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Chapter 7

Managerial Planning and


Goal Setting
True/False Questions
1.

The Europa Hotel survived terrorism by carefully planning security measures for guests,
employees, and the building.
Answer: True

2.

Type: F

Level: 1

Page: 238

Type: F

Level: 2

Page: 238

Type: F

Level: 1

Page: 238

Type: F

The mission is the basis for the strategic level of goals and plans, which in turn shapes the
tactical and operational level.
Answer: True

7.

Page: 238

The act of determining the organization goals and the means for achieving them is called
goal setting.
Answer: False

6.

Level: 2

Goals specify today's means; plans specify future ends.


Answer: False

5.

Type: F

A desired future state that the individual or organization attempts to realize is a goal.
Answer: True

4.

Page: 237

Because everything else stems from leading, of the four management functions, leading is
considered the most fundamental.
Answer: False

3.

Level: 2

Level: 1

Page: 238

Type: F

The complexity of todays environment and uncertainty about the future overwhelm many
managers and lead them to focus on long-term goals and plans instead of operational
issues and short-term results.
Answer: False

Level: 2

Page: 239

Type: F

Chapter Seven * Managerial Planning and Goal Setting


Test Bank * Page 185

8.

Because they provide legitimacy, rationale for decisions, and an increase in motivation and
commitment, goals and plans are valuable to an organization.
Answer: True

9.

Type: F

Level: 2

Page: 241

Type: F

Level: 2

Page: 241

Type: F

Level: 2

Page: 241

Type: F

Level: 1

Page: 242

Type: F

Level: 1

Page: 242

Type: F

Operational plans and goals are those that focus on the outcomes that major divisions and
departments must achieve in order for the organization to reach its overall goals.
Answer: False

17.

Page: 240

A broad statement of where the organization wants to be in the future refers to a mission
statement.
Answer: False

16.

Level: 2

Strategic plans and goals are those that focus on where the organization wants to be in the
future and pertain to the organization as a whole.
Answer: True

15.

Type: F

An organization's mission describes its reason for existence.


Answer: True

14.

Page: 240

The company's philosophy as well as purpose is often expressed in mission statements.


Answer: True

13.

Level: 2

A broad definition of the organization's values, aspiration and reason for being, along with
a recognition of the scope and operations that distinguishes the organization refers to a
Business Strategic Statement.
Answer: False

12.

Type: F

Plans provide a standard of assessment.


Answer: False

11.

Page: 239-240

A plan tells "why" to achieve the goal.


Answer: False

10.

Level: 1

Level: 2

Page: 242

Type: F

The department manager's tool for daily and weekly operations is called the operational
plan.
Answer: True

Level: 1

Page: 243

Type: F

Chapter Seven * Managerial Planning and Goal Setting


Test Bank * Page 186

18.

A means-end chain is when lower-level goals lead to the accomplishment of higher-level


goals.
Answer: True

19.

Level: 2

Page: 246

Type: F

Level: 2

Page: 246

Type: F

Level: 1

Page: 247

Type: F

Level: 2

Page: 247

Type: F

Level: 3

Page: 247

Type: A

Level: 1

Page: 248

Type: F

Problems with MBO occur when the company faces rapid change.
Answer: True

28.

Type: F

To review progress is the final step in the MBO process.


Answer: False

27.

Page: 246

An example of a qualitative goal is the University will provide quality education at a fair
price.
Answer: True

26.

Level: 2

The most difficult step in an MBO process is reviewing progress.


Answer: False

25.

Type: F

MBO refers to managing by opportunity.


Answer: False

24.

Page: 245

The goals should be easy, for employees to feel motivated, so that they can achieve them
easily which in turn increases their motivation level.
Answer: False

23.

Level: 2

To be effective, goals must be set for every aspect of employee behavior or organizational
performance.
Answer: False

22.

Type: F

Goals are most effective when they are specific, measurable, challenging and linked to
rewards.
Answer: True

21.

Page: 244

Specific and measurable goal characteristics apply only to the lower-level goals.
Answer: False

20.

Level: 1

Level: 1

Page: 249

Type: F

Organic organizations and values that encourage participation can harm the MBO process.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 187

Answer: False
29.

Page: 251

Type: A

Level: 2

Page: 253

Type: F

Level: 1

Page: 253

Type: F

Level: 2

Page: 254

Type: A

Level: 2

Page: 255

Type: F

Level: 2

Page: 255

Type: F

The CEO of Alex Aquariums, Inc. must do all of the planning for the company because
that is the way to do things in todays workplace.
Answer: False

38.

Level: 3

Companies should ensure the physical safety and emotional needs of people and/or animals
after implementing a crisis management plan.
Answer: True

37.

Page: 250-251 Type: F

In the containment stage of crisis management, the organization should get the awful
truth out to employees only as soon as possible.
Answer: False

36.

Level: 1

The XYZ Corporation should create a crisis management group that is not crossfunctional, but does work together well under pressure.
Answer: False

35.

Type: F

The three stages of crisis management are prevention, preparation, and containment.
Answer: True

34.

Page: 250

The first stage in crisis management planning includes building relationships and
designating crisis management team and spokesperson.
Answer: False

33.

Level: 1

If Kari, manager at Tip Top Roofing, wanted to develop a contingency plan for Tip Top,
she would need to look at factors such as new equipment, the economy, and the company
workers compensation cases.
Answer: True

32.

Type: F

Contingency plans can also be considered as scenarios.


Answer: True

31.

Page: 249

Standing plans define company responses to specific situations such as natural


emergencies or competitive setbacks.
Answer: False

30.

Level: 2

Level: 2

Page: 256

Type: A

Turtle Terrace should use traditional planning since that is the type of planning every
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 188

company uses.
Answer: False
39.

Page: 256

Type: A

In a complex and competitive business world, traditional planning done by a select few is
the only planning that works.
Answer: False

40.

Level: 2

Level: 2

Page: 256

Type: F

A temporary group consisting of line managers responsible for developing strategic plans
is called a centralized planning group.
Answer: False

Level: 1

Page: 256

Type: F

Multiple Choice Questions


1.

Which of these refers to a desired future state that an organization attempts to realize?
a.
b.
c.
d.
e.

Plan
Vision statement
Goal
Mission statement
Idea

Answer: c
2.

specify future ends and


a.
b.
c.
d.
e.

Page: 238

Type: F

specify today's means.

Goals, plans
Plans, goals
Planning, organizing
Ideas, behaviors
Mission, vision

Answer: a
3.

Level: 1

Level: 2

Page: 238

Type: F

A blueprint specifying the resource allocations schedules, and other actions necessary for
attaining goals is referred to as a(n)
a.
b.
c.
d.
e.

goal.
plan.
mission.
vision.
objective.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 189

Answer: b
4.

Page: 238

Type: F

The development of operational goals


The development of a mission statement
Communication of goals to the rest of the organization
A company-wide meeting
Brainstorming

Answer: b
The
the
a.
b.
c.
d.
e.

Level: 2

Page: 238

Type: F

is the basis for the strategic level of goals and plans which in turn shapes
and
level.
goal, mission, tactical
objective, operational, mission
operational goal, mission and tactical
mission, tactical, operational
tactical plan, operational, mission

Answer: d

Level: 2

Page: 238

Type: F

Which of these are primarily responsible for strategic goals/plans?


a.
b.
c.
d.
e.

Middle management
Board of directors
Consultants
Senior management
Lower management

Answer: d
8.

Level: 1

The planning process begins with which of these?


a.
b.
c.
d.
e.

7.

Type: F

Brainstorming
Organizing
Planning
Developing a mission
A blueprint

Answer: c

6.

Page: 238

______ is the act of determining the organization's goals and the means for achieving
them.
a.
b.
c.
d.
e.

5.

Level: 1

Level: 1

Page: 238

Type: F

______ is primarily responsible for operational goals/plans.


a.

Middle management
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 190

b.
c.
d.
e.

Board of directors
Consultants
Senior management
Lower management

Answer: e
9.

Level: 1

Page: 239

Type: F

Ruby is a first-line supervisor at Rooftop Corporation. She is most concerned with which
level of goals?
a.
b.
c.
d.
e.

Operational goals
Tactical plans
Strategic goals
Mission statement
Vision

Answer: a

Level: 2

Page: 239

Type: A

______ symbolizes the legitimacy of the organization to external audiences.


a.
b.
c.
d.
e.

Operational goals
Tactical plans
Strategic goals
Mission statement
Tactical goals

Answer: d
12.

Type: F

Middle management
Board of directors
Consultants
Senior management
Lower management

Answer: a

11.

Page: 239

Which of these is/are primarily concerned with tactical goals/plans?


a.
b.
c.
d.
e.

10.

Level: 1

Level: 2

Page: 239

Type: F

Rosalie is a manager at GMG Gaming. She recently attended a seminar on goal setting.
She wishes to use goals to provide a sense of direction to her staff. She is using goals as
a.
b.
c.
d.
e.

a way to legitimize her department.


a source of motivation.
a standard of performance.
a guide to action.
impress others.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 191

Answer: d
13.

Level: 2

a goals statement.
a values statement.
an income statement.
a mission statement.
a competitive-edge statement.

Answer: d

Level: 1

Level: 1

Page: 241

Type: F

The organization's reason for existence is known as


a.
b.
c.
d.
e.

the organization's value.


the organization's vision.
the organization's mission.
the organization's goal.
the organization's service.

Answer: c

Level: 2

Page: 241

Type: F

"We respect our employees and value their diversity" is an example of a statement you are
most likely to find in the organization's
a.
b.
c.
d.
e.

mission.
strategic goals.
tactical goals.
strategic plans.
tactical plans.

Answer: a
17.

Type: F

Corporate values
Company philosophy
Company purpose
All of the above
a and b only

Answer: d

16.

Page: 241

Which of these are described by mission statements?


a.
b.
c.
d.
e.

15.

Type: A

A statement that identifies distinguishing characteristics of an organization is known as


a.
b.
c.
d.
e.

14.

Page: 240

Level: 3

Page: 241

Type: A

"We seek to become the premier business school in the west" is an example of a statement
you are most likely to find in the organization's
a.

tactical goals.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 192

b.
c.
d.
e.

operational goals.
mission.
tactical plans.
operational plans.

Answer: c
18.

Level: 1

Page: 241

Type: F

Page: 241

Type: F

At the top of the goal hierarchy is the


a.
b.
c.
d.
e.

strategic goals.
tactical goals.
operational goals.
mission.
employee goals.

Answer: d

Level: 2

Which of these represent the broad statements of where the organization wants to be in
the future?
a.
b.
c.
d.
e.

Operational goals
Tactical goals
Strategic goals
Operational goals
Tactical plans

Answer: c
21.

Type: A

Mission statement
Goal statement
Management by objective
Goal setting
Corporate competitive-value statement

Answer: a

20.

Page: 241

Which of these refers to a broadly stated definition of the organization's basic business
scope and operations that distinguishes it from similar types of organizations?
a.
b.
c.
d.
e.

19.

Level: 3

Level: 1

Page: 242

Type: F

The official goals of the organization are best represented by the


a.
b.
c.
d.
e.

strategic goals
tactical goals
operational goals
competitive goals
none of the above
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 193

Answer: a
22.

Level: 2

Page: 242

Type: F

Which of these are called the action steps by which an organization intends to attain its
strategic goals?
a.
b.
c.
d.
e.

Tactical goals
Operational goals
Tactical plans
Operational plans
Strategic plans

Answer: e
24.
of
a.
b.
c.
d.
e.

Level: 1

Page: 242

goals lead to the attainment of


goals.

Type: F
goals, which in turn lead to the attainment

Operational, strategic, tactical


Tactical, operational, strategic
Strategic, tactical, operational
Operational, tactical, strategic
None of the above.

Answer: d

Level: 3

Page: 242-243 Type: F

Goals that define the outcomes that major divisions and departments must achieve in order
for the organization to reach its overall goals is called
a.
b.
c.
d.
e.

strategic goals.
tactical goals.
operational goals.
a mission.
a plan.

Answer: b
26.

Type: F

operational plans.
tactical plans.
strategic plans.
mission plans.
tactical goals.

Answer: c

25.

Page: 242

A long-term time frame is most closely associated with


a.
b.
c.
d.
e.

23.

Level: 2

Level: 1

Page: 242

Type: F

Beth is a middle manager at Egg Elements Corporation. She is most likely responsible for
the achievement of
goals.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 194

a.
b.
c.
d.
e.

operational
tactical
strategic
lower-level
top-level

Answer: b
27.

Level: 1

Page: 243

Type: F

Which of these refer to specific results expected from individuals?


a.
b.
c.
d.
e.

Operational goals
Tactical goals
Strategic goals
Operational plans
Mission statements

Answer: a

Level: 2

Page: 243

Type: F

Lower-level goals should lead to the achievement of higher-level goals. This is called
a.
b.
c.
d.
e.

linking pin theory.


a value-based chain.
a means-end chain.
all of the above.
none of the above.

Answer: c
30.

Type: F

Tactical plans
Strategic plans
Operational plans
Supervisory plans
Organizational plans

Answer: c

29.

Page: 242

______ represent plans developed at the organization's lower levels that specify action
steps toward achieving operational goals and that support tactical planning activities.
a.
b.
c.
d.
e.

28.

Level: 2

Level: 2

Page: 244

Type: F

Which of these is lacking in the goal "profits should be increased in the coming year?"
a.
b.
c.
d.
e.

Specific and measurable


Challenging but realistic
Covers key result areas
Defined time period
None of the above
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 195

Answer: a
31.

Level: 3

Page: 246

Type: A

You are violating which of these goal characteristics when you attempt to create goals for
every aspect of employee behavior?
a.
b.
c.
d.
e.

Specific and measurable


Linked to rewards
Defined time period
Cover key result areas
Challenging but realistic

Answer: d

Level: 2

Page: 246

Type: F

Samuel set goals for each of his employees. Each employee ended up with at least
twenty-five goals. This process violates which of the following criteria for effective goals?
a.
b.
c.
d.
e.

Specific and measurable


Challenging but realistic
Covers key result areas
Defined time period
Linked to rewards

Answer: c
34.

Type: A

not specific and measurable.


not realistic.
irrelevant.
lacking a specific time period.
does not cover key result area.

Answer: b

33.

Page: 245

Tabu is a salesperson at a large retail chain. She was assigned a goal of $265,000 in sales
for the current quarter. She is unhappy because she knows that the most any salesperson
has sold in one quarter in the past is $150,000. Her goal of $265,000 is probably
a.
b.
c.
d.
e.

32.

Level: 2

Level: 2

Page: 246

Type: A

All of the following are characteristics of effective goal setting EXCEPT


a.
b.
c.
d.
e.

goals should be challenging but not unreasonably difficult.


goals should be set for every aspect of employee behavior.
specific and measurable.
cover key results area.
linked to rewards.

Answer: b

Level: 2

Page: 245-246 Type: F

Chapter Seven * Managerial Planning and Goal Setting


Test Bank * Page 196

35.

The ultimate impact of goals depended on the extent to which goal achievement is linked
to
a.
b.
c.
d.
e.

rewards.
salary increases.
promotions.
all of the above.
b and c only.

Answer: d
36.

Level: 1

Page: 247

Type: F

In using MBO, objectives should be set


a.
b.
c.
d.
e.

by the supervisor.
by the employee.
jointly by the supervisor and the employee.
by the accounting department.
by top management.

Answer: c

Level: 2

Page: 247

Type: F

Which of these is a method of management whereby managers and employees define goals
for every department, project, and person and use them to monitor subsequent
performance?
a.
b.
c.
d.
e.

Organizational planning
Management by objectives
Goal setting
Mission development
Vision development

Answer: b
39.

Type: F

Setting goals
Developing action plans
Appraising overall performance
Reviewing progress
None of the above

Answer: a

38.

Page: 246

Which of these is the first step in the MBO process?


a.
b.
c.
d.
e.

37.

Level: 2

Level: 1

Page: 247

Type: F

Yard Fence Corporation is currently implementing an MBO program. Managers and


employees jointly set objectives and develop action plans, and goal achievement is
evaluated on an annual basis. Yard Fence is missing which major activity that must occur
in order for MBO to be successful?
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 197

a.
b.
c.
d.
e.

Developing a mission statement


Developing tactical goals
Reviewing progress
Reviewing operational plans
None of the above

Answer: c
40.

Level: 2

Page: 248

Type: A

Which is the final step in the MBO process?


a.
b.
c.
d.
e.

Appraise overall performance


Develop an action plan
Review progress
Set goals
Conduct periodic checkups

Answer: a

Level: 1

Page: 248

Type: F

One major problem with MBO is


a.
b.
c.
d.
e.

it discourages individual creativity.


it does not work well in constantly changing environments.
it decreases employee motivation.
it does not work well in non-profit organizations.
none of the above.

Answer: b
43.

Type: A

to develop new action plans.


to develop new objectives based on the review of last year's performance.
to begin a new MBO "cycle", using the same objectives as last year.
to wait several months to allow information to be digested.
none of the above.

Answer: b

42.

Page: 247-248

Frostburg Fireplaces has used MBO for the past year. Top management just finished
evaluating overall performance. The next step in the MBO process should be
a.
b.
c.
d.
e.

41.

Level: 2

Level: 2

Page: 249

Type: F

Which of the following is NOT one of the benefits of MBO?


a.
b.
c.
d.
e.

Performance can be improved at all company levels.


Employees are motivated.
Efforts are focused on activities that will lead to goal attainment.
Operational goals are able to displace strategic goals.
Individual and department goals are aligned with company goals.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 198

Answer: d
44.

b.
c.
d.
e.

Level: 2

Page: 250

Type: F

Standing plans are


a.
b.
c.
d.
e.

plans that are developed to achieve a set of goals that are unlikely to be repeated in
the future.
plans that used to provide guidance for tasks performed repeatedly within the
organization.
plans that define company responses to specific situations, such as emergencies or
setbacks.
most important in the organizations.
none of the above.

Answer: b

Level: 1

Page: 250

Type: F

Page: 250

Type: F

A project is an example of a
a.
b.
c.
d.
e.

policy.
standing plan.
procedure.
single-use plan.
rule.

Answer: d
47.

Type: F

They are developed to achieve a set of goals that are unlikely to be repeated in the
future.
They are used to provide guidance for tasks performed repeatedly within the
organization.
They define plans that define company responses to specific situations, such as
emergencies or setbacks.
They are most important in the organizations.
None of the above.

Answer: a

46.

Page: 249

Which of these is true about single-use plans?


a.

45.

Level: 2

Numerous
a.
b.
c.
d.
e.

Level: 1

are likely to be part of an overall

programs, project
policies, project
standing plans, program
projects, program
programs, rule
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 199

Answer: d
48.

Level: 2

single-plan use.
standing plan.
program.
procedure.
project.

Answer: b

Level: 2

Level: 2

Page: 250

Type: F

An example of a ______ is a statement supporting the organization's efforts in the area of


sexual harassment.
a.
b.
c.
d.
e.

procedure
rule
policy
single-use plan
program

Answer: c

Level: 2

Page: 250

Type: F

"No food and/or drinks in the classroom" is an example of a


a.
b.
c.
d.
e.

procedure.
rule.
policy.
single-use plan.
project.

Answer: b
52.

Type: A

Programs
Policies
Rules
Procedures
Project

Answer: b

51.

Page: 250

Which of these define boundaries within which to make a decision?


a.
b.
c.
d.
e.

50.

Type: F

California Creamery requires that all absent employees bring a note from their doctor
when returning to work. This is an example of a
a.
b.
c.
d.
e.

49.

Page: 250

Level: 2

Page: 250

Type: A

Which of these are true about contingency plans?


a.

They are developed to achieve a set of goals that are unlikely to be repeated in the
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 200

b.
c.
d.
e.

future.
They are used to provide guidance for tasks performed repeatedly within the
organization.
They define company responses to specific situations, such as emergencies or
setbacks.
They are most important in the organizations.
None of the above.

Answer: c
53.

Level: 1

standing plans.
rules.
scenarios.
procedures.
operationally tactical plans.

Answer: c

Level: 1

Type: F

vague, verbal plan


detailed, verbal plan
long, difficult to read plan
vague, written plan
detailed, written plan

Answer: e

Level: 1

Page: 253

Type: F

Which of the following is not a step in the containment stage in crisis management?
a.
b.
c.
d.
e.

Meet safety and emotional needs


Return to business
Set up effective communications systems
Get the awful truth out
Activate the crisis management plan

Answer: c
56.

Page: 252

The crisis management plan should be a ________ that specifies the actions to be taken,
and by whom, if a crisis occurs.
a.
b.
c.
d.
e.

55.

Type: F

Contingency plans are also referred to as


a.
b.
c.
d.
e.

54.

Page: 251

Level: 2

Page: 255

Type: F

During the ______ stage of his companys crisis management, Jesse Winkler must ensure
that the stakeholders physical and emotional needs are met.
a.
b.
c.

prevention
preparation
containment
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 201

d.
e.

response
all of the above

Answer: c
57.

Level: 2

Page: 256

Type: A

The traditional approach to corporate planning was to


a.
b.
c.
d.
e.

have a decentralized planning staff.


have a centralized planning department.
set up a planning task force.
set up planning committees.
use TQM approach.

Answer: b

Level: 1

Page: 256

Type: F

A group of planning specialists who develop plans for the organization as a whole is
known as
a.
b.
c.
d.
e.

management by objectives.
planning task force.
decentralized planning staff.
centralized planning department.
total quality management group.

Answer: d
60.

Type: A

central planning departments.


decentralized planning groups.
top executives.
consulting groups.
the president of the company.

Answer: b

59.

Page: 255

Traditionally, if Tara, CEO of Butterfly Pillows, needed to conduct corporate planning, it


would be performed by all of the following EXCEPT
a.
b.
c.
d.
e.

58.

Level: 2

Level: 1

Page: 256

Type: F

Alabama Airlines has three planning specialists who help division managers develop their
own division plans. Serving as consultants to the divisions, the planning specialists give
advice about strengths, weaknesses, opportunities, and threats. Alabama Airlines is
utilizing what approach to the planning function?
a.
b.
c.
d.
e.

Centralized planning department


Decentralized planning staff
Planning task force
Centralized planning committee
TQM
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 202

Answer: b
61.

Level: 2

create an environment that encourages people to experiment and learn.


make continuous improvement a way of life.
avoid stretching goals.
design a new role for planning staff.
All of the above are acceptable ways.

Answer: c

Level: 2

Page: 257

Type: F

Baltimore Brewery allows its line managers to take responsibility for strategic planning.
This approach is consistent with which of the following?
a.
b.
c.
d.
e.

Centralized planning department


Decentralized planning staff
Planning task force
Centralized planning committee
Command-and-control

Answer: c
63.

Type: A

All of the following are ways in which companies can bring about relentless drive for
progress EXCEPT
a.
b.
c.
d.
e.

62.

Page: 256

Level: 2

Page: 259

Type: A

Which of these refers to a temporary group consisting of line managers responsible for
developing strategic plans?
a.
b.
c.
d.
e.

Planning task force


Decentralized planning staff
Centralized planning department
Schewhart planning group
Total quality management group

Answer: a

Level: 1

Page: 259

Type: F

Scenario Questions
Scenario-Elaine Eastman
The new program would be focused around MBO concepts. Elaine Eastman had been a manager
at ABCD for ten years and she was not all certain if this new MBO approach was going to fit her
department. She had strong commitment to achieving the company's objectives, but she also
knew her employees well enough to know that some didn't share the same commitment.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 203

1.

Elaine can anticipate enjoying the advantages of MBO which include


a.
b.
c.
d.
e.

increased orientation toward goal achievement.


performance can improve at all company levels.
employees are more motivated.
a & c are correct.
a, b, and c are correct.

Answer: e
2.

Elaine can anticipate and work to prevent the problems of MBO which include
a.
b.
c.
d.
e.

increase in paperwork that leads to a reduction of energy.


a decrease in communication between managers and employees.
greater conflict because of opposing goals.
all of the above.
none of the above.

Answer: a
3.

Type: A

If Elaine dictates or suggests the goals for her employees, she can expect
a.
b.
c.
d.
e.

increased motivation from her workers.


decreased motivation from her workers.
decreased frustration for her workers.
decreased intragroup conflict.
none of the above.

Answer: b
4.

Type: A

Type: A

In the MBO process, after the first step of setting objectives is accomplished, the next step
that Eliane should expect is
a.
b.
c.
d.
e.

reviewing progress toward company goals.


appraising overall performance.
developing action plans.
having a company party to celebrate.
none of the above.

Answer: c

Type: A

Short-Answer Questions
1.

A(n)

is a desired future state that the organization attempts to realize.


Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 204

Answer: goal
2.

Page: 238

A(n)
is a blueprint for goal achievement and specifies the necessary resource
allocations, schedules, tasks, and other actions.
Answer: Plan

3.

Page: 238

The act of determining the organization's goals and the means for achieving them is
referred to as
.
Answer: planning

4.

Page: 238

______ and plans are the responsibilities of middle managers.


Answer: Tactical goals

5.

Operational plans that focus on specific tasks and processes that help to meet tactical and
strategic goals are developed by ______ managers and supervisors.
Answer: front-line

6.

Page: 239

______ and ______ facilitate employees identification with the organization and help
motivate them, provide a sense of direction, and allow managers to learn what the
organization is trying to accomplish.
Answer: Goals; plans

7.

Page: 239

Page: 239

List the five reasons explicit goals and plans are important.
Answer:
Explicit goals and plans can serve the following functions: legitimacy, source of motivation
and commitment, guide to action, rationale for decisions, and standard of performance.
Page: 239-240

8.

describes the organization's reason for existence.


Answer: mission

9.

Page: 241

A(n) _______ is a broadly stated definition of basic business scope and operations that
distinguishes the organization from others of a similar type.
Answer: mission statement

10.

Page: 241

Broad statements describing where the organization wants to be in the future are called
.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 205

Answer: strategic goals


11.

Page: 242

_______ define the action steps by which an organization intends to attain its strategic
goals.
Answer: Strategic plans

12.

Page: 242

Goals that define the outcomes that major departments must achieve in order for the
organization to reach its overall goals are known as _______ goals.
Answer: tactical

13.

Page: 242

are designed to help execute major strategic plans and to accomplish a


specific part of the company's strategy.
Answer: Tactical plans

14.

Page: 243

The specific results expected from departments, work groups, and individuals are the
goals.
Answer: operational

15.

plans are developed at the lower levels of the organization to specify


action steps toward achieving operational goals and to support tactical plans.
Answer: Operational

16.

Page: 243

Page: 243

List the five characteristics of effective goals.


Answer:
Goals should be (1) specific and measurable; (2) they should cover key result areas; (3)
they should be challenging but realistic; (4) they should have a defined time period; and (5)
they should be linked to rewards.
Page: 246

17.

is a method whereby managers and employees define goals for every


department, project, and person and use them to monitor subsequent performance.
Answer: Management by objectives

18.

The most difficult step in MBO is _______.


Answer: setting goals

19.

Page: 247

Page: 247

List the four major activities that must occur in order for MBO to succeed.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 206

Answer: (1) Set goals, (2) develop action plans, (3) review progress, and (4) appraise
overall performance.
Page: 247-248
20.

Managers believe that they are better oriented toward goal achievement when
__________ is used.
Answer: management by objectives

21.

______ plans are used to provide guidance for work-related tasks that are performed
repeatedly within the organization.
Answer: Standing

22.

Page: 250

plans are developed to achieve a set of goals that are not likely to be
repeated in the future.
Answer: Single-use

23.

Page: 250

Plans that define company responses to specific situations, such as emergencies, setbacks,
or unexpected conditions are called
plans.
Answer: contingency

25.

Page: 250

_______ are ongoing plans that are used to provide guidance for tasks performed
repeatedly within the organization.
Answer: Standing plans

24.

Page: 247

Page: 251

A special type of contingency plan that is used when events are sudden and devastating
and require immediate response is called ________.
Answer: crisis management planning
Page: 253

26.

What are the three stages of crisis management?


Answer: Prevention, Preparation, and Containment
Page: 253

27.

In the ______ stage of crisis management, the company needs to care for the emotional
and physical safety of its stakeholders.
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 207

Answer: containment
28.

Page: 255

________ are groups of planning specialists who report directly to the CEO or president
of a company.
Answer: Centralized planning departments

29.

Although ______ planning approaches are still popular with some organizations, ______
planning are being criticized as inappropriate for todays fast-paced environment.
Answer: traditional, formal

30.

Page: 256

______ planning done by a few individuals in a complex and competitive business


environment no longer works.
Answer: Traditional

32.

Page: 256

A group of planning specialists assigned to major departments and divisions to help


managers develop their own strategic plans is called
.
Answer: decentralized planning staff

31.

Page: 256

Page: 256

List the steps of the new workplace approach to planning.


Answer:
First, start with a strong mission. Next, set stretch goals. Third, create a culture that
encourages people to experiment and learn. Next, design a new role for planning staff
followed by, make continuous improvement a way of life. Embrace event driven planning.
Finally, total support and commitment to the planning process from top management.
Page: 257-259

33.

A temporary group of line managers who have the responsibility of developing a strategic
plan is known as a(n) _______.
Answer: planning task force

34.

Page: 229

List the six guidelines for planning in todays workplace.


Answer: Start with a strong mission, set stretch goals, create a culture that encourages
learning, embrace event-driven planning, use temporary task forces, and remember that
planning still starts and stops at the top.
Page: 257-259

Chapter Seven * Managerial Planning and Goal Setting


Test Bank * Page 208

Essay Questions
1.

In what ways do plans and goals benefit an organization?


ANSWER:
Plans and goals benefit the organization in several ways. First they provide legitimacy and
a reason for existence. They also provide a source of motivation and commitment,
provide guides for action and decision making, and they set a standard of performance.
Level: 2

2.

Page: 239-240

Compare the four levels of goals and plans.


ANSWER:
The highest level is the mission statement, which defines the organization's basic business
scope and operations and specifies its reasons for existence. The second level is the level
of strategic goals and plans. Those pertain to the organization as a whole and specify
where the organization wants to be in the future. The third level is the tactical level, with
a focus on outcomes that major divisions and departments must achieve in order for the
organization to reach its overall goals. The fourth and lowest level is the
operational level, involving specific measurable results for departments, work groups, and
individuals.
Level: 3

3.

Page: 241-244

Briefly define the characteristics of an effective goal.


ANSWER:
Effective goals are precisely defined and allow for measurable performance. They focus
on the key result areas that contribute most to desired performance. They should be
challenging but not unreasonably difficult. Finally, they should specify the time period that
they cover and they should be tied to valued rewards.
Level: 2

4.

Page: 245-246

List and define the four major activities that must occur in order for management by
objectives (MBO) to succeed.
ANSWER:
The first step is setting goals. The setting of goals involves employees at all levels and
should incorporate the principles of effective goal setting. Goals should be jointly
determined by manager and employee, so as to increase the employee's level of
commitment. The second step is developing action plans. These action plans will specify
how the goals are to be achieved. Next, a progress review is important to make sure that
Chapter Seven * Managerial Planning and Goal Setting
Test Bank * Page 209

the action plans are working. They may be formal or informal and the action plan should
be changed if necessary. The last step is to determine if the goals have been achieved
within the specified time period. This appraisal should factor into the setting of the next
period's goals, allowing for feedback into the setting of the next set of goals.
Level: 3
5.

Page: 247-248

Define the new planning paradigm and explain the rationale behind it.
ANSWER:
The new planning paradigm has four components. First, start with a strong mission.
Next, stretch goals. Third, create an environment that encourages people to experiment
and learn. Next, design a new role for planning staff. Finally, make continuous
improvement a way of life with total support and commitment of top management for the
planning process. This paradigm is based upon the principle of decentralization. It strives
to involve workers at every level of the company. Due to the volatility of the business
environment, dynamic, timely plans are needed by today's organizations. The complexity
of the problems and challenges facing today's organizations mandates that all employees,
with their individual perspectives and talents, be involved.
Level: 3

Page: 256-259

Chapter Seven * Managerial Planning and Goal Setting


Test Bank * Page 210