imp planning

7/18/2019 imp planning

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Chapter 7 Foundations of Planning

TRUE/FALSE QUESTIOS

!"AT IS PLAI#$

1. Planning is concerned with how objectives are to be accomplished, not what is to be accomplished.%False& eas'& p( )*+,

2. If a manager refuses to write anything down or share his plans with others in the organization, he isnot truly planning.

%False& -oderate& p( )*+,

!". O 0AA#ERS PLA$

3. Planning provides direction to managers and nonmanagers alie.%True& eas'& p( )*1,

!. "ven without planning, departments and individuals always wor together, allowing organizations tomove efficiently toward its goals.

%False& -oderate& p( )*1,

#. $esearch indicates that nonplanning organizations always outperform planning organizations.%False& -oderate& p( )*1,

"O! O 0AA#ERS PLA$

%. &oals are the foundation of organizational planning.

%True& -oderate& p( )*2,

'. (ost businesses have only one objective) to mae a profit.%False& eas'& p( )*2,

*. (ost companies+ goals can be classified as either strategic or financial.%True& -oderate& p( )*7,

. -trategic goals are related to the financial performance of the organization.%False& -oderate& p( )*7,

1. /n organization+s real goals are often 0uite irrelevant to what actually goes on.%False& eas'& p( )*3,

11. perational plans specify the details of how the achievement of the overall objectives is to beobtained.

%True& -oderate& p( )*3,12. ong term used to mean anything over three years, but now it means anything over one year.%False& eas'& p( )*3,

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13. -hortterm plans are those covering one year or less.%True& eas'& p( )*3,

1!. 4irectional plans have clearly defined objectives.%False& -oderate& p( )34,

ESTA5LIS"I# #OALS A E6ELOPI# PLAS

1#. /n integrated networ of goals is sometimes called a meansend chain.%True& -oderate& p( )3,

1%. In (5, or management by objectives, goals are often less welldefined, giving managers andemployees more fle6ibility to respond to changing conditions.

%False& -oderate& p( )3,

1'. In a typical (5 program, successful achievement of objectives is reinforced by performancebasedrewards.

%True& -oderate& p( )38,

1*. /n (5 program consists of four elements) loose goals, participative decision maing, an e6plicittime period, and performance feedbac.

%False& diffi9ult& p( )38,

1. -tudies of actual (5 programs find mi6ed results in terms of its effects on overall employee performance and organizational productivity.

%False& diffi9ult& p( )38,

2. In times of dynamic environmental change, welldefined and precisely developed action plans enhance

organizational performance.%False& -oderate& p( )38,

21. / welldesigned goal should be measurable and 0uantifiable.%True& eas'& p( )3+,

22. &oals that are too easy to accomplish are not motivating and neither are goals that are not attainableeven with e6ceptional effort.

%True& -oderate& p( )3+,

23. 7he second step in goal setting is to determine the goals individually or with input from others.%False& -oderate& p( )31,

2!. 7he more the current plans affect future commitments, the longer the time frame for which managersshould plan.

%True& diffi9ult& p( )32,

COTE0PORAR. ISSUES I PLAI#

2#. Planning is a waste of time in a volatile environment.

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%False& eas'& p( )3*,

2%. / major argument against formal plans can+t replace intuition and creativity.%True& eas'& p( )3*,

2'. It+s not enough for managers just to plan. 7hey have to start setting goals.%False& -oderate& p( )33,

2*. In today+s dynamic business environment, successful firms recognize that planning is an ongoing process, not a tablet of rules cast in stone.

%True& -oderate& p( 44,

2. (anagers must be able to follow through with plans even if conditions change.%False& -oderate& p( 44,

3. "ffective planning in dynamic environments means flattening the organizational hierarchy.%True& -oderate& p( 44,

0ULTIPLE:C"OICE QUESTIOS8or each of the following, choose the answer that most completely answers the 0uestion.

!"AT IS PLAI#$

31. Planning involves defining the organization+s goals, establishing an overall strategy for achieving thosegoals, and developing a comprehensive set of plans 9999999999999.a. as to which shift will perform what wor functions b. to determine which manager will be in charge of which departmentc. for organizational wor activities

d. to establish the 0uality and 0uantity of wor to be accomplished%9& diffi9ult& p( )*+,

32. In informal planning, 9999999999 sharing of goals with others in the organization.a. everything may be written down, but there is little or no b. everything is written down, and there isc. nothing is written down, and there is little or nod. nothing is written down: therefore management does a lot of

%9& eas'& p( )*+,

33. Informal planning is 999999999.a. performed at the lowest organizational level b. general and lacs continuityc. developed in informal meetings at a resortd. specific and is developed by the middle managers for their department

%;& eas'& p( )*+,

3!. In formal planning, 999999999.a. specific goals covering a period of years are defined b. specific goals are developed and not written

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c. general goals are developed and not writtend. general goals covering an unspecified period of years are defined

%a& eas'& p( )*+,

3#. 8ormal planning involves which of the following aspects;a. developing general objectives b. planning for up to one year c. writing objectivesd. distributing the plan to all managerial employees

%9& -oderate& p( )*+,

!". O 0AA#ERS PLA$

3%. 7he effect of planning on managers is that it forces them to 999999999999999.a. react to change b. consider the impact of changec. respond indiscriminately

d. develop bureaucratic response models%;& -oderate& p( )*1,

3'. Planning can+t eliminate change. (anagers plan in order to 99999999999.a. be prepared for when changes in management at the top occurs b. anticipate changes and develop the most effective response to changesc. decide what needs to be done when a change in environments happend. have the appropriate materials available when the demand for them comes about

%;& -oderate& p( )*1,

3*. Planning gives direction, reduces the impact of change, minimizes waste and redundancy, and

9999999999.a. establishes the worloads for each of the departments b. sets the basis used for promotion of individuals within the organizationc. eliminates departments that are not needed within the pland. sets the standards used in controlling

%d& -oderate& p( )*1,

3. -tudies of performance in organizations that plan have reached 99999999999.a. somewhat negative conclusions regarding the benefits of planning b. generally mi6ed conclusions regarding the benefits of planningc. generally negative conclusions regarding the benefits of planningd. generally positive conclusions regarding the benefits of planning

%d& diffi9ult& p( )*1,

!. 7he 0uality of the planning process and the appropriate implementation of the plans probably 99999999999.a. don+t contribute to high performance nearly as much as the e6tent of planning b. contribute more to high performance than does the e6tent of planningc. contribute less to high performance than does the e6tent of planningd. should be studied more to factually determine which contributes the most

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%;& diffi9ult& p( )*1,

!1. In studies in which formal planning did not lead to higher performance, 999999999999.a. the e6ternal environment often was the culprit b. management+s e6ecution of the plans was most often the reason for failurec. employees+ implementation of the plans was the primary reason for failured. lac of communication was most often the reason for failure

%a& -oderate& p( )*1,

!2. &overnmental regulations, powerful labor unions, and other critical environmental forces constrainmanagers+ options and 9999999999 the impact of planning on an organization+s performance.a. reduce b. increasec. neutralized. don+t affect

%a& diffi9ult& p( )*1,

"O! O 0AA#ERS PLA$

!3. Planning is often called the primary management function because it 999999999999.a. offers some basis for future decision maing b. creates the vision for the organizational members to wor towardc. establishes the basis for all the other functionsd. sets the tone for the organizational culture

%9& diffi9ult& p( )*2,

!!. Planning involves two important elements) 99999999999.a. goals and decisions

b. goals and plansc. plans and decisionsd. goals and actions

%;& -oderate& p( )*2,!#. &oals are objectives, 9999999999.

a. and we use the two terms interchangeably b. but goals are long term, and objectives are short termc. but goals are used by top management, and objectives are used by firstlevel managementd. but goals are used in reference to profits, and objectives are used in reference to production

output%a& eas'& p( )*2,

!%. Plans are documents that outline how goals are going to be met and 99999999999.a. define which department has what responsibilities needed to accomplish the goals b. tell what materials and processes are necessary to fulfill the goalsc. identify how much capital is re0uired to complete the goalsd. describe resource allocations, schedules, and other necessary actions to accomplish the goals


!'. 9999999999 can evaluate whether an organization is successful.

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a. / goal is the only measure that b. <o single measurec. Plans are also a measure thatd. -taeholders are the only groups that

%;& -oderate& p( )*2,

!*. =hen managers emphasize one goal, they 99999999999.a. assure that the one goal will be accomplished even above the established level b. ignore other goals that must also be reached if longterm success is to achievedc. mae the goal easier to be accomplished by all organizational membersd. deny the organizational members the opportunity to grow and develop

%;& diffi9ult& p( )*2,

!. >sing a single objective can result in unethical practices because managers 999999999999.a. want to satisfy the stocholders of the organization b. will manipulate the outcomes reported to assure that the one objective is achievedc. will ignore other important parts of their jobs in order to loo good on that one measure

d. will use overtime to accomplish that single objective without reporting it%9& diffi9ult& p( )*2,

#. fficial statements of what an organization says and what it wants its various staeholders to believeare referred to as 99999999999.a. real goals b. stated goalsc. committed goalsd. comprehensive goals

%;& -oderate& p( )*7,

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#1. 7he conflict in stated goals e6ists because organizations respond to a variety of 999999999999999.a. staeholders b. e6ternal environmentsc. governmental regulationsd. stocholders

%a& -oderate& p( )**,

#2. =hich of the following is true concerning an organization+s stated objectives;a. rganizations issue identical objectives to all constituents. b. rganizations typically have internal and e6ternal sets of objectives.c. rganizations may issue different objectives to stocholders, customers, employees, and the

public. d. -tated objectives are usually in line with shortterm actions.

%9& -oderate& p( )**,

#3. =hat should a person do to understand what the real objectives of the organization are;a. observe organizational members+ actions

b. attend a stocholders+ annual meetingc. read their annual reportd. watch television news reports


#!. 7he most common ways to describe organizational plans are by their fre0uency of use, time frame,specificity, and 99999999999.a. 0uantifiability b. fle6ibilityc. breadthd. attainability

%9& eas'& p( )*3,

##. =hen we categorize plans as being directional versus specific, we are categorizing them by 999999999999.a. breadth b. specificityc. fre0uency of used. depth

%;& eas'& p( )*3,

#%. =hen we categorize plans as being singleuse versus standing, we categorize them by 999999999999.a. breadth b. specificityc. fre0uency of use d. time frame

%9& eas'& p( )*3,#'. -trategic plans are plans that apply to the entire organization, establish the organization+s overall

goals, and 999999999999.a. guide the organization toward ma6imizing organizational profits for the stocholders b. attempt to satisfy all government regulations while ma6imizing profits

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c. satisfy the organization+s staeholdersd. see to position the organization in terms of its environment


#*. perational plans specify the details of 99999999999.a. what department performs which functional process to accomplish the goals b. what materials are re0uired for which product being producedc. when each product model is to be producedd. how the overall goals are to be achieved


#. -trategic plans tend to cover a longer period of time than operational goals and also 9999999999999.a. cover a more narrow view of the organization b. cover the financial projections of the planning periodc. cover a broader view of the organizationd. include an estimate of the profits that the stocholder can anticipate as dividends

%9& -oderate& p( )*3,

%. -trategic plans include the formulation of goals, whereas operational plans define ways to 9999999999999.a. ma6imize the organization+s profits b. achieve the goalsc. minimize the number of employees that have to be laid off in hard timesd. provide the most efficient methods of production

%;& -oderate& p( )*3,

%1. /s organizational environments have become more uncertain, 999999999999.a. organizations are having to mae longer term plans

b. organizations have to resist the uncertainties to eep the plans moving toward the objectivesc. organizations have to re0uest that the government pass more legislation restricting the amount of

uncertaintyd. the definition of long term has changed


%2. -pecific plans are clearly defined and 999999999999.a. allow managers to their interpret ?fle6ibility@ on their own b. leave no room for interpretationc. give the managers authority to interpret the plans for their area of responsibilityd. eep the staeholders informed of the organization+s objectives

%;& -oderate& p( )34,

%3. / state legislative plan that calls for a 2.!# percent increase in tobacco sales ta6 for the ne6t 2 yearswould be considered what type of plan;a. strategic b. operationalc. specificd. directional

%9& -oderate& p( )34,

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%!. 4irectional plans 9999999999999.a. have clearly defined objectives b. identify general guidelinesc. meet the needs of a uni0ue situationd. last for 3A# years

%;& -oderate& p( )34,

%#. 7he fle6ibility inherent in directional plans must be weighed against the 9999999999999.a. gain of a shorter planning period by specific plans b. gain of a longer planning provided by specific plansc. loss of clarity provided by specific plansd. loss of a shorter planning period by specific plans

%9& eas'& p( )34,

%%. 9999999999 is a onetime plan specifically designed to meet the needs of a uni0ue situation.a. / multipurpose plan

b. / strategic planc. /n operational pland. / singleuse plan

%d& eas'& p( )34,

%'. -tanding plans are ongoing plans that provide 999999999999.a. general directions of how to accomplish an identifiable tas b. staeholders with identifiable goals that the organization will always strive to achievec. the stocholders with identifiable goals that the organization will always strive to achieved. guidance for activities performed repeatedly

%d& -oderate& p( )3),

%*. / city+s policy concerning sateboarding on downtown sidewals that provides guidance for policeaction would be considered what type of plan;a. standing b. contingencyc. directionald. singleuse

%a& -oderate& p( )3),


%. &oals provide the direction for all management decisions and actions and form the 9999999999999.a. profit basis that the organizations will accomplish for stocholders b. desired outcomes that the organizational members will achievec. basis for the sharing of profits with the employees at the endd. criteria against which actual accomplishments are measured


'. =ith traditional goal setting, the goals are set at the top level of management and 9999999999999.a. then they become the responsibility of firstline management to achieve the goals

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b. then they are broen down into subgoals for each level of the organizationc. all the efforts to achieve the goals are directed by top management to ensure that they are

achievedd. then they are delegated to the ne6t lower level to be achieved

%;& -oderate& p( )3),

'1. =ith traditional goal setting, the assumption is that 999999999999999.a. top managers now what is best because they see the ?big picture@ b. top managers are unfamiliar with setting goals, so lowerlevel managers are assigned to do the

tas c. lowerlevel managers understand more of what needs to be accomplishedd. lowerlevel managers are incapable of setting goals

%a& -oderate& p( )3),

'2. =ith traditional goal setting, employees+ wor efforts at their respective levels and wor areas aregeared to meet the goals 99999999999.a. so that the top management will be retained in their position

b. so that their immediate supervisors will be retained in their positionc. that have been assigned in their specific areas of responsibilityd. within the shortest amount of time possible

%9& -oderate& p( )3),

'3. =hat happens to traditional goals as they mae their way down from top management to lower levels;a. 7hey lose clarity and unity. b. 7hey unite the worforce.c. owerlevel managers must continually revise and correct them.d. 7hey purposely remain vague and nonspecific.

%a& -oderate& p( )3,

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'!. =hen the hierarchy of organizational goals is clearly defined, it forms a 999999999999.a. hierarchicallin chain b. meansends chainc. weaestlin chaind. levellevel chain

%;& -oderate& p( )3,

'#. (anagement by objectives B(5C is a management system in which the first steps are setting specific performance goals that are 9999999999999.a. established that can be easily accomplished b. jointly determined by employees and their managersc. determined by top management with clarity so that the objectives are clear to even the most

incompetent employeed. developed in such a manner that the employees are selfdirected and do not need supervision

%;& -oderate& pp( )3:)38,

'%. =hat is the first step in a typical (5 program;

a. (ajor objectives are allocated among divisional and departmental units. b. >nit managers collaboratively set specific objectives for their units with their managers.c. 7he organization+s overall objectives and strategies are formulated.d. /ction plans are specified and agreed upon by managers and employees.

%9& -oderate& p( )38,

''. In the (5 system, 99999999999.a. objectives are determined by management b. goals are only reviewed at the time of completionc. goals are used as controlsd. progress toward objectives is periodically reviewed

%d& -oderate& p( )38,

'*. ne of the potential problems of (5 programs is that 999999999999.a. there may be an overemphasis by the employee on accomplishing their goals without regards to

others in the wor unit b. they may be more effective in times of dynamic environmental changec. employees tae goal setting too seriouslyd. they encourage filling out paperwor


'. / welldesigned goal should be 999999999999.a. short and very specific about e6pected outcomes b. written in terms of outcomes rather than actionsc. identifiable to even the firstline supervisorsd. specific and within a manageable time frame

%;& -oderate& p( )38,

*. / welldesigned goal should be 999999999999.a. discussed at orientation

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b. nearly unattainable, so that even if the unit or employee misses their goal, performance is still veryhigh

c. easy to achieved. clear as to a time frame

%d& -oderate& p( )3+,

*1. 7he process of writing goals 999999999999999.a. forces people to thin them through b. is too time consumingc. is uselessd. inspires innovative concepts

%a& -oderate& p( )3+,

*2. =hat do written goals become;a. old and useless b. infle6ible and generalc. visible and tangible

d. personal and collective%9& -oderate& p( )31,

*3. =hat is the purpose of an organization called;a. the organization+s action plan b. the organization+s missionc. the organization+s visiond. the organization+s contingency plan

%;& -oderate& p( )31,

*!. =hen setting goals, what should a manager do after writing down the goals and communicating them

to all who need to now;a. determine the goals individually or with input from others b. evaluate available resourcesc. review results and whether goals are metd. review the organization+s mission

%9& -oderate& p( )31,

*#. 7hree contingency factors that affect planning are length in the organization, degree of environmentaluncertainty, and 999999999999.a. level of future commitments b. 0uantity of future commitmentsc. fre0uency of future commitmentsd. enforceability of future commitments


*%. 999999999999 planning dominates managers+ planning efforts at lower levels of the organization.a. -trategic b. 7acticalc. perationald. 8unctional

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%9& eas'& p( )31,

*'. 7he commitment concept means that plans should e6tend far enough to meet those commitments 9999999999.a. as 0uicly as possible b. while the resources are availablec. with the staeholders and mae it appear that the organization is really committedd. made when the plans were developed


**. Planning for too long or too short a time period 999999999999999.a. is effective planning b. is inefficient and ineffectivec. is the concept of commitmentd. depends on the organization

%;& diffi9ult& p( )32,

*. /s organizations e6pand and update their computing technology, they are 999999999999999.a. committed to whatever future e6penses are generated by that plan b. in a state of high environmental uncertaintyc. in a state of low environmental uncertaintyd. relying on lower level management to do the planning


. Dow an organization plans can be best understood by looing at 999999999999.a. the goals set out by the organization+s planners b. who does the planningc. the fle6ibility of the organization+s plans

d. the priority of the goals%;& eas'& p( )32,

1. In the traditional approach to planning, planning was done entirely by toplevel managers who wereoften assisted by 999999999999.a. business level managers b. functional level managersc. a mi6ture of managers from the line, functional, and business leveld. a group of planning specialists

%d& eas'& p( )37,

2. =hat is defined as a group of planning specialists whose sole responsibility was helping to write thevarious organizational plans;a. traditional planning specialists b. organizational planning departmentc. formal planning departmentd. mission writers

%9& eas'& p( )37,

3. =hen can the traditional topdown approach to planning be effective;

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a. only if the documents loo impressive b. only if the documents are prepared for the corporate planning staff c. only if the planning involves lower level managementd. only if managers understand that they must create usable documents that members actually use


!. =hen organizational members are more actively involved in planning, they see that the plans 999999999999.a. are not as important as management maes them out to be b. are how the company is going to be judged by the stocholdersc. are more than just something written down on paper d. stated to staeholders are the real plans that the organization desires to achieve

%9& -oderate& p( )37,


#. (anagers who continue to do the things re0uired to achieve the original goals of a plan

999999999999999.a. are following their intuition b. are demonstrating their ability to follow a fle6ible and specific planc. are acting responsiblyd. may not be able to cope with a changed environment

%d& -oderate& p( )3*,

%. =hat is a fre0uently cited criticism of formal planning;a. Plans can+t be developed for a dynamic environment. b. 8ormal planning is too time consuming, given the dynamism in modern business

environments.

c. 8ormal planning creates e6tra, often redundant levels of hierarchy within the organization.d. 8ormal planning wors well only for large, diversified companies.%a& -oderate& p( )3*,

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'. -uccessful organizations are typically the result of what;a. fle6ibility b. formal planning effortsc. innovative visiond. mechanical analysis

%9& diffi9ult& p( )3*,

*. Eisions have a tendency to 999999999999999 as they evolve.a. become formalized b. failc. generate more creativityd. trap employees in a certain mindset

%a& diffi9ult& p( )3*,

. 8ormal planning focuses managers+ attention on what;a. the changing future b. today+s competition

c. tomorrow+s survivald. yesterday+s successes and failures

%;& -oderate& p( )3*,

1. =hat argument against formal planning indicates that confidence in a plan is dangerous;a. Fust planning isn+t enough. b. 8ormal planning reinforces success, which may lead to failure.c. Planning may create rigidity.d. Plans cannot be developed for a dynamic environment.

%;& eas'& p( )33,

11. / wireless networing technology called =i8i that lins together information devices is 9999999999.a. revolutionizing all inds of industries b. maing organizational planning much easier c. complicating the planning process, but will be improving communicationsd. an integral component of planning for the Fortune # companies

%a& diffi9ult& p( )33,

12. In an uncertain environment, managers want to develop 999999999 plans.a. general and fle6ible b. specific but fle6iblec. formald. contingency

%;& -oderate& p( 44,

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13. 8ormal plans serve as a roadmap although the destination may be changing constantly dueto 999999999999999.a. dynamic maret conditions b. political changesc. management changesd. employment maeup

%a& diffi9ult& p( 44,

1!. It is 9999999999 formal planning efforts when the environment is highly uncertain.a. not as important to continue b. important to switch to directional planning and ceasec. necessary to ceased. important to continue

%d& diffi9ult& p( 44,

1#. =hy does the persistence in planning efforts contribute to significant performanceimprovement;

a. /fter so many tries, managers have to hit on a success. b. If managers wear down the employees enough, their performance will improve.c. 7he 0uality of managers+ planning improves when they continue to do it.d. (anagers discover that their focus should be on the future instead of present.

%9& -oderate& p( 44, 1%. 7he organizational hierarchy becomes flattened as the responsibility for establishing goals

and developing plans is 999999999999.a. moved to the middle organizational levels b. shoved to the lowest organizational levelsc. shifted to a formal planning department

d. more the wor of the financial department%;& -oderate& p( 44,

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SCEARIO QUESTIOS8or each of the following, choose the answer that most completely answers the 0uestion.

!"AT IS PLAI#$

It+s /cademic B-cenarioC

Gou are the academic dean for a small liberal arts college. 7he university president has ased you todevelop a plan for the college. De wants the plan to cover the ne6t # years. De wants it to be as specificas possible, but it should leave some room for fle6ibility.

1'. 5ecause your plan will have specific objectives covering a period of # years along with specificaction plans for achieving of these objectives, your plan could best be described as 99999999999999.a. contractual b. formalc. definedd. standard

%;& -oderate& p( )*+,

!". O 0AA#ERS PLA$

It+s /cademic B-cenarioC

Gou are the academic dean for a small liberal arts college. 7he university president has ased you todevelop a plan for the college. De wants the plan to cover the ne6t # years. De wants it to be as specificas possible, but it should leave some room for fle6ibility.

1*. 7he president has e6pressed concern regarding the impact of planning on the ability of the

organizational to respond to emerging changes in the higher education environment, such as distancelearning and corporate universities. Gou should tell the president that planning 999999999999999.a. forces managers to loo at the present b. forces managers to anticipate changec. eliminates the consideration of the impact of changed. increases uncertainty

%;& eas'& p( )*1,

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"O! O 0AA#ERS PLA$

$etail Planning B-cenarioC

(r. 7yler <all is president and H" of a retail chain that is about to begin operations in numerous major cities across the >nited -tates. 7he stores will sell home furnishings that are considered moderately priced for the averageincome buyer. 4uring the last few months he has been woring to lay outdirections for the managers of the stores. (r. <all and his vice presidents have decided that each storeshould have sales e0ual to or greater than 1 per s0uare foot, per day. 7o attract an ade0uate number of customers, the store should be well maintained both inside and out.

1. 7he primary tas that (r. <all and the vice presidents have been performing during the lastcouple of months is nown as 999999999999.a. laying out ideas b. maing plansc. establishing networsd. designing the stores

%;& eas'& p( )*2,

11. 7he statement that each store should have sales e0ual to or greater than 1 per s0uarefoot, per day is an e6ample of 99999999999.a. a specific plan b. a directional planc. a goald. management by objectives

%9& -oderate& p( )*2,

111. 5ecause the environmental conditions in which home furnishing stores operate are generally

stable, the statements intended to attract customers would most liely be considered to be 99999999999.a. operational plans b. specific plansc. directional plansd. strategic plans


112. 7he statement that all stores should be well maintained both inside and out is an e6ample of a 999999999.a. directional plan b. specific planc. stated goald. real goal


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/ 5usiness Plan B-cenarioC

Imagine that you are the owner of a small company that sells typewriters, business e0uipment, andcomputer hardware. Gou employ about ! people. Gou now that the organization needs to move in adifferent direction, and you want to set some longterm goals for the company. Gou want to write a planthat will cover the ne6t 3 years only, nowing that business needs change somewhat fre0uently. Gour goalis to write a plan that provides direction but does not contain e6tremely welldefined, potentiallyrestrictive objectives.

113. 7he fact that your plan covers 3 years suggests that your plan is most consistent with what type of plan;a. specific b. long termc. operationald. strategic


11!. Gour plan will cover the entire organization. 7his characteristic is most consistent with what type of plan;a. specific b. long termc. standardd. strategic


"5iz 4reams B-cenarioC

$obert 4owns has just completed a (aster of -cience degree in computer science at (ajor -tate

>niversity. De now wants to begin a new Internet business selling his services as a =eb site maer for companies in his home city, -t. ouis. De estimates that, if his business idea is a success, within 1 year hewill be employing at a minimum 1 programmers and 2 analysts.

11#. 7o mae his business successful, $obert will first have to develop what type of plan;a. operational b. specificc. directionald. strategic


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11%. 7o clarify how the overall goals are to be achieved, $obert will have to develop aBnC 999999999999999.a. operational plan b. specific planc. directional pland. strategic plan


11'. 7o ensure that the organization+s objectives are clearly defined and do not leave room for interpretation, he will have to develop what type of plan;a. operational b. specificc. directionald. strategic

%;& -oderate& p( )34,

11*. 7o provide the programmers and analysts general guidelines about the efficiencies that are

desired, he will have to develop what type of plan;a. operational b. specificc. directionald. strategic

%9& -oderate& p( )34,

$etail Planning B-cenario 2C

(r. 7yler <all is president and H" of a retail chain that is about to begin operations in numerous major cities across the >nited -tates. 7he stores will sell home furnishings that are considered moderately

priced for the averageincome buyer. 4uring the last few months he has been woring to lay outdirections for the managers of the stores. (r. <all and his vice presidents have decided that each storeshould have sales e0ual to or greater than 1 per s0uare foot, per day.

11. (r. <all+s goal for each store of 1 per s0uare foot, per day has several of the characteristics of a welldesigned goal. 8irst, it is written in terms of outcomes and not actions. -econd, this goal ismeasurable and 0uantifiable. =hat else can (r. <all do to improve the design of this goal;a. specify a time frame for achieving this goal b. ensure that the goal is attainablec. communicate this goal to every single employee of the organizationd. mae certain it will be achieved easily

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11



12. =hen setting goals for the plan, what should (r. <all do after he evaluates available resources;a. review the organization+s mission b. write down the goals and communicate them to all who need to nowc. review the results and whether goals are being metd. determine the goals individually or with input from others

%d& eas'& p( )31,


Planning 8actors B-cenarioC

/s vice president of a local manufacturer, you are interested in developing a new organizational plan.Dowever, you are not sure who you should assign to the varying planning tass. /t the same time, severalother issues that could deeply affect your business are pending, including rising interest rates and the potential formation of a new employee union. Gou must also consider your firm+s contracts with largevendors that e6tend # years into the future.

121. 7he issues that may deeply impact your business such as rising interest rates, the potential formationof a new employee union, and the firm+s contracts with large vendors, are e6amples of 99999999999 factors that affect planning.a. environmental b. noncontrollablec. outsided. contingency


122. 8or the most part, you should assign the operational planning activities to 99999999999.a. line staff

b. top managersc. lowerlevel managersd. middle managers

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123. =hich plans should you and other top management members be developing;a. operational b. specificc. overalld. strategic


12



/J Planning B-cenarioC

rganizations /5H and KGJ are both in the same industry and vie for the same set of customers in themaretplace. /t /5H, the plans are made at the top level of management each year and then areformulated for and announced to each of the midlevel and firstlevel managers. /t KGJ, the plans aremade at the top, and then those managers meet with their subordinates at the ne6t level and mutuallyagreedto goals are established with them. 7he midlevel managers then meet with their firstlevelmanagers and mutually agreedto goals are established with them. 8inally, the firstlevel managers meetwith each of their employees and mutually agreedto goals are established with them.

12!. 7he planning approach used at the /5H organization is 999999999999999.a. management by objectives b. directional planningc. specific planningd. traditional planning


12#. /ssuming KGJ+s hierarchy of goals is clearly defined, the result is 99999999999999999.a. unity of command b. a meansend chainc. management by objectivesd. formal planning department

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12%. KGJ also follows a management by objectives B(5C approach to goal setting. 7hemanagers and employees specify and agree upon 999999999999999, which define howobjectives are to be achieved.a. action plans

b. periodic reviewsc. performancebased rewardsd. objectives and strategies


12'. =hich organization is more liely to have higher employee performance and organizational productivity;a. <either, as they are both in the same industry and facing the same environments. b. rganization /5H, because the plans are formulated by management for each level of the

organization.c. rganization KGJ, because the employees participated in the planning process and now

specifically what their objectives are.d. <either, because the hierarchy of organizational goals is clearly defined at each level.

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13



7he -tate $oad ' Hollaborative

7he -outh 8lorida $egional Planning Houncil convened a group of staeholders, including the 8lorida4epartment of 7ransportation and the 4epartment of Hommunity /ffairs, who are interested in woringtogether on improving -tate $oad '. 4avid 4ahlstrom is the senior planner for the -outh 8lorida$egional Planning Houncil. (r. 4ahlstrom successfully obtained a technical assistance grant. 7he intent isto organize the 1# small communities along -tate $oad ' into an intergovernmental unit. /ll of thecommunities will share the same visioning processes of mission, objectives, and tass. (r. 4ahlstrom isnow charged with developing a strategic plan for this group, called the -tate $oad ' Hollaborative.

12*. 5ecause of the intergovernmental nature of the -tate $oad ' Hollaborative, (r. 4ahlstrom+s bosssuggests that openended goals may be preferable, as they offer greater fle6ibility. (r. 4ahlstrom, anowledgeable and e6perienced planner, tells her that 99999999999.a. a welldesigned goal will also specify a time frame for accomplishment b. a welldesigned goal will also specify a 0uantifiable measure of accomplishmentc. although openended goals may seem preferable because of their fle6ibility, in fact, goals without

a time frame mae an organization less fle6ible because you+re never sure when you+ve met your

goalsd. a welldesigned goal will not be challenging.

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12. 8irst, (r. 4ahlstrom must determine the goals he wants to achieve. 7o do so, he must follow aseries of steps for goal setting. 7he first step in setting goals for this new group should be to 99999999999.a. formally establish the organization+s mission b. evaluate available resourcesc. determine the goals individually and then as for input from othersd. re0uest input from others and then formulate specific goals


13. =hile each community in the -tate $oad ' Hollaborative maintains its identity and independence,(r. 4ahlstrom believes that the leverage of multigovernmental applications will ultimately securemore major funding in the future. Dowever, due to the intergovernmental nature of the organization,(r. 4ahlstrom, although in charge of the collaborative, wields little direct power over any member community individually. =hich contingency factor best represents (r. 4ahlstrom+s situation;a. level in the organization b. time frame of future commitmentsc. environmental uncertaintyd. measurability of the goal


1!



131. 4ahlstrom told the Hollaborative+s members that the more current plans affect future commitments,the longer the time frame is for which managers must plan. 7his concept is also nown as the 99999999999999999.a. first principle of planning b. commitment conceptc. length of future commitmentsd. degree of environmental uncertainty

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7he 4ynamic "nvironment B-cenarioC

/ group of shareholders at Hompany "J has strongly suggested that the firm update its planning practicesto include more participative decision maing and greater feedbac to employees.

132. Hompany "J+s business is technologyrelated and the environment is very dynamic. (anagement at

Hompany "J argues that formal planning 999999999999999.a. is not as effective in static environments b. ignores the employeesc. does not guarantee that the employeeBsC will remain motivated to achieve the goals, even if they

helped set themd. focuses managers+ attention on tomorrow+s survival instead of today+s competition

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133. 5ecause the managers at Hompany "J wor in such an uncertain environment, it is essential thatthey develop a plan. =hat will they have to do to plan in such an environment;a. train their employees in setting goals and establishing plans

b. recognize that their plan must be generalc. be determined to continue with their plan even if the conditions changed. mae their plans as rigid as possible

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1#



ESSA. QUESTIOS

!"AT IS PLAI#$

13!. In a short essay, define planning and discuss the characteristics of formal versus informal planningas it is used in various organizations.

Ans<erPlanning involves defining the organization+s goals, establishing an overall strategy for achieving thosegoals, and developing a comprehensive set of plans to integrate and coordinate organizational wor. It isconcerned with both ends and means. Planning can either be formal or informal. /ll managers engage insome planning, but their planning might be informal. In informal planning, nothing is written down, andthere is little or no sharing of goals with others within the organization. 7his type of planning often isdone in many small businesses where the ownermanager has a vision of where he or she wants the business to go and how to get there. Informal planning is general and lacs continuity. In formal planning,specific goals covering a period of years are defined. 7hese goals are written and nown to organizationalmembers. -pecific action programs e6ist to achieve these goals: that is, managers clearly define the path

they want to tae to get the organization and the various wor units from where they are to where theywant them to be.%eas'& p( )*+,

!". O 0AA#ERS PLA$

13#. In a short essay, list and discuss the four reasons for planning.

Ans<era. Planning establishes coordinated effort. It gives direction to managers and nonmanagers alie.

=hen employees now where the organization or wor unit is going and what they must

contribute to reach goals, they can coordinate their activities, cooperate with each other, and dowhat it taes to accomplish those goals. =ithout planning, departments and individuals might beworing at crosspurposes, preventing the organization from moving efficiently toward its goals.

b. Planning reduces uncertainty by forcing managers to loo ahead, anticipate change, consider theimpact of change, and develop appropriate responses. It also clarifies the conse0uences of actionsmanagers might tae in response to change. "ven though planning can+t eliminate change,managers plan in order to anticipate changes and develop the most effective response to them.

c. Planning reduces overlapping and wasteful activities. =hen wor activities are coordinatedaround established plans, wasted time and resources and redundancy can be minimized.8urthermore, when means and ends are made clear through planning, inefficiencies becomeobvious and can be corrected or eliminated.

d. Planning establishes goals or standards that are used in controlling. If managers are unsure of

what they are trying to accomplish, they will be unable to determine whether or not the goal hasactually been achieved. In planning, goals and plans are developed. 7hen, through controlling,actual performance is compared against the goals, significant deviations are identified, andnecessary corrective action is taen. =ithout planning, there would be no way to control.

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"O! O 0AA#ERS PLA$

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13%. In a short essay, define the following types of plans) strategic plans, operational plans, longterm plans, shortterm plans, specific plans, directional plans, singleuse plans, and standing plans.

Ans<er-trategic plans are plans that apply to the entire organization, establish the organization+s overall goals,and see to position the organization in terms of its environment. Plans that specify the details of how theoverall goals are to be achieved are called operational plans. -trategic plans tend to cover a longer timeframe and a broader view of the organization. -trategic plans also include the formulation of goalswhereas operational plans define ways to achieve the goals. /lso, operational plans tend to cover shorter time periods. =e define longterm plans as those with a time frame beyond three years. =e define shortterm plans as those covering one year or less. -pecific plans are plans that are clearly defined and thatleave no room for interpretation. 7hey have clearly defined objectives. 7here+s no ambiguity and no problem with misunderstanding. 7he drawbacs of specific plans are that they re0uire clarity and a senseof predictability that often do not e6ist. =hen uncertainty is high and managers must be fle6ible in order to respond to une6pected changes, directional plans are preferable. 4irectional plans are fle6ible plansthat set out general guidelines. 7hey provide focus but don+t loc managers into specific goals or coursesof action. Dowever, the fle6ibility inherent in directional plans must be weighed against the loss of clarity

provided by specific plans. / singleuse plan is a onetime plan specifically designed to meet the needs of a uni0ue situation. In contrast, standing plans are ongoing plans that provide guidance for activities performed repeatedly. -tanding plans include policies, rules, and procedures.%diffi9ult& pp( )*3:)3),

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13'. In a short essay, define management by objectives B(5C and list four elements of this type of

goal setting. =hat are some problems associated with this approach;

Ans<er(anagement by objectives B(5C 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. $ather than using goalsonly as controls, (5 uses them to motivate employees as well. (anagement by objectives consists of four elements) goal specificity, participative decision maing, an e6plicit time period, and performancefeedbac. Its appeal lies in its focus on employees woring to accomplish goals they have had a hand indetermining. ne problem is that (5 may not be as effective in times of dynamic environmentalchange. >nder an (5 program, employees need some stability to wor toward accomplishing the setgoals. If new goals must be set every few wees, there+s no time for employees to wor on accomplishingthe goals and measuring that accomplishment. /nother problem of (5 programs is that anoveremphasis by an employee on accomplishing his or her goals without regard to others in the wor unit

can be counterproductive. / manager must wor closely with all members of the wor unit to assure thatemployees aren+t woring at crosspurposes. 8inally, if (5 is viewed simply as an annual e6ercise infilling out paperwor, employees won+t be motivated to accomplish the goals.%-oderate& pp( )3:)38,

13*. In a short essay, list and discuss five characteristics of welldesigned goals.

Ans<erB1C / welldesigned goal should be written in terms of outcomes rather than actions. 7he desired endresult is the most important element of any goal and, therefore, the goal should be written to reflect this.B2C <e6t, a goal should be measurable and 0uantifiable. It+s much easier to determine if a goal has been

met if it+s measurable. In line with specifying a 0uantifiable measure of accomplishment, B3C a welldesigned goal should also be clear as to a time frame. /lthough openended goals may seem preferable because of their supposed fle6ibility, in fact, goals without a time frame mae an organization less fle6ible because a manager is never sure when the goal has been met or when he or she should call it 0uits because the goal will never be met regardless of how long he or she wors at it. B!C <e6t, a welldesignedgoal should be challenging but attainable. &oals that are too easy to accomplish are not motivating andneither are goals that are not attainable even with e6ceptional effort. B#C =elldesigned goals should bewritten down. /lthough actually writing down goals may seem too time consuming, the process of writing the goals forces people to thin them through. In addition, the written goals become visible andtangible evidence of the importance of woring toward something. B%C 8inally, welldesigned goals arecommunicated to all organizational members who need to now the goals. (aing people aware of thegoals ensures that they+re ?on the same page@ and woring in ways to ensure the accomplishment of theorganizational goals.%-oderate& pp( )38:)3+,

13. /re strategic or operational plans needed; 4oes longterm planning mae sense in this situation;7hese decisions are affected by three contingency variables. In a short essay, list the three planningcontingency factors and illustrate how these factors influence planning.

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Ans<er7hree contingency factors affect planning) level in the organization, degree of environmental uncertainty,and length of future commitments. 7he planner+s level in the organization is liely to determine whether the plan is more short term and tactical versus more long term and strategic. 8or the most part,operational planning dominates managers+ planning at lower levels of the organization, while at upper levels, planning is more strategy oriented. "nvironmental uncertainty is the second contingency factor.=hen uncertainty is high, plans should be specific, but more fle6ible. >nder these conditions, managersmay sometimes need to abandon an e6isting plan in favor of a new one. >nder low uncertainty,management is more liely to adhere to e6isting plans. astly, the time frame of e6isting plans is liely toinfluence new and emerging plans. 7he more current plans affect future commitments, the longer the timeframe is for which managers must plan.%-oderate& pp( )31:)32,


1!. In a short essay, identify the si6 main criticisms of formal planning.

Ans<erne of the main arguments directed at formal planning is that it may create rigidity and loc anorganization into specific goals to be achieved within specific timetables. -econd, some argue that planscannot be developed for a dynamic environment. 7hird, formal planning efforts typically involve athorough investigation of the organization+s capabilities and opportunities and a mechanical analysis thatreduces the vision to some type of programmed routine. 7hat approach can spell disaster for anorganization. 8ourth, formal planning has a tendency to focus on how to capitalize on e6isting businessopportunities within an industry. It often does not allow managers to consider creating or reinventing anindustry. 8ifth, formal planning reinforces success, which may lead to failure. 8inally, planning is notenough. /t some point managers must begin doing.%eas'& pp( )3*:)33,

1



1!1. In a short essay, describe how managers can effectively plan when the e6ternal environment iscontinually changing.

Ans<erIn an uncertain environment, managers want to develop plans that are specific, but fle6ible. /lthough thismay seem contradictory, it+s not. 7o be useful, plans need some specificity, but the plans should not becast in stone. (anagers must recognize that planning is an ongoing process. 7he plans serve as aroadmap although the destination may be changing constantly due to dynamic maret conditions. 7heyshould be willing to change directions if environmental conditions warrant. 7his fle6ibility is particularlyimportant as plans are implemented. (anagers must stay alert to environmental changes that couldimpact the effective implementation of plans and mae changes as needed. Leep in mind, also, that it+simportant to continue formal planning efforts, even when the environment is highly uncertain, in order tosee any effect on organizational performance. It+s the persistence in planning efforts that contributes tosignificant performance improvement. It seems that, as with most activities, managers ?learn to plan@ andthe 0uality of their planning improves when they continue to do it. 8inally, effective planning in dynamicenvironments means flattening the organizational hierarchy as the responsibility for establishing goals anddeveloping plans is shoved to lower organizational levels because there+s little time for goals and plans to

flow down from the top. (anagers must train their employees in setting goals and establishing plans andthen trust that they will do so.%-oderate& p( 44,

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