Chapter 5: Planning and Decision Making Concept Questions

A(n) _______ strategy defines the major actions by which a company builds or strengthens its competitive position in the marketplace.

Business.

The sixth step of the formal planning process is to monitor and ________.

Control.

In step 2, the process of generating several alternative goals, managers and other decision makers are encouraged to be ______.

Creative.

A human-centered approach to innovation that integrates customer needs, the potential of technology, and the requirements for business success is known as ______.

Design thinking.

Personal biases that interfere with objective rationality in decision making are called _______ biases.

psychological.

What is the conscious, systematic process of making decisions about goals and activities that an individual, group, or organization will pursue in the future?

Planning.

Which of the following are NOT requirements for effectively managing group decisions? (Check all that apply)

-Encouraging goal displacement. -Facilitating satisficing.

The second stage of decision making involves:

-developing alternative solutions.

The state that exists when decision makers have accurate and comprehensive information is called _____.

Certainty.

A company that reinvests its profits back into the company's current industry to strengthen its competitive position is implementing a(n) ______ strategy.

Concentration.

A strategy of related diversification involves moving into new businesses that are related to the company's original ________ business.

Core.

A successfully completed internal analysis of the firm will allow a company to identify its strengths and ___________.

Core.

A ______ identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses.

Corporate strategy.

A _________ strategy identifies the set of businesses in which the organization competes and the distribution of resources among those businesses.

Corporate.

In the decision-making process, which one of the following actions comes directly AFTER the act of generating alternative solutions?

Determine the respective suitability of each of the alternatives that were generated.

Strategic plans have a strong ______ orientation and cover major portions of the organization.

External.

When conducting a SWOT analysis, opportunities and threats arise in the ______ environment.

External.

True or false: The two types of resources are tangible and quantifiable.

False.

The formal decision making process has six steps. Which step involves implementing the decision?

Fifth.

Which stage in the formal decision making process involves making the choice among the alternatives?

Fourth.

There are four levels of managers, top-level, middle-level, ____________ and team leaders, but there are three levels of planning.

Frontline.

Which of the following is not a barrier to effective decision making?

Full execution of the six stages of decision making.

Companies concentrate on a single industry to ______.

Gain entry into an industry.

Which stage of the formal decision making process involves generating alternative solutions?

Second.

The fifth step of the strategic management process is ______.

Strategy implementation.

The stage of decision making where information is collected and compared to goals and plans to determine success or failure is called ______.

evaluating the decision.

Which of the following is true of the design thinking process?

It starts by developing an understanding of current and potential customers.

Which of the following statements about aligning tactical, operational, and strategic plans is true?

The plans must be consistent and mutually supportive.

Which of the following are components of the internal resource analysis? (Check all that apply)

-Financial analyst. -Marketing audit. -HR assessment.

To be effective, an organization's strategic, tactical, and operational plans must be ______.

Aligned.

Strategic management involves managers from ______ of the organization in the formulation and implementation of strategic goals and strategies.

All levels.

The second step of the planning process should generate ______ goals and plans for the future.

Alternative.

The state that exists when decision makers have accurate and comprehensive information is known as __.

Certainty.

Which of the following statements about using a group to make a decision is true?

Groups generally make higher-quality decisions than individuals.

Which of the following is the first step in the ideal decision-making process?

Identifying and diagnosing the problem.

As noted in Step 5, proper ______ is the key to achieving goals.

Implementation.

After a strategy is formulated, strategic managers must help make sure it is ______.

Implemented efficiently.

Which analysis is made up of components such as a financial analysis or a marketing audit?

Internal resource.

Strengths and weaknesses refer to ______ resources.

Internal.

Why is Step 6 of the planning process so important?

It is needed to determine if the selected plan is working.

The process of making decisions about goals and activities that an organization will pursue in the future is referred to as __.

Planning.

A strategy of ___________ involves moving into new businesses that are similar to the company's original core business.

Related diversification.

The process of assessing a company's internal strengths and weaknesses as well as determining external threats and opportunities is also known as a ___________ analysis.

SWOT.

When considering the social realities of a decision, it is important that managers take into account which of the following?

Social interactions, bargaining, and politicking.

A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals is known as ______.

Strategic management.

The stage in which goals and plans are evaluated is the ______ step of the formal planning process.

Third.

Which stage in the formal decision-making process involves determining the value or adequacy of the alternatives that were generated?

Third.

When conducting a SWOT analysis, _____________ and ___________ arise in the macro environment and competitive environments.

Threats; opportunities.

Which of the following are typically responsible for the development and execution of the strategic plan?

Top-level managers.

A company is a leader in the pet food category. It decides to expand its operations into electric vehicles and cosmetics. The company is adopting a(n) ______ strategy.

Unrelated diversification.

When a company has a(n) ______ diversification strategy, it expands into diversified businesses to minimize risk.

Unrelated.

A ______ strategy involves expanding the domain of the organization to include supply channels and distributors.

Vertical integration.

The strategic ______ points to the future by providing a perspective on where the organization is headed and what it can become.

Vision.

Which of the following takes place during Step 3 of the planning process?

Goals and plans are evaluated.

Which of the following are tactics employed by fast-acting firms to meet time pressures without sacrificing quality? (Check all that apply)

-Focus on real-time information. -Rely on heavily trusted experts. -Take a realistic view of conflict.

Which of the following are common potential problems associated with group decision making?

-Goal displacement. -Satisficing. -Groupthink.

Which of the following are psychological biases that act as barriers to effective decision making?

-Illusion of control. -Framing effects. -Discounting the future.

Which of the following are two generic business strategies? (Check all that apply.)

-Low cost. -Differentiation.

Which of the following are barriers to effective decision making? (Check all that apply.)

-Social realities. -Psychological biases. -Time pressures.

Which of the following are NOT tactics employed by fast-acting firms to meet time pressures without sacrificing quality? (Check all that apply)

-Take a futuristic view of conflict. -Rely on long-range planning. -Focus on futuristic forecasts.

Which of the following levels of managers utilize planning? (check all that apply)

-Top-level. -Middle-level. -Team leaders. -Frontline.

Once a choice is made in the decision-making process, managers must take action to operationalize their choice. This step of decision making is called ______ the decision.

-implementing.

The fourth step in decision making, after all the possible consequences of the options have been evaluated, is called _______.

-making the choice.

______ is the process of amassing, reviewing, and summarizing all information concerning a particular planning issue.

A situational analysis.

The second step in the strategic management process is ______.

Analysis of the external environment.

Step 1 of the basic planning process involves _______.

Analyzing the situation.

The goal and plan selection step of the formal planning process follows which of the following steps?

Goal and plan evaluation.

Implementation of the plan follows which of the following steps of the planning process?

Goal and plan selection.

The fourth step of the formal planning process is ______.

Goal and plan selection.

When using groups to make decisions, what is one of the potential disadvantages?

Goal displacement.

A strategic plan involves making decisions about the organization's ________ goals.

Long-term.

What drives the analysis of the external environment (opportunities and threats)?

Mission and vision.

The __ describes the organization as it currently operates, whereas the strategic vision points to the future.

Mission.

The monitor and control step of the planning process comes after which step?

Plan implementation.

Inputs to a system that can enhance performance are:

Resources.

______ are inputs to production that can be accumulated over time to enhance the performance of a firm.

Resources.

In the ______ stage, planners assemble and study all information relevant to the planning issue in question.

Situational analysis.

A __________ plan involves making decisions about the organization's long-term goals and how they intend to achieve the goals.

Strategic.

SWOT is an acronym that stands for ______, weaknesses, opportunities, and threats.

Strengths.

A vertical integration strategy involves expanding the domain of the organization into ____________ or to ___________.

Supply channels; distributors.

A(n) ________ plan focuses on the specific actions a particular unit or function must take to fulfill its part of the strategic plan.

Tactical.

What are the potential advantages of using a group to make a decision? (Check all that apply.)

-A greater number of perspectives on the issues or different approaches to solving the problem are available. -More information is available. -Participants in the group discussions are more likely to understand why the decision was made. -Group discussion provides intellectual stimulation.

How do social realities affect decision making? (Check all that apply.)

-A manager must consider the preferences and reactions of many people. -Many decisions are the result of intensive social interactions, bargaining, and politicking. -Important managerial decisions are marked by conflict among interested parties.

Which of the following are actions to take during the sixth and final stage of the decision-making process? (Check all that apply.)

-Compare collected information with specified goals. -Use feedback to either continue the decision or go back to the first stage. -Collect information on how well the decision is working.

In the first stage of decision making, the sources of discrepancies that exist in organizational or unit performance may be detected when comparing current performance against:

-past performance. -future expected performance. -current performance of other organizations or units,

The type of plan that translates broad strategic goals into specific goals that are relevant to a particular organizational function is known as a(n) ______ plan.

Tactical.

The two types of resources are ______ resources that are things you can touch, such as buildings or machinery, and ______ resources that are things you cannot touch, such as reputation or knowledge.

-Tangible. -Intangible.

The three requirements for effectively managing group decisions include which of the following? (Check all that apply.)

-The constructive use of disagreement and conflict. -Enhancement of creativity. -An appropriate leadership style.