by comparing the six-month results with the past evaluation, John is in the ______ steps of the planning/control cycle.
A. control
planning
organizing
observation
termination

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Planning/Control Cycle

Feedback: Controlling the direction includes the corrective action in the fourth step of the cycle, which (a) can get a project back on track before it’s too late by correcting deviations or (b) if it’s too late, can provide data for improving future plans. In this case, at the end of the performance period, the information can be used to improve future plans.

The planning/control cycle has two control steps: (1) control the direction by comparing results with the plan and (2) control the direction by taking corrective action in two ways—namely, by
receiving feedback, and, if needed, making new plans.
researching ways to plan better and increasing profits.
increasing organization synergy and diversity.
D. correcting deviations in the plan being carried out or improving future plans.
improving future plans, and, if needed, cutting costs.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: The planning/control cycle has two control steps: (1) control the direction by comparing results with the plan and (2) control the direction by taking corrective action in two ways—namely, by correcting deviations in the plan being carried out or by improving future plans.

What is the primary objective of a plan?
A. It outlines how goals are going to be met.
It explains the company’s slogan.
It provides information about company financials for stakeholders.
It guides ethical decision making.
It sets research and development priorities.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Planning

Topic: Strategy

Feedback: A plan is a document that outlines how goals are going to be met.

You are reading a business document that outlines your company’s long-term goals and direction. These goals include “Reduce energy consumption in our offices by 20%,” “Grow out market share in China from 3% to 10%,” “Enter a strategic alliance with a partner in Australia to begin selling our products in Sydney and Brisbane,” and “Equip all sales representatives with an app that allows them to provide an immediate quote when meeting with customers.” What type of document are you reading?
A. a values statement
a business plan
a SMART goal
a vision statement
a strategic plan

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

Feedback: A strategic plan, or strategy, sets the long-term goals and direction for an organization.

Which of the following companies is NOT one of the “frightful five” companies that dominate the Internet economy?
Facebook
B. Instagram
Amazon
Apple
Microsoft

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

Feedback: The “frightful five” companies that dominate the Internet economy are Amazon, Apple, Facebook, Google, and Microsoft.

You have an idea for a company that sources fruits from local farms and makes fresh juices on a daily basis. You want to start a subscription-based service in which households within a 100-mile radius subscribe to your plan and receive two gallons of freshly squeezed juice (for example, cherry juice, apple juice, lemonade) twice a week. As you think about starting your business, you ask yourself: How rare is the service I am offering? How valuable is it? Can I organize the company to maximize my advantages in the marketplace? After asking these questions, review and identify which question from VRIO did you forget to ask?
Is the resource or capability valuable?
Is the resource or capability currently controlled by only a few firms or no other firms?
Is the firm organized to exploit the resource of capability?
What values should be emphasized?
E. Is the resource or capability costly for other firms to imitate?

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

Feedback: VRIO is a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization (VRIO). The one question you forgot to ask was, Is the resource or capability costly for other firms to imitate?

Based on the VRIO framework, which of the following start-up companies has the least potential to have a competitive advantage, to be profitable, and to grow?
A. a cat-sitting service, where you take care of people’s cats when they are on vacation; you decide to advertise your services on Craigslist and the local newspaper
a “companionship” service for elderly people who live alone because their children are busy working full-time jobs; working adults say such a service would be extremely valuable
the only farm within a 100-mile radius that offers its customers organic beef and organic dairy products such as eggs and milk; no other local company offers these products
a portrait-painting service by a talented artist who is known for his ability to make all men look handsome and all women look beautiful; very few other artists in the local area have this talent
an enrichment program for children that hires talented people and sends each of them to a different school each day of the week; a web-based app helps the manager keep track of all the employees’ schedules and locations

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

Feedback: VRIO is a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about is Value, Rarity, Imitability, and Organization (VRIO). The cat-sitting service is easily imitated and therefore does not pass the VRIO test.

VRIO is a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions. VRIO stands for
visibility, relativity, illumination, and obscurity.
vendors, relationships, introductions, and operations.
volatility, risk, instability, and obstacles.
D. value, rarity, imitability, and organization.
viability, respect, impact, and outreach.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

Feedback: VRIO stands for value, rarity, imitability, and organization.

The Whole Foods chain of supermarkets has stated, “With great courage, integrity, and love, we embrace our responsibility to co-create a world where each of us, our communities, and our planet can flourish. All the while, celebrating the sheer love and joy of food.” This proclamation is Whole Foods’
vision statement.
B. values statement.
mission statement.
corporate slogan.
company tagline.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Fundamentals of Planning

Feedback: A values statement, also called a core values statement, answers the question, “What values do we want to emphasize?” It expresses what the company stands for, its core priorities, the values its employees embody, and what its products contribute to the world.

Which of the following is an example of a mission statement?
“to create a world where the family farm is valued over the large-scale production of agribusiness”
“to become a beacon of hope for those suffering from mental hardship”
“to make education accessible to everyone in the world”
“to engage in business practices that are not only legal but also ethical”
E. “to offer the lowest prices on new hardcover books, anywhere in the world”

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Fundamentals of Planning

Feedback: A mission statement expresses the purposes of the organization. It answers the question “What is our reason for being?” or “Why are we here?”

A short-term usually spans ______ while a long-term goal typically spans
1 month; 3 months.
3 months; 1 year.
C. 12 months; 1 to 5 years.
2 weeks; 6 months.
3 years; 10 years.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goals and Plans

Feedback: Long-term goals, often called strategic goals, span 1 to 5 years and focus on achieving the company’s strategic plan. Short-term goals, sometimes called tactical or operational goals, generally span 12 months.

You receive a memo that reads as follows: “In recent months, our customer evaluations have dropped, and our sales have decreased by 10 percent. To restore our business, we will do the following: (1) We will contact all of our customers and offer a 10 percent discount on their next purchase. (2) For the customers who spend more than $1,000 per year, we will invite them to join our Insiders’ Club, which gives them discounted tickets to concerts and sporting events. (3) Effective immediately, we will begin staffing our call center 24 hours a day, 7 days a week. (4) Customer-service personnel will be given more discretion in helping customers resolve problems, with minimal interference from supervisors.” This memo is a(n)
mission statement.
VRIO analysis.
business model.
D. action plan.
a SMART goal.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goals and Plans

Feedback: An action plan defines the course of action needed to achieve a stated goal.

Which of the following is intended for one-time use and is not likely to be repeated in the future?
A. a procedure
a policy
a program
a rule
a standing plan

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Remember

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goals and Plans

Feedback: A program is a single-use plan encompassing a range of projects or activities.

Which of the following is an example of a rule?
“We believe that the customer comes first.”
“We are committed to hiring a workforce whose diversity mirrors our customers.”
C. “An employee who comes to work intoxicated will be terminated immediately.”
“Sexual harassment will not be condoned in this organization.”
“At their discretion, department managers can offer summer working hours to their employees.”

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Goals and Plans

Feedback: A rule is a standing plan that designates specific required action.

While preparing a self-assessment of your job performance the previous year, you are required to list three goals for the coming year. You list the following as one of your goals: “I will triple sales in my territory by the end of the next fiscal year.” Based on the SMART criteria, what is the problem with this goal?
It does not have a target date.
It is not specific.
It is not measurable.
It is not results-oriented.
E. It is not attainable.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: SMART Goal

Feedback: A SMART goal is one that is Specific, Measurable, Attainable, Results-oriented, and has Target dates. Tripling sales in one year is most likely not attainable.

Management by objectives (MBO) and goal cascading will not work without an effective
technology component.
contingency plan.
bonus-based compensation plan.
D. goal-setting process.
layer of middle management.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: Management by objectives and goal cascading will not work without an effective goal-setting process.

Which of the following is NOT a step in the process of management by objectives (MBO)?
A. Managers determine each employee’s strengths and weaknesses.
Managers and employees jointly set objectives for the employee.
Managers develop action plans.
Managers and employees periodically review the employee’s performance.
The manager makes a performance appraisal and rewards the employee according to results.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: Management by objectives (MBO) is a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results.

___ is the overall goal of MBO.
A. Motivating employees
Controlling subordinates
Controlling costs
Increasing market share
Terminating low-performing employees

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Feedback: The purpose of MBO (management by objectives) is to motivate rather than control subordinates.

Cascading goals being _____ and “cascade” to
short-term goals; long-term goals.
with customers; employees.
with the accounting/finance department; the shop floor.
with customer-service representatives; upper-level management.
E. at the top of the organization; individual employees.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Goal Cascading

Feedback: Cascading goals is the process of ensuring that the strategic goals set at the top level align, or “cascade,” downward with more specific short-term goals at lower levels within an organization, including employees’ objectives and activities.

Which sequence of goals is consistent with “cascading” goals that begin at the top of the organizaiton?
A. strategic goals > divisional goals > department goals > individual goals
individual goals > department goals > divisional goals > strategic goals
divisional goals > strategic goals > individual goals > departmental goals
departmental goals > individual goals > strategic goals > divisional goals
customer goals > employee goals > manager goals > company goals

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Goal Cascading

Feedback: Top managers set strategic goals, which are translated into divisional goals, which are translated into departmental goals, which are translated into individual goals.

As a manager, you meet with each of your team members quarterly to review their progress toward their written and agreed-upon goals. One of your employees, Claire, had a goal of increasing sales in her territory by 10% in the first quarter of the year. However, when you review Claire’s sales numbers, you see that her sales have actually gone down. You know that Claire is a hard worker and has an excellent relationship with her customers. When you sit down to discuss Claire’s performance, she explains what is happening in her territory. A major automobile manufacturer, which once provided 25,000 jobs, has moved its operations to Mexico and laid off all 25,000 of its workers. As a result, the economy in Claire’s region has become quite depressed, and the residents are living off their savings. Taking the steps of the planning/control cycle into account, what is your best course of action with Claire?
A. Terminate Claire’s employment with the company.
Arrange for Claire to take a refresher course on sales methods.
Transfer Claire to another territory and replace her with another sales rep who is new to the company and therefore “hungry.”
Recognize the economic reality of Claire’s territory and change her goals to make them ambitious but realistic.
Put Claire on “probation,” explaining that she will be terminated if her performance does not improve in the next quarter.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Feedback: In the planning/control cycle, managers control the direction by taking corrective action in two ways—namely by correcting deviations in the plan being carried out or by improving future plans. In this case, improving future plans is the best decision.

Which of the following is a tactical goal?
A. By the end of this fiscal year, we will achieve a 10% cost reduction in our office expenses.
Within two years, we will enter into a strategic alliance with a company that is able to effectively market and sell our products in China, India, and other emerging economies.
This company has a policy of conducting a background and credit check on all job applicants.
Smoking on the factory floor is strictly prohibited; anyone caught smoking in company facilities will be disciplined immediately.
As a company, we are committed to increasing our online presence through social media.

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Strategic Goals

Feedback: A tactical goal, also known as a short-term goal or operational goal, typically spans 12 months and is connected to strategic (long-term) goals in a hierarchy known as a means-end chain.

The textbook makes five suggestions for achieving big goals. Use this advice for achieving the goal of obtaining a job after graduation that is interesting and provides a good salary. Given that this is a long-term goal, be sure to explain how you will use the advice between now and the time you graduate.

Research suggests that writing approximately two paragraphs outlining your goals will help you feel more confident. Some advice for writing out—and achieving—your biggest goals are as follows: (1) Make a concrete plan—which embeds your intentions firmly in your memory. (2) Break your goals into manageable bites—and set out clear steps that you can use to record and track your progress. (3) Put something of value on the line—such as money that will be forfeited if you are unsuccessful. (You can deposit the money at stickK.com.) (4) Bundle your temptations or rewards to your efforts—such as tying your reading of pleasurable trashy novels to when you do gym workouts. (5) Seek social support—pursue your goal with the help of a mentor or fellow striver.

Student’s individual goals will vary, but here is an example:

Because I plan to become a CPA (certified public accountant), I need to get an A in my principles of accounting course next semester. To accomplish this goal, I will cut back my hours at work from 20 per week to 10 per week during the fall term. I will use those 10 extra hours to study. Two weeks before the term begins, I will visit the local bookstore or Amazon and purchase at least two comprehensive study guides that will give me tips for studying accounting, as well as a lot of practice with the concepts. To be sure I have enough time to study for my accounting course in the fall, I will take 12 credits instead of 15, and I will make up the 3 credits by taking one course during the winter session. Early in the semester, I will find another student in my class who wants to succeed and will form a study partnership with him or her. Finally, I will be strategic about the instructor whose class I sign up for. I will research who are the best accounting instructors, and I’ll make a priority of getting into one of those classes, even if it means taking a course early in the morning or in the evening.

AACSB: Reflective Thinking

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Goal Setting

Summarize a business model.

A business model outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses. It also describes the industry you’re entering, how your product will be different, how you’ll market to customers, how you’re qualified to run the business, and how you will finance your business.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Business Model

This question contains multiple parts; be sure to answer all of them. First, what exactly is a business model? What should it specify? Next, suppose you are planning to start a personal training business. Third, write a one-paragraph business model.

A business model outlines the need the firm will fill, the operations of the business, its components and functions, and the expected revenues and expenses. It also describes the industry you’re entering, how your product will be different, how you’ll market to customers, how you’re qualified to run the business, and how you will finance your business.

Answers will vary regarding the business model for the personal training business, but here is one suggestion.

Jake’s Personal Fitness will cater to the needs of busy professionals who want to begin an exercise regimen for any reason, whether they are looking to lose weight, tone up, or fight diseases like Type II diabetes. There is significant competition in this business, so I will distinguish my business by making large companies’ human resource departments for my first sales calls. I will propose that they offer a small space in their building in which I can offer personal training to their employees at the employees’ convenience—they will not even have to leave their workplace in order to accomplish their fitness goals. I am qualified to run this business because I have a certificate in personal training from the National Association of Sports Medicine, and I have worked at a local gym for more than three years, watching how the trainers get results with their clients. I will finance my business primarily out of my savings; I will need to invest in weights and other equipment that I will bring with me from location to location. As the business becomes more successful, I will invest in additional equipment to help my clients meet their goals.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Business Model

This question contains two parts; be sure to answer each part. First, define strategic management, explaining how managers from all parts of the organization are involved and the three types of planning that are a part of strategic management. Next, imagine that you are planning to open a coffee shop. Give specific examples of each of the three types of planning with regard to your coffee shop.

Strategic management is a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals. This definition doesn’t mean that managers at the top dictate ideas to be followed by people lower down. Indeed, precisely because middle managers in particular are the ones who will be asked to understand and implement the strategies, they should also help formulate them. Strategic management is a process that involves managers from all parts of the organization—in the formulation, implementation, and execution of strategies and strategic goals to advance the purposes of the organization. Thus, planning covers not only strategic planning (done by top managers) but also tactical planning (done by middle managers) and operational planning (done by first-line managers). Planning and strategic management derive from an organization’s mission and vision about itself. (See Figure 5.1.)

Answers will vary with regard to the coffee shop, but here is one possible answer.

In the early days of my coffee shop, it will be a small business and I will be the only manager, which will make me responsible for all levels of planning: strategic, tactical, and operational. At the strategic level, I will determine where my competitors are located and what they change. I also will determine where people gather so that I can look for a site that will motivate local people to stop in for a cup of coffee or a snack. I know that competitors like Starbucks are entrenched, so I have to find a way to improve on their services and offer goods and/or services that will make customers come to my coffee shop instead of Starbucks. Once I’ve got my site chosen, my tactical planning will revolve around signing a lease for the shop, getting it designed, and building word of mouth regarding the grand opening via social media like Facebook and Twitter. In terms of operational planning, I have to hire two part-time baristas, as I cannot possibly work at the shop 24/7, even though I realize that I will be spending most of my life there until the shop is established and successful. I’ll contact the local community college and advertise the positions on the job services board there. I can’t afford to pay more than minimum wage, but I can promise the baristas free snacks and all the coffee they can drink.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Management

Topic: Vision Statement

Contrast strategic, tactical, and operational planning, explaining the time frame associated with each type.

Strategic planning is done by top management. Using their mission and vision statements, top managers do strategic planning—they determine what the organization’s long-term goals should be for the next 1 to 5 years with the resources they expect to have available. It should communicate not only general goals about growth and profits but also ways to achieve them.

Tactical planning is done by middle management. The strategic priorities and policies are then passed down to middle managers, who must do tactical planning—that is, they determine what contributions their departments or similar work units can make with their given resources during the next 6 to 24 months.

Operational planning is done by first-line management. Middle managers then pass these plans along to first-line managers to do operational planning—that is, they determine how to accomplish specific tasks with available resources within the next 1 to 52 weeks.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

This question has multiple parts; be sure to answer each one. First, explain how a company’s approach to planning and its mission become translated into action plans. Second, imagine that you have just purchased a local ice cream/yogurt store. There are three other similar stores in the city, and yours is the smallest. Write a mission statement and a vision statement, and create an action plan for achieving your vision.

Journalist Dick Leider writes, “Everyone wants a clear reason to get up in the morning.” He continues, “As humans we hunger for meaning and purpose in our lives.” And what is that purpose? “Life never lacks purpose.” “Purpose is innate—but it is up to each of us individually to discover or rediscover it.” An organization has a purpose, too—a mission. And managers must have an idea of where they want the organization to go—a vision.

An organization’s reason for being is expressed in a mission statement. What the organization wishes to become is expressed in a vision statement. From these are derived strategic planning, then tactical planning, and finally operational planning. The purpose of each kind of planning is to specify goals and action plans that ultimately pave the way toward achieving an organization’s vision.

Regarding the ice cream/yogurt shop, answers will vary, but here are some possibilities:

\Mission statement: “The mission of I Scream for Ice Cream is to be the first choice of families looking for a relaxed, family-friendly environment in which to enjoy America’s favorite snack.”

Vision statement: “While I Scream for Ice Cream will always remain a family-friendly store, we have a deeper vision: to educate the public about the benefits of enjoying ice cream made from only the purest, dairy-farm ingredients. We will never make or buy ice cream from any dairy product that has been adulterated with GMOs, growth hormones, or any other chemical.”

To achieve our mission and vision, we will make sure all of our marketing materials show pictures of families, as well as groups of teenagers and parties of younger children. We want parents to see I Scream for Ice Cream as the best place to have their children’s birthday party. We will hire someone to play games with the children at each party, which will also have an educational element about food and nutrition. We plan to grow, and to open more shops in the future, but never to lose our local, welcoming, family-friendly atmosphere.

AACSB: Reflective Thinking

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Mission Statement

Topic: Vision Statement

Tasty Sandwiches trains its employees to always put the sandwich condiments on the sandwich in the same order. Also, Tasty Sandwiches is known for treating its employees well and enjoys some of the lowest employee turnover in the industry. As a result, it is one of three companies being featured in a 20-minute piece on a national newscast to discuss this honor. Identify the types of standing plans and single-use plans. Discuss how Tasty Sandwiches might apply a standing plan and a single-use plan. Include examples in your response. (That is, make all your examples relevant to a sandwich shop.)

Standing plans are plans developed for activities that occur repeatedly over a period of time. Standing plans consist of policies, procedures, and rules.

A policy is a standing plan that outlines the general response to a designated problem or situation. Example: “This workplace does not condone swearing.” This policy is a broad statement that gives managers a general idea about what is allowable for employees who use bad language, but gives no specifics.

A procedure (or standard operating procedure) is a standing plan that outlines the response to particular problems or circumstances. Example: White Castle specifies exactly how a hamburger should be dressed, including the order in which the condiments are applied.

A rule is a standing plan that designates specific required action. Example: “No smoking is allowed anywhere in the building.” This allows no room for interpretation.

Single-use plans are plans developed for activities that are not likely to be repeated in the future. Such plans can be programs or projects.

A program is a single-use plan encompassing a range of projects or activities. Example: Tasty Sandwiches may decide to open a new shop in a different town. A wide range of activities will be required to get the new shop open.

A project is a single-use plan of less scope and complexity than a program. Example: Tasty Sandwiches may decide to offer diversity training to all employees. The project may entail each employee attending a two-hour class at a local community college.

AACSB: Knowledge Application

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Discuss the types and purposes of goals and plans.

Topic: Planning

This question contains two parts; be sure to answer both.

First, define a SMART goal by listing its five key qualities. Next, imagine that you have been promoted to manage a local judo/karate studio and you want to set goals for your employees, who are the instructors who teach judo to children, teens, and adults. Write three SMART goals for your employees that focus on revenue, customer satisfaction, and quality of services.

SMART goals are specific (rather than vague), measurable (quantifiable), attainable (challenging but realistic and attainable), results-oriented (support the vision), and have target dates (deadlines).

The SMART goals for the judo/karate studio will vary, but here are three possibilities:

By the end of the month, create a 10-question customer-service questionnaire that we will give to all parents whose children take classes at our studio. The questionnaire should not only ask how satisfied the customers are but also how we can improve our services.

In September, contact the local community school and talk with the director about offering judo and karate lessons on weeknights at the local high school, with the goal of offering our first night courses in January of next year. We would like the night courses to bring in $3,000 in revenue for the January session.

To ensure that each student of our school gets personalized attention, starting next week each instructor will greet each student by name upon arrival. At the end of each class, instructors will say that they will be available in the office to answer questions or offer additional suggestions on technique or additional classes the student might enjoy attending

AACSB: Knowledge Application

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: SMART Goal

Summarize management by objectives. Describe the three types of objectives used in MBO and give examples of each type.

Management by objectives (MBO) is a four-step process in which (1) the manager and employee jointly set objectives for the employee, (2) the manager develops action plans, (3) the manager and employee periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results. The purpose of MBO is to motivate rather than control subordinates.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Imagine that you are a manager of a local shoe store with the responsibility for four employees. Outline a detailed plan for how you would implement MBO to increase overall store revenue by 10% by the end of the year.

The four-step process of MBO is as follows: (1) The manager and employee jointly set objectives for the employee, (2) the manager develops action plans, (3) the manager and employee periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results.

Answers will vary for the second half of the question, but here is one possibility:

First, I will meet with each of my employees to share the store’s overall goal of increasing revenue by 10% and get their buy-in. Next I will work with each employee to figure out how he or she can increase revenue by at least 10%. I have noticed that Sara is particularly good with children, Mark is good with women, Francine is good with men, and Maria is good with senior citizens. I may ask them to “specialize” in each demographic, and come to me with ideas for how to better serve each group and increase sales. Together we’ll create the action plans. Because this is a new way of doing business, I’ll meet with each employee monthly to review their progress and make adjustments to the plans if necessary. Because I want to motivate everyone to work as a team, I will put an incentive system in place that rewards hard work; each team member who meets his or her goal each month will get one-half a paid personal day.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Management by Objectives (MBO)

Professor Jones, a business teacher, meets with his students mid-quarter to give out midterm reports and discuss with students how to improve their grade for the remainder of term. Also, he likes to meet with his students each week after midterm to discuss how they are progressing on suggestions related to the midterm reports. Discuss how Professor Jones is using the planning control steps of the planning/control cycle with his students.

The planning/control cycle has two planning steps (1 and 2) and two control steps (3 and 4), as follows: (1) Make the plan. (2) Carry out the plan. (3) Control the direction by comparing results with the plan. (4) Control the direction by taking corrective action in two ways—namely, by correcting deviations in the plan being carried out, or by improving future plans.

Professor Jones made his plan before the term ever started; his “plan” for the course is found in his syllabus. He carries out his plan by teaching, and students do their part by learning. By meeting with each student after the midterm, he can assess each student’s progress—in effect, comparing their results with the objectives laid out in his course syllabus. Professor Jones will not need to take corrective action with students who received an A or a B on the exam; with these students he will offer praise and compliments. For students who received a C or lower on the exam, Professor Jones will talk about optional materials that can help students improve their results, such as tutoring sessions, peer study groups, library resources, and so on.

AACSB: Knowledge Application

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-05 Outline the planning/control cycle.

Topic: Planning/Control Cycle

Nike’s famous tagline, “Just do it,” is an example of a slogan, not a business plan or a strategy. Briefly describe the differences among these key terms: planning, a business plan, and a strategy.

Planning is defined as setting goals and deciding how to achieve them, or coping with uncertainty by formulating future courses of action to achieve specific results. A business plan is a document that outlines a firm’s proposed goals, the strategy for achieving them, and the standards for measuring success. A strategy sets the long-term (one to five years) goals and directions for an organization.

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

This question contains two parts; be sure to answer both.

First, describe how an entrepreneur can evaluate a business opportunity using the VRIO framework. Which criteria must the entrepreneur use?

Next, evaluate the following business idea using the VRIO framework: Your parents want to open a mobile pet-grooming company and they have asked you for your opinion about whether they should invest in the concept. They investigated the opportunity and found a vehicle that contains all the necessary equipment. Conduct a VRIO analysis and state your recommendation to your parents.

VRIO is a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization. Evaluating value means asking “Does the resource or capability allow your firm to exploit an opportunity or neutralize a threat?” If the answer is yes, the company will be in a competitive position. Evaluating rarity means asking “Is the resource or capability currently controlled by only a few firms or no other firms?” If the answer is yes, the business will have at least some temporary competitive advantage. Evaluating imitability means asking “Is the resource or capability costly for other firms to imitate?” If the answer is yes, the business definitely has a competitive advantage. Evaluating organization means asking “Is the firm organized to exploit the resource or capability?” If the answer is yes (and the company has value, rarity, and non-imitability) then the firm has the potential to go forward.

Responses to the second part of the question, about the pet-grooming business, will vary, but here is one possible response:

Value: Does the pet-grooming service allow the firm to exploit an opportunity or neutralize a threat? The answer here is yes. Today’s harried professionals want to relax on the weekends, not spend their time taking the dog to the groomer’s. By going directly to their homes, the business has the chance to take advantage of an opportunity.

Rarity: Is the resource currently controlled by only a few firms or no other firms? Right now, no other firms offer a mobile dog-grooming service.

Imitability: Is the resource or capability costly for other firms to imitate? Currently, there are two well-established dog-grooming salons in town. We have to anticipate that once they see how successful we are, they may imitate us. It will not be very expensive for them to enter the mobile grooming business. All they will have to do is lease a van and pay for gas and insurance. They already have employees who know how to do the work and who have good relationships with their customers.

Organization: Is the firm organized to exploit the resource or capability? It should not be difficult to organize the business. We can use software that allows people to book appointments online. Of course, we will have to have someone available to answer the phone during business hours, and ensure that we respond promptly to all messages left on our voice mail.

AACSB: Reflective Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Discuss the role of strategic management.

Topic: Strategic Planning

You are the manager of your college’s bookstore. Create a mission statement, a vision statement, and a values statement for the services you manage.

Background information: A mission statement expresses the purpose of the organization—its reason for being. Facebook’s mission statement is “to give people the power to share and make the world more open and connected.” A vision statement is a long-term goal describing what an organization wants to become. It is a clear sense of the future and the actions needed to get there. Hilton’s vision statement is “To fill the earth with the light and warmth of hospitality.” A values statement expresses what the company stands for, its core priorities, the values its employees embody, and what its products contribute to the world. Patagonia’s values statement includes “the pursuit of ever great quality in everything we do” and “relationships built on integrity and respect.”

Students’ individual responses regarding the bookstore will vary, but here is one possible answer:

Mission statement: “We exist to serve the college’s diverse student body, to provide one-stop shopping for all their course needs, as well as a convenient place for them to purchase their everyday needs without having to leave campus.”

Vision statement: “While we are now a traditional bricks-and-mortar store, we want to become the Amazon of our campus. Students will be able to place their orders online, and we will deliver their entire order by the end of the day.”

Values statement: “We value education, and we believe that free materials on the Internet will never have the quality of professionally published materials that have been written by experts and published by companies that understand the needs of college students. We believe in the sanctity of intellectual property, and we will never condone the pirating or illegal copying of any work that is protected by copyright.”

AACSB: Reflective Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Compare mission, vision, and value statements.

Topic: Fundamentals of Planning

Write five SMART goals for yourself with regard to your life. Include some that are academic and some that are personal or professional.

Each individual student’s SMART goals will vary. Here are two possibilities:

By the end of the year, I will find (and get hired for) a job that pays more than minimum wage.

Next term, I want to raise my GPA from a 2.9 to a 3.1. To do that, I will need to get all As and Bs, and no more than one C next term. To accomplish that goal, I will carefully choose my courses so that I take no more than one particularly challenging class; and I will also find at least one class that might be an “easy A” for me. I plan to increase the time I spend studying by 40%; I’ll do that by turning off the computer and watching fewer videos on YouTube.

AACSB: Knowledge Application

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: SMART Goal

Cascading is essential to promoting consistency in goals. Which three criteria must be met for goal cascading to be successful? Describe and explain each criterion.

First, top management must be committed to the goals. Second, the goals must be applied throughout the organization; it cannot be selectively applied to just some divisions or departments. Third, goals must cascade. That is, they must start at the top of the organization and then flow downward through division, department, and individual goals. When cascading is successful, individual employees understand how their work contributes to overall corporate success.

AACSB: Knowledge Application

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Describe SMART goals and their implementation.

Topic: Goal Cascading

Category # of Questions

AACSB: Analytical Thinking 49

AACSB: Knowledge Application 49

AACSB: Reflective Thinking 14

Accessibility: Keyboard Navigation 96

Blooms: Apply 50

Blooms: Remember 20

Blooms: Understand 42

Difficulty: 1 Easy 21

Difficulty: 2 Medium 45

Difficulty: 3 Hard 45

Learning Objective: 05-01 Discuss the role of strategic management. 26

Learning Objective: 05-02 Compare mission, vision, and value statements. 25

Learning Objective: 05-03 Discuss the types and purposes of goals and plans. 26

Learning Objective: 05-04 Describe SMART goals and their implementation. 26

Learning Objective: 05-05 Outline the planning/control cycle. 9

Topic: Business Model 5

Topic: Business Plan 2

Topic: Fundamentals of Planning 3

Topic: Goal Cascading 3

Topic: Goal Setting 9

Topic: Goals and Plans 4

Topic: Management by Objectives 2

Topic: Management by Objectives (MBO) 14

Topic: Mission Statement 5

Topic: Operational Goals 5

Topic: Planning 18

Topic: Planning/Control Cycle 10

Topic: SMART Goal 7

Topic: Strategic Goals 3

Topic: Strategic Management 2

Topic: Strategic Planning 12

Topic: Strategy 2

Topic: Tactical Goals 1

Topic: Tactical Planning 3

Topic: Vision Statement 5

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