True/False
Indicate whether the
statement is true or false.
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1.
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A problem exists whenever something unexpected happens.
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2.
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Decision making is the process of selecting a course of action that will solve a
problem.
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3.
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There are seven steps in the decision-making model.
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4.
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The steps in the decision-making process, in order, are (1) classifying and
defining the problem or opportunity, (2) setting objectives and criteria, (3) generating creative and
innovative alternatives, (4) analyzing alternatives and selecting the most feasible, and (5) planning
and implementing the decision.
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5.
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In countries where managers use autocratic decision making, decisions tend to
take less time than in countries where managers use participative decision making.
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6.
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Half the decisions made by managers fail to solve the problems they are aimed
at.
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7.
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Upper-level managers tend to make more nonprogrammed decisions than lower-level
managers do.
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8.
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When making a decision under the conditions of certainty, you know the outcome
of each alternative in advance.
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9.
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The current trend in management favors increased employee participation.
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10.
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Groupthink occurs when an individual or subgroup tries to get the group to
accept a particular alternative or dominates the group for personal reasons, rather than pursuing the
original goal of finding the best solution.
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11.
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Product innovations are changes in the transformation of inputs into
outputs.
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12.
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Brainstorming is the process of suggesting many possible alternatives without
evaluation.
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13.
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Consensus mapping is the process of developing group agreement on a solution to
a problem.
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14.
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Probability theory focuses on waiting time.
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15.
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When managers will not admit that they made a bad decision, they are in the
process known as escalation of denial.
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16.
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The five planning dimensions include management level, type of plan, scope,
time, and repetitiveness.
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17.
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Upper-level managers develop operational plans.
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18.
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A business strategy is the strategic plan for managing multiple lines of
business.
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19.
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A functional strategy is the strategic plan for managing one line of
business.
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20.
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A SWOT analysis focuses on those features in a company’s environment that
most directly affect its options and opportunities.
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21.
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Objectives state what is to be accomplished in singular, specific, and
measurable terms with a target date.
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22.
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“To earn a net profit of $1 million in 2009” is considered an
ineffective objective.
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23.
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Management by objectives (MBO) is the process in which managers set objectives
for the employees, periodically evaluate the performance, and reward according to the results.
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24.
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A spinoff is a form of retrenchment in which a corporation sets up one or more
of its different lines of business or areas of operation.
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25.
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A merger occurs when one business buys all or part of another business.
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26.
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A company is a single line of business cannot conduct a business portfolio
analysis.
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27.
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The overall strategy for a line of business is called the adaptive
strategy.
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28.
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“No smoking in the work area,” is an example of a company
policy.
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29.
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Budgets are examples of single-use plans.
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30.
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Contingency plans are alternative plans to be implemented if uncontrollable
events occur.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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31.
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A problem exists whenever:
a. | something unexpected happens. | b. | objectives are not being
met. | c. | an employee makes a mistake. | d. | unexpected expenses
occur. |
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32.
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The process of selecting a course of action that will solve a problem is known
as:
a. | decision making. | b. | management. | c. | problem
solving. | d. | troubleshooting. |
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33.
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All of the following are steps in the decision-making model EXCEPT:
a. | classifying and defining the problem or opportunity. | b. | setting objectives
and criteria. | c. | generating creative and innovative alternatives. | d. | brainstorming. |
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34.
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In __________, decisions tend to be more autocratic.
a. | the United States | b. | the Philippines | c. | Japan | d. | Australia |
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35.
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In countries with low power distance cultures, decision making tends to be
__________.
a. | autocratic | b. | participative | c. | faster | d. | reflexive |
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36.
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Programmed decisions:
a. | should be made using the decision-making model. | b. | arise in
nonrecurring and nonroutine situations. | c. | take longer to make than nonprogrammed
decisions. | d. | are usually made by lower-level managers. |
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37.
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When making a decision under the conditions of __________, you know the outcome
of each alternative in advance.
a. | certainty | b. | risk | c. | uncertainty | d. | classification |
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38.
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When making a decision under conditions of __________, you do not know the
outcome of each alternative in advance, but can assign probabilities to each outcome.
a. | certainty | b. | risk | c. | uncertainty | d. | classification |
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39.
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When making a decision under conditions of __________, lack of information or
knowledge makes the outcome of each alternative unpredictable, so you cannot determine
probabilities.
a. | certainty | b. | risk | c. | uncertainty | d. | classification |
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40.
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Innovation is defined as:
a. | a way of thinking that generates new ideas. | b. | the implementation
of a new idea. | c. | putting existing elements together in a new combination. | d. | creative
thinking. |
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41.
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Creativity is defined as:
a. | a way of thinking that generates new ideas. | b. | the implementation
of a new idea. | c. | putting existing elements together in a new combination. | d. | using the
decision-making process. |
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42.
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The three stages in the creative process, in order, are:
a. | incubation and illumination, preparation, and evaluation. | b. | germination,
preparation, and evaluation. | c. | germination, incubation and illumination, and
preparation. | d. | preparation, incubation and illumination, and
evaluation. |
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43.
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One way to __________ without evaluation is to use brainstorming.
a. | define the problem | b. | set objectives and criteria | c. | generate
alternatives | d. | analyze and select alternatives |
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44.
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To determine the volume of sales or revenue that will result in a profit,
use:
a. | break-even analysis. | b. | capital budgeting. | c. | linear
programming. | d. | probability theory. |
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45.
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Which of the following quantitative techniques focuses on waiting time?
a. | capital budgeting | b. | linear programming | c. | queuing
theory | d. | probability theory |
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46.
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Strategic planning is the process of developing a mission and long-range
objectives and:
a. | setting goals. | b. | determining in advance how they will be
accomplished. | c. | assigning who will accomplish them. | d. | determining which planning level will
accomplish them. |
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47.
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One difference between strategic planning and operational planning is:
a. | the time frame involved. | b. | their success rate. | c. | the effort
involved. | d. | budgeted resources. |
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48.
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The steps in the strategic planning process include all of the following
EXCEPT:
a. | setting objectives. | b. | developing strategies. | c. | analyzing the
environment. | d. | setting rules. |
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49.
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The industry and competitive situation analysis is primarily used:
a. | at the corporate level. | b. | at the business level. | c. | at the functional
level. | d. | to develop contingency plans. |
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50.
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A company situation analysis is used at the __________ level.
a. | corporate | b. | business | c. | functional | d. | team |
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51.
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A SWOT analysis is used to determine:
a. | whether a company might be useful to take over. | b. | what can be done to
deal with a specific problem confronting the company. | c. | a company’s critical success
factors. | d. | an organization’s internal environmental strengths and weaknesses and external
environmental opportunities and threats. |
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52.
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__________ is the process of comparing an organization’s products or
services and processes with those of other companies.
a. | Acquisition | b. | SWOT analysis | c. | Strategic
planning | d. | Benchmarking |
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53.
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An effective objective contains a(n):
a. | target date. | b. | action verb. | c. | statement of the
single, specific, measurable result to be achieved. | d. | all of these |
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54.
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__________ is the process in which managers and their employees jointly set
objectives for the employees, periodically evaluate performance, and reward according to the
results.
a. | Benchmarking | b. | Management by objectives | c. | Strategic
planning | d. | SWOT analysis |
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55.
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With a __________ strategy, the company attempts to hold and maintain its
present size or to grow slowly.
a. | growth | b. | stability | c. | turnaround | d. | retrenchment |
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56.
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Through __________, the organization grows aggressively in its existing line(s)
of business.
a. | concentration | b. | forward integration | c. | backward
integration | d. | related diversification |
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57.
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A conglomerate is an example of:
a. | forward integration. | b. | backward integration. | c. | related
diversification. | d. | unrelated diversification. |
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58.
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Economies of scale for lower prices and higher market share typify the
__________ stage.
a. | introduction | b. | growth | c. | maturity | d. | decline |
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59.
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Policies, procedures, and rules developed for handling repetitive situations are
considered __________ plans.
a. | standing | b. | single-use | c. | strategic | d. | contingency |
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60.
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A __________ is a sequence of actions to be followed in order to achieve an
objective.
a. | standing plan | b. | policy | c. | procedure | d. | rule |
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