Chapter 7

Managerial Planning and

Goal Setting
True/False Questions
1. The Europa Hotel survived terrorism by carefully planning security measures for guests,
employees, and the building.
Answer: True Level: !age: "# Type: $
. %ecause everything else stems from leading, of the four management functions, leading is
considered the most fundamental.
Answer: $alse Level: !age: "& Type: $
". A desired future state that the individual or organi'ation attempts to reali'e is a goal.
Answer: True Level: 1 !age: "& Type: $
(. )oals specify today*s means+ plans specify future ends.
Answer: $alse Level: !age: "& Type: $
,. The act of determining the organi'ation goals and the means for achieving them is called
goal setting.
Answer: $alse Level: 1 !age: "& Type: $
-. The mission is the basis for the strategic level of goals and plans, which in turn shapes the
tactical and operational level.
Answer: True Level: 1 !age: "& Type: $
#. The comple.ity of today/s environment and uncertainty about the future overwhelm many
managers and lead them to focus on long0term goals and plans instead of operational
issues and short0term results.
Answer: $alse Level: !age: "1 Type: $
Chapter Seven * Managerial Planning and Goal Setting
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&. %ecause they provide legitimacy, rationale for decisions, and an increase in motivation and
commitment, goals and plans are valuable to an organi'ation.
Answer: True Level: 1 !age: "10(2 Type: $
1. A plan tells 3why3 to achieve the goal.
Answer: $alse Level: !age: (2 Type: $
12. !lans provide a standard of assessment.
Answer: $alse Level: !age: (2 Type: $
11. A broad definition of the organi'ation*s values, aspiration and reason for being, along with
a recognition of the scope and operations that distinguishes the organi'ation refers to a
%usiness 4trategic 4tatement.
Answer: $alse Level: !age: (1 Type: $
1. The company*s philosophy as well as purpose is often e.pressed in mission statements.
Answer: True Level: !age: (1 Type: $
1". An organi'ation*s mission describes its reason for e.istence.
Answer: True Level: !age: (1 Type: $
1(. 4trategic plans and goals are those that focus on where the organi'ation wants to be in the
future and pertain to the organi'ation as a whole.
Answer: True Level: 1 !age: ( Type: $
1,. A broad statement of where the organi'ation wants to be in the future refers to a mission
statement.
Answer: $alse Level: 1 !age: ( Type: $
1-. 5perational plans and goals are those that focus on the outcomes that ma6or divisions and
departments must achieve in order for the organi'ation to reach its overall goals.
Answer: $alse Level: !age: ( Type: $
1#. The department manager*s tool for daily and wee7ly operations is called the operational
plan.
Answer: True Level: 1 !age: (" Type: $
Chapter Seven * Managerial Planning and Goal Setting
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1&. A means0end chain is when lower0level goals lead to the accomplishment of higher0level
goals.
Answer: True Level: 1 !age: (( Type: $
11. 4pecific and measurable goal characteristics apply only to the lower0level goals.
Answer: $alse Level: !age: (, Type: $
2. )oals are most effective when they are specific, measurable, challenging and lin7ed to
rewards.
Answer: True Level: !age: (- Type: $
1. To be effective, goals must be set for every aspect of employee behavior or organi'ational
performance.
Answer: $alse Level: !age: (- Type: $
. The goals should be easy, for employees to feel motivated, so that they can achieve them
easily which in turn increases their motivation level.
Answer: $alse Level: !age: (- Type: $
". 8%5 refers to managing by opportunity.
Answer: $alse Level: 1 !age: (# Type: $
(. The most difficult step in an 8%5 process is reviewing progress.
Answer: $alse Level: !age: (# Type: $
,. An e.ample of a 9ualitative goal is :the ;niversity will provide 9uality education at a fair
price.<
Answer: True Level: " !age: (# Type: A
-. To review progress is the final step in the 8%5 process.
Answer: $alse Level: 1 !age: (& Type: $
#. !roblems with 8%5 occur when the company faces rapid change.
Answer: True Level: 1 !age: (1 Type: $
&. 5rganic organi'ations and values that encourage participation can harm the 8%5 process.
Chapter Seven * Managerial Planning and Goal Setting
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Answer: $alse Level: !age: (1 Type: $
1. 4tanding plans define company responses to specific situations such as natural
emergencies or competitive setbac7s.
Answer: $alse Level: 1 !age: ,2 Type: $
"2. =ontingency plans can also be considered as scenarios.
Answer: True Level: 1 !age: ,20,1 Type: $
"1. >f ?ari, manager at Tip Top @oofing, wanted to develop a contingency plan for Tip Top,
she would need to loo7 at factors such as new e9uipment, the economy, and the company
wor7ers/ compensation cases.
Answer: True Level: " !age: ,1 Type: A
". The first stage in crisis management planning includes building relationships and
designating crisis management team and spo7esperson.
Answer: $alse Level: !age: ," Type: $
"". The three stages of crisis management are prevention, preparation, and containment.
Answer: True Level: 1 !age: ," Type: $
"(. The ABC =orporation should create a crisis management group that is not cross0
functional, but does wor7 together well under pressure.
Answer: $alse Level: !age: ,( Type: A
",. >n the containment stage of crisis management, the organi'ation should :get the awful
truth out< to employees only as soon as possible.
Answer: $alse Level: !age: ,, Type: $
"-. =ompanies should ensure the physical safety and emotional needs of people andDor
animals after implementing a crisis management plan.
Answer: True Level: !age: ,, Type: $
"#. The =E5 of Ale. A9uariums, >nc. must do all of the planning for the company because
that is the way to do things in today/s wor7place.
Answer: $alse Level: !age: ,- Type: A
"&. Turtle Terrace should use traditional planning since that is the type of planning every
Chapter Seven * Managerial Planning and Goal Setting
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company uses.
Answer: $alse Level: !age: ,- Type: A
"1. >n a comple. and competitive business world, traditional planning done by a select few is
the only planning that wor7s.
Answer: $alse Level: !age: ,- Type: $
(2. A temporary group consisting of line managers responsible for developing strategic plans
is called a centrali'ed planning group.
Answer: $alse Level: 1 !age: ,- Type: $
Multiple Choi"e Questions
1. Ehich of these refers to a desired future state that an organi'ation attempts to reali'eF
a. !lan
b. Gision statement
c. )oal
d. 8ission statement
e. >dea
Answer: c Level: 1 !age: "& Type: $
. specify future ends and specify today*s means.
a. )oals, plans
b. !lans, goals
c. !lanning, organi'ing
d. >deas, behaviors
e. 8ission, vision
Answer: a Level: !age: "& Type: $
". A blueprint specifying the resource allocations schedules, and other actions necessary for
attaining goals is referred to as aHnI
a. goal.
b. plan.
c. mission.
d. vision.
e. ob6ective.
Chapter Seven * Managerial Planning and Goal Setting
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Answer: b Level: 1 !age: "& Type: $
(. JJJJJJ is the act of determining the organi'ation*s goals and the means for achieving
them.
a. %rainstorming
b. 5rgani'ing
c. !lanning
d. Keveloping a mission
e. A blueprint
Answer: c Level: 1 !age: "& Type: $
,. The planning process begins with which of theseF
a. The development of operational goals
b. The development of a mission statement
c. =ommunication of goals to the rest of the organi'ation
d. A company0wide meeting
e. %rainstorming
Answer: b Level: !age: "& Type: $
-. The is the basis for the strategic level of goals and plans which in turn shapes
the and level.
a. goal, mission, tactical
b. ob6ective, operational, mission
c. operational goal, mission and tactical
d. mission, tactical, operational
e. tactical plan, operational, mission
Answer: d Level: !age: "& Type: $
#. Ehich of these are primarily responsible for strategic goalsDplansF
a. 8iddle management
b. %oard of directors
c. =onsultants
d. 4enior management
e. Lower management
Answer: d Level: 1 !age: "& Type: $
&. JJJJJJ is primarily responsible for operational goalsDplans.
a. 8iddle management
Chapter Seven * Managerial Planning and Goal Setting
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b. %oard of directors
c. =onsultants
d. 4enior management
e. Lower management
Answer: e Level: 1 !age: "1 Type: $
1. Ehich of these isDare primarily concerned with tactical goalsDplansF
a. 8iddle management
b. %oard of directors
c. =onsultants
d. 4enior management
e. Lower management
Answer: a Level: 1 !age: "1 Type: $
12. @uby is a first0line supervisor at @ooftop =orporation. 4he is most concerned with which
level of goalsF
a. 5perational goals
b. Tactical plans
c. 4trategic goals
d. 8ission statement
e. Gision
Answer: a Level: !age: "1 Type: A
11. JJJJJJ symboli'es the legitimacy of the organi'ation to e.ternal audiences.
a. 5perational goals
b. Tactical plans
c. 4trategic goals
d. 8ission statement
e. Tactical goals
Answer: d Level: !age: "1 Type: $
1. @osalie is a manager at )8) )aming. 4he recently attended a seminar on goal setting.
4he wishes to use goals to provide a sense of direction to her staff. 4he is using goals as
a. a way to legitimi'e her department.
b. a source of motivation.
c. a standard of performance.
d. a guide to action.
e. impress others.
Chapter Seven * Managerial Planning and Goal Setting
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Answer: d Level: !age: (2 Type: A
1". A statement that identifies distinguishing characteristics of an organi'ation is 7nown as
a. a goals statement.
b. a values statement.
c. an income statement.
d. a mission statement.
e. a competitive0edge statement.
Answer: d Level: 1 !age: (1 Type: $
1(. Ehich of these are described by mission statementsF
a. =orporate values
b. =ompany philosophy
c. =ompany purpose
d. All of the above
e. a and b only
Answer: d Level: 1 !age: (1 Type: $
1,. The organi'ation*s reason for e.istence is 7nown as
a. the organi'ation*s value.
b. the organi'ation*s vision.
c. the organi'ation*s mission.
d. the organi'ation*s goal.
e. the organi'ation*s service.
Answer: c Level: !age: (1 Type: $
1-. 3Ee respect our employees and value their diversity3 is an e.ample of a statement you are
most li7ely to find in the organi'ation*s
a. mission.
b. strategic goals.
c. tactical goals.
d. strategic plans.
e. tactical plans.
Answer: a Level: " !age: (1 Type: A
1#. 3Ee see7 to become the premier business school in the west3 is an e.ample of a statement
you are most li7ely to find in the organi'ation*s
a. tactical goals.
Chapter Seven * Managerial Planning and Goal Setting
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b. operational goals.
c. mission.
d. tactical plans.
e. operational plans.
Answer: c Level: " !age: (1 Type: A
1&. Ehich of these refers to a broadly stated definition of the organi'ation*s basic business
scope and operations that distinguishes it from similar types of organi'ationsF
a. 8ission statement
b. )oal statement
c. 8anagement by ob6ective
d. )oal setting
e. =orporate competitive0value statement
Answer: a Level: 1 !age: (1 Type: $
11. At the top of the goal hierarchy is the
a. strategic goals.
b. tactical goals.
c. operational goals.
d. mission.
e. employee goals.
Answer: d Level: !age: (1 Type: $
2. Ehich of these represent the broad statements of where the organi'ation wants to be in
the futureF
a. 5perational goals
b. Tactical goals
c. 4trategic goals
d. 5perational goals
e. Tactical plans
Answer: c Level: 1 !age: ( Type: $
1. The official goals of the organi'ation are best represented by the .
a. strategic goals
b. tactical goals
c. operational goals
d. competitive goals
e. none of the above
Chapter Seven * Managerial Planning and Goal Setting
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Answer: a Level: !age: ( Type: $
. A long0term time frame is most closely associated with
a. operational plans.
b. tactical plans.
c. strategic plans.
d. mission plans.
e. tactical goals.
Answer: c Level: !age: ( Type: $
". Ehich of these are called the action steps by which an organi'ation intends to attain its
strategic goalsF
a. Tactical goals
b. 5perational goals
c. Tactical plans
d. 5perational plans
e. 4trategic plans
Answer: e Level: 1 !age: ( Type: $
(. goals lead to the attainment of goals, which in turn lead to the attainment
of goals.
a. 5perational, strategic, tactical
b. Tactical, operational, strategic
c. 4trategic, tactical, operational
d. 5perational, tactical, strategic
e. Lone of the above.
Answer: d Level: " !age: (0(" Type: $
,. )oals that define the outcomes that ma6or divisions and departments must achieve in order
for the organi'ation to reach its overall goals is called
a. strategic goals.
b. tactical goals.
c. operational goals.
d. a mission.
e. a plan.
Answer: b Level: 1 !age: ( Type: $
-. %eth is a middle manager at Egg Elements =orporation. 4he is most li7ely responsible for
the achievement of goals.
Chapter Seven * Managerial Planning and Goal Setting
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a. operational
b. tactical
c. strategic
d. lower0level
e. top0level
Answer: b Level: !age: ( Type: $
#. JJJJJJ represent plans developed at the organi'ation*s lower levels that specify action
steps toward achieving operational goals and that support tactical planning activities.
a. Tactical plans
b. 4trategic plans
c. 5perational plans
d. 4upervisory plans
e. 5rgani'ational plans
Answer: c Level: 1 !age: (" Type: $
&. Ehich of these refer to specific results e.pected from individualsF
a. 5perational goals
b. Tactical goals
c. 4trategic goals
d. 5perational plans
e. 8ission statements
Answer: a Level: !age: (" Type: $
1. Lower0level goals should lead to the achievement of higher0level goals. This is called
a. lin7ing pin theory.
b. a value0based chain.
c. a means0end chain.
d. all of the above.
e. none of the above.
Answer: c Level: !age: (( Type: $
"2. Ehich of these is lac7ing in the goal 3profits should be increased in the coming yearF3
a. 4pecific and measurable
b. =hallenging but realistic
c. =overs 7ey result areas
d. Kefined time period
e. Lone of the above
Chapter Seven * Managerial Planning and Goal Setting
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Answer: a Level: !age: (, Type: A
"1. Tabu is a salesperson at a large retail chain. 4he was assigned a goal of M-,,222 in sales
for the current 9uarter. 4he is unhappy because she 7nows that the most any salesperson
has sold in one 9uarter in the past is M1,2,222. Her goal of M-,,222 is probably
a. not specific and measurable.
b. not realistic.
c. irrelevant.
d. lac7ing a specific time period.
e. does not cover 7ey result area.
Answer: b Level: " !age: (- Type: A
". Bou are violating which of these goal characteristics when you attempt to create goals for
every aspect of employee behaviorF
a. 4pecific and measurable
b. Lin7ed to rewards
c. Kefined time period
d. =over 7ey result areas
e. =hallenging but realistic
Answer: d Level: !age: (- Type: $
"". 4amuel set goals for each of his employees. Each employee ended up with at least
twenty0five goals. This process violates which of the following criteria for effective goalsF
a. 4pecific and measurable
b. =hallenging but realistic
c. =overs 7ey result areas
d. Kefined time period
e. Lin7ed to rewards
Answer: c Level: !age: (- Type: A
"(. All of the following are characteristics of effective goal setting EA=E!T
a. goals should be challenging but not unreasonably difficult.
b. goals should be set for every aspect of employee behavior.
c. specific and measurable.
d. cover 7ey results area.
e. lin7ed to rewards.
Answer: b Level: !age: (,0(- Type: $
Chapter Seven * Managerial Planning and Goal Setting
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",. The ultimate impact of goals depended on the e.tent to which goal achievement is lin7ed
to
a. rewards.
b. salary increases.
c. promotions.
d. all of the above.
e. b and c only.
Answer: d Level: !age: (- Type: $
"-. Ehich of these is the first step in the 8%5 processF
a. 4etting goals
b. Keveloping action plans
c. Appraising overall performance
d. @eviewing progress
e. Lone of the above
Answer: a Level: 1 !age: (# Type: $
"#. >n using 8%5, ob6ectives should be set
a. by the supervisor.
b. by the employee.
c. 6ointly by the supervisor and the employee.
d. by the accounting department.
e. by top management.
Answer: c Level: !age: (# Type: $
"&. Ehich of these is a method of management whereby managers and employees define goals
for every department, pro6ect, and person and use them to monitor subse9uent
performanceF
a. 5rgani'ational planning
b. 8anagement by ob6ectives
c. )oal setting
d. 8ission development
e. Gision development
Answer: b Level: 1 !age: (# Type: $
"1. Bard $ence =orporation is currently implementing an 8%5 program. 8anagers and
employees 6ointly set ob6ectives and develop action plans, and goal achievement is
evaluated on an annual basis. Bard $ence is missing which ma6or activity that must occur
in order for 8%5 to be successfulF
Chapter Seven * Managerial Planning and Goal Setting
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a. Keveloping a mission statement
b. Keveloping tactical goals
c. @eviewing progress
d. @eviewing operational plans
e. Lone of the above
Answer: c Level: !age: (#0(& Type: A
(2. $rostburg $ireplaces has used 8%5 for the past year. Top management 6ust finished
evaluating overall performance. The ne.t step in the 8%5 process should be
a. to develop new action plans.
b. to develop new ob6ectives based on the review of last year*s performance.
c. to begin a new 8%5 3cycle3, using the same ob6ectives as last year.
d. to wait several months to allow information to be digested.
e. none of the above.
Answer: b Level: !age: (& Type: A
(1. Ehich is the final step in the 8%5 processF
a. Appraise overall performance
b. Kevelop an action plan
c. @eview progress
d. 4et goals
e. =onduct periodic chec7ups
Answer: a Level: 1 !age: (& Type: $
(. 5ne ma6or problem with 8%5 is
a. it discourages individual creativity.
b. it does not wor7 well in constantly changing environments.
c. it decreases employee motivation.
d. it does not wor7 well in non0profit organi'ations.
e. none of the above.
Answer: b Level: !age: (1 Type: $
(". Ehich of the following is L5T one of the benefits of 8%5F
a. !erformance can be improved at all company levels.
b. Employees are motivated.
c. Efforts are focused on activities that will lead to goal attainment.
d. 5perational goals are able to displace strategic goals.
e. >ndividual and department goals are aligned with company goals.
Chapter Seven * Managerial Planning and Goal Setting
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Answer: d Level: !age: (1 Type: $
((. Ehich of these is true about single0use plansF
a. They are developed to achieve a set of goals that are unli7ely to be repeated in the
future.
b. They are used to provide guidance for tas7s performed repeatedly within the
organi'ation.
c. They define plans that define company responses to specific situations, such as
emergencies or setbac7s.
d. They are most important in the organi'ations.
e. Lone of the above.
Answer: a Level: !age: ,2 Type: $
(,. 4tanding plans are
a. plans that are developed to achieve a set of goals that are unli7ely to be repeated in
the future.
b. plans that used to provide guidance for tas7s performed repeatedly within the
organi'ation.
c. plans that define company responses to specific situations, such as emergencies or
setbac7s.
d. most important in the organi'ations.
e. none of the above.
Answer: b Level: 1 !age: ,2 Type: $
(-. A pro6ect is an e.ample of a
a. policy.
b. standing plan.
c. procedure.
d. single0use plan.
e. rule.
Answer: d Level: 1 !age: ,2 Type: $
(#. Lumerous are li7ely to be part of an overall .
a. programs, pro6ect
b. policies, pro6ect
c. standing plans, program
d. pro6ects, program
e. programs, rule
Chapter Seven * Managerial Planning and Goal Setting
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Answer: d Level: !age: ,2 Type: $
(&. =alifornia =reamery re9uires that all absent employees bring a note from their doctor
when returning to wor7. This is an e.ample of a
a. single0plan use.
b. standing plan.
c. program.
d. procedure.
e. pro6ect.
Answer: b Level: !age: ,2 Type: A
(1. Ehich of these define boundaries within which to ma7e a decisionF
a. !rograms
b. !olicies
c. @ules
d. !rocedures
e. !ro6ect
Answer: b Level: !age: ,2 Type: $
,2. An e.ample of a JJJJJJ is a statement supporting the organi'ation*s efforts in the area of
se.ual harassment.
a. procedure
b. rule
c. policy
d. single0use plan
e. program
Answer: c Level: !age: ,2 Type: $
,1. 3Lo food andDor drin7s in the classroom3 is an e.ample of a
a. procedure.
b. rule.
c. policy.
d. single0use plan.
e. pro6ect.
Answer: b Level: !age: ,2 Type: A
,. Ehich of these are true about contingency plansF
a. They are developed to achieve a set of goals that are unli7ely to be repeated in the
Chapter Seven * Managerial Planning and Goal Setting
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future.
b. They are used to provide guidance for tas7s performed repeatedly within the
organi'ation.
c. They define company responses to specific situations, such as emergencies or
setbac7s.
d. They are most important in the organi'ations.
e. Lone of the above.
Answer: c Level: 1 !age: ,1 Type: $
,". =ontingency plans are also referred to as
a. standing plans.
b. rules.
c. scenarios.
d. procedures.
e. operationally tactical plans.
Answer: c Level: 1 !age: , Type: $
,(. The crisis management plan should be a JJJJJJJJ that specifies the actions to be ta7en,
and by whom, if a crisis occurs.
a. vague, verbal plan
b. detailed, verbal plan
c. long, difficult to read plan
d. vague, written plan
e. detailed, written plan
Answer: e Level: 1 !age: ," Type: $
,,. Ehich of the following is not a step in the containment stage in crisis managementF
a. 8eet safety and emotional needs
b. @eturn to business
c. 4et up effective communications systems
d. )et the awful truth out
e. Activate the crisis management plan
Answer: c Level: !age: ,, Type: $
,-. Kuring the JJJJJJ stage of his company/s crisis management, Nesse Ein7ler must ensure
that the sta7eholders/ physical and emotional needs are met.
a. prevention
b. preparation
c. containment
Chapter Seven * Managerial Planning and Goal Setting
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d. response
e. all of the above
Answer: c Level: !age: ,, Type: A
,#. Traditionally, if Tara, =E5 of %utterfly !illows, needed to conduct corporate planning, it
would be performed by all of the following EA=E!T
a. central planning departments.
b. decentrali'ed planning groups.
c. top e.ecutives.
d. consulting groups.
e. the president of the company.
Answer: b Level: !age: ,- Type: A
,&. The traditional approach to corporate planning was to
a. have a decentrali'ed planning staff.
b. have a centrali'ed planning department.
c. set up a planning tas7 force.
d. set up planning committees.
e. use TO8 approach.
Answer: b Level: 1 !age: ,- Type: $
,1. A group of planning specialists who develop plans for the organi'ation as a whole is
7nown as
a. management by ob6ectives.
b. planning tas7 force.
c. decentrali'ed planning staff.
d. centrali'ed planning department.
e. total 9uality management group.
Answer: d Level: 1 !age: ,- Type: $
-2. Alabama Airlines has three planning specialists who help division managers develop their
own division plans. 4erving as consultants to the divisions, the planning specialists give
advice about strengths, wea7nesses, opportunities, and threats. Alabama Airlines is
utili'ing what approach to the planning functionF
a. =entrali'ed planning department
b. Kecentrali'ed planning staff
c. !lanning tas7 force
d. =entrali'ed planning committee
e. TO8
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Answer: b Level: !age: ,- Type: A
-1. All of the following are ways in which companies can bring about relentless drive for
progress EA=E!T
a. create an environment that encourages people to e.periment and learn.
b. ma7e continuous improvement a way of life.
c. avoid stretching goals.
d. design a new role for planning staff.
e. All of the above are acceptable ways.
Answer: c Level: !age: ,# Type: $
-. %altimore %rewery allows its line managers to ta7e responsibility for strategic planning.
This approach is consistent with which of the followingF
a. =entrali'ed planning department
b. Kecentrali'ed planning staff
c. !lanning tas7 force
d. =entrali'ed planning committee
e. =ommand0and0control
Answer: c Level: !age: ,1 Type: A
-". Ehich of these refers to a temporary group consisting of line managers responsible for
developing strategic plansF
a. !lanning tas7 force
b. Kecentrali'ed planning staff
c. =entrali'ed planning department
d. 4chewhart planning group
e. Total 9uality management group
Answer: a Level: 1 !age: ,1 Type: $
S"enario Questions
S"enario()laine )ast*an
The new program would be focused around 8%5 concepts. Elaine Eastman had been a manager
at A%=K for ten years and she was not all certain if this new 8%5 approach was going to fit her
department. 4he had strong commitment to achieving the company*s ob6ectives, but she also
7new her employees well enough to 7now that some didn*t share the same commitment.
Chapter Seven * Managerial Planning and Goal Setting
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1. Elaine can anticipate en6oying the advantages of 8%5 which include
a. increased orientation toward goal achievement.
b. performance can improve at all company levels.
c. employees are more motivated.
d. a P c are correct.
e. a, b, and c are correct.
Answer: e Type: A
. Elaine can anticipate and wor7 to prevent the problems of 8%5 which include
a. increase in paperwor7 that leads to a reduction of energy.
b. a decrease in communication between managers and employees.
c. greater conflict because of opposing goals.
d. all of the above.
e. none of the above.
Answer: a Type: A
". >f Elaine dictates or suggests the goals for her employees, she can e.pect
a. increased motivation from her wor7ers.
b. decreased motivation from her wor7ers.
c. decreased frustration for her wor7ers.
d. decreased intragroup conflict.
e. none of the above.
Answer: b Type: A
(. >n the 8%5 process, after the first step of setting ob6ectives is accomplished, the ne.t step
that Eliane should e.pect is
a. reviewing progress toward company goals.
b. appraising overall performance.
c. developing action plans.
d. having a company party to celebrate.
e. none of the above.
Answer: c Type: A
Short(+ns,er Questions

1. AHnI is a desired future state that the organi'ation attempts to reali'e.
Chapter Seven * Managerial Planning and Goal Setting
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Answer: goal !age: "&
. AHnI is a blueprint for goal achievement and specifies the necessary resource
allocations, schedules, tas7s, and other actions.
Answer: !lan !age: "&
". The act of determining the organi'ation*s goals and the means for achieving them is
referred to as .
Answer: planning !age: "&
(. JJJJJJ and plans are the responsibilities of middle managers.
Answer: Tactical goals !age: "1
,. 5perational plans that focus on specific tas7s and processes that help to meet tactical and
strategic goals are developed by JJJJJJ managers and supervisors.
Answer: front0line !age: "1
-. JJJJJJ and JJJJJJ facilitate employees/ identification with the organi'ation and help
motivate them, provide a sense of direction, and allow managers to learn what the
organi'ation is trying to accomplish.
Answer: )oals+ plans !age: "1
#. List the five reasons e.plicit goals and plans are important.

Answer:
E.plicit goals and plans can serve the following functions: legitimacy, source of
motivation and commitment, guide to action, rationale for decisions, and standard of
performance.

!age: "10(2
&. describes the organi'ation*s reason for e.istence.
Answer: mission !age: (1
1. AHnI JJJJJJJ is a broadly stated definition of basic business scope and operations that
distinguishes the organi'ation from others of a similar type.

Answer: mission statement !age: (1
12. %road statements describing where the organi'ation wants to be in the future are called
Chapter Seven * Managerial Planning and Goal Setting
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.
Answer: strategic goals !age: (
11. JJJJJJJ define the action steps by which an organi'ation intends to attain its strategic
goals.

Answer: 4trategic plans !age: (
1. )oals that define the outcomes that ma6or departments must achieve in order for the
organi'ation to reach its overall goals are 7nown as JJJJJJJ goals.

Answer: tactical !age: (
1". are designed to help e.ecute ma6or strategic plans and to accomplish a
specific part of the company*s strategy.
Answer: Tactical plans !age: ("
1(. The specific results e.pected from departments, wor7 groups, and individuals are the
goals.
Answer: operational !age: ("
1,. plans are developed at the lower levels of the organi'ation to specify
action steps toward achieving operational goals and to support tactical plans.
Answer: 5perational !age: ("
1-. List the five characteristics of effective goals.

Answer:
)oals should be H1I specific and measurable+ HI they should cover 7ey result areas+ H"I
they should be challenging but realistic+ H(I they should have a defined time period+ and H,I
they should be lin7ed to rewards.

!age: (-
1#. is a method whereby managers and employees define goals for every
department, pro6ect, and person and use them to monitor subse9uent performance.
Answer: 8anagement by ob6ectives !age: (#
1&. The most difficult step in 8%5 is JJJJJJJ.

Answer: setting goals !age: (#
Chapter Seven * Managerial Planning and Goal Setting
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11. List the four ma6or activities that must occur in order for 8%5 to succeed.
Answer: H1I 4et goals, HI develop action plans, H"I review progress, and H(I appraise
overall performance.
!age: (#0(&
2. 8anagers believe that they are better oriented toward goal achievement when
JJJJJJJJJJ is used.
Answer: management by ob6ectives !age: (#
1. JJJJJJ plans are used to provide guidance for wor70related tas7s that are performed
repeatedly within the organi'ation.
Answer: 4tanding !age: ,2
. plans are developed to achieve a set of goals that are not li7ely to be
repeated in the future.
Answer: 4ingle0use !age: ,2
". JJJJJJJ are ongoing plans that are used to provide guidance for tas7s performed
repeatedly within the organi'ation.

Answer: 4tanding plans !age: ,2
(. !lans that define company responses to specific situations, such as emergencies, setbac7s,
or une.pected conditions are called plans.
Answer: contingency !age: ,1
,. A special type of contingency plan that is used when events are sudden and devastating
and re9uire immediate response is called JJJJJJJJ.
Answer: crisis management planning
!age: ,"
-. Ehat are the three stages of crisis managementF
Answer: !revention, !reparation, and =ontainment
!age: ,"
#. >n the JJJJJJ stage of crisis management, the company needs to care for the emotional
and physical safety of its sta7eholders.
Chapter Seven * Managerial Planning and Goal Setting
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Answer: containment !age: ,,
&. JJJJJJJJ are groups of planning specialists who report directly to the =E5 or president
of a company.
Answer: =entrali'ed planning departments !age: ,-
1. Although JJJJJJ planning approaches are still popular with some organi'ations, JJJJJJ
planning are being critici'ed as inappropriate for today/s fast0paced environment.
Answer: traditional, formal !age: ,-
"2. A group of planning specialists assigned to ma6or departments and divisions to help
managers develop their own strategic plans is called .
Answer: decentrali'ed planning staff !age: ,-
"1. JJJJJJ planning done by a few individuals in a comple. and competitive business
environment no longer wor7s.
Answer: Traditional !age: ,-

". List the steps of the new wor7place approach to planning.

Answer:
$irst, start with a strong mission. Le.t, set stretch goals. Third, create a culture that
encourages people to e.periment and learn. Le.t, design a new role for planning staff
followed by, ma7e continuous improvement a way of life. Embrace event driven planning.
$inally, total support and commitment to the planning process from top management.

!age: ,#0,1
"". A temporary group of line managers who have the responsibility of developing a strategic
plan is 7nown as aHnI JJJJJJJ.

Answer: planning tas7 force !age: 1
"(. List the si. guidelines for planning in today/s wor7place.
Answer: 4tart with a strong mission, set stretch goals, create a culture that encourages
learning, embrace event0driven planning, use temporary tas7 forces, and remember that
planning still starts and stops at the top.
!age: ,#0,1

Chapter Seven * Managerial Planning and Goal Setting
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)ssa- Questions

1. >n what ways do plans and goals benefit an organi'ationF

AL4EE@:
!lans and goals benefit the organi'ation in several ways. $irst they provide legitimacy and
a reason for e.istence. They also provide a source of motivation and commitment,
provide guides for action and decision ma7ing, and they set a standard of performance.

Level: !age: "10(2
. =ompare the four levels of goals and plans.

AL4EE@:
The highest level is the mission statement, which defines the organi'ation*s basic business
scope and operations and specifies its reasons for e.istence. The second level is the level
of strategic goals and plans. Those pertain to the organi'ation as a whole and specify
where the organi'ation wants to be in the future. The third level is the tactical level, with
a focus on outcomes that ma6or divisions and departments must achieve in order for the
organi'ation to reach its overall goals. The fourth and lowest level is the
operational level, involving specific measurable results for departments, wor7 groups, and
individuals.

Level: " !age: (10((
". %riefly define the characteristics of an effective goal.

AL4EE@:
Effective goals are precisely defined and allow for measurable performance. They focus
on the 7ey result areas that contribute most to desired performance. They should be
challenging but not unreasonably difficult. $inally, they should specify the time period that
they cover and they should be tied to valued rewards.

Level: !age: (,0(-

(. List and define the four ma6or activities that must occur in order for management by
ob6ectives H8%5I to succeed.

AL4EE@:
The first step is setting goals. The setting of goals involves employees at all levels and
should incorporate the principles of effective goal setting. )oals should be 6ointly
determined by manager and employee, so as to increase the employee*s level of
commitment. The second step is developing action plans. These action plans will specify
Chapter Seven * Managerial Planning and Goal Setting
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how the goals are to be achieved. Le.t, a progress review is important to ma7e sure that
the action plans are wor7ing. They may be formal or informal and the action plan should
be changed if necessary. The last step is to determine if the goals have been achieved
within the specified time period. This appraisal should factor into the setting of the ne.t
period*s goals, allowing for feedbac7 into the setting of the ne.t set of goals.

Level: " !age: (#0(&
,. Kefine the new planning paradigm and e.plain the rationale behind it.

AL4EE@:
The new planning paradigm has four components. $irst, start with a strong mission.
Le.t, stretch goals. Third, create an environment that encourages people to e.periment
and learn. Le.t, design a new role for planning staff. $inally, ma7e continuous
improvement a way of life with total support and commitment of top management for the
planning process. This paradigm is based upon the principle of decentrali'ation. >t strives
to involve wor7ers at every level of the company. Kue to the volatility of the business
environment, dynamic, timely plans are needed by today*s organi'ations. The comple.ity
of the problems and challenges facing today*s organi'ations mandates that all employees,
with their individual perspectives and talents, be involved.

Level: " !age: ,-0,1
Chapter Seven * Managerial Planning and Goal Setting
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