chapter 3

Question 1

Decision making:

Answer 1

• Is the cornerstone of planning
• Is the catalyst that drives the planning process
• Underlies the formulation and implementation of all
  plans

Question 2

Planning:

Answer 2

Occurs within an environmental context

Question 3

Mission

Answer 3

A statement of an organization’s fundamental purpose

Question 4

Organizational Plans: Strategic

Answer 4

A goal set by and for an organization’s top
management. Focuses on broad, general issues
− Reduce carbon emission by 20% by 2030

Question 5

Tactical

Answer 5

A goal set by and for an organization’s middle
managers. Focus on actions needed to achieve strategic
plan
− Convert facility to solar power and add green roof

Question 6

Operational

Answer 6

A goal set by and for an organization’s lower-
level managers. Short-term issues tied to tactical plan
− Solicit bids for solar cells

Question 7

Business-level strategy:

Answer 7

The set of strategic alternatives
from which an organization chooses as it conducts business in
a particular industry or market.

Question 8

Corporate-level strategy:

Answer 8

The set of strategic alternatives
from which an organization chooses as it manages its
operations simultaneously across several industries and
several markets.

Question 9

Strategy formulation

Answer 9

The set of processes involved in creating or determining
an organization’s strategies; it focuses on the content of
strategies

Question 10

Strategy implementation

Answer 10

The methods by which strategies are operationalized or
executed withing the origination; it focuses on the
processes through which strategies are achieved

Question 11

Michael Porter

Answer 11

• Differentiation strategy: An organization seeks to distinguish itself from
  competitors through the quality of its products or services
• Overall cost leadership strategy: An organization attempts to gain a
  competitive advantage by reducing its costs below the costs of
  competing firms
• Focus strategy: An organization concentrates on a specific regional
  market, product line, or group of buyers

Question 12

Introduction stage:

Answer 12

Demand may be very high and
sometimes outpaces the firm’s ability to supply the product.
− Demand is high, managers focus on getting products
“out the door” without sacrificing quality.

Question 13

Growth stage:

Answer 13

More firms begin producing the product,
and sales continue to grow.
− Threat to competitive advantage, and strategies to slow
the threat of new competitors are important.

Question 14

Maturity stage:

Answer 14

Overall demand growth for the product begins
to slow down, and the number of new firms producing the
product begins to decline.
− Essential for long term survival. Focus on product
differentiation and search for new products

Question 15

Decline stage:

Answer 15

Demand for the product or technology
decreases, the number of organizations producing the product
drops, and total sales drop.
− Organizations can do well in this stage if costs are kept low

Question 16

Tactical plans:

Answer 16

Plans aimed at achieving tactical goals and developed to implement parts of a strategic plan; an
organized sequence of steps designed to execute strategic plans

• Tactical planning must address a number of tactical
  goals derived from a broader strategic goal.
• Tactics must specify resources and time frames.
• Tactical planning requires the use of human resources.

Question 17

Operational plans

Answer 17

− Are derived from tactical plans and are aimed at achieving
operational goals
− Tend to be narrowly focused, have relatively short time
horizons, and involve lower-level managers
− Two most basic forms:
▪ Single-use plans
▪ Standing plans