Test Bank - Chap 8

Schermerhorn-Introduction to Management, 12th edition Test Bank
Chapter 08: Fundamentals of Planning
True/False Questions
1. The management process involves planning, organizing, leading, and controlling the use of
resources to achieve performance objectives.
Answer: True
Page: 194
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytic skills
Bloom’s Taxonomy: Knowledge
2. Controlling is the process of setting objectives and determining how to accomplish them.
Answer: False
Page: 194
Difficulty: Easy
3. Leading refers to guiding the efforts of human resources to ensure high levels of task
accomplishment.
Answer: True
Page: 194-195
Difficulty: Easy
4. Stretch goals are performance targets that we have to work extra hard to reach.
Answer: True
Page: 195
Difficulty: Easy
5. Plans alone don’t deliver results; implemented plans do.

Answer: True
Page: 195
Difficulty: Easy
6. An organization with flexibility operates with an orientation toward the past rather than the
future.
Answer: False
Page: 197
Copyright © 2012 John Wiley & Sons, Inc. 8-1


Difficulty: Moderate
7. Planning helps us avoid simply being carried along by the flow of events, and focuses our
attention on priorities.
Answer: True
Page: 197
8. Without planning, control lacks objectives and standards for measuring how well things are going
and what could be done to make them go better.
Answer: True
Page: 197
9. For effective time management, one must become calendar-bound by letting others control one’s
schedule.
Answer: False
Page: 198
Bloom’s Taxonomy: Comprehension
10. As the time frames of planning are shrinking nowadays, top management is no longer responsible
for setting longer-term plans and directions for the organization as a whole.
Answer: False
Page: 199
11. Strategic plans are focused only on a specific department of an organization.

Answer: False
Page: 200
Difficulty: Easy
12. Strategic plans ideally set forth the goals and objectives needed to accomplish the organization’s
vision in terms of mission or purpose and what it hopes to be in the future.

Answer: True
Page: 200
Difficulty: Easy
13. In business, tactical plans often take the form of operational plans that indicate how different
components of the enterprise will contribute to the overall strategy.
Answer: False
Page: 201
14. Operational plans include single-use plans like budgets that apply to one specific task or time
period.
Answer: True
Page: 201
Difficulty: Easy
15. Policies set expectations for many aspects of employee behavior.

Answer: True
Page: 201
Difficulty: Easy
16. Procedures set broad guidelines for decisions.

Answer: False
Page: 202
17. Budgets are standing plans that are used over and over again.
Answer: False
Page: 202
18. To be “over budget” is generally considered bad for a company or an individual; to come in
“under budget” is generally good.

Answer: True
Page: 202
Difficulty: Easy
19. Operating budgets allocate resources like labor, equipment, and space.
Answer: False
Page: 202
Difficulty: Easy
20. A flexible budget allocates resources as if each budget were brand new.
Answer: False
Page: 202
Difficulty: Easy
21. Qualitative forecasting uses expert opinions to predict the future.

Answer: True
Page: 203
22. Contingency planning identifies alternative courses of action to take when things go wrong.
Answer: True
Page: 203
Difficulty: Easy
23. Scenario planning is a short-term version of contingency planning.

Answer: False
Page: 204
Difficulty: Easy
24. The purpose of benchmarking is to find out what other people and organizations are doing very
well, and then plan how to incorporate these ideas into one’s own operations.
Answer: True
Page: 206


Difficulty: Easy
25. Internal benchmarking encourages members and work units to learn from competitors and non-
competitors alike.
Answer: False
Page: 206
26. If staff planners are used, people may often lack commitment to implement the plans no matter
how good they are.
Answer: True
Page: 206
27. Great goals include a stretch factor that moves toward real gains.
Answer: True
Page: 207
Difficulty: Easy
28. Strategic goals set by top management cascade down the organization step by step to become
quality management objectives for lower levels.
Answer: True
Page: 208-209
29. Participatory planning includes in all planning steps the people who will be asked to help
implement them and not the ones affected by the plans.
Answer: False
Page: 209
30. Even though participatory planning takes more time, it can improve results by improving
implementation.

Answer: True
Page: 210
Multiple Choice Questions
31. ________ is the process of setting objectives and determining how to accomplish them.
A. Directing
B. Controlling
C. Leading
D. Organizing
E. Planning
Answer: E
Page: 194
Difficulty: Easy
32. Ryan, the supervisor at MTB Inc., is in the process of setting certain specific goals for his team,
and is deciding how his team can reach those goals. Which of the following is Ryan involved in?
A. Planning
B. Leading
C. Organizing
D. Controlling
E. Directing
Answer: A
Page: 194
Difficulty: Easy
AACSB: Reflective thinking skills
Bloom’s Taxonomy: Application
33. Which of the following management functions deals with the allocation and arrangement of
resources to accomplish tasks?
A. Planning
B. Leading
C. Organizing
D. Controlling
E. Directing
Answer: C
Page: 194
Difficulty: Easy

34. ________ is a management function that guides the efforts of human resources to ensure high
levels of task accomplishment.
A. Leading
B. Directing
C. Administration
D. Organizing
E. Processing
Answer: A
Page: 194
Difficulty: Easy
35. Which of the following management functions deals with monitoring task accomplishments and
taking necessary corrective action?
A. Coordinating
B. Processing
C. Controlling
D. Leading
E. Directing
Answer: C
Page: 195
Difficulty: Easy
36. Which of the following is the first step in the process of planning?
A. Analyzing alternatives and making a plan
B. Defining the objectives
C. Implementing the plan and evaluating results
D. Determining where one stands vis-à-vis objectives
E. Developing premises regarding future conditions
Answer: B
Page: 195
Difficulty: Easy
37. Janice, the chief technology officer at MB Appliances, is in the process of identifying the results
she wants her company to achieve next year. She knows where she wants her company to reach
and knows how far off the desired mark she will be along the way. She is most likely in the
process of:
A. developing premises regarding future conditions.
B. defining her company’s objectives.
C. analyzing her company’s alternatives and making a plan.
D. implementing the plan and evaluating the results.
E. determining where her company stands vis-à-vis objectives.
Answer: B

Page: 195
Difficulty: Easy
38. In which step of the planning process would one know where one is placed in reaching the goals,
and what strengths work in one’s favor and what weaknesses may hold one back?
A. Implementing the plan and evaluating results
C. Developing premises regarding future conditions
D. Analyzing alternatives and making a plan
E. Determining where one stands vis-à-vis objectives
Answer: E
Page: 195
39. After evaluating the current sales of PCs in relation to the desired sales, Cesar, the marketing
manager at Benson & Bros., generates alternative campaigns that may affect the PC’s expected
sales. He identifies, for each campaign, things that may help or hinder progress toward the
company’s objectives. Cesar is currently in which phase of the planning process?
A. Defining the objectives
B. Determining where one stands vis-à-vis objectives
C. Developing premises regarding future conditions
D. Analyzing alternatives and making a plan
E. Implementing the plan and evaluating results
Answer: C
Page: 195
Difficulty: Hard
40. In which phase of the planning process would one choose the alternative to accomplish one’s
objectives and describe what must be done to follow the best course of action?
A. Analyzing alternatives and making a plan
C. Implementing the plan and evaluating results
D. Determining where one stands vis-à-vis objectives
E. Developing premises regarding future conditions
Answer: A
Page: 195

41. Cesar, the marketing manager at Benson and Bros., wants to check if the latest marketing
campaign was successful in increasing the sales of PCs for the company. Which of the following
steps must he take to measure the sales performance?
A. Determine where he stands vis-à-vis objectives
B. Define the objectives
C. Develop premises regarding future conditions
D. Evaluate results and revise plans if needed
E. Analyze alternatives and make a plan
Answer: D
Page: 195
42. In which step of the planning process does one take action and carefully measure progress toward
objectives?
A. Define the objectives
B. Determine where you stand vis-à-vis objectives
C. Implement the plan and evaluate results
D. Analyze alternatives and make a plan
E. Develop premises regarding future conditions
Answer: C
Page: 195
43. In the planning process, ________ refer(s) to the specific results or desired outcomes that one
intends to achieve.
A. objectives and goals
B. beliefs and culture
C. procedures
D. policies
E. guidelines
Answer: A
Page: 195
Difficulty: Easy
44. Performance targets that we have to work extra hard to reach are called ________.
A. stretch goals
B. tactical goals
C. objectives
D. plans
E. missions
Answer: A
Page: 195


Difficulty: Easy
45. A(n) ________ is a statement of action steps to be taken in order to accomplish the objectives.
A. concept
B. objective
C. guideline
D. goal
E. plan
Answer: E
Page: 195
Difficulty: Easy
46. Paul, who is being given the responsibility to meet certain sales targets for next year, is preparing
a list of measures he will take to reach the sales targets. His list includes such specific action
items as preparing a log, checking the quality of inputs and outputs, pricing, and details about his
advertising strategy. Which of the following is Paul preparing?
A. Goal
B. Policy
C. Plan
D. Concept
E. Objective
Answer: C
Page: 195
Difficulty: Easy
47. Which of the following is true of planning?

A. It is done by managers at scheduled times.
B. It is a one-time process.
C. It doesn’t need to be evaluated or monitored for viability.
D. It can include the active participation of all employees.
E. It can deliver results even without implementation.
Answer: D
Page: 195-196
48. Which of the following is an external source of organizational pressure?

A. Quest for operating efficiencies
B. Alternative work arrangements
C. Government regulations

D. Concerns for work–life balance

E. New organizational structures
Answer: C
Page: 196
49. Which of the following is an internal source of organizational pressure?

A. Government regulations
B. Changing social norms and ethical expectations
C. Changing technologies
D. Greater workplace diversity
E. Uncertainties of a global economy
Answer: D
Page: 196
50. ________occurs when an organization allows itself to be carried along by the flow of events.
A. Coordination
B. Organizational pressure
C. The complacency trap
D. Ecological fallacy
E. Ethnocentrism
Answer: C
Page: 197
Difficulty: Easy
51. A manager who is result oriented:

A. makes sure the most important things get first attention.
B. creates a performance-oriented sense of direction.
C. ensures that all resources are used to the best advantage.
D. anticipates problems and opportunities so they can be best dealt with.
E. devises plans and acts on them independently.
Answer: B
Page: 197
52. A(n) ________ oriented manager makes sure the most important things get first attention.
A. priority
B. result

C. advantage
D. change
E. innovation
Answer: A
Page: 197
Difficulty: Easy
53. A(n) ________ oriented manager ensures that all resources are used to the best interest and
benefit.
A. result
B. change
C. relation
D. priority
E. advantage
Answer: E
Page: 197
Difficulty: Easy
54. A(n) ________ oriented manager anticipates problems and opportunities so they can be best dealt
with.
A. result
B. employee
C. priority
D. change
E. advantage
Answer: D
Page: 197
Difficulty: Easy
55. The link between planning and controlling begins with ________.
A. anticipating problems and opportunities
B. setting objectives and standards
C. analyzing the alternatives
D. evaluating and monitoring the results
E. understanding the internal and external organizational threats
Answer: B
Page: 197
Difficulty: Easy

56. Which of the following is true about planning?

A. Good planning improves rigidity.
B. An organization with flexibility starts losing focus.
C. Planning allows organizations to get into the complacency trap.
D. Planning improves coordination.
E. When planning is not done well, it facilitates control.
Answer: D
Page: 197
57. Without planning, the process of ________ lacks a framework for measuring how well things are
going and what could be done to improve things.
A. organizing
B. control
C. leading
D. goal setting
E. decision making
Answer: B
Page: 197
58. Without control, the process of ________ lacks the follow-through needed to ensure that things
work out as intended.
A. planning
B. goal setting
C. leading
D. problem solving
E. directing
Answer: A
Page: 197
59. Which of the following is true about long-range and short-range plans?
A. There is a lot more permanency to long-term plans today than there was in the past.
B. Long-term plans are not subject to frequent revisions today.
C. Long-term plans typically look at least ten years or more into the future.
D. The time frames of planning are shifting today.
E. Lower management sets its own context to work on short-term plans.
Answer: D
Page: 199


60. Even though the time frames of planning may be shrinking, ________ is/are still responsible for
setting longer-term plans and directions for the organization as a whole.
A. lower management
B. middle management
C. shareholders
D. top management
E. file clerks
Answer: D
Page: 199
61. A ________ plan identifies long-term directions for the organization.

A. procedural
B. functional
C. strategic
D. tactical
E. operational
Answer: C
Page: 200
Difficulty: Easy
62. Which of the following is true of strategic plans?

A. Plans at the middle and lower levels of the traditional organizational pyramid tend to be
strategic.
B. They are focused only on a particular department or staff of employees in the organization.
C. They are short-range plans to achieve an immediate goal.
D. They refer to the “tactical” plans of the organization.
E. They ideally set forth the goals and objectives needed to accomplish the organization’s
vision.
Answer: E
Page: 200
63. A ________ clarifies the purpose of the organization and expresses what it hopes to be in the
future.
A. vision
B. mission
C. policy
D. procedure

E. budget
Answer: A
Page: 200
Difficulty: Easy
64. ________ are developed and used to implement strategic plans.

A. Tactical plans
B. Visions
C. Operational plans
D. Missions
E. Procedures
Answer: A
Page: 201
Difficulty: Easy
65. Just before the Thanksgiving weekend, Boyo’s, a toy manufacturer, discovers that its supplier has
used lead-based paint on one of its products. The executive committee has assembled a team to
devise a plan to mitigate the issue. Boyo’s is using ________ planning.
A. tactical
B. strategic
C. top-down
D. production
E. visionary
Answer: A
Page: 201
Difficulty: Hard
66. ________ indicate how different operations within the organization will help advance the overall
strategy.
A. Operational plans
B. Policies
C. Budgets
D. Functional plans
E. Missions
Answer: D
Page: 201
Difficulty: Easy

67. In order to help implement the corporate strategy of Mom Corp., it would most likely develop
a(n) ________ plan for the marketing department.
A. functional
B. operational
C. single-use
D. production
E. zero-based
Answer: A
Page: 201
68. Which of the following functional plans deal with work methods and technologies?
A. Human resource plans
B. Marketing plans
C. Facilities plans
D. Financial plans
E. Production plans
Answer: E
Page: 201
Difficulty: Easy
69. Functional plans dealing with money and capital investments are called ________ plans.
A. marketing
B. logistics
C. financial
D. human resource
E. facilities
Answer: C
Page: 201
Difficulty: Easy
70. Magnadyne Inc. wants to open a new automobile manufacturing unit in Bratislava. Mark’s team
is assigned the task of planning the work layout. Hence, Mark is dealing with the ________ plan.
A. facilities
B. financial
C. operational
D. marketing
E. inventory
Answer: A
Page: 201
Difficulty: Hard


71. As AMD Inc.’s original suppliers have suddenly shut down, AMD is now making plans regarding
alternate suppliers to provide resources for its manufacturing plant. Such plans are referred to as
________ plans.
A. production
B. facilities
C. marketing
D. logistics
E. financial
Answer: D
Page: 201
Difficulty: Easy
72. ________ plans are functional plans that deal with suppliers and acquiring resource inputs.
A. Human resource
B. Logistics
C. Marketing
D. Production
E. Facilities
Answer: B
Page: 201
Difficulty: Easy
73. ________ plans deal with selling and distributing goods or services.
A. Production
B. Financial
C. Facilities
D. Logistics
E. Marketing
Answer: E
Page: 201
Difficulty: Easy
74. Which of the following functional plans deal with building a talented workforce?
A. Human resource plans
B. Logistics plans
C. Marketing plans
D. Production plans
E. Facilities plans
Answer: A

Page: 201
Difficulty: Easy
75. A(n) ________ plan identifies short-term activities to implement the broad plans of the company,
and includes standing plans and single-use plans.
A. forecast
B. functional
C. strategic
D. operational
E. tactical
Answer: D
Page: 201
Difficulty: Easy
76. Which of the following is a standing plan?

A. A policy
B. A budget
C. A vision
D. A mission
E. A forecast
Answer: A
Page: 201
Difficulty: Easy
77. A sexual harassment zero-tolerance policy is an example of ________ plans used by

organizations.
A. facilities
B. financial
C. single-use
D. standing
E. logistics
Answer: D
Page: 201
78. Which of the following is a single-use plan?

A. A procedure
B. A policy
C. A budget

D. A mission
E. A vision
Answer: C
Page: 201
Difficulty: Easy
79. A ________ communicates broad guidelines for making decisions and taking action in specific
circumstances.
A. vision
B. procedure
C. policy
D. tactical plan
E. budget
Answer: C
Page: 201
Difficulty: Easy
80. What is the primary difference between a policy and a procedure?

A. A policy focuses on the organization as a whole, but a procedure focuses only on a single
department.
B. A policy sets a broad guideline, but a procedure defines precise actions to be taken.
C. A policy is a single-use plan, but a procedure is a standing plan.
D. A policy identifies short-term directions for the organization, but a procedure identifies long-
term directions.
E. A policy guides fair employment, but a procedure guides ethical principles.
Answer: B
Page: 202
81. Procedures are stated in employee handbooks and often called ________.
A. bureaucratic procedures
B. contingency procedures
C. standard operating procedures
D. experimental procedures
E. catalogued procedures
Answer: C
Page: 202
Difficulty: Easy

82. ________ are single-use plans that commit resources for specific time periods to activities,
projects, or programs.
A. Procedures
B. Policies
C. Guidelines
D. Budgets
E. Forecasts
Answer: D
Page: 202
Difficulty: Easy
83. Financial budgets:

A. project cash flows and expenditures.
B. plot anticipated sales or revenues against expenses.
C. allocate resources like labor, equipment, and space.
D. allocate a stated amount of resources for a specific purpose.
E. allow resources to vary in proportion with various levels of activity.
Answer: A
Page: 202
Difficulty: Easy
84. ________ budgets allocate resources like labor, equipment, and space.
A. Financial
B. Operating
C. Nonmonetary
D. Zero-based
E. Flexible
Answer: C
Page: 202
Difficulty: Easy
85. Which of the following types of budgets plot anticipated sales or revenues against expenses?
A. Zero-based budgets
B. Nonmonetary budgets
C. Financial budgets
D. Operating budgets
E. Fixed budgets
Answer: D
Page: 202
Difficulty: Easy

86. A fixed budget:

A. allocates a stated amount of resources for a specific purpose.
B. allocates resources as if each budget were brand new.
C. allows resources to vary in proportion with various levels of activity.
D. allocates resources like labor, equipment, and space.
E. always has equal expenditures and revenue.
Answer: A
Page: 202
Difficulty: Easy
87. In a chain of discount department stores, personnel needs are estimated in three different ways:
(a) for a high-demand season, (b) for a moderate-demand season, and (c) for a low-demand
season. By taking these three activity levels into account, managers are developing a(n)
________.
A. fixed budget
B. flexible budget
C. zero-based budget
D. monetary policy
E. operating plan
Answer: B
Page: 202
Difficulty: Hard
88. ACME Manufacturing budgets a project or activity in each new budget period as if it were brand
new. ACME is using a(n) ________ budgeting approach.
A. nonmonetary
B. operating
C. zero-based
D. fixed
E. flexible
Answer: C
Page: 202
89. ________ is the process of predicting what will happen in the future.
A. Benchmarking
B. Scenario planning
C. Contingency planning
D. Staff planning
E. Forecasting

Answer: E
Page: 203
Difficulty: Easy
90. Bizo-mania, a business periodical, recently predicted a global economic downturn. The periodical
attributed the downturn to a predicted increase in the inflation rate. This report is an example of
________.
A. benchmarking
B. scenario planning
C. contingency planning
D. staff planning
E. forecasting
Answer: E
Page: 203
91. Qualitative forecasting uses ________ to predict future events.

A. budgets
B. expert opinions
C. mathematical models
D. statistical analyses
E. surveys
Answer: B
Page: 203
Difficulty: Easy
92. Alexa, a marketing manager at Magnadyne Corp., predicts a 15% drop in the sales of their SUV,
Finesse. She used correlation and regression analyses of previous years’ sales records to arrive at
the conclusion. Alexa is using ________.
A. contingency planning
B. qualitative forecasting
C. quantitative forecasting
D. internal benchmarking
E. external benchmarking
Answer: C
Page: 203
Difficulty: Hard
93. ________ identifies alternative courses of action to take when things go wrong.

A. Internal benchmarking
B. Contingency planning
C. External benchmarking
D. Goal setting
E. Staff planning
Answer: B
Page: 203
Difficulty: Easy
94. Which of the following is a long-term version of contingency planning?

A. Benchmarking
B. Scenario planning
C. Forecasting
D. Staff planning
E. Operationalizing
Answer: B
Page: 204
Difficulty: Easy
95. ________ involves identifying several possible future situations or states of affairs and then
making plans to deal with each situation should it actually occur.
A. Scenario planning
B. External benchmarking
C. Forecasting
D. Staff planning
E. Internal benchmarking
Answer: A
Page: 204
Difficulty: Easy
96. ________ is the use of external and internal comparisons to better evaluate one’s current
performance and identify possible ways to improve for the future.
A. Qualitative forecasting
B. Quantitative forecasting
C. Scenario planning
D. Contingency planning
E. Benchmarking
Answer: E
Page: 206
Difficulty: Easy

97. The purpose of benchmarking is to ________.

A. identify alternative future scenarios and make plans to deal with each
B. identify alternative courses of action to take when things go wrong
C. plan how to incorporate the good, profitable ideas of other organizations into one’s own
operations
D. use expert opinions to predict the future
E. use mathematical models and statistical analyses of historical data and surveys to predict
future events
Answer: C
Page: 206
98. Barnotts, a discount store chain, utilized the best retailing strategies of Walmart to create a market
for itself. By learning from Walmart, Barnotts used ________.
A. qualitative forecasting
B. quantitative forecasting
C. scenario planning
D. external benchmarking
E. internal benchmarking
Answer: D
Page: 206
Difficulty: Hard
99. Which of the following is true about the use of staff planners?
A. It can lead to a communication gap between planners and implementers.
B. It leads to an increase in commitment to implement the plans.
C. The use of staff planners can lead to a short-term rather than a long-term focus.
D. Very few organizations use staff planners as they don’t bring any expertise to the planning
process.
E. The use of staff planners always reduces the focus of the planning team.
Answer: A
Page: 206
100. ________ refer to things done by people and organizations that enable them to achieve superior
performance.
A. Missions
B. Scenario plans
C. Noncompetitive objectives
D. Best practices

E. Operating activities
Answer: D
Page: 206
Difficulty: Easy
101. Which of the following is a characteristic of a “great goal”?

A. It has no precise timetable.
B. It is general and not too specific.
C. It is almost impossible to accomplish.
D. It can be measured easily.
E. It is not challenging.
Answer: D
Page: 207
102. Goal alignment conversations tend to focus on objectives that are:

A. impossible to achieve.
B. challenging.
C. difficult to measure.
D. general.
E. not bound by timetables.
Answer: B
Page: 208
103. When job performance is difficult to quantify, performance objectives can be stated as ________.
A. short-range plans
B. benchmarks
C. verifiable work activities
D. measurable end products
E. deliverables
Answer: C
Page: 209
104. ACME Financial requires that their interest rate planning process include its employees,
managers, some customers, and others who will be affected by the resulting plans and/or will be
asked to help implement them. ACME is utilizing ________.
A. contingency planning

B. scenario planning
C. management by objectives
D. participatory planning
E. benchmarking
Answer: D
Page: 209
Difficulty: Hard
105. Which of the following is true of participatory planning?

A. It reduces the time needed for planning.
B. It has less need for forecasting.
C. It pays greater attention to contingency situations.
D. It can improve results by improving implementation.
E. It decreases the creativity of planning.
Answer: D
Page: 210
Essay Questions
106. Identify and describe the steps in the planning process.

Answer: The five basic steps in the planning process are:
 1. Define your objectives––Identify desired outcomes or results in very specific ways.
Know where you want to go; be specific enough so that you will know you have arrived
when you get there, or know how far off the mark you are at various points along the
way.
 2. Determine where you stand vis-à-vis objectives––Evaluate current accomplishments
relative to the desired results. Know where you stand in reaching the objectives; know
what strengths work in your favor and what weaknesses may hold you back.
 3. Develop premises regarding future conditions––Try to anticipate future events.
Generate alternative “scenarios” for what may happen; identify for each scenario things
that may help or hinder progress toward your objectives.
 4. Analyze alternatives and make a plan––List and carefully evaluate the possible actions
that may be taken. Choose the alternative(s) most likely to accomplish your objectives;
decide step by step what must be done to follow the chosen course of action.
 5. Implement the plan and evaluate results––Take action and carefully measure your
progress toward objectives. Do what the plan requires; evaluate results; take corrective
actions and revise plans as needed.
Page: 195
107. Describe the benefits of planning for individuals and organizations.

Answer: The benefits of planning for individuals and organizations include the following:

 Planning improves focus and flexibility. Focus and flexibility are important to the
performance of both people and organizations in highly competitive and dynamic
environments.
 Planning improves action orientation. Planning keeps people and organizations focused
on the actions that are needed to stay competitive and to become better at what they are
doing. Planning helps make people and organizations more oriented toward results,
priorities, advantages, and change.
 Planning improves coordination. Planning helps individuals, groups, and subsystems
within organizations make meaningful contributions to the organization as a whole, even
as they pursue their specific tasks and objectives.
 Planning improves control. Planning facilitates control by defining objectives and desired
performance results, and identifying specific actions through which they are to be
pursued.
 Planning improves time management. Each day, managers are bombarded by a multitude
of tasks and demands. They work in a setting of frequent interruptions, crises, and
unexpected events. Consequently, it can be easy to lose track of objectives and fall prey
to “time wasters.”
Page: 196-198
108. Compare and contrast between strategic and tactical plans.

Answer: Strategic plans are longer-term plans that set broad and comprehensive directions for an
organization and create a framework for allocating resources for maximum long term
performance impact. Strategic planning begins with a vision that clarifies the purpose of the
organization and expresses what it hopes to be in the future. It involves determining the goals and
objectives that will be pursued in order to accomplish that vision. Also, it specifies how the
organization will be positioned for competitive advantage in its external environment to
accomplish those goals and objectives.
Tactical plans are developed and used to implement strategic plans. They tend to be intermediate
term plans that specify step-by-step means for using the organization’s resources to put strategies
into action. In business, tactical plans often take the form of functional plans that indicate how
different components of the enterprise will contribute to the overall strategy. Such functional
plans might include:
 Production plans—dealing with the methods and technologies needed by people in their
work;
 Financial plans—dealing with money and capital investments;
 Facilities plans—dealing with facilities and work layouts;
 Logistics plans—dealing with suppliers and the flow of raw materials and other product
inputs.
Page: 200-201
109. Identify and briefly describe each of the six major planning tools and techniques that managers
use. Give examples of how they are used.

Answer: The six major planning tools and techniques that managers use are identified and
described below:
 Forecasting is the process of predicting what will happen in the future.
 Contingency planning involves identifying alternative courses of action that can be
implemented, if and when an original plan proves inadequate because of changing
circumstances.
 Scenario planning is a long-term version of contingency planning that involves
identifying several alternative future scenarios or states of affairs that may occur, and
then making plans to deal with each scenario should it actually occur.
 Benchmarking is a technique that makes use of internal and external comparisons to
better evaluate current performance and identify possible actions to improve the future.
 Staff planners are persons who take responsibility for leading and coordinating the
planning function for the total organization or one of its major components.
Page: 203-206
Difficulty: Hard
110. What are the five characteristics that great goals tend to have?
Answer: Great goals tend to have the following five characteristics:
1. Specific—clearly targeted key results and outcomes to be accomplished.
2. Timely—linked to specific timetables and “due dates.”
3. Measurable—described so results can be measured without ambiguity.
4. Challenging—include a stretch factor that moves toward real gains.
5. Attainable—although challenging, realistic and possible to achieve.
Page: 207

Test Bank - Chap 8

Uploaded by

Document Informationclick to expand document information

Document Informationclick to expand document information

Copyright:

Available Formats

Test Bank - Chap 8

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Test Bank - Chap 8

Uploaded by

Copyright:

Available Formats

Schermerhorn-Introduction to Management, 12th edition Test Bank

Chapter 08: Fundamentals of Planning

5. Plans alone don’t deliver results; implemented plans do.

Copyright © 2012 John Wiley & Sons, Inc. 8-1

Learning Objective: 8.1

11. Strategic plans are focused only on a specific department of an organization.

Copyright © 2012 John Wiley & Sons, Inc. 8-2

15. Policies set expectations for many aspects of employee behavior.

16. Procedures set broad guidelines for decisions.

Copyright © 2012 John Wiley & Sons, Inc. 8-3

21. Qualitative forecasting uses expert opinions to predict the future.

23. Scenario planning is a short-term version of contingency planning.

Copyright © 2012 John Wiley & Sons, Inc. 8-4

Learning Objective: 8.3

Copyright © 2012 John Wiley & Sons, Inc. 8-5

Multiple Choice Questions

Copyright © 2012 John Wiley & Sons, Inc. 8-6

Copyright © 2012 John Wiley & Sons, Inc. 8-7

Copyright © 2012 John Wiley & Sons, Inc. 8-8

Copyright © 2012 John Wiley & Sons, Inc. 8-9

Learning Objective: 8.1

47. Which of the following is true of planning?

48. Which of the following is an external source of organizational pressure?

Copyright © 2012 John Wiley & Sons, Inc. 8-10

D. Concerns for work–life balance

49. Which of the following is an internal source of organizational pressure?

51. A manager who is result oriented:

Copyright © 2012 John Wiley & Sons, Inc. 8-11

Copyright © 2012 John Wiley & Sons, Inc. 8-12

56. Which of the following is true about planning?

Copyright © 2012 John Wiley & Sons, Inc. 8-13

AACSB: Analytic skills

61. A ________ plan identifies long-term directions for the organization.

62. Which of the following is true of strategic plans?

Copyright © 2012 John Wiley & Sons, Inc. 8-14

64. ________ are developed and used to implement strategic plans.

Copyright © 2012 John Wiley & Sons, Inc. 8-15

Copyright © 2012 John Wiley & Sons, Inc. 8-16

AACSB: Reflective thinking skills

Copyright © 2012 John Wiley & Sons, Inc. 8-17

76. Which of the following is a standing plan?

77. A sexual harassment zero-tolerance policy is an example of ________ plans used by

78. Which of the following is a single-use plan?

Copyright © 2012 John Wiley & Sons, Inc. 8-18

80. What is the primary difference between a policy and a procedure?

Copyright © 2012 John Wiley & Sons, Inc. 8-19

83. Financial budgets:

Copyright © 2012 John Wiley & Sons, Inc. 8-20

Bloom’s Taxonomy: Knowledge

86. A fixed budget:

Copyright © 2012 John Wiley & Sons, Inc. 8-21

91. Qualitative forecasting uses ________ to predict future events.

Copyright © 2012 John Wiley & Sons, Inc. 8-22

94. Which of the following is a long-term version of contingency planning?

Copyright © 2012 John Wiley & Sons, Inc. 8-23

Bloom’s Taxonomy: Knowledge

97. The purpose of benchmarking is to ________.

Copyright © 2012 John Wiley & Sons, Inc. 8-24