Schermerhorn & Bachrach / Management, 14th edition Test Bank

Chapter 08: Planning Processes and Techniques

True/False

1. The management process involves planning, organizing, leading, and controlling

the use of resources to achieve performance objectives.

Answer: True
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

2. Controlling is the process of setting objectives and determining how to accomplish

them.

Answer: False
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

3. Leading refers to guiding the efforts of human resources to ensure high levels of
task accomplishment.

Answer: True
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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4. Stretch goals are performance targets that we have to work extra hard to reach.

Answer: True
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

5. Plans alone don’t deliver results; implemented plans do.

Answer: True
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

6. An organization with flexibility operates with an orientation toward the past rather
than the future.

Answer: False
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

7. Planning helps us avoid simply being carried along by the flow of events, and
focuses our attention on priorities.

Answer: True
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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8. Without planning, control lacks objectives and standards for measuring how well
things are going and what could be done to make them go better.

Answer: True
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

9. For effective time management, one must become calendar-bound by letting others
control one’s schedule.

Answer: False
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

10. Long-term plans typically look one or more years into the future.

Answer: False
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

11. Short-term plans typically cover one year or less.

Answer: True
Learning Objective: 8.2
Difficulty: Easy

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AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

12. As the time frames of planning are shrinking nowadays, top management is no
longer responsible for setting longer-term plans and directions for the organization
as a whole.

Answer: False
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

13. Strategic plans are focused only on a specific department of an organization.

Answer: False
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

14. Strategic plans ideally set forth the goals and objectives needed to accomplish the
organization’s vision in terms of mission or purpose and what it hopes to be in the
future.

Answer: True
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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15. In business, tactical plans often take the form of operational plans that indicate how
different components of the enterprise will contribute to the overall strategy.

Answer: False
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

16. Operational plans include single-use plans like budgets that apply to one specific
task or time period.

Answer: True
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

17. Policies set expectations for many aspects of employee behavior.

Answer: True
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

18. Procedures set broad guidelines for decisions.

Answer: False
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

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19. Budgets are standing plans that are used over and over again.

Answer: False
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

20. To be “over budget” is generally considered bad for a company or an individual; to

come in “under budget” is generally good.

Answer: True
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

21. Operating budgets allocate resources like labor, equipment, and space.

Answer: False
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

22. A flexible budget allocates resources as if each budget were brand new.

Answer: False
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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23. Qualitative forecasting uses expert opinions to predict the future.

Answer: True
Learning Objective: 8.3
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

24. Contingency planning identifies alternative courses of action to take when things go
wrong.

Answer: True
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

25. Scenario planning is a short-term version of contingency planning.

Answer: False
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

26. The purpose of benchmarking is to find out what other people and organizations are
doing very well, and then plan how to incorporate these ideas into one’s own
operations.

Answer: True
Learning Objective: 8.3

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Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

27. Internal benchmarking encourages members and work units to learn from
competitors and non-competitors alike.

Answer: False
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

28. If staff planners are used, people may often lack commitment to implement the
plans no matter how good they are.

Answer: True
Learning Objective: 8.3
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

29. Great goals include a challenging stretch factor while still being realistic and
possible to achieve.

Answer: True
Learning Objective: 8.4
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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30. Strategic goals set by top management cascade down the organization step by step
to become quality management objectives for lower levels.

Answer: True
Learning Objective: 8.4
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

31. Participatory planning includes in all planning steps the people who will be asked to
help implement them and not the ones affected by the plans.

Answer: False
Learning Objective: 8.4
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

32. Even though participatory planning takes more time, it can improve results by
improving implementation.

Answer: True
Learning Objective: 8.4
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

Multiple Choice

33. _____ is the process of setting objectives and determining how to accomplish them.
A. Directing
B. Controlling

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C. Leading
D. Organizing
E. Planning

Answer: E
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

34. Abasi, the supervisor at KNYA Inc., is in the process of setting certain specific
goals for his team, and is deciding how his team can reach those goals. In this
scenario, Abasi is involved in the process of _____.
A. planning
B. leading
C. organizing
D. controlling
E. directing

Answer: A
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

35. Which of the following management functions deals with the allocation and
arrangement of resources to accomplish tasks?
A. Planning
B. Leading
C. Organizing
D. Controlling
E. Directing

Answer: C
Learning Objective: 8.1
Difficulty: Easy

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Schermerhorn & Bachrach / Management, 14th edition Test Bank

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

36. _____ is a management function that guides the efforts of human resources to
ensure high levels of task accomplishment.
A. Leading
B. Directing
C. Resourcing
D. Organizing
E. Processing

Answer: A
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

37. Which of the following management functions deals with monitoring task
accomplishments and taking necessary corrective action?
A. Coordinating
B. Processing
C. Controlling
D. Leading
E. Directing

Answer: C
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

38. Which of the following is the first step in the planning process?
A. Analyzing alternatives and making a plan
B. Defining the objectives

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C. Implementing the plan and evaluating results

D. Determining where one stands vis-à-vis objectives
E. Developing premises regarding future conditions

Answer: B
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

39. Yoonsuh, the chief technology officer at Namkoong Appliances, is in the process of
identifying the results she wants her company to achieve next year. She knows
where she wants her company to reach and also has an idea of how far off the
desired mark the company will be along the way. She is most likely in the process
of:
A. developing premises regarding future conditions.
B. defining her company’s objectives.
C. analyzing her company’s alternatives and making a plan.
D. implementing the plan and evaluating the results.
E. determining where her company stands vis-à-vis objectives.

Answer: B
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

40. In which step of the planning process would one know where one is placed in
reaching the goals, and what strengths work in one’s favor and what weaknesses
may hold one back?
A. Implementing the plan and evaluating results
B. Defining the objectives
C. Developing premises regarding future conditions
D. Analyzing alternatives and making a plan
E. Determining where one stands vis-à-vis objectives

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Answer: E
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

41. After evaluating the current sales of PCs in relation to the desired sales, Rehan, the
marketing manager at Alfalah Inc., generates alternative campaigns that may affect
the PC’s expected sales. He identifies, for each campaign, things that may help or
hinder progress toward the company’s objectives. Rehan is currently in which phase
of the planning process?
A. Defining the objectives
B. Determining where one stands vis-à-vis objectives
C. Developing premises regarding future conditions
D. Analyzing alternatives and making a plan
E. Implementing the plan and evaluating results

Answer: C
Learning Objective: 8.1
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

42. In which phase of the planning process would one choose the alternative to
accomplish one’s objectives and describe what must be done to follow the best
course of action?
A. Analyzing alternatives and making a plan
B. Defining the objectives
C. Implementing the plan and evaluating results
D. Determining where one stands vis-à-vis objectives
E. Developing premises regarding future conditions

Answer: A
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

43. Roshan, the marketing manager at Kalx Inc., wants to check if the latest marketing
campaign was successful in increasing the sales of PCs for the company. Which of
the following steps must he take to measure the sales performance of the
organization?
A. Determine where he stands vis-à-vis objectives
B. Define the objectives
C. Develop premises regarding future conditions
D. Evaluate results and revise plans if needed
E. Analyze alternatives and make a plan

Answer: D
Difficulty: Moderate
Learning Objective: 8.1
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

44. In which step of the planning process does one take action and carefully measure
progress toward objectives?
A. Define the objectives
B. Determine where you stand vis-à-vis objectives
C. Implement the plan and evaluate results
D. Analyze alternatives and make a plan
E. Develop premises regarding future conditions

Answer: C
Difficulty: Moderate
Learning Objective: 8.1
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

45. In the planning process, _____ are the specific results or desired outcomes that one
intends to achieve.

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A. objectives and goals

B. beliefs and culture
C. procedures
D. policies
E. guidelines

Answer: A
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

46. Performance targets that we have to work extra hard to reach are called _____.
A. stretch goals
B. tactical goals
C. objectives
D. plans
E. missions

Answer: A
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

47. A(n) _____ is a statement of action steps to be taken in order to accomplish the
objectives.
A. concept
B. objective
C. guideline
D. goal
E. plan

Answer: E
Learning Objective: 8.1
Difficulty: Easy

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Schermerhorn & Bachrach / Management, 14th edition Test Bank

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

48. Neehara, who is being given the responsibility to meet certain sales targets for next
year, is preparing a list of measures she will take to reach these targets. Her list
includes such specific action items as preparing a log, checking the quality of inputs
and outputs, pricing, and details about his advertising strategy. In this scenario,
which of the following is Neehara creating?
A. Goal
B. Policy
C. Plan
D. Concept
E. Objective

Answer: C
Learning Objective: 8.1
Difficulty: Easy
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

49. Which of the following is true of planning?

A. It is done by managers at scheduled times.
B. It is a one-time process.
C. It doesn’t need to be evaluated or monitored for viability.
D. It can include the active participation of all employees.
E. It can deliver results even without implementation.

Answer: D
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

50. Which of the following is an external source of organizational pressure?

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A. Quest for operating efficiencies

B. Alternative work arrangements
C. Government regulations
D. Concerns for work–life balance
E. New organizational structures

Answer: C
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

51. Which of the following is an internal source of organizational pressure?

A. Government regulations
B. Changing social norms and ethical expectations
C. Changing technologies
D. Greater workplace diversity
E. Uncertainties of a global economy

Answer: D
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

52. _____occurs when an organization allows itself to be carried along by the flow of
events.
A. Coordination
B. Organizational pressure
C. Complacency trap
D. Ecological fallacy
E. Ethnocentrism

Answer: C
Learning Objective: 8.1
Difficulty: Easy

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Schermerhorn & Bachrach / Management, 14th edition Test Bank

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

53. A(n) _____ oriented manager makes sure the most important things get first
attention.
A. priority
B. result
C. advantage
D. change
E. innovation

Answer: A
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

54. A(n) _____ oriented manager ensures that all resources are used to the best interest
and benefit.
A. result
B. change
C. relation
D. priority
E. advantage

Answer: E
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

55. A(n) _____ oriented manager anticipates problems and opportunities so they can be
dealt with most effectively.
A. result

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B. employee
C. priority
D. change
E. advantage

Answer: D
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

56. The link between planning and controlling begins with _____.
A. anticipating problems and opportunities
B. setting objectives and standards
C. analyzing the alternatives
D. evaluating and monitoring the results
E. understanding the internal and external organizational threats

Answer: B
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

57. Which of the following is true about planning?

A. Good planning improves rigidity.
B. An organization with flexibility starts losing focus.
C. Planning allows organizations to get into the complacency trap.
D. Planning improves coordination.
E. When planning is not done well, it facilitates control.

Answer: D
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

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58. _____ focuses on measuring how well things are going and what could be done to
improve things.
A. organizing
B. controlling
C. leading
D. goal setting
E. decision making

Answer: B
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

59. Without control, the process of _____ lacks the follow-through needed to ensure
that things work out as intended.
A. planning
B. goal setting
C. leading
D. problem solving
E. directing

Answer: A
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

60. Which of the following is true about long-range and short-range plans?
A. There is a lot more permanency to long-term plans today than there was in the past.
B. Long-term plans are not subject to frequent revisions today.
C. Long-term plans typically look at least ten years or more into the future.
D. The time frames of planning are shrinkingat present.

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E. Lower management is mainly responsible for creating short-term plans.

Answer: D
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

61. Even though the time frames of planning may be shrinking, _____ is/are still
responsible for setting longer-term plans and directions for the organization as a
whole.
A. lower management
B. middle management
C. shareholders
D. top management
E. consumers

Answer: D
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

62. _____ are longer-term plans that set broad directions for the organization.
A. Procedural plans
B. Functional plans
C. Strategic plans
D. Tactical plans
E. Operational plans

Answer: C
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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63. Which of the following is true of strategic plans?

A. Plans at the middle and lower levels of the traditional organizational pyramid tend
to be strategic.
B. They are focused only on a particular department or group of employees in the
organization.
C. They are short-range plans to achieve an immediate goal.
D. They refer to the “tactical” plans of the organization.
E. They ideally set forth the goals and objectives needed to accomplish the
organization’s vision.

Answer: E
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

64. A _____ clarifies the purpose of the organization and expresses what it hopes to be
in the future.
A. vision
B. mission
C. policy
D. procedure
E. budget

Answer: A
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

65. _____ are developed and used to implement strategic plans.

A. Tactical plans
B. Visions
C. Operational plans

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D. Missions
E. Procedures

Answer: A
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

66. The management of Khilona, a toy manufacturing company, decides that they will
promote their products at the various shopping malls of the city. In order to do so,
they prepare teams of employees to visit the shopping malls and promote its goods.
The decision of the management to allocate the company’s human resources for
promoting the toys can be regarded as a _____ plan.
A. tactical
B. strategic
C. top-down
D. production
E. visionary

Answer: A
Learning Objective: 8.2
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

67. _____ indicate how different operations within the organization will help advance
the overall strategy.
A. Operational plans
B. Policies
C. Budgets
D. Functional plans
E. Missions

Answer: D
Learning Objective: 8.2

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Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

68. In order to help implement its corporate strategy, the managers of an organization
would most likely develop a(n) _____ plan for the marketing department.
A. functional
B. operational
C. single-use
D. production
E. zero-based

Answer: A
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

69. Which of the following functional plans deal with work methods and technologies?
A. Human resource plans
B. Marketing plans
C. Facilities plans
D. Financial plans
E. Production plans

Answer: E
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

70. Functional plans dealing with money and capital investments are called _____
plans.
A. marketing

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B. logistics
C. financial
D. human resource
E. facilities

Answer: C
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

71. Nakatomi Inc. wants to open a new automobile manufacturing unit in Kasnia.
Kaoruko’s team is assigned the task of planning the layout of the new factory in
Kasnia. In this scenario, Kaoruko is dealing with the _____ plan.
A. facilities
B. financial
C. operational
D. marketing
E. inventory

Answer: A
Learning Objective: 8.2
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

72. As Hazel Inc.’s original suppliers have suddenly shut down, it is now making plans
to find alternate suppliers to provide resources for its manufacturing plant. Such
plans are referred to as _____ plans.
A. production
B. facilities
C. marketing
D. logistics
E. financial

Answer: D

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Learning Objective: 8.2

Difficulty: Easy
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

73. _____ plans are functional plans that deal with suppliers and acquiring resource
inputs.
A. Human resource
B. Logistics
C. Marketing
D. Production
E. Facilities

Answer: B
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

74. _____ plans deal with selling and distributing goods or services.
A. Production
B. Financial
C. Facilities
D. Logistics
E. Marketing

Answer: E
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

75. Which of the following functional plans deal with building a talented workforce?
A. Human resource plans

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B. Logistics plans
C. Marketing plans
D. Production plans
E. Facilities plans

Answer: A
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

76. A(n) _____ plan identifies short-term activities to implement the broad plans of the
company, and includes standing plans and single-use plans.
A. forecast
B. functional
C. strategic
D. operational
E. tactical

Answer: D
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

77. Which of the following is a standing plan?

A. A policy
B. A budget
C. A vision
D. A mission
E. A forecast

Answer: A
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

78. A policy of zero-tolerance toward sexual harassment at workplace is an example of

_____ plans used by organizations.
A. facilities
B. financial
C. single-use
D. standing
E. logistics

Answer: D
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

79. Which of the following is a single-use plan?

A. A procedure
B. A policy
C. A budget
D. A mission
E. A vision

Answer: C
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

80. A _____ communicates broad guidelines for making decisions and taking action in
specific circumstances.
A. vision
B. procedure
C. policy

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D. tactical plan
E. budget

Answer: C
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

81. What is the primary difference between a policy and a procedure?

A. A policy focuses on the organization as a whole, but a procedure focuses only on a
single department.
B. A policy sets a broad guideline, but a procedure defines precise actions to be taken.
C. A policy is a single-use plan, but a procedure is a standing plan.
D. A policy identifies short-term directions for the organization, but a procedure
identifies long-term directions.
E. A policy guides fair employment, but a procedure guides ethical principles.

Answer: B
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

82. Procedures are stated in employee handbooks and often called _____.
A. bureaucratic procedures
B. contingency procedures
C. standard operating procedures
D. experimental procedures
E. catalogued procedures

Answer: C
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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83. _____ are single-use plans that commit resources for specific time periods to
activities, projects, or programs.
A. Procedures
B. Policies
C. Guidelines
D. Budgets
E. Forecasts

Answer: D
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

84. Financial budgets:

A. project cash flows and expenditures.
B. plot anticipated sales or revenues against expenses.
C. allocate resources like labor, equipment, and space.
D. allocate a stated amount of resources for a specific purpose.
E. allow resources to vary in proportion with various levels of activity.

Answer: A
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

85. _____ budgets allocate resources like labor, equipment, and space.
A. Financial
B. Operating
C. Nonmonetary
D. Zero-based
E. Flexible

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Answer: C
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

86. Which of the following types of budgets plot anticipated sales or revenues against
expenses?
A. Zero-based budgets
B. Nonmonetary budgets
C. Financial budgets
D. Operating budgets
E. Fixed budgets

Answer: D
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

87. A fixed budget:

A. allocates a stated amount of resources for a specific purpose.
B. allocates resources as if each budget were brand new.
C. allows resources to vary in proportion with various levels of activity.
D. allocates resources like labor, equipment, and space.
E. always has equal expenditures and revenue.

Answer: A
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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88. Morrison Manufacturing (MM) creates a budget for projects or activities in each
new budget period as if it were brand new. It does not renew any of the past
funding. MM is using a(n) _____ budgeting approach.
A. nonmonetary
B. operating
C. zero-based
D. fixed
E. flexible

Answer: C
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

89. _____ is the process of predicting what will happen in the future.
A. Benchmarking
B. Scenario planning
C. Contingency planning
D. Staff planning
E. Forecasting

Answer: E
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

90. The current issue of a popular business periodical predicted a global economic
downturn. The periodical attributed the downturn to a predicted increase in the
inflation rate. This report is an example of _____.
A. benchmarking
B. scenario planning
C. contingency planning
D. staff planning
E. forecasting

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Answer: E
Learning Objective: 8.3
Difficulty: Moderate
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

91. Qualitative forecasting uses _____ to predict future events.

A. budgets
B. expert opinions
C. mathematical models
D. statistical analyses
E. surveys

Answer: B
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

92. Maria, a marketing manager at Kurt Consulting, predicts a 15% drop in the sales of
their premium packages. She used correlation and regression analyses of previous
years’ sales records to arrive at the conclusion. Maria is using _____.
A. contingency planning
B. qualitative forecasting
C. quantitative forecasting
D. internal benchmarking
E. external benchmarking

Answer: C
Learning Objective: 8.3
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

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93. _____ identifies alternative courses of action to take when things go wrong.
A. Internal benchmarking
B. Contingency planning
C. External benchmarking
D. Goal setting
E. Staff planning

Answer: B
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

94. Which of the following is a long-term version of contingency planning?

A. Benchmarking
B. Scenario planning
C. Forecasting
D. Staff planning
E. Operationalizing

Answer: B
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

95. _____ involves identifying several possible future situations or states of affairs and
then making plans to deal with each situation should it actually occur.
A. Scenario planning
B. External benchmarking
C. Forecasting
D. Staff planning
E. Internal benchmarking

Answer: A

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Learning Objective: 8.3

Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

96. _____ is the use of external and internal comparisons to better evaluate one’s
current performance and identify possible ways to improve for the future.
A. Qualitative forecasting
B. Quantitative forecasting
C. Scenario planning
D. Contingency planning
E. Benchmarking

Answer: E
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

97. The purpose of benchmarking is to _____.

A. identify alternative future scenarios and make plans to deal with each scenario
B. identify alternative courses of action to take when things go wrong
C. plan how to incorporate the good, profitable ideas of other organizations into one’s
own operations
D. use expert opinions to predict the future
E. use mathematical models and statistical analyses of historical data and surveys to
predict future events

Answer: C
Learning Objective: 8.3
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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98. Riveras, a chain of discount stores, utilized the best retailing strategies of another
successful retail chain to create a market for itself. By learning from the retail chain,
Riveras has used _____.
A. qualitative forecasting
B. quantitative forecasting
C. scenario planning
D. external benchmarking
E. internal benchmarking

Answer: D
Learning Objective: 8.3
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

99. Which of the following is true about the use of staff planners?
A. It can lead to a communication gap between planners and implementers.
B. It can lead to an increase in commitment to implement the plans.
C. The use of staff planners can lead to a short-term rather than a long-term focus.
D. Very few organizations use staff planners as they don’t bring any expertise to the
planning process.
E. The use of staff planners always reduces the focus of the planning team.

Answer: A
Learning Objective: 8.3
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

100. _____ refer to things done by people and organizations that enable them to achieve
superior performance.
A. Missions
B. Scenario plans
C. Noncompetitive objectives
D. Best practices
E. Operating activities

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Answer: D
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

101. Which of the following is a characteristic of a “great goal”?

A. It has no precise timetable.
B. It is general and not too specific.
C. It is almost impossible to accomplish.
D. It can be measured easily.
E. It is not challenging.

Answer: D
Learning Objective: 8.4
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

102. Which of the following is true of “great goals”?

A. They are impossible to achieve.
B. They are challenging.
C. They are difficult to measure.
D. They are very generic in nature.
E. They are not bound by timetables.

Answer: B
Learning Objective: 8.4
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

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103. When job performance is difficult to quantify, performance objectives can be stated
as _____.
A. short-range plans
B. benchmarks
C. verifiable work activities
D. measurable end products
E. deliverables

Answer: C
Learning Objective: 8.4
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

104. Silver Finance requires that its interest rate planning process include its employees,
managers, some customers, and others who will be affected by the resulting plans
and/or will be asked to help implement them. Silver Finance is utilizing _____.
A. contingency planning
B. scenario planning
C. management by objectives
D. participatory planning
E. benchmarking

Answer: D
Learning Objective: 8.4
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

105. Which of the following is true of participatory planning?

A. It reduces the time needed for planning.
B. It has less need for forecasting.
C. It pays greater attention to contingency situations.
D. It can improve results by improving implementation.
E. It decreases the creativity of planning.

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Answer: D
Learning Objective: 8.4
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

106. The planning team at Abdullah and Sons has thoroughly examined all possible
situations that may be encountered in the current year. They have also addressed
various factors that may provide assistance or act as barriers to objectives. Which of
the following steps in the planning process has been completed by the planning
team at Abdullah and Sons by taking these actions?
A. Defining objectives
B. Determining where one stands vis-à-vis objectives
C. Developing premises regarding future conditions
D. Measuring performance
E. Implementing the plan and evaluating results

Answer: C
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

107. Aziza is an assistant manager at a popular retail outlet. She likes to keep her
employees motivated and she insists that the sales team meet their daily sales target
and strive to go beyond their targets for extra bonuses. Aziza can be regarded as
a(n) _____ manager.
A. change oriented
B. results oriented
C. priority oriented
D. relational oriented
E. complacency oriented

Answer: B
Learning Objective: 8.1
Difficulty: Moderate

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AACSB: Application of knowledge

Bloom’s Taxonomy: Application

108. Sahoko, the manager of a construction company, is in charge of allocating

equipment and construction workers to different construction projects. She allocates
the majority of equipment and workers to high priority projects. In this scenario,
Sahoko creates a _____ budget.
A. financial
B. operating
C. nonmonetary
D. zero-based
E. personal

Answer: C
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

109. LazyMart, an online retailer, hopes to be one of the most popular, highly efficient,
and biggest e-tailers in the country. It wishes to excel in all its endeavors to serve
customers. This is an example of a:
A. policy.
B. functional plan.
C. code of conduct.
D. vision.
E. tactical plan.

Answer: D
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

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110. Laura is the owner of a boutique. She comes up with a new plan to improve the sale
and distribution of the merchandise of her boutique. Which functional plan did
Laura employ in this scenario?
A. Human resource plan
B. Logistics plan
C. Marketing plan
D. Production plan
E. Facilities plan

Answer: C
Learning Objective: 8.2
Difficulty: Easy
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

111. Morrison Associates, a law firm, encourages its lawyers to learn from each other
about how they can handle their cases better. It encourages the lawyers to share
their best practices and collectively work toward meeting the objectives of the firm.
This is an example of _____.
A. internal benchmarking
B. forecasting
C. functional planning
D. tactical planning
E. external benchmarking

Answer: A
Learning Objective: 8.3
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

112. Javier and his team of engineers have gone through the blueprint of a new
commercial complex and have underlined major issues that could crop up when
work starts at the site. They have also thought of possible fixes to the issues. This is
an example of _____.
A. benchmarking

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B. operational planning
C. functional planning
D. tactical planning
E. contingency planning

Answer: E
Learning Objective: 8.3
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

113. A magazine publishes forecasts of industry conditions, interest rates, unemployment

trends, and national economies every quarter. It uses expert opinion to predict the
future. This method of forecasting the future falls under the category of _____
forecasting.
A. specific
B. attainable
C. timely
D. measurable
E. qualitative

Answer: E
Learning Objective: 8.3
Difficulty: Moderate
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

114. ____ set targets to create the knowledge and skills required for performance.
A. Functional plans
B. Learning goals
C. Outcome goals
D. Strategic plans
E. Tactical plans

Answer: B
Learning Objective: 8.3

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Difficulty: Easy
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

115. ____ set targets for actual performance results.

A. Functional plans
B. Learning goals
C. Outcome goals
D. Strategic plans
E. Tactical plans

Answer: C
Learning Objective: 8.3
Difficulty: Easy
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

116. ____ make(s) sure that goals everywhere in the organization are linked together to
advance its overall mission or purpose.
A. Functional plans
B. Goal alignment
C. Hierarchy of goals
D. Strategic plans
E. Tactical plans

Answer: B
Learning Objective: 8.3
Difficulty: Easy
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

117. ____ help(s) link tactical goals in means-end fashion with the accomplishment of
strategic goals.
A. Functional plans
B. Goal alignment
C. Hierarchy of goals

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D. Outcome goals
E. Participatory planning

Answer: B
Learning Objective: 8.3
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Synthesis

118. The team leader of an IT firm has called for a meeting of all software engineers to
view and discuss the course of action for a new software creation project. This is an
example of _____.
A. participatory planning
B. performance appraisal
C. contingency planning
D. benchmarking
E. zero-based budgeting

Answer: A
Learning Objective: 8.4
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

119. Sujata works for RLB financial services, a mortgage company. The company has
opened a new branch in a developing country and Sujata has been assigned the task
of identifying all kinds of risks the company might face in that country. She
identifies several possible events such as political unrest, ethnic riots, and natural
calamities that would endanger the business continuity of the organization. She
makes plans to deal with each of these events. Sujata is involved in the process of
_____.
A. scenario planning
B. performance appraisal
C. contingency planning
D. benchmarking
E. zero-based budgeting

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Answer: A
Learning Objective: 8.4
Difficulty: Hard
AACSB: Application of knowledge
Bloom’s Taxonomy: Application

Essay

120. Identify and describe the steps in the planning process.

Answer: The five basic steps in the planning process are:

• 1. Define your objectives––Identify desired outcomes or results in very specific
ways. Know where you want to go; be specific enough so that you will know you
have arrived when you get there, or know how far off the mark you are at various
points along the way.
• 2. Determine where you stand vis-à-vis objectives––Evaluate current
accomplishments relative to the desired results. Know where you stand in reaching
the objectives; know what strengths work in your favor and what weaknesses may
hold you back.
• 3. Develop premises regarding future conditions––Try to anticipate future events.
Generate alternative “scenarios” for what may happen; identify for each scenario
things that may help or hinder progress toward your objectives.
• 4. Analyze alternatives and make a plan––List and carefully evaluate the possible
actions that may be taken. Choose the alternative(s) most likely to accomplish your
objectives; decide step by step what must be done to follow the chosen course of
action.
• 5. Implement the plan and evaluate results––Take action and carefully measure
your progress toward objectives. Do what the plan requires; evaluate results; take
corrective actions and revise plans as needed.
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

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121. Describe the benefits of planning for individuals and organizations.

Answer: The benefits of planning for individuals and organizations include the following:
• Planning improves focus and flexibility. Focus and flexibility are important to the
performance of both people and organizations in highly competitive and dynamic
environments.
• Planning improves action orientation. Planning keeps people and organizations
focused on the actions that are needed to stay competitive and to become better at
what they are doing. Planning helps make people and organizations more oriented
toward results, priorities, advantages, and change.
• Planning improves coordination. Planning helps individuals, groups, and
subsystems within organizations make meaningful contributions to the organization
as a whole, even as they pursue their specific tasks and objectives.
• Planning improves control. Planning facilitates control by defining objectives and
desired performance results and identifying specific actions through which they are
to be pursued.
• Planning improves time management. Each day, managers are bombarded by a
multitude of tasks and demands. They work in a setting of frequent interruptions,
crises, and unexpected events. Consequently, it can be easy to lose track of
objectives and fall prey to “time wasters.”
Learning Objective: 8.1
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

122. Compare and contrast strategic and tactical plans.

Answer: Strategic plans are longer-term plans that set broad and comprehensive
directions for an organization and create a framework for allocating resources for
maximum long-term performance impact. Strategic planning begins with a vision
that clarifies the purpose of the organization and expresses what it hopes to be in the
future. It involves determining the goals and objectives that will be pursued in order
to accomplish that vision. Also, it specifies how the organization will be positioned
for competitive advantage in its external environment to accomplish those goals and
objectives.
Tactical plans are developed and used to implement strategic plans. They tend to be
intermediate term plans that specify step-by-step means for using the organization’s

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resources to put strategies into action. In business, tactical plans often take the form
of functional plans that indicate how different components of the enterprise will
contribute to the overall strategy. Such functional plans might include:
• Production plans—dealing with the methods and technologies needed by people in
their work;
• Financial plans—dealing with money and capital investments;
• Facilities plans—dealing with facilities and work layouts;
• Logistics plans—dealing with suppliers and the flow of raw materials and other
product inputs.
Learning Objective: 8.2
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

123. Identify and briefly describe each of the five major planning tools and techniques
that managers use.

Answer: The five major planning tools and techniques that managers use are described
below:
• Forecasting is the process of predicting what will happen in the future.
• Contingency planning involves identifying alternative courses of action that can be
implemented, if and when an original plan proves inadequate because of changing
circumstances.
• Scenario planning is a long-term version of contingency planning that involves
identifying several alternative future scenarios or states of affairs that may occur,
and then making plans to deal with each scenario should it actually occur.
• Benchmarking is a technique that makes use of internal and external comparisons to
better evaluate current performance and identify possible actions to improve the
future.
• Staff planners are persons who take responsibility for leading and coordinating the
planning function for the total organization or one of its major components.
Learning Objective: 8.3
Difficulty: Hard
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

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124. What are the five characteristics that great goals tend to have?

Answer: Great goals tend to have the following five characteristics:

1. Specific—clearly targeted key results and outcomes to be accomplished.
2. Timely—linked to specific timetables and “due dates.”
3. Measurable—described so results can be measured without ambiguity.
4. Challenging—include a stretch factor that moves toward real gains.
5. Attainable—although challenging, realistic and possible to achieve.
Learning Objective: 8.4
Difficulty: Moderate
AACSB: Analytical thinking
Bloom’s Taxonomy: Comprehension

Text Entry

125. ___ is the process of setting objectives and determining how to accomplish them.

Answer: Planning
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

126. Objectives and goals are ____ results that one wishes to achieve.

Answer: specific
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

127. Stretch ___ are performance targets that one must work extra hard and stretch to
reach.

Answer: goals, goal

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Learning Objective: 8.1

Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

128. A plan is a statement of ____ means for accomplishing objectives.

Answer: intended
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

129. The ____ trap is being carried along by the flow of events.

Answer: complacency
Learning Objective: 8.1
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

130. ____ plans typically look three or more years into the future.

Answer: Long-term, Long term

Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

131. A tactical plan helps to implement all or parts of a(n) ____ plan.

Answer: strategic
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking

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Bloom’s Taxonomy: Knowledge

132. A __________ is a standing plan that communicates broad guidelines for decisions
and action.

Answer: policy, policies

Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

133. A(n) ____ is a plan that commits resources to projects or activities.

Answer: budget, budgets

Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

134. A(n) ____-based budget allocates resources as if each budget were brand new.

Answer: zero, 0
Learning Objective: 8.2
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

135. ____ attempts to predict the future.

Answer: Forecasting, Forecast

Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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136. Contingency planning identifies ____ courses of action to take when things go
wrong.

Answer: alternative, alternatives

Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

137. Scenario planning identifies alternative ____ scenarios and makes plans to deal with
each.

Answer: future, futures

Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

138. ____ uses external and internal comparisons to plan for future improvements.

Answer: Benchmarking
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

139. Best practices are things people and organizations do that lead to ____ performance.

Answer: superior
Learning Objective: 8.3
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

140. ____ goals set targets to create the knowledge and skills required for performance.

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Answer: Learning
Learning Objective: 8.4
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

141. Outcome goals set targets for ____ performance results.

Answer: actual
Learning Objective: 8.4
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

142. Goal ____ makes sure that goals throughout the organization are linked together to
advance the mission.

Answer: alignment
Learning Objective: 8.4
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

143. In a(n) ____ of goals, lower-level goals and objectives support accomplishment of
higher-level goals and objectives.

Answer: hierarchy
Learning Objective: 8.4
Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

144. _____ planning includes the persons who will be affected by plans and/or those who
will implement them.

Answer: Participatory, Participation

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Learning Objective: 8.4

Difficulty: Easy
AACSB: Analytical thinking
Bloom’s Taxonomy: Knowledge

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