Management Chapter 8 Quiz

Management chapter 8 quiz
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Management, 14e (Robbins/Coulter) Chapter 8 Planning Work Activities
1) ________ involves defining the organization's goals, establishing strategies for achieving those goals,
and developing plans to integrate and coordinate work activities.
A) Execution
B) Logistics
C) Planning
D) Operations
Answer: C Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of
planning Classification: Concept
2) The effect of planning on managers is that it forces them to ________.
A) generate higher profits
B) anticipate and respond to change
C) eliminate uncertainty
D) work at cross purposes
Answer: B Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of
3) Which one of the following is among the reasons why managers should plan?
A) When work activities are coordinated around plans, inefficiencies become obvious.
B) Uncertainty can be eliminated and the organization can be insulated from change with planning.
C) Planning eliminates the need to set goals.
D) Planning eliminates the need to measure work effort.
Answer: A Diff: 3
AACSB: Reflective thinking
Learning Obj: LO 8.1: Define the nature and purposes of planning
Classification: Concept
4) Which one of the following is true of the impact of formal planning on organizational performance?
A) Formal planning is associated with positive financial results.
B) Organizations that formally plan invariably outperform those that don't plan.
C) The amount of planning done is more important to high performance than the quality of planning and
implementation.
D) Companies can start seeing the impact of formal planning on performance about a year after starting
the planning process.
Answer: A Diff: 3 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of
5) When formal planning fails to lead to higher performance, which one of the following is most likely to
be the reason for the failure?
A) A participative style of planning was used.
B) Managers were allowed too much autonomy.
C) The company emphasized the control function over other functions.
D) External forces constrain managers' options.

Answer: D Diff: 3 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of
6) Planning is concerned with how objectives are to be accomplished, not what is to be
accomplished. Answer: FALSE
Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of planning
7) Planning provides direction to managers and non-managers alike.
Answer: TRUE Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of
8) The presence of planning inhibits the ability of departments and individuals to work together or
organizations to move.
Answer: FALSE Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of
9) Planning helps managers eliminate uncertainty and insulates organizations from change.
10) Several research studies have conclusively proven that planning organizations always outperform
non-planning organizations.
11) Studies indicate that doing a good job planning and implementing those plans play a bigger part in
high performance than does how much planning is done.
Answer: TRUE Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.1: Define the nature and purposes of
12) In a short essay, define planning and discuss the characteristics of formal planning as it is used in
various organizations.
Answer: Planning involves defining the organization's goals, establishing an overall strategy for achieving
those goals, and developing a comprehensive set of plans to integrate and coordinate organizational
work. It is concerned with both ends and means. In formal planning, specific goals covering a period of
years are defined. These goals are written and known to organizational members.
Diff: 3 AACSB: Reflective thinking; Written and oral communication Learning Obj: LO 8.1: Define the
nature and purposes of planning Classification: Concept
13) White Forest Financials is a small investment firm, operating in an extremely volatile environment.
One of the company's two owners, David White, is of the opinion that it would be futile for the company
to engage in formal planning as the business environment is constantly shifting. However, the co-owner,
Marsha Forest, believes that planning is essential for the company's success. Whom would you support?
Why?
Answer: Marsha Forest is correct in her observation that planning is essential to a company's success.
Generally speaking, formal planning is associated with positive financial results. Planning offers several
advantages to companies. It establishes coordinated effort and gives direction to managers and non-
managers alike. It reduces overlapping and wasteful activities. Planning also establishes goals or
standards that are used in controlling. Planning reduces uncertainty by forcing companies to look ahead,
anticipate change, consider the impact of change, and develop appropriate responses. It also clarifies
the consequences of actions companies might take in response to change. Even though planning can't
eliminate change, companies plan in order to anticipate changes and develop the most effective
response to them. Even when the environment is highly uncertain, it's important to continue formal
planning in order to see any effect on organizational performance. It's the persistence in planning that
contributes to significant performance improvement. In an uncertain environment, managers should
develop plans that are specific, but flexible. Managers need to recognize that planning is an ongoing
process. The plans serve as a road map although the destination may change due to dynamic market
conditions. They should be ready to change directions if environmental conditions warrant.
Diff: 3 AACSB: Application of knowledge; Written and oral communication Learning Obj: LO 8.1: Define
the nature and purposes of planning Classification: Application
14) Discuss the impact of planning on organizational performance.
Answer: Numerous studies have looked at the relationship between planning and performance.
Although most showed generally positive relationships, we can't say that organizations that formally
plan always outperform those that don't plan.
Generally speaking, formal planning is associated with positive financial results-higher profits, higher
return on assets, and so forth. Also, it seems that doing a good job planning and implementing those
plans play a bigger part in high performance than does how much planning is done. Next, in those
studies where formal planning didn't lead to higher performance, the external environment often was
the culprit. When external forces-say, governmental regulations or powerful labor unions-constrain
managers' options, it reduces the impact planning has on an organization's performance. Finally, the
planning-performance relationship seems to be influenced by the planning time frame. It seems that at
least four years of formal planning is required before it begins to affect performance.
Diff: 3 AACSB: Reflective thinking; Written and oral communication Learning Obj: LO 8.1: Define the
nature and purposes of planning Classification: Concept
15) Which aspect of planning refers to documents that outline how results are to be achieved?
A) goals
B) plans
C) objectives
D) performance guidelines
Answer: B Diff: 2 AACSB: Reflective thinking
Learning Obj: LO 8.2: Classify the types of goals organizations might have and the plans they use
16) Goals are different from plans because ________.
A) goals identify specific steps that the organization needs to achieve, and plans identify the overall
mission of the organization
B) goals describe financial objectives, and plans describe objectives related to social responsibility
C) goals are important only for small companies, and plans are important only for large companies
D) goals are desired outcomes, and plans describe how those outcomes will be accomplished Answer: D
Diff: 3 AACSB: Reflective thinking
17) Which one of the following statements is true regarding an organization's goals?
A) All organizations share the single goal of making profits.
B) A single goal is more efficient than multiple goals for defining an organization's success.
C) Using a single goal such as profit may result in unethical behaviors by employees.
D) Long-term success is ensured if managers emphasize only one goal for an organization.
Answer: C Diff: 3 AACSB: Reflective thinking
18) Most companies' goals can be classified as either ________ or ________.
A) strategic; financial
B) operational; tactical
C) social; economic
D) strategic; operational
Answer: A Diff: 2 AACSB: Reflective thinking
19) If top management set a goal that each store in the company should have sales equal to or greater
than $100 per square foot per day, this would be an example of ________.
A) a strategic plan
B) a directional plan
C) a financial goal
D) a strategic goal
Answer: C Diff: 2 AACSB: Application of knowledge
Classification: Application
20) Nike, Inc. is a sportswear and equipment manufacturer that serves a multitude of sports disciplines.
Which one of the following statements from Nike would be the best example of a strategic goal?
A) a ten percent increase in average annual sales
B) a seven percent increase in average annual income
C) achieving a return on investment of 17 percent
D) accelerating growth through focused execution

Answer: D Diff: 2 AACSB: Application of knowledge
21) Robert Downs, owner of a new community newspaper in his home town of Corning, New York, has
set the following goal for his company: "To be a champion for free speech and for the development of
the community." This goal constitutes the ________ goal of the company.
A) informal
B) operational
C) financial
D) strategic
22) An organization's ________ goals are official statements of what an organization says, and what it
wants its stakeholders to believe its goals are.
A) stated
B) real
C) authentic
D) implicit

23) When making editorial decisions for his newspaper, the owner/editor mostly picks issues that are in
line with his political beliefs and those that his advertisers approve of despite his publicly stated goal "to
be a champion for free speech and for the development of the community." This indicates that
________.
A) the company's strategic goals do not leave any room for interpretation
B) the company's stated goals are not its real goals
C) the company's goals are directional in nature
D) the company's financial goals derive from its strategic goals
Answer: B Diff: 3 AACSB: Analytical thinking
24) Which one of the following is the best indicator of an organization's real goals?
A) organizational members' actions
B) mission statement
C) annual reports
D) stock valuation
25) An organization's mission states that it "is committed to reducing its environmental footprint"; but
its facilities do not comply with statutory environmental regulations. This is an instance of how
________.
A) strategic goals help shape financial goals
B) long-term goals differ from short-term goals
C) an organizations stated goals need not be its real goals
D) a company's real goals are derived from its mission statement
26) Organizational plans can be classified on the basis of their ________.
A) usefulness
B) frequency of use
C) suitability
D) attainability
27) Strategic plans are usually ________.

A) short term, directional, and standing
B) short term, specific, and standing
C) long term, directional, and single use
D) long term, specific, and standing
28) ________ plans apply to the entire organization and establish the organization's overall goals.
A) Departmental
B) Strategic
C) Operational
D) Long-term
29) Operational plans are usually ________.
A) short term, directional, and standing
B) short term, specific, and standing
C) long term, directional, and single use

D) long term, specific, and standing
30) Plans that encompass only the production or the sales goals of a company are termed ________
plans.
A) operational
B) strategic
C) informal
D) financial
31) Mr. Slabaugh wants to formulate a plan that lays out general guidelines for his employees and leaves
room for interpretation. Which one of the following types of plans would best suit his requirement?
A) informal
B) specific
C) directional
D) standing

32) Williamson is the owner of a small company that sells corporate gifts through an online store.
Business has slowed down in recent months and he realizes that the organization must move in a
different direction if it is to survive. He has reset some of the company's overall goals and wants to
develop a plan to achieve those goals. He is anticipating the business environment to be volatile for the
next few years. Considering the above information, it can be determined that his plan must be
________, ________, and ________.
A) operational; directional; rigid
B) informal; unwritten; flexible
C) strategic; general; rigid
D) strategic; directional; flexible
Answer: D Diff: 3 AACSB: Analytical thinking; Application of knowledge
33) Which one of the following factors has contributed to the decline in the number of years used to
define short-term and long-term plans?
A) environmental uncertainty
B) economic recessions
C) flattened organizational structures
D) stagnant business conditions

34) Long-term plans are defined as those with a time frame beyond ________.
A) seven years
B) one year
C) five years
D) three years
Answer: D Diff: 2 AACSB: Reflective thinking
35) Short-term plans are those covering ________ or less.
A) three years
B) one year
C) six months
D) five years
36) ________ plans are clearly defined and leave no room for interpretation.
A) Directional
B) Stated
C) Long-term
D) Specific
37) Todd Miller, CEO of Miller's Grocery, has determined that all stores should be well maintained both
inside and out. This is an example of a ________.
A) directional plan
B) specific plan
C) financial goal
D) social goal
Answer: A Diff: 2 AACSB: Application of knowledge
38) What plans are preferable when uncertainty is high in the business environment?
A) standing plans
B) directional plans
C) operational plans
D) long-term plans
39) Which of the following is an example of a single-use plan?
A) affirmative action hiring policies of a company
B) a plan developed to install a new computer network
C) the procedure to be followed for firing low-performing employees
D) a plan developed to ensure worker safety at the company's facilities
Answer: B Diff: 2 AACSB: Application of knowledge
40) A standing plan is ________.
A) an ongoing plan that provides guidance for activities performed repeatedly
B) a plan that stands in place of a preferred plan in case of the failure of the latter
C) a one-time plan specifically designed to meet the needs of a unique situation

D) a flexible plan that sets out general guidelines for company strategy
41) Which one of the following is an example of a standing plan?
A) a retail chain's plan to counter the entry of a new competitor
B) a plan developed to address a sudden, unanticipated surge in demand
C) a fire escape policy establishing practices to be followed in an emergency
D) a plan to cope with radical changes in the political environment
Answer: C Diff: 3 AACSB: Analytical thinking
42) Which one of the following would be a well-written goal for an online retailer operating in a volatile
business environment?
A) To minimize costs, maximize profits, and maximize return on investment.
B) To accelerate our growth to the maximum possible level over the next three years.
C) To achieve a 25 percent growth in revenue, which is defined as the number of items sold multiplied
by their price.
D) To invoice merchandise worth $200,000, every month, for the next three years.

43) As managers plan, they develop both goals and plans.
Answer: TRUE Diff: 1 AACSB: Reflective thinking
44) Most businesses have only the single goal of making profits.
Answer: FALSE Diff: 1 AACSB: Reflective thinking
45) Strategic goals focus exclusively on the financial performance of the organization.
46) Stated goals are those that an organization actually pursues.
47) The number of years used to define short-term and long-term plans has increased considerably
because of the greater environmental certainty businesses have today.
48) Long-term plans are those with a time frame beyond three years.
49) Short-term plans are those covering one year or less.

50) When uncertainty is high and managers must be flexible in order to respond to unexpected changes,
directional plans are preferable.
51) Directional plans are clearly defined and leave no room for interpretation.
52) The standard procedure to be followed by the human resources department of a company when
initiating disciplinary action against an employee is an example of a standing plan.
Answer: TRUE Diff: 2 AACSB: Application of knowledge
53) Distinguish between the stated and the real goals of an organization. Illustrate the difference with an
example.
Answer: An organization's stated goals are official statements of what an organization says, and what it
wants its stakeholders to believe, its goals are. However, stated goals-which can be found in an
organization's charter, annual report, public relations announcements, or in public statements made by
managers-are often conflicting and influenced by what various stakeholders think organizations should
do. Such statements are vague and probably better represent management's public relations skills than
being meaningful guides to what the organization is actually trying to accomplish. It shouldn't be
surprising then to find that an organization's stated goals are often irrelevant to what actually goes on. If
you want to know an organization's real goals-those goals an organization actually pursues-observe
what organizational members are doing. Actions define priorities. For example, a company may publicly
commit to increasing worker participation in management, while actually practicing a hierarchical, top-
down approach. Knowing that real and stated goals may differ is important for recognizing what you
might otherwise think are inconsistencies.
Diff: 3 AACSB: Reflective thinking; Written and oral communication
54) In a short essay, describe the different classifications of plans.
Answer: Strategic plans are plans that apply to the entire organization, establish the organization's
overall goals, and seek to position the organization in terms of its environment. Plans that specify the
details of how the overall goals are to be achieved are called operational plans. Strategic plans tend to
cover a longer time frame and a broader view of the organization. Strategic plans also include the
formulation of goals whereas operational plans define ways to achieve the goals. Also, operational plans
tend to cover shorter time periods. We define longterm plans as those with a time frame beyond three
years. Short-term plans are those covering one year or less. Specific plans are plans that are clearly
defined and that leave no room for interpretation. They have clearly defined objectives. There's no
ambiguity and no problem with misunderstanding. The drawbacks of specific plans are that they require
clarity and a sense of predictability that often do not exist. When uncertainty is high and managers must
be flexible in order to respond to unexpected changes, directional plans are preferable. Directional plans
are flexible plans that set out general guidelines. They provide focus but don't lock managers into
specific goals or courses of action. However, the flexibility inherent in directional plans must be weighed
against the loss of clarity provided by specific plans. A single-use plan is a one-time plan specifically
designed to meet the needs of a unique situation. In contrast, standing plans are ongoing plans that
provide guidance for activities performed repeatedly. Standing plans include policies, rules, and
procedures.
55) In ________, goals set by top managers flow down through the organization and become subgoals
for each organizational area.
A) management by objectives
B) management by observation
C) traditional goal setting
D) traditional planning
Answer: C Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.3: Compare and contrast approaches to
goal-setting and planning Classification: Concept
56) Which one of the following is an assumption associated with traditional goal setting?
A) Employees will be more motivated to try to attain goals that they helped set.
B) Clarity and specificity are preserved as the goals filter down through organizational levels.
C) Top managers know what is best because they see the "big picture."
D) Managers and employees together develop goals.

Learning Obj: LO 8.3: Compare and contrast approaches to goal-setting and planning Classification:
Concept
57) Which one of the following is a problem associated with traditional goal setting?
A) Top level managers tend to define the organization's goals in very narrow terms.
B) Transition of strategic goals into departmental, team, and individual goals is difficult.
C) It can result in the formation of a means-ends chain.
D) Goals set are invariably easily accomplished.
Concept
58) A problem associated with traditional goal setting is that ________.
A) the narrowly defined goals inhibit a manager's ability to interpret them
B) the high degree of reliance on employees for developing goals is not suited to many situations
C) clarity is lost as the goals make their way down from the top of the organization to lower levels
D) it promotes the growth of a flatter organizational structure and threatens organizational efficiency
Concept
59) Which one of the following statements is true of traditional goal setting?
A) Traditional goal setting assumes that employees know best and employs a bottom-up approach of
setting organizational goals.
B) Evaluation of performance is carried out concurrently with the flow of goals through the organization.
C) Goals defined narrowly by top managers need to be made more directional as they flow down
through the organization.
D) Managers at each level define goals and apply their own interpretations and biases as they make
them more specific.
Learning Obj: LO 8.3: Compare and contrast approaches to goal-setting and planning
60) A ________ is an integrated network of goals in which the accomplishment of goals at one level
makes possible the achievement of the goals at the next level.
A) reverse pyramid
B) means-ends chain
C) bottom-up ladder
D) process sequence
Concept
61) ________ is a process of setting mutually-agreed upon goals and using those goals to evaluate
employee performance.
A) Management by objectives
B) Management by walking around
C) Management by observation
D) Management by exception
Answer: A Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.3: Compare and contrast approaches to
62) Which one of the following is the first step in MBO?
A) The organization's overall objectives and strategies are formulated.
B) Unit managers collaboratively set specific objectives for their units with their managers.
C) Action plans are specified and agreed upon by managers and employees.
D) Major objectives are allocated among divisional and departmental units.
Concept
63) Which one of the following is the last step in MBO?
A) Progress toward objectives is periodically reviewed, and feedback is provided.
B) The organization's overall objectives and strategies are formulated.
C) Successful achievement of objectives is reinforced by performance-based rewards.
D) Action plans are implemented.
Concept
64) Bonnie is discussing with her subordinate, Julie, the types of projects Julie would like to work on in
the coming year. They are setting goals and determining what success would look like. Bonnie and Julie
are engaged in ________.
A) performance planning
B) strategic planning
C) management by observation
D) management by objectives
Answer: D Diff: 3 AACSB: Application of knowledge Learning Obj: LO 8.3: Compare and contrast
approaches to goal-setting and planning Classification: Application
65) Bill has been working his plan for about three months. He is now discussing his progress with Jim, his
supervisor. If Bill and Jim are using the MBO planning process, this discussion is called ________.
A) performance feedback
B) redirection of goals
C) advise and adjust
D) the milestone checkpoint
Answer: A Diff: 3 AACSB: Application of knowledge
Application
66) Which one of the following reflects the way goals are used in an MBO program?
A) Goals are used to prepare financial budgets for each unit.
B) Goals are used to broadly set the direction subject to encourage interpretation by individual
managers.
C) Apart from being used to ensure that employees are doing what they are supposed to be doing, goals
are used as a motivating tool for employees.
D) Goals are used to compare organizational performance year over year.
Concept
67) Which is the first step managers should follow in goal setting?
A) evaluating available resources
B) determining goals individually or with input from others
C) writing down goals and communicating them to all who need to know
D) reviewing the organization's mission
Concept
68) A ________ is a broad statement of an organization's purpose that provides an overall guide to what
organizational members think is important.
A) mission
B) vision
C) project
D) preamble
Concept
69) Well-written goals are ________.
A) written in terms of actions rather than outcomes
B) just out of reach
C) easily achieved
D) clear as to a time frame

Answer: D Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.3: Compare and contrast approaches to
70) An organization is in the process of goal setting. It has finished reviewing the organization's mission.
What should it do next?
A) determine the goals individually or with input from others
B) write down the goals and communicate them to all who need to know
C) evaluate available resources
D) review results and whether goals are being met
Concept
71) Which one of the following is the last step in goal setting?
A) review the organization's mission or purpose
B) determine the goals individually or with input from others
C) write down the goals and communicate them to all who need to know
D) review results and whether goals are being met
72) When uncertainty is high, plans should be ________ and ________.
A) specific; flexible
B) directional; standing
C) short-term; directional
D) general; informal
Concept
73) The commitment concept says that plans should ________.
A) extend far enough to meet those commitments made when the plans were developed
B) be done for as long a time period as possible
C) be done for as short a time period as possible
D) not commit to specifically meeting the goals made when the plans were developed Answer: A
Diff: 2 AACSB: Reflective thinking
Concept
74) Top executives are mainly involved in ________ planning.
A) functional
B) operational
C) strategic
D) departmental
Concept
75) ________ planning dominates managers' planning efforts at lower levels of the organization.
A) Strategic
B) Organization-wide
C) Operational
D) Directional
Answer: C Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.3: Compare and contrast approaches to
76) Which one of the following is true of the traditional approach to planning?
A) Plans are developed by organizational members at the various levels.
B) This approach makes managerial planning thorough, systematic, and coordinated.
C) Plans created through this method are seldom written down.
D) Formal planning departments are rarely used in this approach.
Learning Obj: LO 8.3: Compare and contrast approaches to goal-setting and planning
77) When is the traditional top-down approach to planning most likely to be effective?
A) when lower level employees develop plans
B) when the plans focus on developing a large number of plans and carefully documenting them
C) when the management avoids the use of a formal planning department
D) when plans are developed that can actually be used by organizational members
78) When lower-level managers and employees are involved in the planning process, ________.
A) the documents they create are rarely reviewed

B) the plans take on a life of their own
C) their job satisfaction increases but productivity suffers
D) they see the plans as more than just something written down on paper
Answer: D Diff: 2
AACSB: Reflective thinking
Concept
79) In traditional goal setting, goals set by top managers flow down through the organization and
become subgoals for each organizational area.
Answer: TRUE Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.3: Compare and contrast approaches
to goal-setting and planning Classification: Concept
80) In the management by objectives (MBO) process of goal setting, goals are ambiguous, giving
managers and employees more flexibility to respond to changing conditions.
Concept
81) The first step in goal setting is to evaluate available resources.
Concept
82) The commitment concept says that plans should extend far enough to meet those commitments
made when the plans were developed.
Concept
83) When organizational members are more actively involved in planning, the probability that the plan
will be used increases.
Concept
84) In a short essay, define management by objectives (MBO) and list four elements of this type of goal
setting.
Answer: Management by objectives (MBO) is a management system in which specific performance goals
are jointly determined by employees and their managers, progress toward accomplishing these goals is
periodically reviewed, and rewards are allocated on the basis of this progress. Rather than using goals
only as controls, MBO uses them to motivate employees as well. Management by objectives consists of
four elements: goal specificity, participative decision making, an explicit time period, and performance
feedback. Its appeal lies in its focus on employees working to accomplish goals they have had a hand in
determining.
Concept
85) In a short essay, list and discuss six characteristics of well-designed goals.
Answer: (1) A well-designed goal should be written in terms of outcomes rather than actions. The
desired end result is the most important element of any goal and, therefore, the goal should be written
to reflect this. (2) Next, a goal should be measurable and quantifiable. It's much easier to determine if a
goal has been met if it's measurable. In line with specifying a quantifiable measure of accomplishment.
(3) A well-designed goal should also be clear as to a time frame. Although open-ended goals may seem
preferable because of their supposed flexibility, in fact, goals without a time frame make an organization
less flexible because a manager is never sure when the goal has been met or when he or she should call
it quits because the goal will never be met regardless of how long he or she works at it. (4) Next, a well-
designed goal should be challenging but attainable. Goals that are too easy to accomplish are not
motivating and neither are goals that are not attainable even with exceptional effort. (5) Well-designed
goals should be written down. Although actually writing down goals may seem too time consuming, the
process of writing the goals forces people to think them through. In addition, the written goals become
visible and tangible evidence of the importance of working toward something. (6) Finally, well-designed
goals are communicated to all organizational members who need to know the goals. Making people
aware of the goals ensures that they're "on the same page" and working in ways to ensure the
accomplishment of the organizational goals.
Concept
86) In a short essay, discuss the three planning contingency factors that influence the choice of plans
and illustrate how these factors influence planning.
Answer: Three contingency factors affect planning: level in the organization, degree of environmental
uncertainty, and length of future commitments. The planner's level in the organization is likely to
determine whether the plan is more strategic versus more operational. For the most part, operational
planning dominates managers' planning at lower levels of the organization, while at upper levels,
planning is more strategy oriented. Environmental uncertainty is the second contingency factor. When
uncertainty is high, plans should be specific, but more flexible. Under these conditions, managers may
sometimes need to abandon an existing plan in favor of a new one. Under low uncertainty, management
is more likely to adhere to existing plans. Lastly, the time frame of existing plans is likely to influence
new and emerging plans. The more current plans affect future commitments, the longer the time frame
is for which managers must plan.

Concept
87) How can managers effectively plan when the external environment is continually changing?
A) They should discontinue formal planning.
B) They should set general, but rigid plans.
C) They should be ready to change directions if environmental conditions warrant.
D) They should continue to follow the set organizational plans as persistence will eventually pay.
Answer: C
Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in planning
88) Which one of the following statements is true of planning in dynamic environments?
A) Organizations should follow a pyramidal structure when operating in uncertain environments.
B) Organizations must discontinue formal planning in such a scenario.
C) To be useful in a dynamic environment, plans need to be specific and unchanging.
D) Flatter organizational hierarchies are necessary for planning in uncertain environments.
Answer: D Diff: 3 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
89) A manager's analysis of the external environment can be improved by ________, which involves
screening information to detect emerging trends.
A) environmental scanning
B) environmental activism
C) critical path analysis
D) social screening
Answer: A Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
90) ________ refers to gathering information about competitors that allows managers to anticipate
competitors' actions rather than merely react to them.
A) Due diligence
B) Competitor intelligence
C) Data aggregation
D) Value analysis
Answer: B Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
91) Which one of the following statements is true of competitive intelligence as a means of
environmental scanning?
A) The Competitive Espionage Act makes it a crime in the United States to engage in competitive
intelligence.
B) It is unethical to use competitive intelligence to make strategic business decisions.
C) Competitive intelligence is ethical if competitor-related information is collected from sources

accessible and available to the public.
D) Buying competitors' products and asking their own employees to evaluate them to learn about new
technical innovations is an example of the unethical practices followed in competitive intelligence.
Answer: C Diff: 2 AACSB: Reflective thinking; Ethical understanding and reasoning Learning Obj: LO 8.4:
Discuss contemporary issues in planning Classification: Concept
92) ________ involves the theft of proprietary materials or trade secrets by any means.
A) Corporate espionage
B) Business intelligence
C) Data mining
D) Data aggregation
Answer: A Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
93) The ________ Act makes it a crime in the United States to engage in theft of a trade secret.
A) Sarbanes-Oxley
B) Patriot
C) Economic Espionage
D) Industrial Espionage
Answer: C Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
94) Which one of the following would be a legal and ethical source of business intelligence?
A) competitors' financial data
B) information provided by a former employee
C) memos found in a business's trash
D) posts on social media
Answer: A Diff: 3 AACSB: Application of knowledge; Analytical thinking; Ethical understanding and
reasoning Learning Obj: LO 8.4: Discuss contemporary issues in planning Classification: Application
95) Software and other ________ can help managers to make sense of ________.
A) technology; qualitative information
B) interactive dashboards; internal reports
C) planning approaches; strategic plans
D) digital tools; big data
Answer: D Diff: 3 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
96) Darby is a member of a global team of engineers who are required to coordinate their design efforts.
Emailing files to each other doesn't work well, as several versions may be circulating simultaneously.
Darby and his team could benefit from ________.
A) Google Analytics
B) cloud computing
C) frequent face-to-face meetings
D) the use of social media
Answer: B Diff: 2 AACSB: Application of knowledge Learning Obj: LO 8.4: Discuss contemporary issues in
planning Classification: Application
97) Future factories may have equipment that sends data about itself to the ________ so managers can
receive updates even when they are away from the equipment.
A) Internet of the Future
B) security monitoring company
C) Internet of Things
D) Internet of Data
Answer: C Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
98) In an uncertain environment, managers should develop plans that are specific, but flexible.
Answer: TRUE Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
99) Dynamic environments require a flatter organizational hierarchy in order to plan effectively.
Answer: TRUE Diff: 2 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
100) Environmental scanning involves monitoring the firm's pollution emissions.

Answer: FALSE Diff: 1 AACSB: Reflective thinking Learning Obj: LO 8.4: Discuss contemporary issues in
101) Much competitor intelligence is available from public sources, but it is illegal to use it to gain a
competitive advantage.
Answer: FALSE Diff: 2 AACSB: Reflective thinking; Ethical understanding and reasoning Learning Obj: LO
8.4: Discuss contemporary issues in planning Classification: Concept
102) Business intelligence is the same thing as competitor intelligence
103) There is a fine line between what is legal and ethical and what is legal but unethical.
Answer: TRUE Diff: 1 AACSB: Reflective thinking; Ethical understanding and reasoning Learning Obj: LO
8.4: Discuss contemporary issues in planning Classification: Concept
104) Qualitative data includes information about the number and cost of warranty work.
Answer: FALSE Diff: 2 AACSB: Application of knowledge Learning Obj: LO 8.4: Discuss contemporary
issues in planning Classification: Application
105) Cloud computing allows managers to store data in a secret part of their computers that is hack-
proof.
106) The Internet of Things allows production equipment to communicate with other machines and
make adjustments as necessary.
107) In a short essay, describe how managers can effectively plan when the external environment is
continually changing.
Answer: In an uncertain environment, managers want to develop plans that are specific, but flexible.
Although this may seem contradictory, it's not. To be useful, plans need some specificity, but the plans
should not be cast in stone. Managers must recognize that planning is an ongoing process. The plans
serve as a roadmap although the destination may be changing constantly due to dynamic market
conditions. They should be willing to change directions if environmental conditions warrant. This
flexibility is particularly important as plans are implemented. Managers must stay alert to environmental
changes that could impact the effective implementation of plans and make changes as needed. Keep in
mind, also, that it's important to continue formal planning efforts, even when the environment is highly
uncertain, in order to see any effect on organizational performance. It's the persistence in planning
efforts that contributes to significant performance improvement. It seems that, as with most activities,
managers "learn to plan" and the quality of their planning improves when they continue to do it. Finally,
effective planning in dynamic environments means flattening the organizational hierarchy as the
responsibility for establishing goals and developing plans is shoved to lower organizational levels
because there's little time for goals and plans to flow down from the top. Managers must train their
employees in setting goals and establishing plans and then trust that they will do so. Diff: 3
AACSB: Reflective thinking; Written and oral communication Learning Obj: LO 8.4: Discuss contemporary
issues in planning Classification: Concept
108) What is competitor intelligence? Identify some of the sources of competitor intelligence. Discuss
the legal and ethical issues related to this concept.
Answer: Competitor intelligence involves gathering information about competitors that allows managers
to anticipate competitors' actions rather than merely react to them. It is one of the fastest-growing
forms of environmental scanning. It seeks basic information about competitors: Who are they? What are
they doing? How will what they're doing affect us? Advertisements, promotional materials, press
releases, reports filed with government agencies, annual reports, want ads, newspaper reports,
information on the Internet, and industry studies are readily accessible sources of information. Specific
information on an industry and associated organizations is increasingly available through electronic
databases.
Managers can literally tap into this wealth of competitor information by purchasing access to databases.
Attending trade shows and debriefing your own sales staff also can be good sources of information on
competitors. In addition, many organizations even regularly buy competitors' products and ask their
own employees to evaluate them to learn about new technical innovations. Managers do need to be
careful about the way information, especially competitor intelligence, is gathered to prevent any
concerns about whether it's legal or ethical. Difficult decisions about competitor intelligence arise
because often there's a fine line between what's considered legal and ethical and what's considered
legal but unethical. Some people or companies will go to any lengths- some unethical-to get information
about competitors. Many who study competitor intelligence suggest that much of the competitor-
related information managers need to make crucial strategic decisions that are available and accessible
to the public. In other words, competitor intelligence isn't corporate espionage

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Management chapter 8 quiz

Management, 14e (Robbins/Coulter) Chapter 8 Planning Work Activities

2) The effect of planning on managers is that it forces them to ________.

A) generate higher profits

B) anticipate and respond to change

D) work at cross purposes

C) Planning eliminates the need to set goals.

D) Planning eliminates the need to measure work effort.

AACSB: Reflective thinking

Learning Obj: LO 8.1: Define the nature and purposes of planning

A) Formal planning is associated with positive financial results.

A) A participative style of planning was used.

B) Managers were allowed too much autonomy.

C) The company emphasized the control function over other functions.

D) External forces constrain managers' options.

6) Planning is concerned with how objectives are to be accomplished, not what is to be

accomplished. Answer: FALSE

7) Planning provides direction to managers and non-managers alike.

Answer: B Diff: 2 AACSB: Reflective thinking

Diff: 3 AACSB: Reflective thinking

A) All organizations share the single goal of making profits.

Answer: C Diff: 3 AACSB: Reflective thinking

18) Most companies' goals can be classified as either ________ or ________.

Answer: A Diff: 2 AACSB: Reflective thinking

Answer: C Diff: 2 AACSB: Application of knowledge

A) a ten percent increase in average annual sales

B) a seven percent increase in average annual income

C) achieving a return on investment of 17 percent

D) accelerating growth through focused execution

Answer: D Diff: 3 AACSB: Application of knowledge

Answer: A Diff: 1 AACSB: Reflective thinking

B) the company's stated goals are not its real goals

C) the company's goals are directional in nature

D) the company's financial goals derive from its strategic goals

Answer: B Diff: 3 AACSB: Analytical thinking

A) organizational members' actions

Answer: A Diff: 2 AACSB: Reflective thinking

A) strategic goals help shape financial goals

B) long-term goals differ from short-term goals

C) an organizations stated goals need not be its real goals

D) a company's real goals are derived from its mission statement

Answer: C Diff: 2 AACSB: Application of knowledge

26) Organizational plans can be classified on the basis of their ________.

Answer: B Diff: 2 AACSB: Reflective thinking

27) Strategic plans are usually ________.

B) short term, specific, and standing

C) long term, directional, and single use

D) long term, specific, and standing

Answer: C Diff: 2 AACSB: Reflective thinking

Answer: B Diff: 2 AACSB: Reflective thinking

29) Operational plans are usually ________.

A) short term, directional, and standing

B) short term, specific, and standing

C) long term, directional, and single use

Answer: B Diff: 2 AACSB: Reflective thinking

Answer: A Diff: 2 AACSB: Reflective thinking

Answer: C Diff: 3 AACSB: Application of knowledge

A) operational; directional; rigid

18) Most companies' goals can be classified as either or .