chapter 6 managing the business...

Chapter 6 Managing the Business Enterprise1) Which of the following would not be included under the definition of a manager?

A) Prime Minister of CanadaB) president of the University of TorontoC) industrial engineerD) president of IBME) executive director of the United Way

Answer: CDiff: 1 Page Ref: 176

2) What is the primary purpose of setting a goal for an organization?A) identifies threats and opportunitiesB) determines if the firm is highly leveragedC) makes workers think in quantitative termsD) assures successes for the firmE) provides guidance and direction for all managers

Answer: EDiff: 1 Page Ref: 176

3) Objectives that a business hopes (and plans) to achieve are calledA) goals.B) tactics.C) strategies.D) implementation steps.E) actions.

Answer: ADiff: 1 Page Ref: 176

4) Ace Products hopes to increase sales of home heating products in the upcoming year. This is an example ofa(n)A) goal.B) action.C) tactic.D) implementation step.E) strategy.


5) A ________ is a broad set of organizational plans for implementing the decisions made for achievingorganizational goals.A) strategyB) formulaC) missionD) functionE) blueprint


6) Lynne Smith, chief financial officer for Web Industries, is working on a broad set of organizational plans forimplementing the decisions made for achieving organizational goals. Lynne is developing a ________ forWeb Industries.A) formulaB) functionC) blueprintD) missionE) strategy


7) Mega Computer has a goal of reducing its manufacturing costs by 15 percent over the next three years. Eachof the manufacturing managers has been given tasks to reach this goal. In this case the goal:A) provides directionB) helps make decisionsC) helps allocate resourcesD) helps assess performanceE) defines corporate culture

Answer: DDiff: 2 Page Ref: 177

8) If a specific product sales group has a goal of increasing sales for the following year by 10 percent, the goalwill function to:A) define corporate cultureB) provide directionC) help assess performanceD) help allocate resourcesE) help make decisions


9) Mega Computer has decided that within the next five years it wants to become an industry leader in diskdrive technology, a technology that has little existing support inside the company at this time. This goal will:A) help make decisionsB) help allocate resourcesC) help assess performanceD) provide directionE) define corporate culture


10) Mega Computer has targeted the growth of its new line of computers to surpass the current line within twoyears. Charles, the marketing manager, is reviewing the advertising budget for the next year and this goal:A) provides directionB) defines corporate cultureC) helps make decisionsD) helps allocate resourcesE) helps assess performance


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11) The management of Critters Galore, a nation-wide retailer of pet supplies, has decided that its share of themarket is too low and they have a target of increasing their current market share from 25 percent to 40percent. Everyone is expected to do whatever it takes to achieve this goal. The market is very competitiveand Critters Galore will need to be very aggressive. The goal:A) provides directionB) helps assess performanceC) helps to define corporate cultureD) helps allocate resourcesE) helps make decisions


12) Rolex sells high-quality, high-priced watches through selected jewellery stores. This is their:A) long-term goalB) strategic goalC) missionD) purposeE) corporate performance target


13) Both Rolex and Timex want to sell watches at a profit. They share a common:A) missionB) corporate performance targetC) long-term goalD) strategic goalE) purpose


14) What time periods are typically covered by long-term goals?A) 10-15 years or more into the futureB) 1-3 years in the futureC) 5 years or more into the futureD) anything longer than three yearsE) 5 to 25 years into the future


15) A mission statement is:A) a statement developed by the board of directors to guide the businessB) solely for people visiting the company so they understand what the company doesC) a statement of how an organization will achieve its purpose in the environment in which it conductsits business

D) the same as a purposeE) not necessary for smaller businesses


16) If Kodak wants to increase its share of the 35mm film market by ten percent during the next six years it hasset:A) a long-term goalB) a short-term goalC) a strategic targetD) an intermediate goalE) a midrange goal


17) The finance department of Computers-B-Us has set a goal of increasing the company's return on investmentto 14 percent in the next three years. This goal is:A) an intermediate goalB) a strategic targetC) a long-term goalD) a short-term goalE) a midrange goal


18) Suppose that within the next four years, McDonald's wants to double the number of franchised restaurantsin the Toronto area. This is:A) a long-term goalB) an intermediate goalC) a short-term goalD) a strategic targetE) a midrange goal

Answer: BDiff: 1 Page Ref: 178

19) Bob's Barbecue currently has a 15 percent share of market. Bob has decided that he wants a 20 percent shareof market by the end of the year. Bob has set:A) a short-term goalB) a midrange goalC) a strategic targetD) a long-term goalE) an intermediate goal


20) The purpose of ________ strategy is to determine the businesses the firm will be in and how these businesseswill relate to each other.A) businessB) corporateC) fundamentalD) missionE) functional


21) Companies adopting a ________ strategy will increase corporate activities or investment.A) retrenchmentB) functionalC) businessD) stabilityE) growth


22) Strategy formulation is the:A) creation of a small program for defining and structuring an organization's goalsB) creation of a small program for defining and meeting an organization's goalsC) creation of a broad program for defining and meeting an organization's goalsD) creation of a broad program for planning and meeting an organization's goalsE) creation of a broad program for defining and structuring an organization's goals


23) When MCI shifted from the long-distance telephone business to where it wanted to get involved in localtelephone operations and new wireless digital technology, it was changing its:A) plansB) strategyC) long-term goalsD) purposeE) mission


24) Strategic goals are set by:A) production employeesB) middle managementC) first-line supervisorsD) middle management and first-line supervisorsE) top managers


25) Strategic formulation involves, in order:A) (1) analyzing the organization and its environment, (2) matching the organization and itsenvironment, and (3) setting strategic goals

B) (1) creating a mission statement, (2) setting strategic goals, and (3) analyzing the organization and itsenvironment

C) (1) setting strategic goals, (2) analyzing the organization and its environment, and (3) matching theorganization and its environment

D) (1) creating a mission statement, (2) analyzing the organization and its environment, and (3) settingstrategic goals

E) (1) setting strategic goals, (2) analyzing the organization and its environment, and (3) creating amission statement


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26) Strategic goals are:A) the product of input from all customersB) the product of input from all employeesC) derived directly from tactical plansD) derived directly from operational plansE) derived directly from the mission statement


27) The term SWOT analysis stands for the identification of strengths, weaknesses, ________ and threats.A) optimismB) organizationC) opportunitiesD) obstructionsE) openings


28) Increasing sales by 4 percent in the next eight months is an example of a(n)A) short-term goal.B) strategy.C) tactic.D) intermediate goal.E) long-term goal.


29) Which of the following outlines how an organization intends to meet its mission statement goals andincludes the firm's responsiveness to new challenges and needs?A) strategyB) tacticsC) research and developmentD) goal settingE) controlling


30) Which of the following is NOT one of the basic steps of strategy formulation?A) analyzing the environmentB) determining what advertising mode to useC) analyzing the organization and its environmentD) setting strategic goalsE) matching the organization and its environment


31) Long-term goals derived directly from a firm's mission statement are calledA) organizational goals.B) strategic plans.C) tactical plans.D) environmental goals.E) strategic goals.


32) Scanning the environment for threats and opportunities is referred to asA) devising strategy.B) tactical planning.C) organizational analysis.D) environmental analysis.E) developing implementation tactics.


33) ________ are areas in which a firm can potentially expand, grow, or take advantage of existing strengths.A) OpportunitiesB) Internal factorsC) ThreatsD) StrategiesE) Tactics


34) Which of the following would be classified as an opportunity for an organization?A) competitionB) strong reputation with consumersC) government regulationsD) changing consumer tastesE) recall of a competitor's product


35) What are the three steps involved in formulating strategy for the organization?A) set the strategic goals, conduct an environmental analysis, and prepare standard operating proceduresB) prepare an organizational plan, set the strategic goal and implement the strategyC) prepare a strong growth strategy, prepare a marketing plan, and prepare standard operatingprocedures

D) set the strategic goals, conduct an environmental and organizational analysis, and match the twoanalyses

E) prepare an organizational plan, prepare a financial plan, and match these two plansAnswer: DDiff: 2 Page Ref: 178

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36) Setting strategic goals is the first step in strategy formulation. What is the next step?A) matching company strengths with environmental characteristicsB) analyzing the company and its environmentC) developing a mission statementD) segmenting the markets the company wants to penetrateE) preparing an organizational plan


37) The analysis of a firm's strengths and weaknesses is known as:A) SBU analysisB) environmental analysisC) contingency analysisD) barrier analysisE) organizational analysis


38) Changing consumer tastes, hostile takeover offers, and new competitors would be classified as:A) opportunitiesB) threatsC) strengthsD) natural responsesE) weaknesses


39) Which of the following would typically be considered threats?A) slow-paying customersB) a small share of the marketC) new products from competitorsD) new marketsE) less government regulation


40) Which of the following would typically be considered opportunities?A) improving economyB) high unemploymentC) decreased demand from foreign countriesD) a large base of satisfied customersE) quick-paying customers


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41) Which of the following would usually be considered a corporate weakness?A) increased government regulationB) an economy that was turning downC) a small bank accountD) a strong competitorE) a large base of satisfied customers


42) All of the following would usually be considered corporate strengths except:A) a strong economyB) technical expertise in the employeesC) a dedicated work forceD) surplus cashE) good managerial talent


43) Extensive marketing channels, a large base of satisfied customers, and a good reputation are all examples ofa company's:A) weaknessesB) strengthsC) opportunitiesD) strategiesE) threats


44) Poor employee morale, ineffective advertising, and products that are not using current technology areexamples of a company's:A) threatsB) strategiesC) weaknessesD) strengthsE) opportunities


45) A new patent owned by the organization but not yet in commercial use best illustrates:A) a generic strategy optionB) horizontal integrationC) functional level strategyD) a weakness because the patent has not been placed in commercial useE) a strength identified during the organizational analysis


46) Which of the following was not identified as one of the determinants of organizational analysis?A) new government regulationsB) surplus cashC) dedicated workforceD) technical expertiseE) organizational profit


47) American Express is pursuing a ________ strategy through e-partnering; buying shares of small companiesthat provide technology that American Express itself does not have.A) functionalB) growthC) stabilityD) businessE) retrenchment


48) American Express is formulating a ________ strategy when it makes decisions about how best to compete.A) retrenchmentB) functionalC) stabilityD) growthE) business


49) ________ strategy takes place at the level of the business unit or product line, focuses on a firm's competitiveposition.A) FunctionalB) BusinessC) CorporateD) MissionE) Fundamental


50) ________ strategy focuses on how specific areas can achieve corporate goals.A) FunctionalB) BusinessC) CorporateD) MissionE) Fundamental


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51) Each business unit in an organization will develop a ________ strategy that focuses on how it will achievecorporate goals.A) functionalB) businessC) corporateD) missionE) fundamental


52) The hierarchy of plans, starting from the top, is:A) operational plans, tactical plans, strategic plansB) tactical plans, strategic plans, operational plansC) strategic plans, tactical plans, operational plansD) strategic plans, operational plans, tactical plansE) operational plans, strategic plans, tactical plans


53) A(n) ________ is a plan which is decided by a firm's top management, and which reflects the company'spriorities, as well as the steps needed to meet strategic goals.A) single-use planB) tactical planC) standing planD) operational planE) strategic plan


54) Top managers are to middle and lower-level managers as:A) market penetration is to product developmentB) strategic plan is to an operational planC) computers is to a serverD) vertical integration is to horizontal integrationE) cost leadership is to differentiation


55) When Bell Canada diversified by forming BCE, it acquired interests in businesses like trust companies,pipelines, and real estate. This is an example of:A) vertical integrationB) conglomerate diversificationC) cost leadershipD) concentric diversificationE) cooperative diversification


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56) What does "retrenchment" mean when discussing business strategy?A) ceasing to do businessB) growth at a modest rateC) an increase in the market share for two or more productsD) cutting back some operationsE) a change in the mission for the organization


57) When an organization strives to provide goods or services that are distinctive from those of its competitors, itis pursuing the strategic option known as:A) focusB) market penetrationC) cost leadershipD) differentiationE) market development


58) An example of a business that must follow a differentiation strategy is:A) a local trucking companyB) an aluminum siding installerC) a discount retailerD) a resource-industry businessE) a fashion designer


59) Contingency planning involves:A) an organization's methods for dealing with emergenciesB) developing plans for a business should there be a sudden decrease in revenue or increase in expensesC) developing plans for future growthD) identifying aspects of a business or its environment that might entail changes in strategyE) identifying aspects of a business that require changes in organization in three to five years time


60) Crisis management involves:A) ensuring that all the employees know what to do in an emergencyB) identifying aspects of a business or its environment that might entail changes in strategyC) an organization's methods for dealing with emergenciesD) knowing how to contain a crisis, should one happenE) identifying aspects of a business that require changes in organization in three to five years time


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61) Which activity is not part of the management process?A) planningB) controllingC) organizingD) human resource planningE) leading


62) The four-part management process includes:A) leading, organizing, controlling, and goal establishmentB) planning, controlling, leading and decision-makingC) planning, organizing, leading and decision makingD) planning, decision making, target establishment, and comparison of performance to the standardE) organizing, planning, leading and controlling


63) The management process of determining what the organization needs to do and how best to get it done isknown as:A) controllingB) planningC) decision makingD) entrepreneurshipE) organizing


64) ________ involves determining what the business needs to do and the best way to achieve it.A) LeadingB) OrganizingC) DecidingD) ControllingE) Planning


65) If a manager attends a subordinate's wedding, this is an example of the ________ role.A) liaisonB) entrepreneurC) disseminatorD) leaderE) figurehead


66) When a manager responds to a strike at a supplier, the manager is acting in the ________ role.A) disturbance handlerB) liaisonC) monitorD) resource allocatorE) leader


67) In terms of Mintzberg's managerial roles, the person responsible for the work of the unit is a:A) spokespersonB) disturbance handlerC) liaisonD) negotiatorE) leader


68) Ronald Koslowsky, a marketing manager at Winstron Co., receives a telephone call from LeRoy Shellton, amarketing manager at Young-Times Inc. The two chat socially, occasionally talking about different parts oftheir work. This is an example of a manager operating in Mintzberg's ________ role.A) spokespersonB) negotiatorC) liaisonD) resource allocatorE) disseminator


69) Tom Smith Jr., a manager responsible for hockey stick tape production at StickStuck Corp., spontaneouslytours the plant to check on what's going on. By so doing, Tom is functioning in Mintzberg's ________ role.A) liaisonB) figureheadC) leaderD) resource allocatorE) monitor


70) Jack Leutens, senior manager of marketing research at Tromex Enterprises, calls in seven of his subordinatesto brief them on his recent research findings. This is an example of a manager functioning in the roleMintzberg called the:A) spokesmanB) resource allocatorC) monitorD) disseminatorE) leader


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71) "Ms. Jensen. There's someone here from the radio station to interview you about the explosion." Ms. Jensen isabout to function in the role Mintzberg described as:A) disseminatorB) leaderC) resource allocatorD) monitorE) spokesperson


72) Midge thought anxiously about how to position her company, Midge Corporation, for the future. By sodoing, Midge functioned in the role Mintzberg called:A) negotiatorB) entrepreneurC) figureheadD) spokespersonE) resource allocator


73) "Hey Reg!!! I just caught two kids shoplifting! What do I do now?" the assistant manager said to his superior,Reg Caluza. Reg was about to function in the role Mintzberg identified as the:A) spokespersonB) resource allocatorC) disturbance handlerD) monitorE) figurehead


74) Cecil and Cyrus, two of Simpson's young employees stormed into their manager's office. Both were intent onsecuring approval from her for projects they were proposing for the company. Shelly Simpson, manager atSoho, Howso, Tatso & Associates, was about to function in the role Mintzberg identified as the:A) figureheadB) resource allocatorC) monitorD) liaisonE) entrepreneur


75) Burton Kawalski, Vice President of Personnel at QVJ Corporation, sat down at the bargaining table acrossfrom the leader of the union, Vladmir Ramonovitch Jr. Burton's expertise in the managerial role Mintzbergcalled ________ was about to be tested.A) figureheadB) entrepreneurC) negotiatorD) liaisonE) disseminator


76) The managerial role theory was developed by:A) Tom Peters and Robert WatermanB) Harlan ClevelandC) Peter DruckerD) Henry MintzbergE) James Bryant Quinn


77) Which of the following is not supported by Mintzberg's research on chief executive officers?A) managerial activities are characterized by brevityB) managers prefer "live" actionC) managerial activities are characterized by a lack of varietyD) managers are attracted to the verbal mediaE) managers work at an unrelenting pace


78) Mintzberg's studies of managerial work showed it had all the following characteristics except:A) activities were characterized by brevity, variety, and fragmentationB) work involves many quick decisionsC) managers are attracted to verbal mediaD) work was at an unrelenting paceE) managers have a preference for "live" action


79) Mintzberg believes that there are three roles that managers perform. They are:A) managerial, interpersonal, decision-makingB) decision-making, inspirational, informationalC) managerial, interpersonal, informationalD) interpersonal, informational, decision-makingE) inspirational, managerial, interpersonal


80) Mintzberg's research on managers showed which of the following?A) managers typically begin a task and then work on it until it is finishedB) managers work at an unrelenting paceC) managers prefer written mediaD) managers work under varying degrees of pressure, sometimes being very busy, and sometimes muchless busy

E) managers have a preference for historical data rather than "live action"Answer: BDiff: 2 Page Ref: 186

81) "Excuse me," the secretary began. "Don't you have a 3:30 appointment to present a gold watch to Mr.Chung?" The manager froze in her tracks, realized the secretary was correct, and immediately beganpreparing herself to fulfill the managerial role identified by Mintzberg as:A) disseminatorB) liaisonC) entrepreneurD) leaderE) figurehead


82) Mintzberg's decision-making roles include all of the following except:A) resource allocatorB) negotiatorC) disturbance handlerD) liaisonE) entrepreneur


83) The president of Bob's Barbecue is reassessing his company's goals with the expectation that the companystrategy will be modified. He is involved in the management process of:A) controllingB) planningC) directingD) staffingE) organizing


84) When Louis Gerstner, CEO of IBM, cut costs and committed IBM to new products and services he wasengaged in the management process of:A) organizingB) directingC) controllingD) staffingE) planning


85) ________ involves structuring the necessary resources to achieve a particular task.A) PlanningB) AllocatingC) LeadingD) OrganizingE) Controlling


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86) Determining the jobs to be performed and how best to arrange the jobs into a logical structure is known as:A) decision makingB) controllingC) organizingD) entrepreneurshipE) management


87) Organizing involves:A) determining how best to use available material resourcesB) determining who reports to whom and what each employee doesC) developing an organizational chartD) structuring the necessary resources to complete a particular taskE) developing an efficient plan for the use of time


88) When Millie was appointed president of Goodcare Hospital, she noticed that the former president had all themajor functions reporting directly to him. She is analyzing the functions to see how they could berestructured to be more efficient. She is engaged in the management process of:A) controllingB) staffingC) directingD) organizingE) planning


89) Leading involves:A) guiding and motivating employees to meet the firm's objectivesB) giving direction to subordinatesC) acting in a fair way when dealing with employeesD) giving employees the enthusiastic support they need to complete their jobsE) managing employees so that they will enthusiastically complete their jobs


90) The management process which involves interactions between managers and their subordinates is:A) organizing the jobsB) leadingC) planningD) decision makingE) controlling


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91) When Eckhard Pfeiffer, CEO of Compaq, monitors the engineers performance to make sure that they are ontract with Compaq goals he is in the management process of:A) staffingB) organizingC) controllingD) leadingE) planning


92) Controlling involves:A) monitoring expenses and revenues to ensure that the company is profitableB) ensuring that all policies and procedures are followed within a companyC) reviewing data to ensure that employees are doing what they are supposed to doD) reviewing all financial and productivity data to ensure that the company is achieving its goalsE) monitoring the firm's performance and acting to bring it in-line with the firm's goals


93) The first step in the control process is to:A) establish standardsB) define the problemC) determine what the organization needs to doD) determine the jobs to be performedE) measure performance


94) Scott is the store manager at one of the Computers-B-Us retail stores. Each Monday he meets with all theemployees to review the assignments for the week and provide assistance for those who need it. Scott isengaged in the management process of:A) organizingB) controllingC) leadingD) planningE) staffing


95) Scott, the manager of a Computers-B-Us store, in reviewing the sales results from last week noticed that allbut one employee was on target. As he contemplated how to fix the problem he was engaged in themanagement process of:A) controllingB) organizingC) staffingD) planningE) directing


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96) The management process which monitors the organization's performance to ensure it meets its goals isknown as:A) controllingB) organizingC) leadingD) planningE) directing


97) The first step in the control process is to establish standards. What is the next step?A) adjust performance or standards as necessaryB) define the problemC) measure performanceD) generate alternativesE) compare performance with standards


98) Vice president, treasurer, chief executive officer, and president are at the ________ level of management.A) first-lineB) topC) intermediateD) middleE) officer


99) The title "Division Manager" is an example of a ________ management position.A) middleB) first-lineC) liaisonD) lowerE) top


100) Top level managers are responsible for all of the following except:A) implementing policiesB) the overall performance of the organizationC) dealing with the external environmentD) representing the organization in its dealings with other organizationsE) formulating strategies


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101) A manager whose title is "Chief Executive Officer" would be a member of:A) bottom level managementB) middle level managementC) top level managementD) first line managementE) the marketing department


102) Top managers typically have the following job titles except:A) presidentB) general managerC) vice-presidentD) chief executive officerE) executive vice-president


103) Middle managers typically have the following job titles except:A) general managerB) production supervisorC) division managerD) plant managerE) operations manager


104) Plant manager, operations manager, and division manager are at the ________ management level.A) officerB) first-lineC) intermediateD) middleE) top


105) Supervisor, office manager, and group leader are at the ________ management level.A) middleB) intermediateC) topD) first-lineE) officer


106) First-line managers typically have the following job titles except:A) foremanB) plant managerC) production supervisorD) supervisorE) office manager


107) The development, pricing, promotion, and distribution of a product is the responsibility of:A) operations managersB) human resource managersC) marketing managersD) financial managersE) first level managers


108) Companies like Procter & Gamble, Coca-Cola and Levi Strauss have a strong need for ________ managers.A) human resourcesB) marketingC) financeD) informationE) operations


109) The hiring, training, evaluation, and compensation of employees is the responsibility of:A) human resource managersB) supervisorsC) vice-presidentsD) research and development managersE) operations managers


110) Technical skills are especially important for:A) bottom level managersB) top level managersC) middle level managersD) first-line managersE) officers


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111) The ability to type, to create a spreadsheet, or to write a computer program are examples of which basicmanagement skill?A) decision-makingB) human relationsC) technicalD) conceptualE) time-management


112) At what level of management are technical skills relatively unimportant?A) topB) middleC) front-line supervisorD) bottomE) first-line


113) The technical skills, human relations skills, and conceptual skills of managers:A) shift so that the conceptual skills become less important to the higher level managerB) shift in their degree of importance as the manager rises to the top of the organizationC) retain the same degree of importance as a manager progresses "up the organization ladder" to the topD) shift so that human relations skills become more important than conceptual skills to the higher levelmanager

E) shift so that the technical skills become more important to the higher level managerAnswer: BDiff: 2 Page Ref: 192-193

114) All of the following describe basic management skills except:A) the emphasis on each skill remains the same regardless of the level of managementB) they are skills that are needed by all managersC) include the ability to think in the abstractD) include time-management skillsE) include human relations skills


115) Which is the skill that top-level managers use more than first-level managers?A) conceptualB) human relationsC) technicalD) strategyE) marketing


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116) The ability to think in the abstract, to diagnose and analyze different situations, and to see beyond thepresent is known as a(n) ________ skill.A) intuitionB) decision makingC) technicalD) human relationsE) conceptual


117) Selection of the best course of action in a particular situation is known as:A) organizingB) managementC) planningD) decision makingE) controlling


118) Two management skills required for the 21st century will be:A) teamwork skills and technology skillsB) teamwork skills and global management skillsC) diversity skills and technology skillsD) teamwork skills and diversity skillsE) global management skills and technology skills


119) What is corporate culture?A) the extent to which the organization is accommodating to those of different races and creedsB) the ethnic background of most of the managers in an organizationC) the shared experiences, stories, and beliefs of the management of a firmD) the shared experiences, stories, and beliefs that characterize a firmE) the ethnic background of most of the employees in an organization


120) What characteristics are evident at the Toyota Canada plant?A) customer satisfaction is not emphasized as part of the corporate cultureB) the culture is one of continuous improvementC) absenteeism and tardiness have been chronic problemsD) emphasis is on individual achievement which motivates workers to outperform each otherE) every process in the plant is carried out by a different department


121) The primary purpose of setting goals is to determine which business market to enter.Answer: FALSEDiff: 1 Page Ref: 176

122) Goal setting helps firms allocate resources.Answer: TRUEDiff: 1 Page Ref: 176

123) Short-term goals usually cover a range of one to five years.Answer: FALSEDiff: 1 Page Ref: 178

124) The first step in strategic formulation is the setting of strategic goals.Answer: TRUEDiff: 1 Page Ref: 178

125) Strategic goals are derived directly from the firm's mission statement.Answer: TRUEDiff: 1 Page Ref: 178

126) Environmental analysis is the process of analyzing a firm's strengths and weaknesses.Answer: FALSEDiff: 2 Page Ref: 179

127) Strategic plans usually relate to the lower levels of management and are short term in nature.Answer: FALSEDiff: 1 Page Ref: 181

128) Tactical plans originate from strategic plans and are directed towards attaining a stated strategic goal.Answer: TRUEDiff: 2 Page Ref: 181

129) A market penetration strategy involves boosting sales of present products by more aggressive selling in thefirm's current markets.Answer: TRUEDiff: 2 Page Ref: 182

130) Vertical integration means acquiring control of competitors in the same or similar markets with the same orsimilar products.Answer: FALSEDiff: 2 Page Ref: 182

131) CN's diversification into trucking is an example of related diversification.Answer: TRUEDiff: 2 Page Ref: 182

132) Volvo's strategy of stressing safety is known as a differentiation strategy.Answer: TRUEDiff: 2 Page Ref: 183

133) A functional strategy is the basic course of action that each department follows so that the businessaccomplishes its overall goals.Answer: TRUEDiff: 1 Page Ref: 183

134) Contingency planning is an organization's method for dealing with emergencies.Answer: FALSEDiff: 1 Page Ref: 184

135) Since September 11, 2001, more firms have developed crisis management plans.Answer: TRUEDiff: 2 Page Ref: 185

136) A manager is likely to be engaged in planning, organizing, leading, and controlling during the course of anygiven day.Answer: TRUEDiff: 2 Page Ref: 185

137) The management process consists of four primary activities: planning, organizing, leading, and payingworkers.Answer: FALSEDiff: 2 Page Ref: 185

138) The planning, organizing, leading, and controlling aspects of management are independent of each other;therefore, a single manager usually performs only one of the four.Answer: FALSEDiff: 1 Page Ref: 186

139) The first step in planning is to establish a means of monitoring sales volume.Answer: FALSEDiff: 1 Page Ref: 187

140) Organizing is that portion of a manager's job concerned with mobilizing the necessary resources to completea particular task.Answer: TRUEDiff: 1 Page Ref: 187

141) An essential element in controlling is monitoring the firm's performance to ensure that it stays on tracktowards its goals.Answer: TRUEDiff: 1 Page Ref: 188

142) Common titles for top managers include president, vice president, treasurer, chief executive officer, and chieffinancial officer.Answer: TRUEDiff: 2 Page Ref: 189

143) A common title that is found in top level management is "supervisor."Answer: FALSEDiff: 1 Page Ref: 189

144) The authority and responsibility of managers is greatest for first-line supervisors.Answer: FALSEDiff: 1 Page Ref: 190

145) Operations managers are responsible for the firm's financial operations, including its investments andaccounting functions.Answer: FALSEDiff: 1 Page Ref: 191

146) An information manager is responsible for the design and implementation of systems to gather, process, anddisseminate information.Answer: TRUEDiff: 1 Page Ref: 191

147) All managers need an equal balance of technical, human, and conceptual skills.Answer: FALSEDiff: 2 Page Ref: 192

148) The most important basic skills for a supervisor to have are technical and conceptual.Answer: FALSEDiff: 2 Page Ref: 192-193

149) Top managers depend on conceptual skills the most, while first-line supervisors depend on these skills theleast.Answer: TRUEDiff: 2 Page Ref: 193

150) The first step in decision making is to define the problem, gather the facts and identify alternative solutions.Answer: TRUEDiff: 2 Page Ref: 193

151) To manage time more effectively, managers must address the leading causes of wasted time: the telephone,e-mail, meetings and the Internet.Answer: FALSEDiff: 2 Page Ref: 194

152) A significant issue facing tomorrow's manager is technology, especially as it relates to communication.Answer: TRUEDiff: 1 Page Ref: 195

153) The shared experiences, stories, beliefs, and norms that characterize an organization are referred to asorganizational structure.Answer: FALSEDiff: 1 Page Ref: 196

154) Corporate culture reflects the "personality" of the organization.Answer: TRUEDiff: 2 Page Ref: 196

155) Corporate culture influences management philosophy, style, and behavior.Answer: TRUEDiff: 2 Page Ref: 196

156) List the three types of strategy.Answer: Corporate, business, and functional.Diff: 2 Page Ref: 181

157) What is a mission statement?Answer: A mission statement is an organization's statement of how it will achieve its purpose in the

environment in which it conducts business.Diff: 2 Page Ref: 177

158) What is environmental analysis?Answer: Environmental analysis is the process of scanning the business environment for threats and

opportunities.Diff: 2 Page Ref: 178

159) What is organizational analysis?Answer: Organizational analysis is the process of analyzing a firm's strengths and weaknesses.Diff: 2 Page Ref: 178

160) What are the three levels of plans?Answer: Strategic, tactical, and operational.Diff: 2 Page Ref: 181

161) What is contingency planning?Answer: Contingency planning is planning for change - identifying the aspects of business or its environment

that might entail changes in strategy.Diff: 2 Page Ref: 184

162) What is crisis management?Answer: Crisis management involves an organization's methods for dealing with emergencies.Diff: 2 Page Ref: 185

163) List the four management functions.Answer: Planning, organizing, leading, and controlling.Diff: 2 Page Ref: 185

164) List the three basic levels of management.Answer: Top management, middle management, and first-line management.Diff: 2 Page Ref: 189

165) List the five basic management skills.Answer: Technical, human relations, conceptual, decision making, and time management.Diff: 2 Page Ref: 192

166) At which level of management are technical skills most important?Answer: First-line management.Diff: 2 Page Ref: 192

167) At which level of management are human relation skills most important?Answer: Middle management.Diff: 2 Page Ref: 193

168) At which level of management are conceptual skills most important?Answer: Top management.Diff: 2 Page Ref: 193

169) Identify the four leading causes of wasted time in the workplace.Answer: To manage time effectively, managers must address four leading causes of wasted time: paperwork,

telephone, meetings, and e-mail.Diff: 2 Page Ref: 194

170) Define the term corporate culture.Answer: Corporate culture is the unique identity of each company or organization?the shared experiences,

stories, beliefs, and norms that characterize an organization.Diff: 2 Page Ref: 196

171) What are the characteristics of a good goal?Answer: The characteristic of a good goal is one in which goal setting provides direction, guidance and

motivation for all, helps allocate resources, define the corporate culture and help managers assessperformance. There are certain types of goals which follow criteria such as long-term goals,intermediate goals and short-term goals

Diff: 2 Page Ref: 176-177

172) Describe the three steps in strategy formulation.Answer: Three steps in strategy formulation are:

∙ setting strategic goals: long-term goals derived directly from a firm's mission statement∙ analyzing the organization and its environment: process of scanning the environment for threats andopportunities∙ matching the organization and its environment: process of analyzing a firm's strengths and weaknesses

Diff: 2 Page Ref: 178

173) Briefly describe the general planning process. Indicate the kinds of things that can go wrong at each step inthe process.Answer: ∙ The hierarchy of plans can be viewed on three general levels:

∙ strategic, tactical, operational managers at each level are responsible ∙ a plan is only practical when there is a logical flow from one level to the next so if the planningprocess is not started properly at the top by the board of directors and top management right down tothe lower-level managers who focus on weekly or monthly performances then the process will not beimplemented smoothly


174) Explain how plans differ at the strategic, tactical, and operational levels.Answer: ∙ Plans can be found at three different levels:

∙ strategic plans: plans that reflect decisions about resource allocations, company priorities andsteps needed to meet strategic goals which are usually set by the board of directors and topmanagement ∙ tactical plans: short-range plans concerned with implementing specific aspects of a company'sstrategic plans involving upper and middle management ∙ operational plans: for daily, weekly or monthly performance developed by middle and lowermanagers


175) Describe five of the different corporate-level strategies that a company might pursue.Answer: ∙ Concentration

∙ concentration strategy: involves focusing the company on one product or product line∙ Growth ∙ market penetration: boosting sales of present products by more aggressively selling in the firm'scurrent markets ∙ geographic expansion ∙ product development∙ Integration ∙ horizontal integration ∙ vertical integration∙ Diversification ∙ related diversification: adding new, but related, products or services to an existing business ∙ conglomerate diversification : diversifying into products or markets that are not related to the firm'spresent businesses∙ Investment Reduction ∙ investment reduction: reducing the company's investment in one or more of its lines of business


176) Identify and describe the three competitive strategies identified by Michael Porter.Answer: ∙ cost leadership: becoming the low cost leader in an industry

∙ differentiation: a firm seeks to be unique in its industry along some dimension that is valued by buyers∙ focus: selecting a market segment and serving the customers in that market niche better thancompetitors


177) Distinguish between contingency planning and crisis management.Answer: ∙ contingency planning: identifying aspects of a business or its environment that might entail changes in

strategy∙ crisis management: an organization's methods for dealing with emergencies


178) Is management universal? Explain.Answer: ∙ management is the process of planning, organizing, leading and controlling an enterprise's financial,

physical, human, and information resources in order to achieve the organization's goals of supplyingvarious products and services


179) List and describe the four management functions.Answer: The four management functions are planning, organizing, leading, and controlling. Planning is the

process of determining what an organization needs to do and how best to get it done. Organizing isthe process of determining how best to arrange an organization's resources and activities into acoherent structure. Leading is the management process of guiding and motivating employees to meetthe organization's objectives. Finally, controlling is the process of monitoring an organization'sperformance to ensure that it is meeting its goals.


180) Why is planning important?Answer: ∙ planning is important since it is the portion of a manager's job concerned with determining what the

business needs to do and the best way to achieve it∙ planning involves three main components: ∙ managers determine the firm's goals ∙ develop a comprehensive strategy for achieving those goals ∙ after a strategy is developed, design tactical and operational plans for implementing the strategy


181) Explain the three types of managers and what skills are necessary for their job.Answer: ∙ top, middle, first-line with different focuses on technical, human relations, conceptual,

decision-making, and time-management skillsDiff: 2 Page Ref: 189-190

182) What are the basic steps in decision making?Answer: ∙ Define the problem, gather facts, and identify alternative solutions.

∙ Evaluate each alternative and select the best one.∙ Implement the chosen alternative, periodically following up and evaluating the effectiveness of thatchoice.


183) Explain the term "time management skills" and discuss the four leading causes of wasted time. Providesolutions to these problems and also include an example of a time where you had to use such skills.Answer: ∙ time management skills: skills associated with the productive use of time

∙ four causes of wasted time are paperwork, the telephone, meetings and e-mailDiff: 2 Page Ref: 194-195

184) What are the two most significant challenges as managers enter the 21st century? Discuss both of them.Answer: ∙ global management skills

∙ management and technology skillsDiff: 2 Page Ref: 195

185) What are the purposes of having a strong corporate culture?Answer: A strong corporate culture serves several purposes. First, it directs employees' efforts and helps

everyone work toward the same goals. Second, it helps newcomers identify accepted behaviors.Finally, it gives each organization its own identity, much like personalities giving identity to people.


186) Where does an organization's culture come from?Answer: In some cases, organizational culture is a reflection of the founder of the organization. In other cases,

organizational culture is forged over a long period of time by a constant and focused businessstrategy.


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