test 2 part 2

What does planning involve in an organization?

Defining the organization's goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate work activities.

Why should managers plan?

When work activities are coordinated around plans, inefficiencies become obvious.

What is a likely reason for formal planning to fail to lead to higher performance?

Constraints of the external environment.

How do goals differ from plans?

Goals are desired outcomes, while plans describe how those outcomes will be accomplished.

What is a true statement regarding an organization's goals?

Using a single goal such as profit may result in unethical behaviors by employees.

What type of plans apply to the entire organization and establish overall goals?

Strategic plans.

What do plans that encompass only the production process of a company refer to?

Operational plans.

What are plans that are clearly defined and leave no room for interpretation called?

Specific plans.

What is a standing plan?

An ongoing plan that provides guidance for activities performed repeatedly.

What is traditional goal setting?

A process where all goals are set by top managers and flow down through the organization to become subgoals.

What is a problem with traditional goal setting?

Clarity is lost as goals make their way down from the top of the organization.

What is management by objectives (MBO)?

A process of setting mutually-agreed upon goals and using those goals to evaluate employee performance.

What is one element of a management by objectives (MBO) program?

Performance feedback.

How are goals used in an MBO program?

Goals are used as a motivating tool for employees.

What is the last step in the MBO process?

Successful achievement of objectives is reinforced by performance-based rewards.

What characteristics define well-written goals?

Goals are measurable and clear as to time frame.

What is the first step managers should follow in goal setting?

Evaluating available resources.

What is a mission statement?

A broad statement of an organization's purpose that provides an overall guide to what an organization thinks is important.

What is the last step in goal setting?

Review results and whether goals are being met.

When uncertainty is high, how should plans be structured?

Plans should be flexible.

What type of planning is predominant at lower levels of the organization?

Operational planning.

What does the commitment concept say about plans?

Plans should extend far enough to meet those commitments made when they were developed.

What type of planning do top executives mainly focus on?

Strategic planning.

What is true about planning in dynamic environments?

Flatter organizational hierarchies are advantageous when planning in uncertain environments.

How can a manager improve their analysis of the external environment?

By environmental scanning.

What is competitor intelligence?

Gathering information about competitors that allows managers to anticipate competitors' actions rather than merely react to them.

What is true regarding ethical competitor intelligence?

It is ethical if competitor-related information is collected from accessible and available public sources.

What does corporate espionage involve?

The theft of proprietary materials or trade secrets by any means.

What type of plan leaves room for interpretation while providing general guidelines?

Directional plan.

What does defining the organizational mission force managers to identify?

What the organization is in business to do.

What does an external analysis help managers understand?

What the competition is doing.

What is included in analyzing a company's labor supply?

Studying its external environment.

What does a study of the external environment allow a manager to identify?

Opportunities and threats for the organization.

What are the major value-creating capabilities of the organization called?

Core competencies.

What is a SWOT analysis?

The combined external and internal analyses.

What is the final step in the strategic management process?

Understanding the effectiveness of the strategies used.

What are the three main types of corporate strategies?

Growth, stability, and renewal.

What is a growth strategy?

When an organization expands the number of markets served or the products offered.

What type of corporate strategy is demonstrated by diversifying a product line?

Growth strategy.

What type of strategies address declining performance?

Renewal strategies.

What is a retrenchment strategy used for?

To deal with minor performance problems and stabilize operations.

In the BCG matrix, what is a business unit with low growth but high market share called?

Cash cow.

What is a question mark in the BCG matrix?

A business unit with high growth but low market share.

What is a dog in the BCG matrix?

A business unit with low growth and low market share.

What is a star in the BCG matrix?

A business unit with high growth and high market share.

What should be done with dogs in the BCG matrix?

They should be sold off or liquidated.

What should managers do with cash cows?

'Milk' them for cash, limit new investment, and invest the cash generated in stars and question marks.

Heavy investment in what will help maintain high market share?

Stars.

What does a cost leadership strategy require?

Maintaining the lowest cost structure.

What does a differentiation strategy involve?

Offering unique products that are widely valued by customers.

What does it mean for a firm to be 'stuck in the middle'?

It cannot develop a cost or differentiation advantage.

What is strategic leadership?

The ability to anticipate, envision, maintain flexibility, think strategically, and initiate changes for a viable future.

How can an organization develop strategic flexibility?

By having multiple alternatives when making strategic decisions.

What is an advantage of being a first mover in the market?

Opportunity to begin building customer relationships.