BBDM 1023 BUSINESS ORGANISATION AND MANAGEMENT

TUTORIAL 5 (ANSWER)

1. Importance of planning:
All the managers will involve in setting future goals of an organization. Besides that,
planning helps to create a sense of direction and purpose for all the managers.

2. There are 3 steps in planning process.

Determining the Organization’s Mission and Goals

In this process, manager needs to define its business and establish a major goal. In
defining its business, manager needs to identify who are their customers and how to
satisfy them. Goals that are set by the manager should be realistic have time period in
which they are achieved.

Strategy Formulation
In this stage, manager will analyze the current situation to develop strategies to
achieve the mission.

Strategy Implementation
Manager will allocate resources and find responsibility to achieve goals.

3.Managers can use four major corporate-level strategies in order to help their organization
to increase its sales and profits. Discuss any two of these strategies and explain the decisions
that a manager would have to make in a business in order to design a program that used these
two strategies.

Managers can concentrate the organization on a single business, can use a diversification
strategy, can expand internationally, or can use either a backward or forward vertical
integration strategy.

True/False Questions

1. The set of decisions that managers make to assist the organization in the attainment of
its goals is called the strategy of the organization.

Answer: True Page: 261 Learning Objective: 1 Difficulty: Easy

2. Planning is a goal-making but not a strategy-making process.

Answer: False Page: 261 Learning Objective: 1 Difficulty: Easy

3. The last step in the planning process is to determine the organization's mission and
goals.

Answer: False Page: 261 Learning Objective: 1 Difficulty: Moderate

4. A broad statement of the organization's purpose, its products, and its customers is
called a mission statement.

Answer: True Page: 261 Learning Objective: 1 Difficulty: Easy

5. Planning takes place at the corporate level and the business level of the organization,
but not at the functional level of the organization.

Answer: False Page: 262 Learning Objective: 2 Difficulty: Moderate

6. The divisions of the organization exist at the business level of the organization.

Answer: True Page: 262 Learning Objective: 2 Difficulty: Easy

7. The corporate-level plan of an organization contains the decisions that are related to
the organization's mission, goals, strategy, and structure.

Answer: True Page: 262 Learning Objective: 2 Difficulty: Easy

8. Another name for a department of an organization is a function.

Answer: True Page: 263 Learning Objective: 2 Difficulty: Easy

9. Functional goals and strategies need not be consistent with divisional goals and
strategies.

Answer: False Page: 264 Learning Objective: 2 Difficulty: Moderate

10. In the typical organization, corporate-level planning is the primary responsibility of
first-line supervisors.

Answer: False Page: 264 Learning Objective: 2 Difficulty: Moderate

11. In the typical organization, top managers are primarily responsible for planning that
takes place at the business level of the organization.

Answer: False Page: 264 Learning Objective: 2 Difficulty: Moderate

12. Standing plans are useful in situations that involve programmed decisions.

Answer: True Page: 265 Learning Objective: 2 Difficulty: Easy

13. A general guide to action within an organization is called an SOP of the organization.

Answer: False Page: 265 Learning Objective: 2 Difficulty: Easy

14. A written set of instructions that describes the series of actions that a manager should
take in a specific situation is called an SOP of the organization.

Answer: True Page: 265 Learning Objective: 2 Difficulty: Easy

15. A written procedure that requires any employee who receives a gift worth more than
$25 from a customer to report that gift to his or her organization is called a rule.

Answer: True Page: 265 Learning Objective: 2 Difficulty: Easy

16. Single-use plans are intended to be used primarily in programmed decision-making

situations.

Answer: False Page: 265 Learning Objective: 2 Difficulty: Easy

17. According to Fayol, managers should stay committed to a static plan instead of to a
flexible plan.

Answer: False Page: 267 Learning Objective: 3 Difficulty: Easy

18. Another name for contingency planning is scenario planning.

Answer: True Page: 267 Learning Objective: 3 Difficulty: Easy

19. The first step in defining an organization's mission is to define its business.

Answer: True Page: 268 Learning Objective: 3 Difficulty: Easy

20. Managerial goals should be both challenging and realistic.

Answer: True Page: 270 Learning Objective: 3 Difficulty: Easy

21. SWOT analysis is the last step in the strategy formulation process.

Answer: False Page: 271 Learning Objective: 4 Difficulty: Easy

22. The last step in a SWOT analysis is to identify the organization's internal strengths
and internal weaknesses.

Answer: False Page: 271 Learning Objective: 4 Difficulty: Easy

23. With a multidomestic strategy, managers decide to sell the same product with the
same marketing approach in all of the countries in which the product is sold.

Answer: False Page: 278 Learning Objective: 5 Difficulty: Easy

24. With a global strategy, managers decide to customize a product and its marketing
strategy to fit the different needs of the target market in each of the countries in which
the product is sold.

Answer: False Page: 278 Learning Objective: 5 Difficulty: Moderate

25. The advantages and disadvantages of a global strategy are the same as those of a
multidomestic strategy.

Answer: False Page: 279 Learning Objective: 5 Difficulty: Moderate

26. Managers of XYZ Company attempt to give the organization a competitive advantage
by driving production costs to as low a level as possible. We say that the organization
is pursuing a differentiation strategy.

Answer: False Page: 285 Learning Objective: 5 Difficulty: Moderate

27. According to Michael Porter's theory, it is very possible for managers to pursue both a
low-cost strategy and a differentiation strategy at the same time.

Answer: False Page: 287 Learning Objective: 5 Difficulty: Easy