Diff 2 type es page ref 135 skill comprehension donna

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Diff: 2 Type: ES Page Ref: 135 Skill: Comprehension Objective: 6.4
21) Donna is going to open her own restaurant. How will a mission statement help her with her new business? Answer: To come up with a mission statement, she will have to decide how her business is going to achieve its purpose (which presumably is to make a profit selling food to customers). The mission will likely include the restaurant’s main objectives, its organizational philosophy, and what kind of service will be provided for customers. Diff: 2 Type: ES Page Ref: 133 Skill: Comprehension Objective: 6.4 22) Donna is going to open her own restaurant. Why is it important for Donna to be setting goals? How will the types of goals that Donna will most likely set help her in growing her business? Answer: Donna can expect a number of benefits from the goal-setting process. Goal setting (1) provides direction and guidance, not only for Donna but also for her employees, (2) will help Donna allocate resources such as personnel and capital, (3) will help Donna to define the organization’s corporate culture, and (4) will help Donna determine if she has been successful. Donna will be wise to set long-term, intermediate, and short-term goals. Long-term goals relate to extended periods of time, typically five years or more. Intermediate goals are set for a period of one to five years. Short- term goals are typically set for one year or less. These goals will be signposts for business growth as the months and years pass. Diff: 2 Type: ES Page Ref: 133 Skill: Comprehension Objective: 6.4 23) Explain the importance of strategic management and effective goal setting in organizational success. Answer: Strategic management is the process that is required to ensure that an organization maintains an effective alignment with its environment. The starting point in effective strategic management is setting goals (objectives that a business hopes and plans to achieve). In most companies, decisions
are guided by a strategy, or a broad set of organizational plans for implementing the decisions made for achieving organizational goals. Diff: 2 Type: ES Page Ref: 133 Skill: Comprehension Objective: 6.4 24) Describe five of the different corporate-level strategies that a company might pursue. Answer: A concentration strategy involves focusing the company on one product or product line. Market penetration means boosting sales of present products by more aggressively selling in the firm’s current markets. Geographic expansion means expanding operations to new geographic areas. Product development means developing improved products for current markets. Horizontal integration means acquiring control of competitors in the same or similar markets, while vertical integration means owning or controlling the inputs to the firm’s processes and/or the channels through which the products or services are distributed. Related diversification means adding new, but related, products or services to an existing business, while conglomerate diversification means diversifying into

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