MGT 3013 Chapter 5

______ help you ignore extraneous matters in favor of focusing on what's important, which is realizing the goals on time and on budget. A. Deadlines B. Relationships C. Changes D. Networks E. Options

A. Deadlines

A company that is an expert at producing and selling narrowly defined products or services, and which does not tend to seek opportunities outside its present market is known by Miles and Snow as a(n) A. defender. B. analyzer. C. adaptor. D. prospector. E. reactor.

A. defender

Which of the following comes LAST when an organization makes a plan? A. operational planning B. mission statement C. strategic planning D. tactical planning E. vision statement

A. operational planning

One type of standing plan, the __________, outlines the general response to a designated problem or situation. A. policy B. project C. rule D. procedure E. program

A. policy

After setting goals, managers should next A. prepare an action plan for accomplishing the goals. B. propose changes to the goals of same-level managers to bring all into alignment. C. supervise subrdinates closely. D. report failure to meet goals to superiors. E. begin the planning process anew.

A. prepare an action plan for accomplishing the goals.

If you are happiest being a "hands-on" professional rather than becoming a manager, you may prefer a(n) ______ career. A. steady-state B. portfolio C. spiral D. inclining E. linear

A. steady-state

Productivity gains from MBO are higher when an organization has A. top-management commitment. B. few budget problems. C. team rather than individual performance reviews. D. union support. E. nonmanagerial employee support.

A. top-management commitment.

Avon, the world's leading direct seller of beauty products, has a(n) ________ statement, which is "to be the company that best understands and satisfies the product, service, and self-fulfillment needs of women globally." A. vision B. intention C. goal D. mission E. rationale

A. vision

Jordan, a sales manager, met with his staff to discuss that they were only a third of the way to their sales goal, but halfway through the sales period. He was looking for suggestions to improve second-half performance. Which part of the planning/control cycle is Jordan doing? A. Benchmarking against competitors. B. Controlling the direction. C. Making the plan. D. Carrying out the plan. E. Updating the plan.

B. Controlling the direction.

Because of the frequency with which world competition and information technology alter marketplace conditions, a company's ________ may have to be done closer to every 1 or 2 years than every 5. A. management planning B. strategic planning C. tactical planning D. operational planning E. implementation planning

B. strategic planning

What is the time frame of an operational plan? A. 2-10 years B. 1-5 years C. 6-24 months D. 1-52 weeks E. 1-90 days

D. 1-52 weeks

If a business lacks insight or fails to use the adaptive cycle properly, it is likely to be which of the following? A. A prospector B. An analyzer C. A defender D. A reactor E. An imitator

D. A reactor

Improving future plans is part of which step in the planning/control cycle? A. Making the plan. B. Carrying out the plan. C. Benchmarking against competitors. D. Controlling the direction. E. Updating the plan.

D. Controlling the direction.

Which of the following is one of the challenges of planning? A. Assigning the right people to tasks. B. Determining the correct budget. C. Measuring results with accuracy. D. Finding the time to plan. E. Motivating employees.

D. Finding the time to plan

Apple has a plan to generate buzz for its new products by maintaining secrecy about them. Apple has learned that strong measures are required to protect such mysteries, so it has enhanced its security and even fired and sued employees for leaking news about the products. These efforts would be considered which part of the planning/control cycle? A. Making the plan. B. Carrying out the plan. C. Comparing results. D. Taking corrective action. E. Benchmarking competitors.

D. Taking corrective action.

Hilton Hotel's statement expressing its purpose as "to fill the earth with the light and warmth of hospitality" is a(n) A. vision statement. B. intention statement. C. goal statement. D. mission statement. E. rationale statement.

D. mission statement.

Dayton Construction has a ________ for processing invoices, which includes coding them by job number and construction phase, and matching them with the correct purchase order. A. program. B. policy. C. rule. D. procedure. E. project.

D. procedure.

When a firm responds to uncertainty in its environment as a(n) ________, its continual pursuit of product and market innovation may lead to a loss of efficiency, but is likely to make competitors nervous. A. reactor B. analyzer C. defender D. prospector E. executor

D. prospector

Planning is defined as A. formulating a method to allocate resources effectively. B. motivating employees. C. coping with obstacles to past performance. D. setting goals and deciding how to achieve them. E. implementing strategic goals.

D. setting goals and deciding how to achieve them

Megan met with her supervisor for a formal review of her job performance over the past year. Though Megan had agreed to complete five training modules during the course of the year, she only did two. At this stage, which part of the planning/control cycle would be applicable to her manager going forward? A. Carry out the plan. B. Improve feedback. C. Correct deviations in the plan. D. Benchmark against other employees. E. Improve future plans.

E. Improve future plans.

During which managerial function do you make a blueprint for action that describes what you need to do to realize your goals? A. Organizing B. Leading C. Controlling D. Defining E. Planning

E. Planning

The statement which expresses the purpose of an organization is called a(n) A. goal statement. B. rationale statement. C. vision statement. D. intention statement. E. mission statement.

E. mission statement.

Executive management has recently decided to acquire a small company with a complementary product line, so Craig, a marketing manager, is meeting with other managers to discuss how to implement policies to support the acquisition over the next year. He is participating in A. mission development. B. strategic planning. C. controlling. D. operational planning. E. tactical planning.

E. tactical planning.

A bike messenger company that operates in the downtown area of a large city recently set the following goal: "All deliveries should be completed as quickly as possible." This example meets the criteria for a SMART goal

FALSE

A mission statement expresses what the organization should become and where it wants to go strategically

FALSE

A policy includes more specifics that does a rule

FALSE

A steady-state career entails a slow-but-steady growth in level of responsibility and compensation

FALSE

A transitory career path involves a series of alternating promotions and demotions

FALSE

According to Miles and Snow's basic strategy types, a defender protects its strong position in an industry by constantly seeking new opportunities for growth

FALSE

Amazon's statement in which it states its desire to "be the earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online" is a mission statement

FALSE

As part of the planning process, businesses set what are known as targets, which are specific commitments to achieve measurable results within a stated period of time

FALSE

In MBO, objectives that employees fail to meet should be put aside for the next period in favor of ones that they can achieve

FALSE

In an organization's approach to planning, its mission and vision statements should be created once the strategic planning process is complete

FALSE

In single-use plans, a program is another name for a project

FALSE

In the planning/control cycle, carrying out the plan is one of the control steps

FALSE

In this time of Internet connections and speedy-access computer databases, one typically has complete information for planning and decision making

FALSE

Planning helps managers to cope with events that can be predicted but id not particularly helpful when conditions are uncertain

FALSE

Planning occurs only at the highest levels of an organizations, being done by top managers

FALSE

Policies, procedures, and rules are types of single-use plans

FALSE

SMART is an acronym that represents characteristics necessary to motivate employees in their periodic reviews

FALSE

What is MBO? Describe the process by which MBO is done as well as its purpose.

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

The purpose of MBO is to motivate subordinates

TRUE

Southwest Airlines' goal of being highly profitable is a tactical goal

FALSE

Microsoft has been accused of adapting competitors' products after those firms spent the resources and took the risks to develop them. Companies with this strategy are known as analyzers by Miles and Snow

TRUE

Planning and strategic management derive from an organization's mission and vision about itself

TRUE

Planning gives you expectations against which you can compare your performance

TRUE

SMART goals that are challenging yet can be met within the available scope of time, equipment, and financial support are known as attainable, the "A" in SMART

TRUE

Southwest Airlines' goal of making arrival times more reliable is a tactical goal

TRUE

Strategic goals focus on objectives for the organization as a whole

TRUE

Tactical planning is done by first-line managers, who look forward to the next 1-8 weeks

FALSE

The "R" in SMART goal stands for "reachable"

FALSE

The first step in an MBO program is for the manager to set objectives for her subordinate

FALSE

The operating plan defines the course of action needed to achieve a stated goal

FALSE

The planning/control cycle has three planning steps and three control steps

FALSE

The process of a business cycling through decisions first to select products and markets, then about producing and delivering the products, and finally to establish roles and processes is known as the discovery cycle FALSE

FALSE

Discuss the three things that must happen for MBO to be successful.

For MBO to be successful, three things have to happen: 1. Top management must be committed. "When top-management commitment [to MBO] was high," said one review, "the average gain in productivity was 56%. When commitment was low, the average gain in productivity was only 6%." 2. It must be applied organizationwide. The program has to be put in place throughout the entire organization. That is, it cannot be applied in just some divisions and departments; it has to be done in all of them. 3. Objectives must "cascade." MBO works by cascading objectives down through the organization; that is, objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization. Top managers set general organizational objectives, which are translated into divisional objectives, which are translated into departmental objectives. The hierarchy ends in individual objectives set by each employee.

List the four benefits of planning.

Planning provides a means to check on progress toward goals. Planning helps to coordinate activities between people and/or departments. Planning helps in thinking ahead and anticipating problems or opportunities. Planning helps one cope with uncertainty.

In general, planning has many benefits. However, planning also has two cautions of which one must be aware. Discuss these.

Planning requires time, including that to involve others (subordinates, peers, staff, competitors, markets, etc.). Also, some decisions have to be made without a lot of time. While you shouldn't shoot from the hip in making decisions, often you may have to "go with what you've got" and make a decision based on a plan that is perhaps only three-quarters complete. Sometimes the need to make a decision quickly outweighs the benefit of having more complete information.

Define the components of the acronym SMART in goal setting. Provide an example of a SMART goal and demonstrate that it meets all criteria.

SMART goals are: specific (rather than vague), measurable (quantifiable), attainable (challenging but realistic and attainable), results-oriented (support the vision), and with target dates (deadlines). An example of a SMART goal is "Ninety percent of planes should arrive within 15 minutes of the scheduled arrival time by December 2013."

Strategic planning determines goals for an organization for a period of 1-5 years

TRUE

The U.S. government space program is an example of a single-use plan

TRUE

The administrative part of the adaptive cycle focuses on establishing roles and organizational processes

TRUE

The career path that most resembles the traditional view of climbing the stairs in a corporate hierarchy is called the linear career

TRUE

The operating plan identifies clear targets such as revenues and cash flow

TRUE

Describe the planning/control cycle.

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

Operational goals are set by middle managers and focus on the actions needed to achieve strategic goals.

FALSE

Operational planning is normally performed by middle management

FALSE

Organizationwide, the best structure for objectives in MBO is known as a diversity pattern

FALSE

Perpetuation objectives are one type of objective used in MBO

FALSE

Deadlines can help one concentrate the mind, in order to make decisions rather than put them off

TRUE

Decisions that are predictable, following a well-defined set of procedures, are typical of operational planning

TRUE

If you do not have all of the information for a complete plan, you should A. make decisions based on what you have, since perfect information is rare. B. wait until you can get that information to take action you know will be appropriate. C. implement two or more courses of action simultaneously. D. shrink the plan to limit its scope to only areas where you have good information. E. disregard the plan and go with your intuition.

A. make decisions based on what you have, since perfect information is rare.

A single-use plan encompassing a range of projects or activities is a(n) A. program. B. strategy. C. series. D. agenda. E. mission.

A. program.

MBO stands for A. Management by Observation. B. Management by Objectives. C. Management by Ownership. D. Management by Obligation. E. Management by Organization.

B. Management by Objectives.

Which of the following is a type of objective for MBO? A. Profitability B. Personal development C. Market share D. Social responsibility E. Ethics

B. Personal development

________ goals are set by and for middle managers and focus on the actions needed to achieve ________ goals. A. Strategic; operational B. Tactical; strategic C. Strategic; tactical D. Tactical; operational E. Operational; tactical

B. Tactical; strategic

The goal to "improve the quality of customer service by instituting follow-up telephone calls this month" is not a SMART goal because it is A. unlikely to align with higher level goals. B. not measurable. C. too simplistic. D. not results oriented. E. unlikely to result in improvement to customer service.

B. not measurable.

The constant feedback loop of the ______ is designed to ensure plans stay headed in the right direction. A. means-end chain B. planning/control cycle C. control system D. project management method E. project planning sequence

B. planning/control cycle

Which of the following would best describe MBO? A. It works at the highest levels of an organization. B. It works at the lowest levels of an organization. C. Its purpose is to motivate employees. D. Its purpose is to control employees. E. It effectively benchmarks HR practices against competitors.

C. Its purpose is to motivate employees.

Which level of management is most often engaged in tactical planning? A. Working-level employees B. First-line managers C. Middle managers D. Top managers E. Consultants

C. Middle managers

A company producing cameras and video cameras prefers to focus its resources on a fast imitation program to reverse-engineer new features from competitors and add those, rather than implementing truly inventive features. Miles and Snow would call this company a(n) A. reactor. B. prospector. C. analyzer. D. defender. E. imitator.

C. analyzer.

In terms of difficulty, the best goals are A. just beyond what is achievable, to maximize motivation. B. easy to attain, so failure will not hurt morale. C. challenging but realistic. D. impossible to really reach, because they are meant only to be idealistic and inspirational. E. easy or hard, since both work equally well.

C. challenging but realistic.

NASA's Curiosity Rover, employed to investigate a large crater on Mars, is an example of a A. policy. B. rule. C. project. D. procedure. E. program.

C. project.

A career that is upwardly mobile, with a number of jobs that are fundamentally different yet still build on one another is known as a(n) ______ career. A. steady-state B. portfolio C. spiral D. inclining E. linear

C. spiral

Sultan is a new manager, and he is using MBO for the first time with his subordinates. It is essential for Sultan to A. decide on goals for employees and clearly inform them of these goals. B. ask the employee to commit the goals to memory. C. set goals that are just out of the subordinate's reach. D. reward employees when they meet objectives. E. review an employee's performance once, at the end of the performance period.

D. reward employees when they meet objectives.

Miles and Snow suggest that organizations responding to uncertainty in the environment do so with one of four approaches. Name and describe these approaches, and provide an example of each.

Defenders are expert at producing and selling narrowly defined products or services. Often they are old-line successful enterprises, such as Macy's and JCPenney, which in the 2010 era of consumer frugality found themselves losing customers to discounters like Walmart. They do not tend to seek opportunities outside their present markets. They devote most of their attention to making refinements in their existing operations, such as slashing prices. A company described as "aggressive" is often a Prospector organization. Prospectors focus on developing new products or services and in seeking out new markets, rather than waiting for things to happen. An example of a Prospector company is Gap, which announced it would look for new sales by expanding abroad. Another such company is Apple. Analyzers take a "me too" response to the world. Analyzers let other organizations take the risks of product development and marketing and then imitate (or perhaps slightly improve on) what seems to work best. For years, Microsoft has been accused of taking this approach. Reactors make adjustments only when finally forced to by environmental pressures. In the worst cases, they are so incapable of responding fast enough that they suffer massive sales losses and are even driven out of business. Kmart, for instance, failed to respond to Walmart's development of its distribution and inventory management competencies, resulting in stalled growth and a significant reduction in market share. Kmart's core business never recovered from this reactive strategy.

Which of the following is a benefit of planning? A. Planning allows you to spend little time preparing for the future. B. Planning allows you to make all decisions without consulting superiors. C. Planning helps you compare your results to your competitors'. D. Planning helps the company to be spontaneous. E. Planning helps you cope with uncertainty.

E. Planning helps you cope with uncertainty

Which of the following best represents the strategic planning time frame that Jeff Bezos of Amazon prefers? A. Six months or less B. One to two years C. Three to five years D. Five to seven years E. Ten to twenty years

E. Ten to twenty years

The adaptive cycle portrays businesses as continuously cycling through three kinds of business decisions: entrepreneurial, ______, and administrative A. leadership B. alignment C. organization D. production E. engineering

E. engineering

The first step in the MBO process is to A. determine rewards for meeting goals. B. give a performance appraisal. C. develop an action plan. D. periodically review performance. E. jointly set objectives.

E. jointly set objectives.

McKesson Corp., a U.S. pharmaceutical distributor, has a(n) ________ statement, which is "to provide comprehensive pharmacy solutions that improve productivity, profitability and result in superior patient care and satisfaction." A. purpose B. vision C. intention D. goal E. mission

E. mission

MBO works by cascading objectives down through the organization, and these objectives become more ______ at lower levels of the organization. A. measurable B. challenging C. results-oriented D. attainable E. specific

E. specific

Explain the difference between standing plans and single-use plans. Define the three types of standing plans, the two types of single-use plans and give examples of each.

Standing plans are plans developed for activities that occur repeatedly over a period of time. Standing plans consist of policies, procedures, and rules. A policy is a standing plan that outlines the general response to a designated problem or situation. Example: "This workplace does not condone swearing." This policy is a broad statement that gives managers a general idea about what is allowable for employees who use bad language, but gives no specifics. A procedure (or standard operating procedure) is a standing plan that outlines the response to particular problems or circumstances. Example: White Castle specifies exactly how a hamburger should be dressed, including the order in which the mustard, ketchup, and pickles are applied. A rule is a standing plan that designates specific required action. Example: "No smoking is allowed anywhere in the building." This allows no room for interpretation. Single-use plans are plans developed for activities that are not likely to be repeated in the future. Such plans can be programs or projects. A program is a single-use plan encompassing a range of projects or activities. Example: The U.S. government space program (which was to be closed by the end of 2010) had several projects, including the Challenger project and the Hubble Telescope project. A project is a single-use plan of less scope and complexity than a program. Example: The space shuttle Discovery was one project in the government's space program.

Explain the different types of planning for the different levels of management. Include the typical time frame for which each plan is created.

Strategic planning is done by top management. Using their mission and vision statements, top managers do strategic planning—they determine what the organization's long-term goals should be for the next 1-5 years with the resources they expect to have available. It should communicate not only general goals about growth and profits but also ways to achieve them. Tactical planning is done by middle management. The strategic priorities and policies are then passed down to middle managers, who must do tactical planning—that is, they determine what contributions their departments or similar work units can make with their given resources during the next 6-24 months. Operational planning is done by first-line management. Middle managers then pass these plans along to first-line managers to do operational planning—that is, they determine how to accomplish specific tasks with available resources within the next 1-52 weeks.

A marketing plan is an example of an action plan

TRUE

A procedure is a standing plan that outlines the response to particular problems or circumstances

TRUE

A spiral career path depends on having jobs that, while fundamentally different, build on one another

TRUE

A vision has a clear sense of the future and the actions needed to get there

TRUE

An organization's goals arranged in a hierarchy from low level to high level can be termed a means-end chain

TRUE

Because it is unrealistic for SMART goals to be accomplished overnight, they should have target dates

TRUE

Determining an organization's mission is the responsibility of top management and the board of directors

TRUE

Eastman Kodak, though it actually invented the digital camera, was slow to move into the production of this product as well as digital printers. Its continued reliance untraditional 35mm film production and processing, which resulted in its bankruptcy, makes it a reactor accruing to Miles and Snow

TRUE

Facebook strives to be on the cutting edge of social media and is experiencing phenomenal growth. It encourages what it calls a "hacker" mindset, always looking to break down the old in favor of something better. Of Miles and Snow's basic strategy types, Facebook would be described as a prospector.

TRUE

In order for MBO to be successful, it must be implemented throughout the entire organization

TRUE

In the planning/control cycle, comparing the results with the plan is one of the control steps

TRUE

In the planning/control cycle, part of the control process can be to improve future plans

TRUE

Which of the following is one of the organizational responses organizations make when confronted with uncertainty, as identified by Miles and Snow? A. Aggressor B. Investigator C. Reactor D. Planner E. Leader

C. Reactor

Portia is meeting with her subordinates to determine which workers from her department need training in order to handle production increases expected during the next nine months. Portia is involved in A. vision development. B. operational planning. C. controlling. D. tactical planning. E. developing an MBO.

B. operational planning.

In the current broadband environment, consumers are able to download products like music, movies, and books. Netflix was aggressive in taking advantage of this fact, offering web streaming and game console access to its customers before competitors. According to Miles and Snow, Netflix would be a(n) A. reactor. B. prospector. C. analyzer. D. defender. E. executor.

B. prospector.

Management instituted a new ______ in Yichao's workplace that "employees who are more than 15 minutes late to work without calling a supervisor will be given a written warning." A. policy B. rule C. procedure D. project E. program

B. rule

A SMART goal is one that is A. specific, maintainable, affordable, realistic, and timely. B. specific, measurable, attainable, results-oriented, and has target dates. C. specific, maintainable, achievement-oriented, in real time, and timely. D. specific, measurable, affordable, realistic, and has target dates. E. specific, maintainable, aligned with other goals, realistic, and timely.

B. specific, measurable, attainable, results-oriented, and has target dates.

Alita is participating with other division heads in a discussion about new international competition for the firm and what the organization's goals should be for the next three years. She is participating in A. tactical planning. B. strategic planning. C. operational planning. D. controlling. E. writing a mission statement.

B. strategic planning.

Kristi has been struggling with her weight, and one of her coworkers suggested that she make a SMART goal for herself. Which of the following is the best example of a SMART goal for Kristi? A. I want to lose a lot of weight. B. I want to look better in a swimsuit. C. I want to lose 20 pounds over the course of one calendar year. D. I want to start losing weight soon. E. I want to lose 30% of my body mass by next month.

C. I want to lose 20 pounds over the course of one calendar year.

At which level of planning must managers be paying attention to the environment outside the organization, be future oriented, and deal with uncertain and competitive conditions? A. tactical B. organizational C. strategic D. front-line E. operational

C. strategic

Managers at Cimarron Saddlery expect to meet profitability goals for the company by cutting costs through a 70% increase in global sourcing of leather and other materials over the next two years. This is an example of a(n) A. supervision objective. B. operational goal. C. tactical goal. D. maintenance objective. E. strategic goal.

C. tactical goal.

Which of the following is associated with operational planning? A. Determining the overall direction of the organization. B. Examining the environment outside of the organization. C. Implementing policies and plans of top management. D. Directing daily tasks of nonmanagerial personnel. E. Making decisions under highly uncertain conditions.

D. Directing daily tasks of nonmanagerial personnel.

Which of the following is the correct order of planning steps within an organization? A. Strategic planning, mission statement & vision statement, operational planning, tactical planning B. Strategic planning, mission statement & vision statement, tactical planning, operational planning C. Strategic planning, operational planning, mission statement & vision statement, tactical planning D. Mission statement & vision statement, strategic planning, tactical planning, operational planning E. Mission statement & vision statement, strategic planning, operational planning, tactical planning

D. Mission statement & vision statement, strategic planning, tactical planning, operational planning

When White Castle specifies exactly how to dress a hamburger, including the order of the condiments, this is called a A. program. B. policy. C. rule. D. procedure. E. project.

D. procedure.

Cimarron Saddlery expects to improve profitability of the organization by 15% over the next three years. This is an example of a(n) A. supervision objective. B. operational goal. C. tactical goal. D. maintenance objective. E. strategic goal.

E. strategic goal.

There are three levels of planning. Their order, from first to last, is A. operational, tactical, and strategic. B. strategic, operational, and tactical. C. tactical, operational, and strategic. D. tactical, strategic, and operational. E. strategic, tactical, and operational.

E. strategic, tactical, and operational.

Southwest Airlines acquisition of rival AirTran Airways may have been responsible for a sharp decline in on-time arrivals, which is one of Southwest's ________ goals, supporting a larger goal of being highly profitable. A. dependant B. strategic C. operational D. facilities E. tactical

E. tactical

Blockbuster Video was slow to adapt to the latest trends in its industry, such as DVD-by-mail and movie downloads online. When it tried to incorporate the same into its business model, it was well behind competitors like Netflix. Blockbuster might be defined as a defender, according to Miles and Snow

FALSE

MBO was developed by Frederick Taylor as part of scientific management

FALSE