MGMT 2009 2nd Edition Chuck Williams - Test Bank

MGMT 2009 2nd Edition Chuck Williams – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

Chapter 5—Planning and Decision Making

 

TRUE/FALSE

 

1. Creating and executing a plan is one of the most important tasks a manager has.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   79

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

2. On average, companies with plans have larger profits and grow much faster than companies that don’t.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        REF:   80

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

3. Planning can impede change, create a false sense of certainty, and lead to the detachment of planners.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        REF:   80

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

4. Planning is one of the best ways to improve organizational and individual performance.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   80

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

5. Planning is a three-step process consisting first setting goals, next developing effective action plans, and finally tracking progress toward goal achievement.

 

ANS:  F

Planning consists of a total of five steps: (a) setting goals, (b) developing commitment to the goals, (c) developing effective action plans, (d) tracking progress toward goal achievement, and (e) maintaining flexibility in planning.

 

PTS:   1                    DIF:    Moderate       REF:   81-83             TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

6. S.M.A.R.T. goals are Specific, Meaningful, Active, Reachable, and Timely.

 

ANS:  F

S.M.A.R.T. goals are Specific, Measurable, Attainable, Realistic, and Timely.

 

PTS:   1                    DIF:    Moderate       REF:   81                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

7. Encouraging worker participation in goal setting, making goals public, and getting top management’s support are all recommended ways to increase goal commitment.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        REF:   82

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

8. Both proximal and distal goals are used to provide additional motivation and rewards for employees.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        REF:   82

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

9. For planning to be effective, workers need a specific, challenging goal as well as regular feedback to track their progress.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   82-83

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

10. The two approaches to maintaining flexibility in organizations while they plan are outcome-based planning and change-based planning.

 

ANS:  F

The two approaches are options-based planning and learning-based planning.

 

PTS:   1                    DIF:    Moderate       REF:   83                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

11. Planning works best when the goals and action plans at the bottom and middle of the organization support the goals and action plans at the top of the organization.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   82

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

12. Developing a vision and mission statement is the sole responsibility of middle management.

 

ANS:  F

Developing a vision and mission statement is the responsibility of top managers. See Exhibit 5.3.

 

PTS:   1                    DIF:    Easy               REF:   84                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

13. A mission is a statement of a company’s purpose or reason for existing.

 

ANS:  F

This is the definition of a vision. The mission, which flows from the vision, is a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and a timeframe.

 

PTS:   1                    DIF:    Moderate       REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

14. The organization’s vision must regularly change to adapt to changes in the environment over time.

 

ANS:  F

One of the defining characteristics of an organizational vision is that it should be enduring.

 

PTS:   1                    DIF:    Difficult         REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

15. Tactical plans specify how a company will use resources, budgets, and people to accomplish specific goals within its mission.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   85

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

16. Tactical plans and objectives are used to direct behavior, efforts, and attention over the next six months to two years.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   85

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

17. Management by objectives is a two-step process in which managers and their employees discuss possible goals, and then meet regularly to review progress toward accomplishment of those goals.

 

ANS:  F

Management by objectives is a four-step process in which managers and their employees (a) discuss possible goals, (b) participatively select goals that are challenging, attainable, and consistent with the company’s overall goals, (c) jointly develop tactical plans that lead to accomplishment of tactical goals and objectives, and (d) meet regularly to review progress toward accomplishment of those goals

 

PTS:   1                    DIF:    Easy               REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

18. One of the disadvantages of MBO is that managers are frequently unable to give employees feedback on their performance.

 

ANS:  F

Managers are quite able to do this, they are just reluctant to do so.

 

PTS:   1                    DIF:    Difficult         REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

19. The three kinds of operational plans are single-use plans, standing plans, and budgets.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        REF:   85

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

20. Standing plans deal with unique, one-time-only events.

 

ANS:  F

This is the definition of single-use plans. Standing plans are created once and then used repeatedly to handle frequently recurring events.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

21. The three kinds of standing plans are policies, procedures, and rules and regulations.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        REF:   85

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

22. Budgeting is a critical management task, one that most managers could do better.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   86

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

23. All decision making is rational.

 

ANS:  F

Rational decision making is a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions. Not all decision making is this logical.

 

PTS:   1                    DIF:    Easy               REF:   86                  TOP:   AACSB Reflective Thinking

KEY:  Individual Dynamics | Strategy

 

24. The term decision making is used to refer to the process of choosing a solution from available alternatives.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   86

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

25. The process of rational decision making emphasizes the use of systematic procedures to arrive at optimal solutions. The process of decision making does not.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        REF:   86

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

26. The six steps in the rational decision-making process are as follows: (1) frame the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal decision.

 

ANS:  F

The six steps in the rational decision-making process are as follows: (1) define the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal decision.

 

PTS:   1                    DIF:    Moderate       REF:   87                  TOP:   AACSB Reflective Thinking

KEY:  Individual Dynamics | Strategy

 

27. Both absolute comparisons and relative comparisons are methods for identifying decision criteria.

 

ANS:  F

These are methods for weighting the criteria, not identifying them.

 

PTS:   1                    DIF:    Difficult         REF:   88                  TOP:   AACSB Reflective Thinking

KEY:  Individual Dynamics | Strategy

 

28. The rational decision-making model assumes that managers make decisions under conditions of uncertainty.

 

ANS:  F

The rational decision-making model assumes that managers make decisions under conditions of certainty

 

PTS:   1                    DIF:    Easy               REF:   86-88             TOP:   AACSB Reflective Thinking

KEY:  Individual Dynamics | Strategy

 

29. The bounded rationality model argues that managers try to take a rational approach to decision making but are restricted by real-world constraints, incomplete and imperfect information, and their own limited decision-making capabilities.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   89

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

30. Groupthink is more likely to occur in a highly cohesive group that is insulated from others and has no established procedure for systematically defining problems and exploring alternatives.

 

ANS:  T                    PTS:   1                    DIF:    Easy               REF:   91

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics | Strategy

 

MULTIPLE CHOICE

 

1. In 1997, Royal Dutch/Shell earned $8 billion in profit. In that year, top management decided to strive to increase the company’s profits to $17 billion annually by 2001. Which classical management function would be instrumental in achieving this goal?

a.	motivating
b.	research and development
c.	planning
d.	marketing
e.	optimizing

 

 

ANS:  C

Planning is defined as choosing a goal and developing a strategy to attain that goal.

 

PTS:   1                    DIF:    Easy               REF:   78                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

2. Planning is ultimately based upon ____.

a.	how a planner deals with bounded rationality
b.	choosing a goal and developing a method or strategy to achieve that goal
c.	the relationship between organizational line and staff personnel
d.	whether the mission statement is internally or externally oriented
e.	the personality type of the individual engaged in planning

 

 

ANS:  B

Definition of planning.

 

PTS:   1                    DIF:    Moderate       REF:   78                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

3. One of the benefits of planning is how it ____.

a.	encourages people to work faster
b.	encourages people to try a variety of different ways to do others’ jobs
c.	reduces employee turnover
d.	eliminates all discriminatory practices
e.	does none of these

 

 

ANS:  E

Section 1 of the chapter offers four benefits from planning: 1) intensified work effort; 2) increased persistence toward goals; 3) direction; and 4) creation of task strategies that lead to stronger performance.

 

PTS:   1                    DIF:    Moderate       REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

4. One of the benefits of planning is how it ____.

a.	encourages people to work harder for extended periods
b.	encourages people to try a variety of different ways to do others’ jobs
c.	reduces employee turnover
d.	creates a mechanistic environment
e.	does none of these

 

 

ANS:  A

Section 1 of the chapter offers four benefits from planning: 1) intensified work effort; 2) increased persistence toward goals; 3) direction; and 4) creation of task strategies that lead to stronger performance.

 

PTS:   1                    DIF:    Difficult         REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

5. One of the benefits of planning is how it ____.

a.	improves vertical integration of departments
b.	encourages people to engage in behaviors directly related to goal accomplishment
c.	encourages people to remain with the company, rather than go to work for the competition
d.	eliminates the need for change agents
e.	makes a long-term mission statement redundant

 

 

ANS:  B

Section 1 of the chapter offers four benefits from planning: 1) intensified work effort; 2) increased persistence toward goals; 3) direction; and 4) creation of task strategies that lead to stronger performance.

 

PTS:   1                    DIF:    Moderate       REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

6. How does a company benefit from planning?

a.	increased use of groupthink
b.	less solidified group cohesion
c.	more compliance with organizational culture
d.	intensified effort, persistence, direction, and creation of task strategies
e.	the ability to make greater use of devil’s advocacy

 

 

ANS:  D

Section 1 of the chapter offers four benefits from planning: 1) intensified work effort; 2) increased persistence toward goals; 3) direction; and 4) creation of task strategies that lead to stronger performance.

 

PTS:   1                    DIF:    Moderate       REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

7. Planning has been proven effective for ____.

a.	companies that operate on five different continents
b.	nonprofit organizations
c.	employees
d.	small companies with fewer than five employees
e.	all of these

 

 

ANS:  E                    PTS:   1                    DIF:    Moderate        REF:   80

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value | HRM

 

8. The use of ____ in planning produces a false sense of certainty and is often cited as one of the major pitfalls of planning.

a.	assumptions
b.	commitment
c.	detachment
d.	tactics
e.	benchmarking

 

 

ANS:  A

The three pitfalls of planning are: 1) planning may produce a false sense of security; 2) planning may impede change and adaptation; and 3) planners may operate detached from “ground level” reality of the company and its environment. Assumptions may play a role in creating a false sense of security to the degree that planners view them as certain vs. probabilistic.

 

PTS:   1                    DIF:    Easy               REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

9. According to the text, which of the following is a pitfall of planning?

a.	the acceptance of sacrificing solutions
b.	a false sense of certainty based on faulty assumptions
c.	the inability of organizational line personnel to accept the long-term benefit of planning
d.	the requirement for expensive employee training before plans can be effectively implemented
e.	outsourcing

 

 

ANS:  B

The three pitfalls of planning are: 1) planning may produce a false sense of security; 2) planning may impede change and adaptation; and 3) planners may operate detached from “ground level” reality of the company and its environment.

 

PTS:   1                    DIF:    Difficult         REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

10. Which of the following is a possible outcome of planning?

a.	Planning may lead to a mechanistic organizational chart.
b.	Planning may harm individual and organizational performance.
c.	Planning can eliminate the need for formalization.
d.	Planning will allow the company to know about all changes in its external environment before they occur.
e.	All of these are possible outcomes of planning

 

 

ANS:  B

Planning plays a rather controversial role in management, and it critics have pointed out that it may harm individual and organizational performance. Planning is no “silver bullet.”

 

PTS:   1                    DIF:    Easy               REF:   81                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

11. The last step in effective planning is to ____.

a.	maintain flexibility in planning
b.	develop long-term action plans
c.	develop goal commitment
d.	acculturate the employees
e.	track progress toward goal achievement

 

 

ANS:  A

See Exhibit 5.1.

 

PTS:   1                    DIF:    Easy               REF:   83                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

12. According to the S.M.A.R.T. guidelines, goals should be ____.

a.	Service-oriented
b.	Measurable
c.	Rational
d.	Tactical
e.	Actionable

 

 

ANS:  B

S.M.A.R.T. goals should be: 1) Specific; 2) Measurable; 3) Attainable; 4) Realistic; and 5) Timely.

 

PTS:   1                    DIF:    Moderate       REF:   81                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

13. According to the S.M.A.R.T. guidelines, goals should be ____.

a.	Aggregated
b.	Reliable
c.	Timely
d.	Motivated
e.	all of these

 

 

ANS:  C

S.M.A.R.T. goals should be: 1) Specific; 2) Measurable; 3) Attainable; 4) Realistic; and 5) Timely.

 

PTS:   1                    DIF:    Easy               REF:   81                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

14. According to the S.M.A.R.T. guidelines, goals should be ____.

a.	Synergistic
b.	Maximized
c.	Accelerated
d.	Role-related
e.	none of these

 

 

ANS:  E

S.M.A.R.T. goals should be: 1) Specific; 2) Measurable; 3) Attainable; 4) Realistic; and 5) Timely.

 

PTS:   1                    DIF:    Moderate       REF:   81                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

15. Which of the following is NOT one of the characteristics of S.M.A.R.T. goals?

a.	Synergistic
b.	Measurable
c.	Timely
d.	Attainable
e.	Realistic

 

 

ANS:  A

S.M.A.R.T. goals should be: 1) Specific; 2) Measurable; 3) Attainable; 4) Realistic; and 5) Timely.

 

PTS:   1                    DIF:    Moderate       REF:   83                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

16. The most popular approach to increasing goal commitment is ____.

a.	encouraging workers’ participation in goal setting
b.	making goals public
c.	getting top management’s support
d.	assigning realistic and attainable goals
e.	management by mentoring

 

 

ANS:  A

Participative goal setting leads to higher goal commitment, and is the most popular approach to achieving commitment.

 

PTS:   1                    DIF:    Difficult         REF:   82                  TOP:   AACSB Reflective Thinking

KEY:  Strategy | Creation of Value

 

17. Which of the following is a commonly used method for increasing goal commitment?

a.	encouraging worker participation in goal setting
b.	keeping goals private
c.	setting ethical goals
d.	using ombudsman to set goals
e.	all of these

 

 

ANS:  A

Participative goal setting leads to higher goal commitment, and is the most popular approach to achieving commitment.

 

PTS:   1                    DIF:    Easy               REF:   82                  TOP:   AACSB Reflective Thinking

KEY:  Strategy | Creation of Value

 

18. Which of the following is a commonly used method for increasing goal commitment?

a.	reward whistleblowing
b.	make goals public
c.	get the union’s support
d.	use the equity theory
e.	establish a median goal for all employees

 

 

ANS:  B

The text includes the example of a study that found college students had stronger goal commitment when they publicly committed to a goal of raising their GPA. Goal commitment is enhanced by such public goal statements.

 

PTS:   1                    DIF:    Easy               REF:   82                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

19. A(n) ____ lists the specific steps, people, resources, and time period for accomplishing a goal.

a.	strategy
b.	proximal goal
c.	distal goal
d.	action plan
e.	subordinate objective

 

 

ANS:  D                    PTS:   1                    DIF:    Moderate        REF:   82

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

20. Which of the following is an accepted method for tracking progress toward goal achievement?

a.	setting response and stimulus goals
b.	gathering and providing performance feedback
c.	using operant and classical conditioning
d.	mechanistic and dynamic feedback
e.	data warehousing and data mining

 

 

ANS:  B

Providing feedback is identified as one of two major approaches to tracking progress toward goal attainment.

 

PTS:   1                    DIF:    Moderate       REF:   82                  TOP:   AACSB Analytic

KEY:  Creation of Value | HRM

 

21. The goal was to reduce the expenses incurred by the sales force. A manager examining weekly expense sheets prepared by the individual salespeople would be using which of the accepted methods for tracking progress toward goal achievement?

a.	setting realistic and attainable goals
b.	gathering and providing performance feedback
c.	developing concrete action plans
d.	making sure goals are measurable
e.	comparing dynamic with mechanistic goals

 

 

ANS:  B

Providing feedback is identified as one of two major approaches to tracking progress toward goal attainment. This manager is providing data useful for determining progress in relation to sales productivity and cost containment.

 

PTS:   1                    DIF:    Moderate       REF:   82                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Creation of Value | HRM

 

22. A manufacturer of suntan lotion could set a(n) ____ goal to increase revenues by 8 percent over the next five years and a(n) ____ goal to increase sales next June in Miami Beach by 3 percent.

a.	tactical; strategic
b.	operational; tactical
c.	distal; proximal
d.	operational; strategic
e.	proximal; distal

 

 

ANS:  C

Proximal goals are short-term or subgoals, while distal goals are long-term or primary.

 

PTS:   1                    DIF:    Easy               REF:   82                  TOP:   AACSB Analytic

KEY:  Creation of Value | HRM

 

23. ____ can help organizations to maintain flexibility as they plan.

a.	Environmental munificence
b.	Options-based planning
c.	Formalization
d.	Liaisons
e.	Group cohesiveness

 

 

ANS:  B

Options-based planning is a major approach to planning which provides greater strategic flexibility.

 

PTS:   1                    DIF:    Easy               REF:   83                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

24. ____ planning keeps options open by making small, simultaneous investments in many alternative plans.

a.	Learning-based
b.	Options-based
c.	Conditioned
d.	Functional
e.	Operant

 

 

ANS:  B                    PTS:   1                    DIF:    Easy               REF:   83

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

25. The basic purpose of ____ planning is to leave commitments open by maintaining slack resources.

a.	options-based planning
b.	learning-based planning
c.	traditional planning
d.	operant planning
e.	the establishment of planning windows

 

 

ANS:  A                    PTS:   1                    DIF:    Moderate        REF:   83

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

26. For options-based planning to work, the organization must ____.

a.	have slack resources
b.	use cross-functional teams
c.	have broad spans of management
d.	have tall organizational structures
e.	use decentralization

 

 

ANS:  A

Slack resources are defined as a cushion of extra resources that can be used with options-based planning to adapt to unanticipated changes, problems, or opportunities.

 

PTS:   1                    DIF:    Easy               REF:   83                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

27. Planning works best when the goals and action plans at the ____ of the organization support the goals and action plans at the ____ of the organization.

a.	bottom and top; middle
b.	top and middle; bottom
c.	bottom and middle; top
d.	group level; individual level
e.	staff level; line level

 

 

ANS:  C                    PTS:   1                    DIF:    Moderate        REF:   83-84

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

28. Top management is responsible for developing long-term ____ that make clear how the company will serve customers and position itself against competitors in the next two to five years.

a.	standing plans
b.	tactical plans
c.	operational plans
d.	strategic plans
e.	mission statements

 

 

ANS:  D

Definition of strategic plans, which are typically developed by top management.

 

PTS:   1                    DIF:    Easy               REF:   84                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

29. ____ is responsible for developing strategic plans that make clear how the company will serve customers and position itself against competitors in the next two to five years.

a.	An action team
b.	Middle management
c.	Planning staff
d.	A change agent
e.	Top management

 

 

ANS:  E                    PTS:   1                    DIF:    Easy               REF:   84

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

30. A(n) ____ is a statement of a company’s purpose or reason for existing.

a.	vision
b.	action plan
c.	strategy
d.	competitive profile
e.	mission

 

 

ANS:  A

Definition of vision.

 

PTS:   1                    DIF:    Easy               REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

31. A(n) ____ should be brief, enduring, inspirational, clear, and consistent with widely shared company beliefs and values.

a.	organizational strategy
b.	mission statement
c.	vision statement
d.	value statement
e.	action plan

 

 

ANS:  C

Definition of vision.

 

PTS:   1                    DIF:    Difficult         REF:   84                  TOP:   AACSB Reflective Thinking

KEY:  Strategy | Creation of Value

 

32. The ____ flows directly from the ____.

a.	vision; tactical plans
b.	action plan; contingency plans
c.	mission; operational plans
d.	mission; vision
e.	strategy; action plans

 

 

ANS:  D                    PTS:   1                    DIF:    Difficult         REF:   84

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

33. Disney is not in the movie and theme park business. Its ____ is to create fun and fantasy for its customers.

a.	transformational mission
b.	vision
c.	strategic mission
d.	mission target
e.	motivational mission

 

 

ANS:  B

This statement describes Disney’s enduring purpose.

 

PTS:   1                    DIF:    Moderate       REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

34. A company’s mission ____.

a.	flows from its strategy
b.	unifies company-wide efforts
c.	can never be accomplished, only approached
d.	is not in accordance with the S.M.A.R.T. guidelines
e.	identifies its organizational culture

 

 

ANS:  B

A mission is a statement of a company’s overall goal that unifies company-wide efforts toward its vision, stretches and challenges the organization, and possesses a finish line and a time frame.

 

PTS:   1                    DIF:    Moderate       REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

35. Which of the following statements about a company’s mission is true?

a.	A company’s mission flows from its vision.
b.	A company’s mission is a more specific goal that unifies company-wide efforts.
c.	A company’s mission possesses a finish line and a timeframe
d.	Once a company’s mission has been accomplished, a new one should be chosen.
e.	All of these statements about a company’s mission are true.

 

 

ANS:  E

A mission is a statement of a company’s overall goal that unifies company-wide efforts toward its vision, stretches and challenges the organization, and possesses a finish line and a time frame.

 

PTS:   1                    DIF:    Moderate       REF:   84                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

36. Seeds of Change is a company that markets certified organic food. A statement found at the marketer’s Web site reads, “At Seeds of Change, we’re committed to making delicious foods that are healthy for you as well as the planet.” This statement is most likely the company’s ____ because it will not change over time.

a.	vision
b.	mission
c.	statement of value
d.	discretionary responsibility
e.	action-based goal

 

 

ANS:  A

This is a statement of Seeds of Change’s enduring purpose, or vision.

 

PTS:   1                    DIF:    Difficult         REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

37. The organization’s ____ does not change over time.

a.	mission
b.	vision
c.	strategy
d.	operational plan
e.	action plan

 

 

ANS:  B

One of the chief characteristics of a vision is that it is enduring.

 

PTS:   1                    DIF:    Moderate       REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

38. Most people who have watched the television show Star Trek are familiar with the starship Enterprise’s ____– “To explore strange new worlds. To seek out new life and new civilizations. To boldly go where no man has gone before.”

a.	plan of action
b.	tactical plan
c.	mission
d.	actionable goal
e.	strategy

 

 

ANS:  C

A mission is a statement of a company’s overall goal that unifies company-wide efforts toward its vision, stretches and challenges the organization, and possesses a finish line and a time frame.

 

PTS:   1                    DIF:    Easy               REF:   84                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

39. An Australian manufacturer of surfboards wants to increase awareness of its brand in the U.S. market. A ____ plan to accomplish this objective might be to host a series of surfboard competitions in California to raise brand awareness.

a.	contingency
b.	single-use
c.	standing
d.	visionary
e.	tactical

 

 

ANS:  E

Tactical plans are plans created and implemented by middle managers that specify how the company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within its mission statement. Here, the surfboard maker is using this tactical plan to increase brand awareness in the U.S.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

40. A department store is experiencing greater than usual shrinkage, and management wants it stopped. Middle management decided to hire a security company to study and problem and develop the best plan for dealing with the problem. Middle management have implemented a(n) ____ plan.

a.	contingency
b.	strategic
c.	operational
d.	visionary
e.	tactical

 

 

ANS:  E

Tactical plans are plans created and implemented by middle managers that specify how the company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within its mission statement.

 

PTS:   1                    DIF:    Difficult         REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

41. ____ plans are plans that specify how a company will use resources, budgets, and people to accomplish specific goals within its mission.

a.	Strategic
b.	Tactical
c.	Operational
d.	Single-use
e.	Dialectical

 

 

ANS:  B                    PTS:   1                    DIF:    Moderate        REF:   85

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

42. Who is responsible for the creation of tactical plans?

a.	team leaders
b.	lower-level managers
c.	middle managers
d.	top managers
e.	staff advisors

 

 

ANS:  C                    PTS:   1                    DIF:    Moderate        REF:   85

TOP:   AACSB Reflective Thinking            KEY:  Leadership Principles

 

43. What type of planning would be used to create the festivities necessary to celebrate the 100-year anniversary of a furniture manufacturer?

a.	single-use plan
b.	contingency plan
c.	scenario plan
d.	standing plan
e.	role-model plan

 

 

ANS:  A

Single-use plans are defined as plans that cover unique, one-time events–in this case the 100-year anniversary.

 

PTS:   1                    DIF:    Easy               REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

44. Management by objectives (MBO) is a management technique often used to develop and carry out ____.

a.	single-use plans
b.	standing plans
c.	operational plans
d.	tactical plans
e.	hierarchical plans

 

 

ANS:  D

MBO is defined as a four-step process in which managers and employees discuss and select goals, develop tactical plans, and meet regularly to review progress toward goal accomplishment. MBO focuses on shorter-term tactical planning.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

45. Which of the following is NOT a step in the management by objectives (MBO) process?

a.	jointly discuss possible goals
b.	participatively select goals that are challenging
c.	jointly develop operational plans
d.	meet regularly to review progress toward goal accomplishment
e.	participate in the selection of goals that are consistent with the company’s overall goals

 

 

ANS:  C

MBO is defined as a four-step process in which managers and employees discuss and select goals, develop tactical plans, and meet regularly to review progress toward goal accomplishment.

 

PTS:   1                    DIF:    Difficult         REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

46. When done correctly, management by objectives (MBO) is an extremely effective method for ____.

a.	brainstorming
b.	developing policies and procedures
c.	broadening the span of transformation
d.	problem framing
e.	tactical planning

 

 

ANS:  E

MBO is defined as a four-step process in which managers and employees discuss and select goals, develop tactical plans, and meet regularly to review progress toward goal accomplishment. MBO is focused on tactical planning.

 

PTS:   1                    DIF:    Difficult         REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

47. Who is primarily responsible for developing operational plans?

a.	lower-level managers
b.	middle managers
c.	top managers
d.	staff advisors
e.	any of these

 

 

ANS:  A                    PTS:   1                    DIF:    Easy               REF:   85

TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

48. ____ plans direct the behavior, efforts, and priorities of operative employees for periods ranging from one to six months.

a.	Strategic
b.	Tactical
c.	Operational
d.	Standing
e.	Procedural

 

 

ANS:  C

Operational plans are defined as day-to-day plans, developed and implemented by lower-level managers, for producing or delivering the organization’s products and services over a 30-day to six-month period.

 

PTS:   1                    DIF:    Difficult         REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

49. There are three kinds of ____ plans. They are single-use plans, standing plans, and budgets.

a.	strategic
b.	tactical
c.	operational
d.	MBO
e.	actionable

 

 

ANS:  C                    PTS:   1                    DIF:    Easy               REF:   85

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

50. ____ are a type of operational plan.

a.	Single-use plans
b.	Contingency plans
c.	Short-term strategies
d.	Mission modifications
e.	Benchmarks

 

 

ANS:  A

The three kinds of operational plans are single-use plans, standing plans, and budgets.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

51. The ____ is a type of operational plan that saves managers time because it is created once and then used repeatedly to handle frequently recurring events.

a.	standing plan
b.	budget
c.	multiple-use plan
d.	options-based plan
e.	forecast

 

 

ANS:  A

Standing plans are used repeatedly to handle frequently recurring events.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value

 

52. In case of a fire, most organizations have a series of actions that must take place beginning with notifying the fire department and including evacuating buildings. What kind of a standing plan is described in this example?

a.	rules and regulations
b.	procedures
c.	policies
d.	organizational norms
e.	security governances

 

 

ANS:  B

Procedures are defined as a standing plan that indicates the specific steps that should be taken in response to a particular event. Here the company has established procedures to be used in the event of a fire.

 

PTS:   1                    DIF:    Easy               REF:   86                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

53. ____ are types of standing plans.

a.	Policies and procedures
b.	Targeted plans
c.	Long-term tactical strategies
d.	MBO guidelines
e.	Transformational plans

 

 

ANS:  A                    PTS:   1                    DIF:    Easy               REF:   85-86

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value

 

54. ____ are standing plans that indicate the specific steps that should be taken in response to a particular event.

a.	Policies
b.	Procedures
c.	Actionable plans
d.	Options-based plans
e.	Single-use plans

 

 

ANS:  B

Definition of a standing plan.

 

PTS:   1                    DIF:    Easy               REF:   86                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

55. A(n) ____ is a standing plan that indicates the general course of action that should be taken in response to a particular event or situation.

a.	policy
b.	procedure
c.	rule
d.	regulation
e.	heuristic

 

 

ANS:  A

Definition of a policy.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM | Ethical Responsibilities | Legal Responsibilities

 

56. Which of the following is the most specific type of standing plan?

a.	policies
b.	procedures
c.	rules and regulations
d.	forecasts
e.	MBO plans

 

 

ANS:  C

Rules and regulations are defined as standing plans that describe how a particular action should be performed, or what must happen or not happen in response to a particular event. Rules and regulations are more specific than procedures because they precisely define what must happen (and not happen) in response to a particular event.

 

PTS:   1                    DIF:    Difficult         REF:   86                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

57. Budgets are an example of ____ planning.

a.	strategic
b.	tactical
c.	operational
d.	actionable
e.	single-use

 

 

ANS:  C                    PTS:   1                    DIF:    Easy               REF:   85-86

TOP:   AACSB Analytic                            KEY:  Strategy | Creation of Value | HRM

 

58. New employees were instructed to never wear loose-fitting clothes when working around the canning machine. What kind of a standing plan is described in this example?

a.	rules and regulations
b.	procedures
c.	policies
d.	organizational norms
e.	security governances

 

 

ANS:  A

This is a precise statement of the type of clothing that should not be worn in the workplace–a rule.

 

PTS:   1                    DIF:    Easy               REF:   86                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

59. ____ is the process of choosing a solution from available alternatives.

a.	Decision making
b.	Problem identification
c.	Heuristics
d.	Multivariable selection
e.	Problem solving

 

 

ANS:  A                    PTS:   1                    DIF:    Easy               REF:   86

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

60. ____ is a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions.

a.	Problem identification
b.	Rational decision making
c.	Benchmarking
d.	Multivariable selection
e.	Keystoning

 

 

ANS:  B                    PTS:   1                    DIF:    Easy               REF:   86

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

61. Neither Chili nor Peru has a mass-market café culture, but that fact has not stopped Starbucks from engaging in ____ to determine how best to expand into those market.

a.	intuitive conditioning
b.	benchmarking
c.	decision making
d.	organizational design
e.	conditioned learning

 

 

ANS:  C

Decision making is the process of choosing a solution from available alternatives.

 

PTS:   1                    DIF:    Difficult         REF:   86                  TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

62. Neither Chili nor Peru has a mass-market café culture, but that fact has not stopped Starbucks from trying to determine what can be done to make its coffee houses successful in those markets. By recognizing that people in these two South American countries do not drink coffee like people in the U.S. and that they need to change this habit, Starbucks has begun a ____ process with problem identification.

a.	rational decision making
b.	trend analysis
c.	sacrificing
d.	selection of optimal solutions
e.	framing constraints

 

 

ANS:  A

The first step in rational decision making is problem identification.

 

PTS:   1                    DIF:    Easy               REF:   86                  TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

63. The European Union encourages companies to abandon national boundaries and offer the same products to all of the member countries. Allianz, Germany’s largest insurance group, is considering converting from a German company to a European company. If it makes this decision rationally, it will first ____.

a.	create decision criteria based on national GNPs
b.	identify problems arising from tax and regulatory issues
c.	decide whether to expand to one nation at a time
d.	create a committee to make the final decision
e.	avoid the use of bounded rationality

 

 

ANS:  B

Problem identification is the first step in rational decision making.

 

PTS:   1                    DIF:    Moderate       REF:   86-87             TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

64. A ____ exists when there is a gap between a desired state–what managers want–and an existing state–the situation that the managers are facing.

a.	service gap
b.	benchmark
c.	condition of uncertainty
d.	minimum threshold
e.	problem

 

 

ANS:  E                    PTS:   1                    DIF:    Moderate        REF:   87

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

65. Which of the following is one of the six steps in the rational decision-making process?

a.	choose a minimally acceptable alternative solution
b.	evaluate the effectiveness of the decision
c.	weight the criteria
d.	introduce the decision to those who will be impacted by it
e.	identify customer service gaps

 

 

ANS:  C                    PTS:   1                    DIF:    Easy               REF:   87

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

66. In the 1960s, Coca-Cola executives in Atlanta learned there was a bottler in the Colombian jungle that was bottling pirated Coke in dumped bottles. Since the soft drink company was at that time expanding globally and building its reputation on exacting production standards, it recognized this unauthorized bottler was a(n) ____.

a.	standard of malfeasance
b.	problem
c.	benchmark
d.	keystone issue
e.	absolute criteria

 

 

ANS:  B

A problem exists when there is a gap between a desired state–what managers want–and an existing state–the situation that the managers are facing.

 

PTS:   1                    DIF:    Easy               REF:   87                  TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

67. One method of weighing decision criteria uses ____, which is a process where each decision is compared directly to every other criterion.

a.	absolute comparisons
b.	relative comparisons
c.	valences
d.	minimum threshold rule
e.	comparative ranking scales

 

 

ANS:  B                    PTS:   1                    DIF:    Moderate        REF:   88

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

68. In the 1960s, Coca-Cola executives in Atlanta learned there was a bottler in the Colombian jungle that was bottling pirated Coke in dumped bottles. Since the soft drink company was at that time expanding globally and building its reputation on exacting production standards, in the ____ stage of the rational decision-making process, Coke decided it had to either bring some sort of legal action against the unauthorized bottler, ignore it, or buy it.

a.	problem definition
b.	criteria weighting
c.	generation of alternative courses of action
d.	identification of decision criteria
e.	finding the optimal solution

 

 

ANS:  C

Coke is looking at possible courses of action that would solve the problem.

 

PTS:   1                    DIF:    Easy               REF:   88                  TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

69. As a company that manufactures janitorial cleaning supplies tries to develop more environmentally-friendly products that can clean as well as its current ones, the company’s manager must select among alternatives derived from oranges, parsley, lemon, or a combination of these ingredients. This is the ____ step in the rational decision-making model.

a.	generate alternative courses of action
b.	evaluate each alternative
c.	compute the optimal decision
d.	satisfice each alternative
e.	bounded rationality

 

 

ANS:  B

The company must evaluate each alternative ingredient.

 

PTS:   1                    DIF:    Moderate       REF:   89                  TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

70. When Coca-Cola discovered it had an unauthorized bottler selling Coke in the Colombian jungle, it used the rational decision making process to find a solution. What do you know about the stage in which Coke evaluated its possible courses of action?

a.	Coke found this stage to be the least expensive of all the stages.
b.	Coke found this stage to be the most time-consuming of all the stages.
c.	This stage was the last stage in the process for Coca-Cola.
d.	The stage required Coke use complex mathematical models.
e.	None of these statements accurately describe this stage.

 

 

ANS:  B                    PTS:   1                    DIF:    Difficult         REF:   89

TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

71. Marie-Helene de Taillac is a well-known European designer of understated, very delicate jewelry. Once she determined that further growth was impossible without changing how she distributed her product, she decided to open her own retail outlet to sell her products rather than letting department stores sell it. Since she made the decision without really examining how much the costs involved in implementing her decision, she has engaged in ____ behavior.

a.	benchmarking
b.	laddering
c.	sacrificing
d.	maximizing
e.	leapfrogging

 

 

ANS:  C

She chose an alternative solution that was “good enough.”

 

PTS:   1                    DIF:    Moderate       REF:   90                  TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Environmental Influence

 

72. ____ occurs when managers choose an alternative that is good enough, rather than the best possible alternative.

a.	Maximizing
b.	Optimizing
c.	Availability bias
d.	Negative frame
e.	sacrificing

 

 

ANS:  E                    PTS:   1                    DIF:    Easy               REF:   90

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics | Strategy

 

73. Groupthink occurs in ____.

a.	newly formed groups whose members were arbitrarily selected and who are assigned to make programmed decisions
b.	groups in which members have dissimilar backgrounds
c.	standing committees whose members are under no pressure to agree
d.	groups whose members are elected to serve as figureheads
e.	highly cohesive groups where there is a great deal of pressure to agree with each other

 

 

ANS:  E                    PTS:   1                    DIF:    Easy               REF:   91

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics

 

74. Which of the following steps in the decision-making process can be done better by groups than by individuals?

a.	defining the problem and generating alternatives
b.	creating cohesive solutions to organization problems as a whole
c.	creating weighted alternatives and coping with bounded rationality
d.	dealing with the problems associated with bounded rationality
e.	evaluating how optimal the solution to the problem is and comparing it to other courses of action

 

 

ANS:  A                    PTS:   1                    DIF:    Moderate        REF:   91

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics | Strategy

 

75. ____ is the emotional reaction that can occur when disagreements become personal rather than professional.

a.	A-type conflict
b.	C-type conflict
c.	Emotive empowerment
d.	Organizational disharmony
e.	Norm disruption

 

 

ANS:  A                    PTS:   1                    DIF:    Easy               REF:   92-93

TOP:   AACSB Reflective Thinking            KEY:  Individual Dynamics

 

76. The ____ approach to decision-making is a method in which an individual or a subgroup is assigned the role of a critic.

a.	dialectical inquiry
b.	groupthink
c.	devil’s advocacy
d.	Delphi
e.	dyadic communications

 

 

ANS:  C                    PTS:   1                    DIF:    Easy               REF:   93

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics

 

77. Studies of the proper use of the devil’s advocacy and dialectical inquiry approaches have shown that these methods ____.

a.	lead to less a-type conflict
b.	lead to improved decision mentoring
c.	lead to greater acceptance of decisions once they have been made
d.	introduce c-type conflict into the decision-making process
e.	eliminate all organizational conflict

 

 

ANS:  D                    PTS:   1                    DIF:    Moderate        REF:   93

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics

 

78. The ____ is a decision-making method in which a panel of experts responds to questions and to each other until an agreement is reached on how a specific issue should be handled.

a.	dialectical inquiry technique
b.	nominal group technique
c.	Delphi technique
d.	electronic brainstorming technique
e.	feedback method

 

 

ANS:  C                    PTS:   1                    DIF:    Moderate        REF:   93

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics

 

79. The nominal group technique improves group decision making by ____.

a.	requiring the selection of co-leaders to prevent member dominance
b.	providing predetermined group norms
c.	eliminating group cohesiveness
d.	decreasing a-type conflict
e.	encouraging all members to have an equal voice in the decision making process

 

 

ANS:  D                    PTS:   1                    DIF:    Moderate        REF:   93

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics

 

80. Which of the following is NOT one of the rules for effective brainstorming?

a.	The more ideas, the better.
b.	Select an open-minded group leader.
c.	All ideas are acceptable.
d.	Criticism is not allowed.
e.	Use other members’ ideas to come up with more ideas.

 

 

ANS:  B                    PTS:   1                    DIF:    Easy               REF:   94

TOP:   AACSB Reflective Thinking            KEY:  Group Dynamics

 

81. Which of the following is a disadvantage of face-to-face brainstorming that is overcome by electronic brainstorming?

a.	assimilation blocking
b.	production blocking
c.	delegation errors
d.	group norm evaluation
e.	negative valence

 

 

ANS:  B

One example of production blocking is having to wait your turn to share your idea.

 

PTS:   1                    DIF:    Moderate       REF:   94

TOP:   AACSB Reflective Thinking | AACSB Technology

KEY:  Group Dynamics | Information Technologies

 

Krispy Kreme

Krispy Kreme is a relatively small doughnut seller. It has only 295 stores while Dunkin Doughnuts has over 3,600 outlets in the United States and Canada. In spite of its size, Krispy Kreme has been described by many as “the hottest brand in America.” The company’s success in an environment, which has made success difficult for many food operations, is due in large part to the long-term vision of its top management and its establishment and achievement of S.M.A.R.T. goals. The company originated in Winston-Salem, North Carolina, in the mid 1930s when Vernon Rudolph bought a secret recipe for yeast doughnuts from a French pastry cook. Rudolph ran the company until his death in 1973 when he died without naming a successor, which caused the company problems for the next decade.

 

82. Refer to Krispy Kreme. How does Krispy Kreme benefit from planning?

a.	Planning makes persistence unnecessary.
b.	Planning allows managers to direct their employees to “do their best.”
c.	Planning gives direction to managers and employees.
d.	Planning eliminates the need for task strategies.
e.	Planning would provide all of these benefits to Krispy Kreme.

 

 

ANS:  C

Section 1 of the chapter offers four benefits from planning: 1) intensified work effort; 2) increased persistence toward goals; 3) direction; and 4) creation of task strategies that lead to stronger performance.

 

PTS:   1                    DIF:    Easy               REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

83. Refer to Krispy Kreme. Krispy Kreme’s goal to open six new Krispy Kreme stores by 2009 in British Columbia where it already has a well-established reputation would be an example of a S.M.A.R.T. goal because it is ____.

a.	specific, marketable, and temporal
b.	specific, measurable, actionable, realistic, and timely
c.	service-oriented, manageable, achievable, and time-oriented
d.	standardized, measurable, actionable, response-driven, and temporal
e.	selective, marketable, achievable, and real-time-oriented

 

 

ANS:  B

Characteristics of S.M.A.R.T. goals.

 

PTS:   1                    DIF:    Moderate       REF:   81                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

84. Refer to Krispy Kreme. The company’s goal to open six new Krispy Kreme stores in the next six months in British Columbia where it already has a well-established reputation would be an example of a(n) ____ goal.

a.	distal
b.	temporal
c.	adjacent
d.	proximal
e.	advocacy

 

 

ANS:  D

Proximal goals are short-term.

 

PTS:   1                    DIF:    Easy               REF:   82                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

85. Refer to Krispy Kreme. The company’s goal to never reveal its secret recipe to anyone outside the company is an example of a(n) ____ goal.

a.	distal
b.	temporal
c.	adjacent
d.	proximal
e.	advocacy

 

 

ANS:  A

Distal goals are long-term, and primary goals.

 

PTS:   1                    DIF:    Easy               REF:   82                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

86. Refer to Krispy Kreme. Which of the following would be an example of an operational plan for Krispy Kreme?

a.	to open a new plant for making doughnut mix outside the U.S.
b.	to change the color of the “walking KK” logo of the company
c.	to turn on the HOT DOUGHNUTS NOW sign whenever fresh doughnuts came off the line
d.	to hire a new human relations vice-president to oversee all of the company’s operations
e.	to modify the doughnut mix recipe so that less expensive ingredients can be used

 

 

ANS:  C

Operational are day-to-day type decisions such as this advertising move.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

D.G. Yuengling & Son

With beer sales dropping around the world, you should be ecstatic that sales of Yuengling (pronounced Ying-Ling) beer are up 225 percent in the last six years. But as you walk through the caves and tunnels of Yuengling’s Eagle Brewery, carved into Sharp Mountain in 1831 to maintain a perfect 50-degree temperature for storing beer, you see not only the history of America’s oldest brewery everywhere you turn, but also chipped paint, rusting pipes, and an aging plant that can’t keep up with the growing demand for Yuengling beer. So far, thanks to hard work, dedicated workers, and some luck, you’ve doubled your production capacity from 250,000 to 500,000 barrels of beer a year, but if you push for more, the old brewery will break.

Yet with sales up so dramatically, the company faces a problem says CEO and owner Dick Yuengling, “We are sold out of beer. We run the risk of losing our customer base because we don’t have any product on the shelves.” Shortages are so bad that the advertising

budget has been cut from $3 to $2 a barrel. Yuengling explains, “You can’t fuel the fire when we can’t get them beer anyway.”

Ironically, with production stuck at 500,000 barrels a year, Yuengling beer has become harder to find as it has become more popular. Sales representative Diane Adams said, “It was a little hairy. People were up in arms.” So, rather than sacrifice sales in its home market of Pennsylvania, where Yuengling has its largest market share (10 percent), the company has temporarily stopped shipping beer to distributors in Maine, Massachusetts, and Rhode Island. Since that strategy won’t help Yuengling grow outside Pennsylvania, you still face the question, of how to permanently increase beer production to meet the growing demand.

You’ve identified five options. The first is to add new storage and finishing tanks to Eagle Brewery to increase production capacity by 10 percent to 550,000 barrels a year. Though doable, this is only a short-term solution. Second, you could outsource production to another company. This would be more cost-effective, but would Yuengling beer produced in non-Yuengling factories taste different? For a “specialty” beer, this could be a substantial risk. Still, outsourcing would be affordable, and Yuengling has done it before, outsourcing production of its Black and Tan beer to Pabst Blue Ribbon’s brewery in Lehigh, Pennsylvania, until Pabst closed that facility four years ago. The third option is to buy another brewery, but there aren’t many for sale and those that are would be expensive and require significant upgrades. For example, it would cost $13 million to buy and $5 million to fix Stroh’s 1.5 million-barrel brewery in Tampa, Florida, which is far from Yuengling’s northeastern markets.

A fourth option is to build a new factory capable of producing 1.2 million barrels per year, but that would cost $50 million and take three years. The fifth and final option is simply to “do nothing.” The company is already very profitable, has low overhead costs, and is very efficient. In other words, by “doing nothing” the company could still make a lot of money without incurring the risks inherent in the other options. And risk is a real consideration because everyone in the company remembers that Yuengling was losing money just a few years ago.

 

87. Refer to Yuengling. In the first stage of the planning process for Yuengling, it should have ____.

a.	developed an effective action plan that would satisfy all of its customers
b.	determined its problem was that demand for its beer exceeds its ability to supply it
c.	developed several alternative methods for supply its beer to customers
d.	established a budget
e.	developed goal commitment to customer satisfaction

 

 

ANS:  B                    PTS:   1                    DIF:    Easy               REF:   81

TOP:   AACSB Analytic                            KEY:  Strategy

 

88. Refer to Yuengling. Yuengling’s objective to pay off its loan for a new $50 million brewery within five years was an example of a ____ goal.

a.	generational
b.	learning-based
c.	distal
d.	options-based
e.	proximal

 

 

ANS:  C                    PTS:   1                    DIF:    Easy               REF:   82

TOP:   AACSB Analytic                            KEY:  Strategy | Environmental Influence

 

89. Refer to Yuengling. What type of planning allowed Yuengling to purchase the Stroh’s brewery?

a.	resource-based
b.	learning-based
c.	environmentally-specific
d.	options-based
e.	generational

 

 

ANS:  D                    PTS:   1                    DIF:    Moderate        REF:   83

TOP:   AACSB Analytic                            KEY:  Strategy | Environmental Influence

 

90. Refer to Yuengling. What is the primary problem at Yuengling?

a.	Its customers are not brand loyal.
b.	Its advertising campaigns are ineffective.
c.	Demand for its beer exceeds supply.
d.	It is unable to create a usable budget.
e.	Supply of its beer exceeds its demand.

 

 

ANS:  C                    PTS:   1                    DIF:    Difficult         REF:   87

TOP:   AACSB Analytic                            KEY:  Strategy | Environmental Influence

 

91. Refer to Yuengling. One of the decision criteria Yuengling used to develop alternative courses of action to solve its problem involved a desire to ____.

a.	minimize risk
b.	minimize environmental uncertainty
c.	ignore resource scarcity
d.	create environmental complexity
e.	maximize profits

 

 

ANS:  A                    PTS:   1                    DIF:    Difficult         REF:   87-88

TOP:   AACSB Analytic                            KEY:  Environmental Influence

 

SHORT ANSWER

 

1. What is planning? What are its benefits?

 

ANS:

Planning is choosing a goal and developing a method to achieve that goal. Planning is one of the best ways to improve organizational and individual performance. It encourages people to work harder (intensified effort), to work hard for extended periods (persistence), to engage in behaviors directly related to goal accomplishment (directed behavior), and to think of better ways to do their jobs (task strategies). But most important, companies that plan have larger profits and faster growth than companies that don’t plan.

 

PTS:   1                    DIF:    Easy               REF:   78                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

2. Briefly describe the benefits and pitfalls of planning.

 

ANS:

Planning refers to choosing a goal and developing a method or strategy to achieve that goal. Planning has numerous benefits. It is one of the best ways to improve both organizational and individual performance. It encourages people to work harder (intensified effort), to work hard for extended periods (persistence), to engage in behaviors directly related to goal accomplishment (directed behavior), and to think of better ways to do their jobs (task strategies). But most important, companies that plan have larger profits and faster growth than companies that don’t plan. However, planning also has three potential pitfalls. Companies that are overly committed to their plans may be slow to adapt to changes in their environment. Planning is based on assumptions about the future, and when those assumptions are wrong, plans are likely to fail. Finally, planning can fail when planners are detached from the implementation of plans.

 

PTS:   1                    DIF:    Moderate       REF:   80                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

3. List the steps in effective planning.

 

ANS:

Planning consists of a total of five steps: (a) setting goals, (b) developing commitment to the goals, (c) developing effective action plans, (d) tracking progress toward goal achievement, and (e) maintaining flexibility in planning.

 

PTS:   1                    DIF:    Moderate       REF:   80-83             TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

4. Identify and explain the purpose of the S.M.A.R.T. guidelines.

 

ANS:

One way of writing effective goals for yourself, your job, or your company is to use the S.M.A.R.T. guidelines. S.M.A.R.T. goals are Specific, Measurable, Attainable, Realistic, and Timely. The purpose of the S.M.A.R.T. guidelines is to give managers an easy-to-remember acronym that can help them to set effective goings during their stressful and busy daily activities.

 

PTS:   1                    DIF:    Easy               REF:   81                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

5. Identify three ways of increasing goal commitment. Which one is most commonly used by managers?

 

ANS:

Managers can bring about goal commitment in three ways. The first, and most popular approach, is to set goals participatively. Rather than assigning goals to workers, managers and employees choose goals together. The second technique is making the goal public, by having individuals and work units tell others about their goals. The third way of increasing goal commitment is to obtain top management’s support. Top management can show support for a plan or program by providing funds, speaking publicly about the plan, or participating in the plan itself.

 

PTS:   1                    DIF:    Moderate       REF:   81-82             TOP:   AACSB Analytic

KEY:  Leadership Principles | Strategy | Creation of Value | HRM

 

6. Briefly identify and explain the two accepted methods of tracking progress toward goal achievement.

 

ANS:

There are two accepted methods of tracking progress. The first is to set proximal goals and distal goals. Proximal goals are short-term goals or subgoals, whereas distal goals are long-term or primary goals. The idea behind setting proximal goals is that they may be more motivating and rewarding than waiting to achieve far-off distal goals. The second method of tracking progress is to gather and provide performance feedback. Regular, frequent performance feedback allows workers and managers to track their progress toward goal achievement and make adjustments in effort, direction, and strategies.

 

PTS:   1                    DIF:    Moderate       REF:   82-83             TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value | HRM

 

7. Identify the four basic steps in the management by objectives process.

 

ANS:

Management by objectives is a four-step process in which managers and employees (a) discuss possible goals; (b) participatively select goals; (c) jointly develop tactical plans; and (d) meet regularly to review progress toward goal accomplishment.

 

PTS:   1                    DIF:    Easy               REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Creation of Value | HRM

 

8. List and briefly describe the three kinds of operational plans.

 

ANS:

The three kinds of operational plans are: (a) single-use plans, which cover unique, one-time-only events; (b) standing plans, which save managers time, because they are created once and then used repeatedly to handle frequently recurring events, and (c) budgets, which are quantitative plans, through which managers decide how to allocate available money to best accomplish company goals.

 

PTS:   1                    DIF:    Easy               REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Creation of Value | HRM

 

9. List and briefly describe the three kinds of standing plans, and comment on their relative specificity.

 

ANS:

The three types of standing plans are policies, procedures, and rules and regulations, which increase in specificity in that order. Policies are the least specific type of standing plan. They indicate the general course of action that company managers should take in response to a particular event or situation. Procedures are more specific than policies, because they indicate the series of steps that should be taken in response to a particular event. Rules and regulations are even more specific than procedures, because they specify what must happen or not happen. They describe precisely how a particular action should be performed.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

10. Define the terms decision making and rational decision making, Briefly differentiate between them.

 

ANS:

Decision making is the process of choosing a solution from available alternatives. Rational decision making is a systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations. Thus, rational decision making is more structured, and would be one of approaches that might be used in the more general process of decision making.

 

PTS:   1                    DIF:    Moderate       REF:   86-87             TOP:   AACSB Analytic

KEY:  Strategy

 

11. List the six steps in the rational decision making process.

 

ANS:

The six steps in the rational decision making process are: (1) define the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal decision.

 

PTS:   1                    DIF:    Easy               REF:   87                  TOP:   AACSB Reflective Thinking

KEY:  Individual Dynamics | Strategy

 

12. Briefly explain what decision criteria are. Identify two approaches that may be used to weight these criteria.

 

ANS:

Decision criteria are the standards used to guide judgments and decisions. Typically, the more criteria that a potential solution meets, the better that solution should be. After identifying decision criteria, the next step in the rational decision making process is deciding which criteria are more or less important. While there are numerous mathematical models for weighting decision criteria, all require the decision maker to provide an initial ranking of the decision criteria. Some use absolute comparisons, in which each criterion is compared to a standard or ranked on its own merits. Another method is relative comparisons, in which each criterion is compared directly to every other criterion.

 

PTS:   1                    DIF:    Moderate       REF:   87                  TOP:   AACSB Reflective Thinking

KEY:  Individual Dynamics | Strategy

 

13. Briefly identify the two types of conflict that may spontaneously occur in group decision-making situations. Comment on the probable effectiveness of group decisions given each type of conflict.

 

ANS:

The two types of conflict that might spontaneously occur in a group are c-type conflict and a-type conflict. C-type conflict, or cognitive conflict, focuses on problem- and issue-related differences of opinion. In c-type conflict, group members disagree because their different experiences and expertise lead them to different views of the problem and its potential solutions. However, c-type conflict is also characterized by a willingness to examine, compare, and reconcile those differences to produce the best possible solution. By contrast, a-type conflict, meaning “affective conflict,” refers to the emotional reactions that can occur when disagreements become personal rather than professional. A-type conflict often results in hostility, anger, resentment, distrust, cynicism, and apathy. So, unlike c-type conflict, a-type conflict undermines team effectiveness by preventing teams from engaging in the kinds of activities, such as c-type conflict, that are critical to team effectiveness. Thus, c-type conflict can enhance the quality of group decisions, while a-type conflict will probably reduce the effectiveness of those decisions.

 

PTS:   1                    DIF:    Easy               REF:   92                  TOP:   AACSB Reflective Thinking

KEY:  Group Dynamics | Strategy

 

ESSAY

 

1. Describe a planning effort that you are acquainted with (either through reading or personal experience), and evaluate the manifestation of benefits and pitfalls of planning described in the chapter as manifest in that case. That is to say, you should explain how, if at all, the benefits of planning described in the text were manifest in your case. Similarly, you should identify any of the significant pitfalls of planning that might have been manifest in your case. Comment on the extent to which your case seems to substantiate or refute the claims made for the benefits and pitfalls of planning, as described in the text.

 

ANS:

Planning is defined as choosing a goal and developing a method or strategy to achieve that goal. Student case examples should clearly identify both the goal of the planning effort and the method to be used to achieve it. Better answers will appropriately integrate more of the benefits and pitfalls of planning, which are summarized below. Adequate answers will simply restate text examples. Better answers will be original, appropriate applications of the text material applied to a case or scenario not presented in the text or class lecture. Either way, answers should clearly indicate how the events and outcomes in the case that is presented either substantiate or refute the statements made about the benefits and pitfalls of planning in the text.

 

Planning has numerous benefits. It is one of the best ways to improve both organizational and individual performance. It encourages people to work harder (intensified effort), to work hard for extended periods (persistence), to engage in behaviors directly related to goal accomplishment (directed behavior), and to think of better ways to do their jobs (task strategies). But most important, companies that plan have larger profits and faster growth than companies that don’t plan. However, planning also has three potential pitfalls. Companies that are overly committed to their plans may be slow to adapt to changes in their environment. Planning is based on assumptions about the future, and when those assumptions are wrong, plans are likely to fail. Finally, planning can fail when planners are detached from the implementation of plans.

 

PTS:   1                    DIF:    Moderate       REF:   78-80             TOP:   AACSB Analytic

KEY:  Leadership Principles | Creation of Value | HRM

 

2. Cheryl Trump, of New York City, is the daughter of a well-known financier. She is currently in her first year of college, but has decided that she definitely wants to earn an MBA, as soon as possible after earning her four-year college degree. Outline the five steps in effective planning. Use the guidelines for effective planning to develop an appropriate plan for Cheryl.

 

ANS:

Planning consists of a total of five steps: (a) setting goals, (b) developing commitment to the goals, (c) developing effective action plans, (d) tracking progress toward goal achievement, and (e) maintaining flexibility in planning. In terms of (a) setting goals, goals need to be specific and challenging in order to direct behavior and increase effort. Cheryl’s present goal is specific, but could be made more challenging by targeting any one of the top 25 MBA programs in the country as her goal. In terms of (b) developing commitment to her goal, we can assume that if Cheryl has selected this goal on her own (i.e., participatively), and understands all of its implications, then she is probably already sufficiently committed to it at a personal level. She might enhance this commitment by making a public statement of her goal, and soliciting (and receiving) support from her parents in achieving it. In terms of (c) developing effective action plans, Cheryl should research the MBA degree and how it contributes to career success. Thereafter, she should draw up a concrete written plan, outlining the specific steps, people, resources, and time period for accomplishing her goal. Her research will probably lead her to conclude that she should gain several years of work experience in her desired industry before enrolling in an MBA program. In terms of (d) tracking progress toward goal achievement, Cheryl should set a series of integrated proximal and distal goals, where the proximal goals (e.g., maintain a high GPA, arrange for an internship while in college, network as much as possible to develop connections for a later job search) and clearly related subgoals will move her forward to her distal (long-term or primary) goals. Examples of distal goals might be, obtaining an entry level position in finance at a major corporation upon graduation, and then obtaining company support to pursue a top-flight MBA degree within five years of beginning work. Further, she should utilize her grades as well as contact with her professors while in college to solicit feedback and evaluate her progress, and use her performance appraisals and other contacts as sources of feedback once she begins working full-time after graduation. Finally, in terms of (e) maintaining flexibility in planning, Cheryl should be ready to revise her overall plan, if, at any point along the way, insurmountable obstacles become apparent. For example, if it should become clear that she cannot earn a high GPA in college, then she should lower her sights and shoot for a less prestigious MBA program.

 

PTS:   1                    DIF:    Moderate       REF:   81-83             TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

3. How can organizations maintain flexibility as they plan? Explain how the method for maintaining flexibility is different from traditional planning.

 

ANS:

Organizations can use options-based planning to maintain flexibility as they plan. The goal of options-based planning is to keep options open by making small, simultaneous investments in many options or plans. Then when one or a few of these plans emerge as likely winners, you invest even more in these plans while discontinuing or reducing investment in the others.

 

This approach differs significantly from traditional planning. In part, options-based planning is the opposite of traditional planning. For example, the purpose of a traditional action plan is to commit people and resources to a particular course of action. However, the purpose of options-based planning is to leave those commitments open. Holding options open gives you choices and those choices give you flexibility.

 

PTS:   1                    DIF:    Moderate       REF:   83                  TOP:   AACSB Analytic

KEY:  Strategy | Creation of Value

 

4. Compare and contrast the planning done at the top, middle, and bottom levels of an organization.

 

ANS:

Planning at all levels of management must follow the five steps in effective planning (i.e., (a) setting goals, (b) developing commitment to the goals, (c) developing effective action plans, (d) tracking progress toward goal achievement, and (e) maintaining flexibility in planning). Similarly, planning at all three levels of management is interrelated. That is, proper planning requires that the goals at the bottom and middle of the organization support the objectives at the top of the organization. However, there are significant differences in the objectives and timetables of the planning process at the top, middle, and lower levels of the organization. Top management develops strategic plans that indicate how a company will serve customers and position itself against competitors over a two- to five-year period. Strategic planning starts with the creation of an organizational vision and mission. Middle managers use techniques like management by objectives to develop tactical plans that direct behavior, efforts, and priorities over the next six months to two years. Finally, lower-level managers develop operational plans that guide daily activities in producing or delivering an organization’s products and services. Operational plans typically span periods ranging from 30 days to six months. There are three kinds of operational plans: single-use plans, standing plans (policies, procedures, and rules and regulations), and budgets. Thus, all three levels of planning should follow the same steps, but the objectives and timetables are different at each level, and plans at all levels must be carefully developed to ensure their effective interdependence in achieving overall organizational goals.

 

PTS:   1                    DIF:    Moderate       REF:   83-85             TOP:   AACSB Analytic

KEY:  Leadership Principles | Creation of Value | HRM

 

5. Describe the management by objectives (MBO) process. Which type of manager would be responsible for MBO? What is the probable value of MBO to managers?

 

ANS:

Management by objectives is a management technique often used by middle managers to develop and carry out tactical plans. Middle management is responsible for developing and carrying out tactical plans to accomplish the organization’s mission. Tactical plans specify how a company will use resources, budgets, and people to accomplish specific goals within its mission. Whereas strategic plans and objectives are used to focus company efforts over the next two to five years, tactical plans and objectives are used to direct behavior, efforts, and attention over the next six months to two years. Management by objectives, or MBO, is a four-step process in which managers and their employees (1) discuss possible goals, (2) participatively select goals that are challenging, attainable, and consistent with the company’s overall goals, (3) jointly develop tactical plans that lead to accomplishment of tactical goals and objectives, and (4) meet regularly to review progress toward accomplishment of those goals. When done right, MBO is an extremely effective method of tactical planning. The results from 70 different organizations strongly support the effectiveness of management by objectives. On average, companies that effectively use MBO will outproduce those that don’t use MBO by an incredible 44.6 percent! And in companies where top management is committed to MBO, that is, where objective-setting begins at the top, the average increase in performance is an even more astounding 56.5 percent. By contrast, when top management does not participate in or support MBO, the average increase in productivity drops to 6.1 percent. In all, though, there is a 97 percent chance that companies that use MBO will outperform those that don’t! Thus, MBO can make a very big difference to the companies that use it. It should be noted that the performance of individual managers using MBO will probably be better in organizations where top management participates in and supports MBO. However, even if top management support is absent, the performance of individual managers is likely to be higher with MBO than without it.

 

PTS:   1                    DIF:    Moderate       REF:   85                  TOP:   AACSB Analytic

KEY:  Leadership Principles | Creation of Value | HRM

 

6. Explain how the rational decision-making process may help to overcome predispositions and biases that a manager has in a given decision making situation.

 

ANS:

Rational decision making is a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions. It is based upon a clearly defined series of six steps, which, when followed, force a manager to carefully identify and evaluate multiple relevant aspects of a problem. The systematic application of this process is likely to overcome intuitive feelings and biases, which might otherwise predominate in decision making.

 

The six steps in the rational decision-making process are: (1) define the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal decision. When managers pay more explicit attention to carefully defining the problem and concretely articulating decision criteria and weights, they develop a more objective framework for evaluating and selecting among alternatives. Further, the mathematical approach to computing the optimal value of each alternative in order to make the final decision further reduces the chances that non-rational biases or influences will intervene and influence the outcome. Thus, the rational decision-making process can help to ensure a more logical and systematically defensible decision to problems facing the manager.

 

PTS:   1                    DIF:    Difficult         REF:   86-87             TOP:   AACSB Analytic

KEY:  Individual Dynamics | Strategy | Motivation Concepts

 

7. Define the two types of conflict that may spontaneously occur in group decision-making situations. List and explain the approaches to structured conflict that may help to enhance the quality of group decisions. Be sure to comment on the research results evaluating their effectiveness.

 

ANS:

Most people view conflict negatively. However, the right kind of conflict can lead to much better group decision making. C-type conflict, or cognitive conflict, focuses on problem- and issue-related differences of opinion. In c-type conflict, group members disagree because their different experiences and expertise lead them to different views of the problem and its potential solutions. However, c-type conflict is also characterized by a willingness to examine, compare, and reconcile those differences to produce the best possible solution. By contrast, a-type conflict, meaning “affective conflict,” refers to the emotional reactions that can occur when disagreements become personal rather than professional. A-type conflict often results in hostility, anger, resentment, distrust, cynicism, and apathy. So, unlike c-type conflict, a-type conflict undermines team effectiveness by preventing teams from engaging in the kinds of activities, such as c-type conflict, that are critical to team effectiveness.

 

Devil’s advocacy and dialectical inquiry are two methods that introduce structured c-type conflict into the group decision-making process. Devil’s advocacy creates c-type conflict by assigning an individual or a subgroup the role of critic. This individual criticizes and questions a proposed solution, in order to help decision makers decide whether to use, change, or not use the original proposed solution. Dialectical inquiry creates c-type conflict by forcing decision makers to state the assumptions of a proposed solution (a thesis) and to then generate a solution that is the opposite (antithesis) of the proposed solution. It takes the form of a debate between advocates of the thesis and antithesis, and similarly helps decision makers decide whether to use, change, or not use the original proposed solution.

 

When properly used, both the devil’s advocacy and dialectical inquiry approaches introduce c-type conflict into the decision-making process. Further, contrary to the common belief that conflict is bad, studies show that these methods lead to less a-type conflict, improved decision quality, and greater acceptance of decisions once they have been made. In meta-analytic research on the effectiveness of these techniques, each technique has been compared to decisions obtained by following experts’ advice. While the estimated probabilities of success may seem small, (55 percent for dialectical inquiry and 58 percent for devil’s advocacy), they very likely understate the effects of both techniques. In other words, the probabilities of success would have been much larger if both techniques had been compared to unstructured decision-making processes, which are typical of the average group or manager’s approach.

 

PTS:   1                    DIF:    Easy               REF:   92                  TOP:   AACSB Reflective Thinking

KEY:  Group Dynamics | Strategy