Management Final Exam

You've been asked to lead the United Way fundraising campaign for your office. In the past, your office's efforts have been negligible. You suspect that the office didn't have clear understanding of how and why to participate. Therefore, you decide to set a goal for this year's campaign. When your boss asks why, which reason do you give to back your decision?

goals provide guidance and a unified direction for people in the organization

a company's strategic goals specify a direction for accomplishing the company's mission. Which one of twitter's goals listed is a strategic goal?

grow annual revenues by 18% or more to a range of $1365-1375 million

reactor strategy

has no consistent approach to strategy

resource deployment

how a firm distributes its resources across the areas in which it competes

High Market Growth Rate & High Relative Market Share

invest heavily

Zombiesmith manufactures gaming miniatures. Its highly specialized products and targeted customer base indicates that Zombiesmith is using a(n) _________________ to gain a competitive advantage.

focus strategy

defender strategy

focuses on lowering costs and improving performance of current products

ways to overcome barriers to planning and decision making/goal setting

- Understanding the purposes of goals and planning - Communication and participation - Consistency, revision, and updating - Effective reward system

examples of developing tactical plans

- specify the resources available - identify human resource constraints

4 important purposes of goal setting

1- provide guidance and a unified direction 2- goal setting affects other aspects of planning 3- specific and moderately difficult goals can motivate employees 4- goals provide an effective mechanism for evaluation and control

2 most important business decisions

1- what is our business? (origins of strategy) 2- the allocation of money and people (scarce resources)

UNIQLO tries to monitor its competitors' actions, but notices that one of these competitors seems to shift strategies often and does not anticipate trends in the environment. Which type of strategy does the competitor appear to have?

reactor

risk propensity

the extent to which a decision maker gambles when deciding

Which of the following is true of strategic goals?

they focus on broad, general issues.

overall cost leadership strategy

seeks to gain a competitive advantage by reducing its costs below competing firms

low market growth rate, low relative market share

sell business

_____ are primary inputs for developing tactical goals.

Strategic goals

Which of the following is an organizational strength?

Surplus capital

delphi group

a group is used to achieve a consensus of expert opinion

To make this decision, Joe and Debra would have to take which of the following actions?

Choose whether to adopt a low-cost, differentiation, or focus structure for the new industry.

examples of business level strategy

- At Apple, managers ask, "Should our next iPad product be innovative and new, so we can charge a higher price for it, or should we consider going down one more size, so people with less money can purchase an iPad?" - Last week, senior managers in the Post-it® Note division at 3M met to determine the best way to handle their product. Regardless of how 3M positions its other products, Post-it Notes will continue to be widely sold at a premium price. The company will continue to develop new Post-it products to attract new buyers.

examples of corporate level strategy

- Google managers ask the question, "Should we acquire YouTube?" - The manufacturer of Chobani Yogurt decided to open a flagship store in Soho, where customers can order special yogurt creations, such as fig and walnut or cucumber and olive oil. Though it was in the business of manufacturing yogurt for 7 years, the company never tried to run a restaurant before.

6 steps of decision making

- Identifying "Is this a problem?" - Identify alternatives - Evaluate alternatives - Select the best alternative - Implement choice - Follow up "Was this decision successful?"

Decision making conditions

- certainty - risk - uncertainty

policy

standing plan specifying the organization's general response to a designated problem or situation

A condition in which a decision maker knows with reasonable surety what the alternatives are and what conditions are associated with each alternative is called a _____.

state of certainty

Imagine that your friend, Eve, never lived or traveled far from Yuma, Arizona, but she applied to colleges in Idaho, Michigan, New Hampshire, and Florida. Despite this _____________, Eve thought moving to a previously unexplored city might be interesting.

state of uncertainty

"seek to provide a 14% or greater annualized return of investment for our shareholders" is an example of a....

strategic goal

set by boards of directors and top management, have an extended time horizon, and address questions of scope, resource deployment, competitive advantage, and strategy.

strategic goal setting

Tactical plans are an organized sequence of steps designed to execute _____.

strategic plans

In order to further an organization's goal of increasing sales by a large margin, the managers coordinate the acquisition of a number of retail outlets in smaller cities. These acquisitions represent the implementation of a(n) _____ plan.

tactical

"We seek to expand by opening 150 new restaurant locations in the next 10 years" is an example of a....

tactical goal

set by upper and middle management. They have a shorter time horizon and a more specific focus than strategic plans.

tactical goal setting

The focus of _____ is on how to operationalize actions necessary to achieve the strategic goals.

tactical goals

Suppose Joe and Debra were considering whether Theo Chocolate should branch out and start selling other items, such as locally made baked goods, along with their chocolates. This is a __________________ strategic decision.

corporate-level

"seek to improve efficiency by implementing a new computerized payment system" is an example of a....

operational goal

developed by middle and lower-level managers, have a short-term focus, and are generally narrow in scope

operational goal setting

Target and Walmart sell athletic clothing at a lower price than specialty retailers. These stores operate under a ____________________ .

overall cost leadership strategy

when managers approach the execution of a tactical plan, what kinds of activities are involved?

planning strategically

one of your company's major competitors recently filed for bankruptcy, which has coaused many of its customers to look for a new supplier. this presents your company with an ________

organizational opportunity

Behavioral elements in decision making

- Coalition - Intuition - Escalation of commitment - Risk propensity - Personal ethics

Porter's generic strategies

- Differentiation strategy - Overall cost leadership strategy - Focus strategy

examples of executing tactical plans

- assess outcomes - monitor activities - distribute resources to responsible parties

types of group decision making

- interacting groups - delphi group - nominal groups

analyzer strategy

maintains current businesses and is somewhat innovative in new businesses

Escalation of commitment

managers stay with a decisions even if it's wrong

Interacting groups and teams

members openly discuss, argue about, and agree on the best alternative. Most common form of group decision making

satisficing

searching for alternatives until one is found that meets some minimum standard of sufficiency

differentiation strategy

seeks to distinguish itself from competitors through the quality of its products and services

in the planning process, what is the role of strategic goals and plans?

sets company direction

Sam owns a small cafe that faces competition from a new restaurant across the street. Sam may want to perform a SWOT analysis to inform his...

strategy formulation

nominal group

structured technique used to generate creative an innovative alternatives or ideas , prevents domination of one person in the group

Assume that your SWOT analysis reveals that as your product quality has declined so too has market perceptions of your firm as a producer. Specifically, you are now seen as a relatively high-priced producer of low-quality products. Does this finding reflect a strength, a weakness, an opportunity, or a threat?

weakness

which list of steps reflects the best order for the planning process?

- set strategic goals and plans - set tactical goals and plans - set operational goals and plans

barriers to planning and decision making/goal setting

- Inappropriate goals - Improper reward system - Dynamic and complex environment - Reluctance to establish goals - Resistance to change - Constraints

Weather Watches, a watch manufacturing company, faces a lot of problems while planning and setting goals as its competitors' technology is constantly developing. It too has to upgrade the technology it uses to keep up with its competitors. Which of the following barriers to goal setting and planning does Weather Watches face?

A dynamic and complex environment

Groupthink occurs when a team desire for consensus overwhelms the desire for reaching the best outcome. As a team leader, which tactic can you use to minimize the potential for groupthink in your team's decision making?

Assign at least one member to play the role of devil's advocate.

Businesses commonly rely upon groups to make decisions because of the many advantages to group decision making. Which of the following are advantages of group decision making

Better communication of the decision may occur. More knowledge and information are considered.

Which of the following is a similarity between rules and regulations and standard operating procedures (SOPs)?

Both are relatively narrow in scope.

_____ refers to an organization's beginning of the business activities formerly conducted by its customers.

Forward vertical integration

Omar decides to buy a pair of running shoes from a store. He likes three pairs of running shoes at the store. Following the steps of rational decision-making process in deciding which pair to buy, which of the following should be Omar's next step?

He should evaluate the feasibility of each pair of running shoes.

In your role as project leader for the organization's involvement in the annual United Way campaign, you have planned a party to mark the end of the fundraising initiative. Thinking about the importance of developing and executing plans, answer the question posed. What must you do to ensure the plan for the party is developed successfully?

Include the party in the planning document for the United Way initiative

You are working as part of a team tasked with identifying potential problems in the company's code of ethics. It's important that flaws in the code be discovered before it is finalized and that means the team should be willing to disagree with each other as the code is discussed. Which team decision-making approach will be best for ensuring the members can openly discuss, argue about, and agree on the best outcome?

Interacting group approach

Which of the following is an advantage of the interacting group decision-making method?

Interaction among people can spark new ideas.

Which of the following is true of the BCG matrix?

It helps managers understand how strategic business units contribute to an overall organization.

Which of the following is true of bounded rationality?

It suggests that decision makers are limited by their values and unconscious reflexes, skills, and habits.

Which of the following is true of satisficing?

It suggests that decision makers search only until they find an alternative that meets some minimum standard of sufficiency.

Lana, the owner of a high-end boutique, claims she selects items for her boutique purely on a hunch. Based on Lana's claim, which of the following is true of Lana's decision-making process?

Lana uses intuition in her decision-making process.

A(n) _____ is a pattern of action that develops over time in an organization in the absence of mission and goals or despite mission and goals.

emergent strategy

While Matt likes the structure provided by the rational decision-making process, you caution him that it has some shortcomings. Why is the rational decision-making process difficult to apply completely in many situations?

Managers may lack the resources to explore creative solutions. Managers often make decisions that are not based on facts and logic. Managers do not always evaluate situations logically.

Which of the following must occur for an organization to support differentiation?

Marketing and sales must emphasize the high-value image of an organization's products.

After you reviewed the six steps with Matt, he asked for an example of how to evaluate alternatives as he decides whether VoxSigns should lay off employees. Which of the following is the correct example to give to Matt?

Matt would assess each option in terms of feasibility, satisfactoriness, and consequences; he will want to consider if the company is capable of implementing each option, as well as the resulting financial returns and other consequences (such as lower employee moral for remaining employees).

Which of the following is a major tool for managing diversification?

Organization structure

prospector strategy

encourages creativity and flexibility and is often decentralized

The manager of Follicle, a salon and spa, believes that the techniques they have followed for generations are superior to the latest techniques that are scientifically proven to be more effective. He fears that the use of new techniques may lead to failure and continues to use the existing techniques. In this scenario, which of the following barriers to goal setting and planning is most evident?

Resistance to change

Which of the following areas does a well-conceived strategy address?

Resource deployment

Assume that your SWOT analysis suggests your firm still has a reputation for high-quality products and you decide to put new emphasis on boosting product quality so you can charge higher prices. Which of these methods for improving quality will likely be the easiest and fastest to implement?

Start buying high-quality materials

_____ refers to the set of processes involved in creating or determining the strategies of an organization.

Strategy formulation

SWOT analysis for formulating good strategies

Strengths (exploit) Weaknesses (avoid) Opportunities (exploit) Threats (neutralize)

_____ exists among a set of businesses when the businesses' economic value together is greater than their economic value separately.

Synergy

goal determined by boards of directors

mission statement

Standard operating procedure

standing plan outlining steps to be followed in particular circumstances

Harriet is very quiet by nature. Recently, she participated in a team discussion in her office to decide their monthly goal. Even though Harriet had some good suggestions and wanted to speak, she was unable to get in a word because Simon, another team member, spoke most of the time. In this scenario, which of the following drawbacks of group decision making is most evident?

The group may be dominated by a single person.

Which of the following is true of nominal groups?

The members do not freely interact with each other.

Which of the following is a function of a planning staff?

To go beyond pet projects and particular departments

A theoretical advantage of unrelated diversification is that:

a business will have a stable performance over time.

Decision making is the process of:

adopting one course of action as opposed to others.

Amish has just created a new soft drink, which he calls "Punjab." Flavored with ginger and cumin, the drink cost $20,000 to develop, because of the need to get and verify patents and develop a unique bottle. Punjab has been on the market now for three years, and Amish has sold only 300 cases. However, this year, he is considering spending another $20,000 to develop a new marketing plan for his product. If he sells it in convenience stores only, it will have to sell more, right?

escalation

By not recognizing her ____________________ , Eve repeatedly took her 8-year-old laptop for repairs, even though the repair costs were greater than the price of a brand-new, faster laptop with much more memory.

escalation of commitment

The final step in the decision-making process requires that mangers:

evaluate the effectiveness of their decision.

tactical goals link a company's strategy with its operations. given what you know about twitter's planning process from the reading, which one of twitter's goals listed is a tactical goal?

expand premium ad products for advertisers to create, manage, and activate tailored audiences including mobile advertising IDs, mobile phone numbers, and look a like audiences.

programmed decision

fairly structured and requires some frequency

An accounting firm is deciding whether to renew the lease at its current building or relocate to one located several blocks away. This requires considering whether the current prestigious address is worth paying higher rent, the inconvenience and expense of moving the office, and a variety of other factors. This is a:

non programmed decison

In February 2011, Facebook announced that it would be releasing versions of Oregon Trail and Where in the World Is Carmen Sandiego?, two popular video games. The decision Facebook made about which video games to offer is a:

non-programmed decision

During the maturity stage of the product life cycle, the:

number of established firms producing the product declines.

Groupthink

occurs when a group or team's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision

A line manager at a brewery sets a target for the minimum number of beer cartons that have to be shipped out by the end of each day. This is an example of a(n) _____ goal.

operational

A _____ is the most general form of a standing plan that specifies an organization's general response to a designated problem or situation.

policy

Grandpa's Special is a culinary arts training center. Due to its popularity, a large number of people want to join the center. Since Grandpa's Special will not be able to train a large number of people due to insufficient resources, it decides to grant admission only to ladies between the ages 18 and 25. This is an example of a _____.

policy

A _____________________ technique used by Proctor & Gamble is meant to minimize risk by selling a large number of diverse products.

portfolio management

Last spring, your spouse surprised you with a puppy (named Loki after the Norse god of mischief). Fortunately, the puppy gets along well with your 17 cats. The decision you make every day about whether to feed Loki is a:

programmed decision

scope

specifies the range of markets in which an organization will compete

unrelated diversification

an organization operates multiple businesses not logically associated with one another

You have just learned that the United States and China have signed a new trade agreement. This agreement will make it easier for Chinese companies to export electronic components, such as those your firm makes, into the United States. Does this new trade agreement reflect a strength, a weakness, an opportunity, or a threat?

threat

The _____ is an international strategy in which a company attempts to combine the benefits of global scale efficiencies with the benefits and advantages of local responsiveness.

transnational strategy

non-programmed decision

unstructured and occurs much less often

An organization that implements a defender strategy focuses on:

protecting its market from new competitors.

product life cycle approach

- Introduction: sales volume slowly increases over time - Growth: sales volume increases more rapidly as time progresses - Maturity: peak of sales volume as time progresses - Decline: sales volume decreases as time progresses

_____ helps an organization perceive, or even generate, new opportunities in its environment.

Creativity

Some aspects of UNIQLO's strategy appear to be in line with Porter's differentiation strategy, while others are more aligned with overall cost leadership. If UNIQLO decided to direct its marketing toward people between the ages of 16 and 30, it would be using __________strategy.

a focus

single product strategy

an organization manufactures one product/service and sells in a single geographic market

related diversification

an organization operates in several business that are somehow linked with one another (by technology, distribution network, marketing skills, brand names/reputation, or customers)

distinctive competence

an organizational strength possessed by on a small number of competing firms

The _____ establishes the corporate mission and strategy.

board of directors

when conducting SWOT analysis, information about turnover, profit margins, and staff quality can be used to identify ...

company strengths and weaknesses

GE business screen

compares industry attractiveness and competitive position- evaluates prospective industry decisions

An organization has a _____ when it is not implementing valuable strategies that are being implemented by competing organizations.

competitive disadvantage

focus strategy

concentrates on a specific regional market, product line, or group of buyers

A fire broke out in a well-reputed hospital in a city. Despite the fire fighters arriving within ten minutes of the occurrence, over a hundred people were severely injured. This was due to insufficient equipment necessary to evacuate people during an emergency. This was clearly a case of the hospital management's faulty _____.

contingency planning

state of certainty

decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative

Bounded rationality

decision makers are limited by their values and unconscious reflexes skills and habits

Selena fractures the radial bone in her forearm. Her surgeon advises her to undergo a surgery in which a steel plate would be inserted to support the bone. He explains to her that after the surgery there would be only a 70 percent chance of regaining complete movement in the arm and a 30 percent chance of completely losing arm functionality. Selena decides to proceed with the surgery. In this scenario, Selena's decision making process is an example of _____.

decision making under a state of risk

standing plans

developed for activities that recur regularly over a period of time (policies, standard operating procedures, rules and regulations)

single use plans

developed to carry out a course of action not likely to be repeated in the future (programs and projects)

UNIQLO anticipates that demand will be very high for its patent-protected clothing line, particularly given climate concerns in its core markets. With an expected $10 billion in U.S. sales by the year 2020, which stage of the product life cycle is the company in?

growth

Satisfactoriness refers to:

how well an alternative fulfills the conditions of a decision situation.

As a seasoned manager, you are mentoring Bill, who was recently promoted to team manager. Consider Bill's plans and then explain to him the barriers he faces and how he can overcome these barriers. Bill wants to set a goal for his team to generate 50% more in revenues than it did last quarter. Which major barrier to goal setting could affect Bill?

inappropriate goals

coalition

informal alliance formed to achieve a common goal

Decentralizing power in the hands of a local subsidiary:

may make it difficult to transfer learning from one subsidiary to another.

Smiles and Rainbows, a not-for-profit organization, defines the reason for its existence as follows: "To provide effective vocational education for underprivileged children throughout the United States." This is an example of an organization's _____.

mission

"We seek to operate a chain of restaurants that prepares high-quality food on a timely basis for a reasonable price" is an example of a....

mission statement

You have a mandatory department meeting every Monday at 10:00 AM. An acquaintance just sent you a Facebook message saying she might take a vacation day from work next Monday, and perhaps you could meet for coffee at 10:00 AM. Your decision to say you are unavailable to meet at 10:00 AM but could check if you might be available at a different time is a:

programmed decision

Every year, your family poses for a photograph to be used in its holiday cards. To add interest to the photo, everyone wears an identical accessory: sometimes you all wear the same scarf, other times you all wear the same sweater. To avoid getting stuck with another item of questionable fashion taste, you proposed wearing a Sean John Tweed Diamond Top Fedora this year. Everyone agreed the hat was a good choice, so you bought one for every family member.

satisficing

Friendly Faces, a not-for-profit organization, sets a target to feed 100 children every day for one year. Rehaan, the local resources manager, is given the responsibility of achieving this goal. In keeping with the guidelines of tactical planning, Rehaan plans to first identify 100 children who could benefit from this project. Rehaan's plan is an example of a _____.

tactical plan

Low market growth rate and high relative market share

take profits

state of risk

the availability of each alternative and its potential payoffs and costs are all associated with probability estimates

state of uncertainty

the decision maker does not know all of the alternatives, the risks associated with each, or the consequences each alternative is likely to have

components of strategy

- distinctive competence - scope - resource deployment

operational goals

set by/for lower level managers, short term, how will we achieve tactical goals?

tactical goals

set by/for middle management, how will we achieve strategic goals?

strategic goals

set by/for top management

Simon's administrative model

- Managers use incomplete and imperfect information, are constrained by their bounded rationality, and tend to satisfice - Ends up with a decision that may or may not serve the interest of the organization

classical decision making process

- Mangers obtain complete and perfect information, eliminate uncertainty, evaluate everything rationally and logically - End up with the decision that best serves the interests of the organization

advantages to group decision making

- More information and knowledge are available - More alternatives are likely to be generated - More acceptance of the final decision is likely - enhanced communication of the decision may result - Better decisions generally emerge

disadvantages to group decision making

- The process takes longer than individual decision making, so it is costlier - Compromise decisions resulting from indecisiveness may emerge - One person may dominate the group - Groupthink may occur

levels of strategy

- corporate level strategy (broad) - business level strategy - marketing strategy (specific) - finance strategy (specific)

basic levels of goal operation

- operational goals - tactical goals - strategic goals - mission statement

Miles and Snow Typology

- prospector strategy - defender strategy - analyzer strategy - reactor strategy

corporate level strategies

- single product strategy - related diversification - unrelated diversification

types of operational plans

- single use plans - standing plans

Unlike multidomestic firms, global corporations:

assume that customers are the same regardless of nationality.

Jack wanted to buy a 2014 Tesla Model S. But because the car is priced at $93,400, and is a student with only a part-time job, principles of _____________led him to test drive only cars within his realistic price range.

bounded rationality

Contingency planning is...

difficult because we only need them if things don't go as we expect. Managers cannot anticipate the future so it is difficult to consider what plans we may need.

The Bose Corporation's ____________ is based on the high technology of its products.

distinctive competence

A weakness of the single-product strategy is that the:

firm using it will suffer if its product is replaced by a new one.

A _____ is a strategy in which an organization concentrates on a specific regional market, product line, or group of buyers.

focus strategy

mission statement

fundamental purpose of the organization

Horizontal consistency of goals means that:

goals should be consistent from one department to the next.

It is difficult to imitate a distinctive competence because:

its nature might not be understood by competing firms.

Bill wants every member of his team to commit to learning one new skill each quarter. Bill wants to encourage employees to accomplish this goal. What must Bill do?

reward those who accomplish the goal

high market growth, low market share

invest cautiously

intuition

innate belief about something without conscious deliberation

The first stage of the product life cycle is the _____.

introduction stage

Athena has been working at Taco Town for 15 years. She can't begin to tell you how many customers she's served, only that she sees more than 100 people a day at her store. Last week, Athena saw someone walking into the restaurant and instantly knew that he was going to cause trouble. She didn't think; she just automatically set off her silent alarm, and the police cars pulled up just as the customer pulled out a gun.

intuition

Unlike programmed decisions, nonprogrammed decisions are:

relatively unstructured and occur much less often.