CHAPTER 9: PLANNING AND DECISION AIDS Test Correlation Table
Question Types/Level of Difficulty LEARNING OBJECTIVES Easy
Moderate Difficult 1. Explain knowledge management TF 2, 8 3, 4, 5,
6, 7 1 and how it creates value for organizations. MC 3, 6, 8, 10
1, 5, 7, 9 2, 4, 11 ES 1, 2 2. Describe the basic features of TF 9,
10, 12, 16 14, 17 11, 13, 15 the Delphi technique, simulation, and
scenario forecasting aids. MC 12, 18, 19, 21, 13, 14, 15, 16, 20,
22, 23, 25, 27 26, 28 17, 24, 29, 30 ES 4 3 3. Use Osborns
creativity model to TF 18, 20, 22, 23 24, 25, 26 19, 21 stimulate
adaptive and innovative decisions. MC 45, 48 31, 32, 33, 34, 40,
41, 47 35, 36, 37, 38, 39, 42, 43, 44, 46 ES 5, 6 4. Apply three
quality management TF 28 29, 30 27, 31 decision and planning aids:
benchmarking, the Deming cycle, and the balanced scorecard model.
MC 49, 50, 53, 54, 51, 52, 55, 56, 57, 60, 66, 67, 59, 70 58, 61,
62, 63, 68, 71, 73 64, 65, 69, 72 ES 7 8 223
CHAPTER 9: PLANNING AND DECISION AIDS True/False Questions
Learning Objective 1 1. SchlumbergerSemas InTouch decision system
features a centralized help desk in Houston. ANSWER: F, Knowledge,
Difficult, p. 238 2. Creative management (CM) involves recognizing,
generating, documenting, distributing, and transferring between
persons useful information to improve organizational effectiveness.
ANSWER: F, Knowledge, Easy, p. 238 3. Knowledge management is
generally viewed as consisting of two main components: explicit
knowledge and tacit knowledge. ANSWER: F, Knowledge, Moderate, p.
239 4. Enabling technologies include such things as intranets,
Internet, search engines, and work-flow software. ANSWER: T,
Knowledge, Moderate, p. 239 5. Knowledge is becoming more valuable
than physical or financial assets, or even natural resources.
ANSWER: T, Knowledge, Moderate, p. 239 6. The application of
knowledge management has three natural targets: an organizations
teams, customers, and competitors. ANSWER: F, Knowledge, Moderate,
p. 239 7. Organizations consistently identify cultural issues as
the greatest barriers to the successful implementation of knowledge
management. ANSWER: T, Knowledge, Moderate, p. 242 8. Expert
systems have problem-solving capabilities within a specific area of
knowledge. ANSWER: T, Knowledge, Easy, p. 241 Learning Objective 2
9. Forecasting is primarily concerned with internal events or
conditions beyond the organizations control that are important to
its survival and growth. ANSWER: F, Knowledge, Easy, p. 242 10.
Extrapolation is the projection of some tendency from the past or
present into the future. 224
CHAPTER 9: PLANNING AND DECISION AIDS ANSWER: T, Knowledge,
Easy, p. 242 11. In the second phase of the Delphi technique, a
questionnaire is sent to a group of experts. ANSWER: F, Knowledge,
Difficult, p. 244 12. A simulation is a representation of a real
system. ANSWER: T, Knowledge, Easy, p. 245 13. Spreadsheet
simulations are useful for estimating the most critical aspect of
venture planning which is profit and loss. ANSWER: F, Knowledge,
Difficult, p. 246 14. Scenarios are quite useful in forcing those
involved in planning to evaluate preliminary plans against past
history. ANSWER: F, Knowledge, Moderate, p. 247 15. Scenarios often
involve answering what next questions. ANSWER: F, Knowledge,
Difficult, p. 246 16. In the planning and administrative competency
in Chapter 9, the Society of Safety Engineers used computer
simulations to predict the future needs of clients. ANSWER: F,
Knowledge, Easy, pp. 245246 17. A competitor scenario presents
various actions that might be taken in response to competitive
forces. ANSWER: F, Knowledge, Moderate, pp. 246247 Learning
Objective 3 18. Conceptual thinking is the ability to visualize,
generate, and implement new ideas. ANSWER: F, Knowledge, Easy, p.
248 19. The creative process includes five interconnected stages:
preparation, concentration, incubation, illumination, and
verification. ANSWER: T, Knowledge, Difficult, p. 248 20. The
Osborn creativity model is intended to stimulate competition, as
various groups strive to convince others that their idea is
superior. ANSWER: F, Knowledge, Easy, p. 249 21. Bob is the leader
of a team that is using Osborns creativity model to generate ways
their firm can gain a competitive advantage in the industry.
Currently the team is 225
CHAPTER 9: PLANNING AND DECISION AIDS brainstorming for ideas.
Thus, they are in the fact-finding phase of the model. ANSWER: F,
Application, Difficult, p. 250 22. Brainstorming is an unrestrained
flow of ideas in a group or team with all critical judgments
suspended. ANSWER: T, Knowledge, Easy, p. 250 23. Quantity without
concern for quality is not welcome in a brainstorming session.
ANSWER: F, Knowledge, Easy, p. 250 24. The Osborn creativity model
has four phases. ANSWER: F, Knowledge, Moderate, p. 249 25. At
IDEO, clients are usually invited to brainstorming sessions because
their knowledge is needed to complete a project. ANSWER: T,
Knowledge, Moderate, pp. 251252 26. The Osborn creativity model is
based on the assumption that most people have the potential for
greater creativity and innovation in decision making than they use.
ANSWER: T, Knowledge, Moderate, p. 252 Learning Objective 4 27. The
most common definition of quality is the extent to which a good or
service conforms to specifications or standards. ANSWER: F,
Knowledge, Difficult, p. 252 28. Benchmarking is the continuous
process of comparing an organizations goods, services, and
practices against industry leaders anywhere in the world to gain
information that will help the organization improve performance.
ANSWER: T, Knowledge, Easy, p. 253 29. Benchmarking includes six
stages. ANSWER: F, Knowledge, Moderate, p. 253 30. The Deming cycle
is also known as the PACA cycle. ANSWER: F, Knowledge, Moderate, p.
254 31. The Deming cycle is comprised of four stages: plan, do,
check, and review. ANSWER: F, Application, Difficult, p. 254
Multiple Choice Questions 226
CHAPTER 9: PLANNING AND DECISION AIDS Preview 1.
SchlumbergerSemas InTouch service is built on all of the following
elements except __________. a. a standard computer platform for all
engineers b. global network infrastructure c. satellite
communication d. centralized document authoring and publishing
ANSWER: C, Knowledge, Moderate, p. 238 2. SchlumbergerSemas InTouch
system is just one example of how companies are starting to use
__________. a. collaborative teams b. online decision aids c.
knowledge management drivers d. expert systems ANSWER: B,
Knowledge, Difficult, p. 238 Learning Objective 1 Fostering
Knowledge Management 3. __________ involves recognizing,
generating, documenting, distributing, and transferring between
persons useful information to improve organizational effectiveness.
a. Creative management b. Information management c. Data management
d. Knowledge management ANSWER: D, Knowledge, Easy, p. 238 4. Which
of the following is not one of the uses for the seven planning and
decision aids suggested in the text? a. These aids are useful at
various levels in the organization. b. These aids are useful in
virtually all functional areas. c. These aids can assist in the
analysis essential to planning and decision making associated with
many types of organizational issues and problems. d. These aids are
considered general planning and decision aids. ANSWER: D,
Knowledge, Difficult, p. 238 5. Which of the following is not
generally viewed as one of the main components of knowledge
management (KM)? a. information knowledge b. explicit knowledge c.
tacit knowledge d. enabling technologies ANSWER: A, Knowledge,
Moderate, p. 239 6. __________ knowledge consists in part of books,
magazines, journals, and government data and reports. 227
CHAPTER 9: PLANNING AND DECISION AIDS a. Common b. Tacit c.
Enabling d. Explicit ANSWER: D, Knowledge, Easy, p. 239 7. David
Nagle is trying to teach his son Jonathan how to ride a bike. David
realizes that his knowledge of bike riding was developed from his
own direct experiences with a bicycle and is subconsciously
understood. Hes having a difficult time explaining to Jonathan how
to ride his new bike. Davids knowledge of bike riding is
__________. a. explicit b. common c. enabling d. tacit ANSWER: D,
Application, Moderate, p. 239 8. Which of the following is not an
example of an enabling technology? a. intranets b. Internet c.
search engines d. all of the above ANSWER: D, Knowledge, Easy, p.
239 9. Which of the following is not one of the natural targets for
the application of knowledge management? a. teams b. customers c.
competitors d. workforce ANSWER: C, Knowledge, Moderate, p. 239 10.
__________ are computer based programs based on the decision-making
processes of human experts that store and receive data, diagnose
problems, and offer solutions. a. Knowledge management systems b.
Decision systems c. Expert systems d. Computer support systems
ANSWER: C, Knowledge, Easy, p. 241 228
CHAPTER 9: PLANNING AND DECISION AIDS 11. One of the primary
characteristics of an expert system is __________. a. searching to
find the best possible solution b. using line of reasoning
processes c. use of fuzzy logic d. ability to solve highly
generalized problems ANSWER: B, Knowledge, Difficult, p. 241
Learning Objective 2 Fostering Forecasts 12. __________ involves
projecting or estimating future events or conditions in an
organizations environment. a. Extrapolation b. Scenarios c.
Decision aids d. Forecasting ANSWER: D, Knowledge, Easy, p. 242 13.
Forecasting is concerned primarily with __________. a. external
events or conditions that the organization can control b. internal
events or conditions that the organization can control c. external
events or conditions that the organization cannot control d.
internal events or conditions that the organization cannot control
ANSWER: C, Knowledge, Moderate, p. 242 14. Much forecasting is
based on __________. a. simulation b. scenarios c. extrapolation d.
the Delphi technique ANSWER: C, Knowledge, Moderate, p. 242 15. The
simplest, and at times most misleading, form of extrapolation is a
__________. a. linear projection of a present trend into the future
b. curvilinear projection of a present trend into the future c.
linear projection of a past trend into the future d. curvilinear
projection of a past trend into the future ANSWER: C, Application,
Moderate, p. 242 229
CHAPTER 9: PLANNING AND DECISION AIDS 16. Duane Somers works
for Porkys Bar B Q and is attempting to make a sales forecast for
fiscal year 2006. Duane knows that sales increased 4% in 2003 and
5% in 2004. He also knows that consumer preferences seem to be
shifting away from pork in favor of chicken. Duane forecasts 2006
sales to increase 2% on the basis of __________. a. scenarios b.
extrapolation c. the Delphi technique d. simulations ANSWER: B,
Application, Moderate, p. 242 17. Rachel Cline needs to make a
decision on whether to expand her business to a second location.
She assembles a panel of experts including a member of her chamber
of commerce, her accountant, and a professor of strategic
management at a local university. The group refined their opinions,
step by step, until they reached a consensus that Rachel should
expand to the second location. This decision is an example of
__________. a. the Delphi technique b. groupthink c. extrapolation
d. scenarios ANSWER: A, Application, Moderate, p. 243 18.
__________ is(are) a forecasting aid based on a consensus of a
panel of experts. a. Extrapolation b. Scenarios c. Decision
forecasts d. The Delphi technique ANSWER: D, Knowledge, Easy, p.
243 19. The American Society of Engineers used a __________ to
anticipate changes in OSHAs operations. a. Delphi study b.
benchmarking model c. creativity model d. simulation ANSWER: A,
Knowledge, Easy, pp. 243244 20. The American Society of Engineers
assembled a panel of __________ to evaluate predictions in their
Delphi study. a. OSHA administrators b. professional engineers c.
industry executives d. chapter presidents ANSWER: D, Knowledge,
Difficult, p. 243 230
CHAPTER 9: PLANNING AND DECISION AIDS 21. The Delphi technique
involves __________ basic steps. a. two b. three c. four d. five
ANSWER: B, Knowledge, Easy, p. 244 22. The number of experts who
participate in the Delphi technique may range from only a few to
more than 100, depending on the scope of the study. A range of
__________ is recommended for a very focused issue. a. 10 to 15 b.
15 to 30 c. 30 to 40 d. 40 to 60 ANSWER: B, Knowledge, Difficult,
p. 244 23. The heart of the Delphi technique is __________. a. the
qualifications of the experts b. the number of rounds c. the number
of experts d. the series of questionnaires ANSWER: D, Knowledge,
Difficult, p. 243 24. The Ford Motor Company developed a system
that shows how changes in external variables (e.g., inflation,
price changes, unemployment) may affect Fords sales, profits and
employment levels. This is an example of __________. a. the Delphi
technique b. a simulation c. a strategic plan d. virtual reality
ANSWER: B, Application, Moderate, p. 245 25. Which of the following
statements about simulations is not true? a. A simulation is a
representation of a real system. b. Simulation is often used to
forecast the effects of environmental changes and internal
management decisions on an organization. c. The goal of simulation
is to experience reality. d. Most simulations are intended to let
management ask numerous what-if questions. ANSWER: C, Knowledge,
Difficult, p. 245 231
CHAPTER 9: PLANNING AND DECISION AIDS 26. Electric utility
managers took part in a __________ to develop understanding of the
new deregulated business environment they were entering. a. Delphi
study b. simulation c. scenario study d. fact finding phase ANSWER:
B, Knowledge, Easy, pp. 245246 27. Taking part in an electric
utilities industry restructuring simulation helped senior managers
learn to do all of the following except __________. a. forecast
competitive strategies b. forecast competitors prices c. discover
that incremental cost was the main factor in determining how
competitive they could be d. discover that marginal cost was the
main factor in determining how competitive they could be ANSWER: C,
Knowledge, Difficult, p. 246 28. __________ is a story that helps
people recognize and adapt to changing features of their
environments. a. The Delphi technique b. A simulation c. A scenario
d. An extrapolation ANSWER: C, Knowledge, Easy, p. 246 29.
__________ provides a way to identify alternative paths that may
exist for an organization in the future and the actions that likely
are involved in going down each of those paths. a. The Delphi
technique b. A scenario c. A simulation d. An extrapolation ANSWER:
B, Knowledge, Moderate, p. 246 30. Competitor scenarios present
projections of __________. a. how a competitor might be defeated b.
what a competitor might do c. what level of threat exists d. all of
the above ANSWER: B, Knowledge, Moderate, pp. 246247 232
CHAPTER 9: PLANNING AND DECISION AIDS Learning Objective 3
Fostering Creativity 31. All decision making needs to be supported
strongly by __________. a. efficacy b. entropy c. rules d.
creativity ANSWER: D, Knowledge, Moderate, p. 248 32. Creativity is
the ability to __________ new ideas. a. visualize b. generate c.
implement d. all of the above ANSWER: D, Knowledge, Moderate, p.
248 33. Which of the following is not one of the five stages of the
creative process? a. brainstorming b. concentration c. preparation
d. illumination ANSWER: A, Knowledge, Moderate, p. 248 34. The
__________ stage of the creative process involves searching for and
collecting facts and ideas. a. concentration b. preparation c.
brainstorming d. illumination ANSWER: B, Knowledge, Moderate, p.
248 35. During the creative process of developing ideas for a new
novel, author Jane Windham began focusing her energies and
resources on identifying and solving the problem of whether her
main character should be a man or a woman. Jane is in the
__________ stage of the creative process. a. incubation b.
concentration c. brainstorming d. actualization ANSWER: B,
Application, Moderate, p. 249 233
CHAPTER 9: PLANNING AND DECISION AIDS 36. Louis McDonald is
having a difficult time deciding how to proceed on an important
research project. He feels he needs to be creative in the subjects
selected for the study and the way in which data is gathered from
these subjects. McDonald goes for a walk to relax in hopes that he
can unconsciously search for a solution. McDonald is in the
__________ stage of the creative process. a. realization b.
brainstorming c. incubation d. actualization ANSWER: C,
Application, Moderate, p. 249 37. During the creative process of
developing new software, Elvira Melendez experienced a moment of
discovery, an instant recognition in which she realized what needed
to be done to solve a problem. Elvira is in the __________ stage of
the creative process. a. incubation b. brainstorming c. realization
d. illumination ANSWER: D, Application, Moderate, p. 249 38. At the
__________ stage of the creative process, confirmation and
acceptance of the new approach is sought. a. verification b.
confirmation c. realization d. validation ANSWER: A, Knowledge,
Moderate, p. 249 39. __________ is not a phase in Osborns
creativity model. a. Fact finding b. Application finding c.
Solution finding d. Idea finding ANSWER: B, Knowledge, Moderate, p.
249 40. Which of the following statements is not true regarding the
Osborn creativity model? a. It is designed to help overcome
blockages to creativity and innovation. b. External pressure and
self-generated tension are harmful. c. It can be used with all
types of groups. d. Intense pressure and threats from the wrong
sources can easily undermine the process. ANSWER: B, Knowledge,
Difficult, p. 249 234
CHAPTER 9: PLANNING AND DECISION AIDS 41. Distinguishing
between a symptom and an actual problem occurs in the __________
phase of the Osborn creativity model. a. fact-finding b.
idea-finding c. solution-finding d. application-finding ANSWER: A,
Knowledge, Difficult, p. 249 42. Brainstorming occurs in the
__________ phase of the Osborn creativity model. a. fact-finding b.
solution-finding c. idea-finding d. application-finding ANSWER: C,
Knowledge, Moderate, p. 250 43. Which of the following is not one
of the basic rules that should be followed in a brainstorming
session? a. Criticism is encouraged. b. Freewheeling is welcomed.
c. Quantity is wanted. d. Combination and improvement are sought.
ANSWER: A, Knowledge, Moderate, p. 250 44. The __________ phase of
the Osborn creativity model involves generating and evaluating
possible courses of action and deciding how to implement the chosen
course of action. a. fact-finding b. idea-finding c.
application-finding d. solution-finding ANSWER: D, Knowledge,
Moderate, p. 250 45. Skilled brainstorming facilitators at IDEO
perform all of the following functions except __________. a. lead
the sessions b. enforce rules c. write and record the suggestions
d. All of the above are performed by facilitators. ANSWER: D,
Knowledge, Easy, p. 252 235
CHAPTER 9: PLANNING AND DECISION AIDS 46. In the illustration
of the Teamwork Competency at IDEO, by using __________, the
companys clients gain insight and learn because they join IDEO
designers in the creative process. a. fact finding b. brainstorming
c. synthesis d. incubation ANSWER: B, Knowledge, Moderate, pp.
251252 47. The Osborn creativity model is based on the assumption
that __________. a. few people can be creative if the proper
environment is in place b. most people have the potential for
greater creativity than they use c. most people are not creative d.
creativity is not natural, but can be acquired under the proper
circumstances ANSWER: B, Knowledge, Difficult, p. 252 48.
__________ makes use of technology to input and automatically
disseminate ideas in real time over a computer network to all team
members, each of whom may be stimulated to generate additional
ideas. a. Virtual reality b. Group decision support systems c.
Management information systems d. Electronic brainstorming ANSWER:
D, Knowledge, Easy, p. 252 Learning Objective 4 Fostering Quality
49. __________ is the extent to which a product or service meets
and/or exceeds customers expectations. a. Value b. Excellence c.
Quality d. Conformance to specifications ANSWER: C, Knowledge,
Easy, p. 252 50. __________ is a systematic and continuous process
of measuring and comparing an organizations goods, services, and
practices against industry leaders anywhere in the world to gain
information that will help the organization improve performance. a.
Benchmarking b. Quality c. Total Quality Management (TQM) d.
Reengineering ANSWER: A, Knowledge, Easy, p. 253 236
CHAPTER 9: PLANNING AND DECISION AIDS 51. Benchmarking includes
__________ stages. a. five b. six c. seven d. eight ANSWER: C,
Knowledge, Moderate, p. 253 52. __________ includes a careful study
of the organizations own products and processes that are to be
compared to benchmark products and processes. a. Defining the
domain b. Identifying the best performers c. Collecting and
analyzing data to identify gaps d. Setting improvement goals
ANSWER: A, Knowledge, Moderate, p. 253 53. __________ is not among
the functions that may be benchmarked. a. Finance b. Marketing c.
Transportation d. All of the above may be benchmarked. ANSWER: D,
Knowledge, Easy, p. 253 54. Xerox compared its warehousing and
distribution process with that of L. L. Bean, the catalog sales
company, because of its excellent reputation in this area. Xerox
has completed which step in the benchmarking process? a.
identifying the best performers b. defining the domain c.
collecting and analyzing data to identify gaps d. setting
improvement goals ANSWER: A, Application, Easy, p. 254 55.
__________ are not usually a good source of information for
learning about best-in- class organizations. a. Customers b.
Suppliers c. Government agencies d. Trade journals ANSWER: C,
Knowledge, Moderate, p. 254 237
CHAPTER 9: PLANNING AND DECISION AIDS 56. Pedro Rodriquez is a
vice president with Wal-Mart. Rodriquez is interested in improving
the performance of the pet supplies departments in all stores. He
identified some of the countrys best pet stores and in the process
of gathering financial data from these stores so that he can
understand how to improve performance Wal-Mart. Rodriquez is using
a process known as __________. a. Deming cycle b. benchmarking c.
total quality management (TQM) d. reengineering ANSWER: B,
Application, Moderate, p. 253 57. Which of the following statements
regarding benchmarking is not true? a. Over time, the things that
are benchmarked should remain the same. b. Benchmarking needs to be
linked to other sources of information, such as changing customer
expectations and preferences. c. Benchmarking typically looks at
the present in terms of how some process or quality dimension is
being achieved by others. d. Benchmarking is often used to help an
organization adapt, but less commonly to innovate. ANSWER: A,
Knowledge, Difficult, p. 254 58. When benchmarking is used simply
to copy the best-in-class competitors, it may lead to __________.
a. sustained competitive advantage b. short-term competitive
advantage c. competitive disadvantage d. competitive parity ANSWER:
B, Knowledge, Moderate, p. 254 59. The Deming cycle involves
__________ stages. a. two b. three c. four d. five ANSWER: C,
Knowledge, Easy, p. 254 60. Which of the following is not among the
questions that need to be answered in the plan stage of the Deming
cycle? a. What are we trying to accomplish? b. Do we have the
resources for what we are trying to accomplish? c. What changes can
we make that will result in improvement? d. How will we know that a
change is an improvement? ANSWER: B, Knowledge, Difficult, p. 254
238
CHAPTER 9: PLANNING AND DECISION AIDS 61. __________ is not one
of the stages of the Deming cycle. a. Plan b. Do c. Will d. Check
ANSWER: C, Knowledge, Moderate, p. 254 62. Truett Fontenot is a
famous chef in New Orleans. He has tested some new recipes in a
laboratory. Next he intends to establish a pilot production process
and try out the recipes on a small number of customers. Truett is
operating in the __________ stage of the Deming cycle. a. plan b.
do c. will d. check ANSWER: B, Knowledge, Moderate, pp. 254255 63.
Anna Lyn is the production supervisor for a manufacturing company
that is implementing a new quality control process. She is trying
to determine if the new process is working as it was intended and
whether any revisions need to be made. Anna is operating in the
__________ stage of the Deming cycle. a. plan b. will c. do d.
check ANSWER: D, Knowledge, Moderate, p. 255 64. The __________
stage of the Deming cycle focuses on implementing the process
within the organization or with its customers and suppliers. a. act
b. will c. do d. plan ANSWER: A, Knowledge, Moderate, p. 255 65. In
the textbook example, the owner of the Deluxe diner applied
__________ to solve the problem of customers having to wait too
long to be seated. a. benchmarking b. reengineering c. total
quality management (TQM) d. the Deming cycle ANSWER: D, Knowledge,
Moderate, p. 255 239
CHAPTER 9: PLANNING AND DECISION AIDS 66. Which of the
following was not one of the problems identified by Billie Boyd,
the owner of Deluxe Diner, as she used her communication competency
to solve the problem of long lines at lunchtime? a. Customers were
waiting in line for as long as 15 minutes. b. Usually, tables were
available. c. Many of the customers were regulars. d. All of the
above were problems that Billie Boyd identified. ANSWER: D,
Knowledge, Difficult, p. 255 67. Which of the following was not one
of the changes developed by Billie Boyd, the owner of Deluxe Diner,
to solve the problem of long lines at lunchtime? a. Allow customers
to fax their orders in ahead of time. b. Encourage customers to
open corporate charge accounts. c. Install a preparation table for
fax orders in the kitchen. d. Devote one of the two cash registers
to handling fax orders. ANSWER: B, Knowledge, Difficult, p. 255 68.
The balanced scorecard looks at all of the following strategic
perspectives except __________. a. internal perspective b.
competitive perspective c. innovation perspective d. customer
perspective ANSWER: B, Knowledge, Difficult, p. 256 69. Edwin
Kaycee is evaluating his motorcycle parts assembly operations in
Mexico for the amount of manufacturing defects that are being
caused by poor workmanship. This balanced scorecard factor is
addressed in the __________. a. learning perspective b. financial
perspective c. internal perspective d. quality perspective ANSWER:
C, Application, Moderate, p. 256 70. __________ is a method for
gaining wider perspective on strategic decisions by considering the
role of finances, customers, and innovation. a. Benchmarking b.
Brainstorming c. Balanced scorecard d. Knowledge management ANSWER:
C, Knowledge, Easy, p. 256 240
CHAPTER 9: PLANNING AND DECISION AIDS 71. Southwest Airlines
took an innovative approach to using the balanced scorecard in
linking operational goals, such as baggage delivery, to __________.
a. internal perspectives of safety b. learning perspectives of
employee training c. customer perspectives of satisfaction d.
financial perspectives of profitability ANSWER: D, Knowledge,
Difficult, pp. 257258 72. Customer perspectives of Southwest
Airlines balanced scorecard include all of the following except
__________. a. seat revenue b. lowest prices c. on-time flights d.
Number 1 ranking ANSWER: A, Knowledge, Moderate, p. 258 73. The
balanced scorecard is criticized because __________. a. it does not
link the perspectives to each other b. innovation is internal, but
it is not included in the internal perspective c. managers are not
given autonomy to pursue perspective goals d. the balanced
scorecard model is too technical for most managers ANSWER: B,
Knowledge, Difficult, p. 258 Essay Questions Learning Objective 1
1. What is knowledge management (KM)? What is the difference
between tacit and explicit knowledge? Give examples of each.
Knowledge management (KM) involves recognizing, generating,
documenting, distributing, and transferring between persons useful
information to improve organizational effectiveness. KM is
generally viewed as consisting of three main components: explicit
knowledge, tacit knowledge and enabling technologies. Explicit
knowledge is knowledge that is contained in books, magazines,
journals, reports and manuals. Information published by the U.S.
Census Bureau is an example. Tacit knowledge is knowledge that is
unconsciously understood and applied. It is difficult to express
and often developed from direct experiences and action. The
knowledge of how to play golf or ride a bicycle is an example.
Moderate, pp. 238239 241
CHAPTER 9: PLANNING AND DECISION AIDS 2. Describe how
SchlumbergerSema applied knowledge management to improve
organizational effectiveness under challenging operating
conditions. SchlumbergerSema designed the InTouch system to
immediately connect on-site employees with subject-matter experts.
The firm operates in remote locations in 100 countries and faces
huge challenges in conducting sensitive technical operations. The
InTouch system is designed to use the global Schlumberger
infrastructure through a standard computer platform and a single
portal into the technical resource base. Help desks are available,
with just-in-time online distance learning, and a centralized
document authoring and publishing system. An example of the system
in operation took place on a remote location in Indonesia, late in
the day. Wrong instructions programmed into a computerized drilling
tool were not noticed until after drilling had started. Although it
was 4 a.m. in Houston, the head of the department that oversees the
specific tool was able to respond within 15 minutes and transmit a
solution back to the Indonesian job. Within an hour, the job was
corrected and underway again. Moderate, p. 238 Learning Objective 2
3. What is the Delphi technique? Describe in detail the use of the
Delphi technique. The Delphi technique is a forecasting aid based
on a consensus of a panel of experts. The experts refine their
opinions, step by step, until they reach a consensus. Because the
technique relies on opinions, it obviously isnt foolproof. But the
consensus arrived at tends to be much more accurate than a single
experts opinion. The Delphi process replaces face-to-face
communication and debate with a carefully planned, orderly program
of sequential discussions. The Delphi technique involves three
basic steps: A questionnaire is sent to a group of experts. A
summary of the first round is prepared (it may show such things as
the average, medium and quartile range of response). This summary,
along with a revised questionnaire, is sent to those who completed
the first questionnaire. A summary of the second round is prepared
(this often shows that a consensus is developing). The experts are
then asked in a third questionnaire to indicate whether they
support this emerging consensus. Three rounds generally are
recommended. Difficult, pp. 243244 4. What is a simulation? What is
the goal of a simulation and how is it used? A simulation is a
representation of a real system. A simulation model usually
describes the behavior of the real system (or some aspect of it) in
quantitative and/or qualitative terms. Simulation often is used to
forecast the effects of environmental changes and internal
management decision on an organization, department, or SBU. The
goal of simulation is to reproduce or test reality without actually
experiencing it. Most simulations are intended to let management
ask numerous what-if questions. Moderate, p. 245 Learning Objective
3 242
CHAPTER 9: PLANNING AND DECISION AIDS 5. Discuss three of the
five stages in the creative process. a. Preparation involves a
thorough investigation to ensure that all parts of an issue or
problem are identified or understood. This stage involves searching
for and collecting facts and ideas. b. Concentration occurs when
energies and resources are focused on identifying and solving an
issue or problem. A commitment must be made in this stage to
implementing a solution. c. Incubation involves an internal and
unconscious ordering of gathered information. A successful
incubation stage yields fresh ideas and new ways of thinking about
the nature of an issue or a problem and alternative solutions. d.
Illumination is the moment of discovery, the instant of
recognition, as when a light seems to be turned on mentally. The
mind instantly connects an issue or a problem to a solution. e.
Verification is the testing of the created solution or idea. At
this stage, confirmation and acceptance of the new approach is
sought. Moderate, pp. 248249 6. What are three of the rules that
should be followed in a brainstorming session? A brainstorming
session should include about how many people? a. Criticism is ruled
out. b. Freewheeling is welcomed. c. Quantity is wanted. d.
Combination and improvement are sought. e. From 5 to 12 people
should be included in a brainstorming session. Moderate, p. 250
Learning Objective 4 7. What is benchmarking? What are the seven
stages in the benchmarking process? Benchmarking is a systematic
and continuous process of measuring and comparing an organizations
goods, services, and practices against industry leaders anywhere in
the world to gain information that will help the organization
improve performance. 1. Define the domain to be benchmarked. 2.
Identify the best performers. 3. Collect and analyze data to
identify gaps. 4. Set improvement goals. 5. Develop and implement
plans to close gaps. 6. Evaluate results. 7. Repeat the
evaluations. Moderate, pp. 253254 243
CHAPTER 9: PLANNING AND DECISION AIDS 8. Describe how Billie
Boyd, the owner of Deluxe Diner, applied the Deming cycle to solve
the problem of customers having to wait too long to be seated
during lunchtime at the diner. Billie Boyd promoted two-way
communication by soliciting feedback, listening, seeking out
contrary opinions; creating give and take conversations; informing
employees of relevant data and activities and keeping them up to
date; and appearing to be persuasive and comfortable in her
managerial role. One process in the plan stage involved several
team meetings with her employees. They identified four main aspects
of this problem: (1) customers were waiting in line for as long as
15 minutes, (2) usually, tables were available, (3) many of the
customers were regulars, and (4) people taking orders and preparing
food were getting in each others way. Boyd developed a plan that
involved the following changes: (1) customers were allowed to fax
their orders in ahead of time, (2) a preparation table for fax
orders was installed in the kitchen, and (3) one of the two cash
registers was devoted to handling fax orders. Difficult, p. 255
244