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Foundations of Planning 2
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Avg score: 45% • Most missed: “Long-term plans used to refer to plans that covered a period of over three years…”
Foundations of Planning 2
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25 Questions

1. A major strength of formal planning is that it generally correlates with higher profits.
2. The most drastic renewal strategy an organization can carry out is a retrenchment strategy.
3. Capabilities are 'what' an organization has; resources are 'how' it uses what it has.
4. Innovation and super-high quality are typically the keys to a cost-leadership strategy.
5. Informal planning typically works better in large organizations.
6. A major strength of formal planning is that it reinforces past successes and incorporates them into the future.
7. Planning provides direction to managers and nonmanagers alike.
8. Formal planning can increase creativity in an organization.
9. An organization that fails to plan will find it hard to assess progress.
10. The final three steps in the strategic management process involve the creation and implementation of strategies for realizing organizational goals.
11. Goals are documents that outline how plans are to be carried out.
12. A major argument against formal plans is that they can't replace intuition and creativity.
13. Buying a competitor's product for evaluation is a form of environmental scanning.
14. A diversification strategy focuses on a company becoming its own supplier of inputs.
15. 'Build a better mousetrap' is a way of describing a competitive advantage.
16. Directional plans leave no room for interpretation.
17. A six-month plan qualifies as a short-term plan.
18. Successful planning depends more on what managers plan than the quality of their planning.
19. Informal plans are not recognized to be an effective form of planning.
20. Planning rarely improves teamwork and cooperation among employees.
21. Southwest Airlines studied race car pit crews as an example of benchmarking.
22. At some point, all managers create formal plans.
23. Goals typically should be reserved for managers only. Goals should not be shared with subordinates.
24. Long-term plans used to refer to plans that covered a period of over three years, but now it refers to any time period over one year.
25. The key to MBO, or management by objectives, is that managers and subordinates mutually agree on goals.

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