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Chapter Three: Foundations of Planning
True/False
1.
Planning is concerned with defining an organization’s goals and objectives and how to integrate and coordinate activities.
(True; Easy; p. 88) 2. In informal planning, the organization's objectives are rarely verbalized. (True; Moderate; p. 88) 3. Planning is exactly what is needed in order to more effectively manage a
chaotic environment.
(True; Moderate; p. 89) 4. Without planning, there can be no effective control. (True; Moderate; p. 89) 5. In informal planning, the organization's objectives are written down and
communicated to employees.
(False; Moderate; p. 88) 6. Planning minimizes waste and redundancy. (True; Easy; p. 89) 7. Uncertainty and change produce a need for more effective planning in
today’s business environment.
(True; Moderate; p. 89) 8. Planning can completely replace the need for intuition and creativity. (False; Moderate; p. 89) 9. Strategic plans describe how an organization’s overall objectives are to be achieved.
(False; Easy; p. 92)
10. Short-term plans describe how an organization’s overall objectives are to be achieved.
(False; Easy; p. 93)
11. Long term plans describe what an organization plans to do within the next
two to three years.
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(False; Easy; p. 93)
12. Well-thought out formal plans eliminate the need to rely on intuition and
creativity. Apple Computer is a prime example of this concept.
(False; Moderate; p. 93)
13. Organizations with formal plans will always outperform those organizations
without formal plans.
(False; Challenging; p. 91)
14. Tactical plans form a basis for strategic plans. (False; Challenging; p. 92)
15. It appears that specific plans are always preferable to directional, or loosely
guided plans, because specific plans have clearly defined objectives.
(True; Easy; p. 93)
16. Standing plans are flexible plans, with clearly defined objectives and that
leave no room for misinterpretation.
(False; Moderate; p. 94)
17. The objectives in MBO should be concise statements of financial
accomplishments.
(False; Easy; p. 94)
18. MBO uses goals to control employees. (False; Challenging; p. 94)
19. Feedback favorably affects performance. (True; Moderate; p. 96)
20. An organization's objectives and strategies define its purpose. (False; Moderate; p. 99)
21. Identifying the scope of an organization's products or services will force it to
define its mission.
(False; Challenging; p. 99)
22. In order to fulfill the grand strategy, managers will seek to position their units
so that they can gain a relative advantage over their competition.
(True; Challenging; p. 105)
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23.
Porter's three competitive strategies are cost-leadership, price-leadership, and niche.
(False; Moderate; p. 105)
24. A project is an example of a single-use plan. (True; Moderate; p. 94)
25. SWOT analysis determines the primary threats and opportunities an organization faces. (True; Easy; p. 102)
26. A SWOT analysis consists of four key steps. (False; Easy; p. 102)
27. The grand strategies are growth, differentiation, stability, and combination strategies.
(False; Easy; p. 103)
28. A differentiation strategy is a strategy that an organization follows when it wants to establish a competitive advantage in a narrow market segment. (False; Challenging; p. 105)
29. A combination strategy is a strategy that an organization follows when it wants to be unique in its industry within a broad market segment. (False; Challenging; p. 105)
30. Reducing the size, scope or number operational units usually in a declining
environment is known as reengineering.
(False; Challenging; p. 104)
31. Reducing the size, scope or number operational units usually in a declining environment is known as a retrenchment strategy. (True; Challenging; p.104)
32. How do we overcome the challenge of scanning a global business environment?
One way is for management to subscribe to news services that review newspapers and books from around the globe and provide summaries to client companies.
(False; Challenging; p. 106)
33. Strengths that represent unique skills or resources that can determine an
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