Tb09

CHAPTER 9: PLANNING AND DECISION AIDS
Test Correlation Table Question Types/Level of Difficulty

LEARNING OBJECTIVES Easy Moderate Difficult

1. Explain knowledge management TF 2, 8 3, 4, 5, 6, 7 1
and how it creates value for
organizations.
MC 3, 6, 8, 10 1, 5, 7, 9 2, 4, 11

ES — 1, 2 —

2. Describe the basic features of TF 9, 10, 12, 16 14, 17 11, 13, 15
the Delphi technique, simulation,
and scenario forecasting aids.
MC 12, 18, 19, 21, 13, 14, 15, 16, 20, 22, 23, 25, 27
26, 28 17, 24, 29, 30

ES — 4 3

3. Use Osborn’s creativity model to TF 18, 20, 22, 23 24, 25, 26 19, 21
stimulate adaptive and innovative
decisions.
MC 45, 48 31, 32, 33, 34, 40, 41, 47
35, 36, 37, 38,
39, 42, 43, 44,
46

ES — 5, 6 —

4. Apply three quality management TF 28 29, 30 27, 31
decision and planning aids:
benchmarking, the Deming cycle,
and the balanced scorecard model.
MC 49, 50, 53, 54, 51, 52, 55, 56, 57, 60, 66, 67,
59, 70 58, 61, 62, 63, 68, 71, 73
64, 65, 69, 72

ES — 7 8

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True/False Questions
Learning Objective 1

1. SchlumbergerSema’s InTouch decision system features a centralized help desk in
Houston.

ANSWER: F, Knowledge, Difficult, p. 238

2. Creative management (CM) involves recognizing, generating, documenting, distributing,
and transferring between persons useful information to improve organizational
effectiveness.

ANSWER: F, Knowledge, Easy, p. 238

3. Knowledge management is generally viewed as consisting of two main components:
explicit knowledge and tacit knowledge.

ANSWER: F, Knowledge, Moderate, p. 239

4. Enabling technologies include such things as intranets, Internet, search engines, and
work-flow software.

ANSWER: T, Knowledge, Moderate, p. 239

5. Knowledge is becoming more valuable than physical or financial assets, or even natural
resources.


6. The application of knowledge management has three natural targets: an organization’s
teams, customers, and competitors.


7. Organizations consistently identify cultural issues as the greatest barriers to the
successful implementation of knowledge management.


8. Expert systems have problem-solving capabilities within a specific area of knowledge.

ANSWER: T, Knowledge, Easy, p. 241


9. Forecasting is primarily concerned with internal events or conditions beyond the
organization’s control that are important to its survival and growth.


10. Extrapolation is the projection of some tendency from the past or present into the future.

224



11. In the second phase of the Delphi technique, a questionnaire is sent to a group of
experts.


12. A simulation is a representation of a real system.


13. Spreadsheet simulations are useful for estimating the most critical aspect of venture
planning which is profit and loss.


14. Scenarios are quite useful in forcing those involved in planning to evaluate preliminary
plans against past history.


15. Scenarios often involve answering “what next” questions.


16. In the planning and administrative competency in Chapter 9, the Society of Safety
Engineers used computer simulations to predict the future needs of clients.

ANSWER: F, Knowledge, Easy, pp. 245–246

17. A competitor scenario presents various actions that might be taken in response to
competitive forces.

ANSWER: F, Knowledge, Moderate, pp. 246–247


18. “Conceptual thinking” is the ability to visualize, generate, and implement new ideas.


19. The creative process includes five interconnected stages: preparation, concentration,
incubation, illumination, and verification.

ANSWER: T, Knowledge, Difficult, p. 248

20. The Osborn creativity model is intended to stimulate competition, as various groups
strive to convince others that their idea is superior.


21. Bob is the leader of a team that is using Osborn’s creativity model to generate ways
their firm can gain a competitive advantage in the industry. Currently the team is
225


brainstorming for ideas. Thus, they are in the fact-finding phase of the model.

ANSWER: F, Application, Difficult, p. 250

22. Brainstorming is an unrestrained flow of ideas in a group or team with all critical
judgments suspended.


23. Quantity without concern for quality is not welcome in a brainstorming session.


24. The Osborn creativity model has four phases.


25. At IDEO, clients are usually invited to brainstorming sessions because their knowledge
is needed to complete a project.

ANSWER: T, Knowledge, Moderate, pp. 251–252

26. The Osborn creativity model is based on the assumption that most people have the
potential for greater creativity and innovation in decision making than they use.



27. The most common definition of quality is the extent to which a good or service conforms
to specifications or standards.


28. Benchmarking is the continuous process of comparing an organization’s goods,
services, and practices against industry leaders anywhere in the world to gain
information that will help the organization improve performance.


29. Benchmarking includes six stages.


30. The Deming cycle is also known as the PACA cycle.


31. The Deming cycle is comprised of four stages: plan, do, check, and review.

ANSWER: F, Application, Difficult, p. 254

Multiple Choice Questions

226


Preview
1. SchlumbergerSema’s InTouch service is built on all of the following elements except
__________.
a. a standard computer platform for all engineers
b. global network infrastructure
c. satellite communication
d. centralized document authoring and publishing

ANSWER: C, Knowledge, Moderate, p. 238

2. SchlumbergerSema’s InTouch system is just one example of how companies are
starting to use __________.
a. collaborative teams
b. online decision aids
c. knowledge management drivers
d. expert systems

ANSWER: B, Knowledge, Difficult, p. 238


Fostering Knowledge Management
3. __________ involves recognizing, generating, documenting, distributing, and
transferring between persons useful information to improve organizational effectiveness.
a. Creative management
b. Information management
c. Data management
d. Knowledge management

ANSWER: D, Knowledge, Easy, p. 238

4. Which of the following is not one of the uses for the seven planning and decision aids
suggested in the text?
a. These aids are useful at various levels in the organization.
b. These aids are useful in virtually all functional areas.
c. These aids can assist in the analysis essential to planning and decision making
associated with many types of organizational issues and problems.
d. These aids are considered general planning and decision aids.

ANSWER: D, Knowledge, Difficult, p. 238

5. Which of the following is not generally viewed as one of the main components of
knowledge management (KM)?
a. information knowledge
b. explicit knowledge
c. tacit knowledge
d. enabling technologies

ANSWER: A, Knowledge, Moderate, p. 239

6. __________ knowledge consists in part of books, magazines, journals, and government
data and reports.

227


a. Common
b. Tacit
c. Enabling
d. Explicit


7. David Nagle is trying to teach his son Jonathan how to ride a bike. David realizes that
his knowledge of bike riding was developed from his own direct experiences with a
bicycle and is subconsciously understood. He’s having a difficult time explaining to
Jonathan how to ride his new bike. David’s knowledge of bike riding is __________.
a. explicit
b. common
c. enabling
d. tacit

ANSWER: D, Application, Moderate, p. 239

8. Which of the following is not an example of an enabling technology?
a. intranets
b. Internet
c. search engines
d. all of the above


9. Which of the following is not one of the natural targets for the application of knowledge
management?
a. teams
b. customers
c. competitors
d. workforce


10. __________ are computer based programs based on the decision-making processes of
human experts that store and receive data, diagnose problems, and offer solutions.
a. Knowledge management systems
b. Decision systems
c. Expert systems
d. Computer support systems

ANSWER: C, Knowledge, Easy, p. 241

228


11. One of the primary characteristics of an expert system is __________.
a. searching to find the best possible solution
b. using line of reasoning processes
c. use of fuzzy logic
d. ability to solve highly generalized problems



Fostering Forecasts
12. __________ involves projecting or estimating future events or conditions in an
organization’s environment.
a. Extrapolation
b. Scenarios
c. Decision aids
d. Forecasting


13. Forecasting is concerned primarily with __________.
a. external events or conditions that the organization can control
b. internal events or conditions that the organization can control
c. external events or conditions that the organization cannot control
d. internal events or conditions that the organization cannot control


14. Much forecasting is based on __________.
a. simulation
b. scenarios
c. extrapolation
d. the Delphi technique


15. The simplest, and at times most misleading, form of extrapolation is a __________.
a. linear projection of a present trend into the future
b. curvilinear projection of a present trend into the future
c. linear projection of a past trend into the future
d. curvilinear projection of a past trend into the future

ANSWER: C, Application, Moderate, p. 242

229


16. Duane Somers works for Porky’s Bar B Q and is attempting to make a sales forecast for
fiscal year 2006. Duane knows that sales increased 4% in 2003 and 5% in 2004. He
also knows that consumer preferences seem to be shifting away from pork in favor of
chicken. Duane forecasts 2006 sales to increase 2% on the basis of __________.
a. scenarios
b. extrapolation
c. the Delphi technique
d. simulations

ANSWER: B, Application, Moderate, p. 242

17. Rachel Cline needs to make a decision on whether to expand her business to a second
location. She assembles a panel of experts including a member of her chamber of
commerce, her accountant, and a professor of strategic management at a local
university. The group refined their opinions, step by step, until they reached a
consensus that Rachel should expand to the second location. This decision is an
example of __________.
a. the Delphi technique
b. groupthink
c. extrapolation
d. scenarios

ANSWER: A, Application, Moderate, p. 243

18. __________ is(are) a forecasting aid based on a consensus of a panel of experts.
a. Extrapolation
b. Scenarios
c. Decision forecasts
d. The Delphi technique


19. The American Society of Engineers used a __________ to anticipate changes in
OSHA’s operations.
a. Delphi study
b. benchmarking model
c. creativity model
d. simulation

ANSWER: A, Knowledge, Easy, pp. 243–244

20. The American Society of Engineers assembled a panel of __________ to evaluate
predictions in their Delphi study.
a. OSHA administrators
b. professional engineers
c. industry executives
d. chapter presidents


230


21. The Delphi technique involves __________ basic steps.
a. two
b. three
c. four
d. five

ANSWER: B, Knowledge, Easy, p. 244

22. The number of experts who participate in the Delphi technique may range from only a
few to more than 100, depending on the scope of the study. A range of __________ is
recommended for a very focused issue.
a. 10 to 15
b. 15 to 30
c. 30 to 40
d. 40 to 60


23. The heart of the Delphi technique is __________.
a. the qualifications of the experts
b. the number of rounds
c. the number of experts
d. the series of questionnaires


24. The Ford Motor Company developed a system that shows how changes in external
variables (e.g., inflation, price changes, unemployment) may affect Ford’s sales, profits
and employment levels. This is an example of __________.
a. the Delphi technique
b. a simulation
c. a strategic plan
d. virtual reality


25. Which of the following statements about simulations is not true?
a. A simulation is a representation of a real system.
b. Simulation is often used to forecast the effects of environmental changes and
internal management decisions on an organization.
c. The goal of simulation is to experience reality.
d. Most simulations are intended to let management ask numerous “what-if” questions.

ANSWER: C, Knowledge, Difficult, p. 245

231


26. Electric utility managers took part in a __________ to develop understanding of the new
deregulated business environment they were entering.
a. Delphi study
b. simulation
c. scenario study
d. fact finding phase

ANSWER: B, Knowledge, Easy, pp. 245–246

27. Taking part in an electric utilities industry restructuring simulation helped senior
managers learn to do all of the following except __________.
a. forecast competitive strategies
b. forecast competitors’ prices
c. discover that incremental cost was the main factor in determining how competitive
they could be
d. discover that marginal cost was the main factor in determining how competitive they
could be

ANSWER: C, Knowledge, Difficult, p. 246

28. __________ is a story that helps people recognize and adapt to changing features of
their environments.
a. The Delphi technique
b. A simulation
c. A scenario
d. An extrapolation


29. __________ provides a way to identify alternative paths that may exist for an
organization in the future and the actions that likely are involved in going down each of
those paths.
a. The Delphi technique
b. A scenario
c. A simulation
d. An extrapolation

ANSWER: B, Knowledge, Moderate, p. 246

30. Competitor scenarios present projections of __________.
a. how a competitor might be defeated
b. what a competitor might do
c. what level of threat exists
d. all of the above

ANSWER: B, Knowledge, Moderate, pp. 246–247

232



Fostering Creativity
31. All decision making needs to be supported strongly by __________.
a. efficacy
b. entropy
c. rules
d. creativity

ANSWER: D, Knowledge, Moderate, p. 248

32. Creativity is the ability to __________ new ideas.
a. visualize
b. generate
c. implement
d. all of the above


33. Which of the following is not one of the five stages of the creative process?
a. brainstorming
b. concentration
c. preparation
d. illumination


34. The __________ stage of the creative process involves searching for and collecting
facts and ideas.
a. concentration
b. preparation
c. brainstorming
d. illumination


35. During the creative process of developing ideas for a new novel, author Jane Windham
began focusing her energies and resources on identifying and solving the problem of
whether her main character should be a man or a woman. Jane is in the __________
stage of the creative process.
a. incubation
b. concentration
c. brainstorming
d. actualization


233


36. Louis McDonald is having a difficult time deciding how to proceed on an important
research project. He feels he needs to be creative in the subjects selected for the study
and the way in which data is gathered from these subjects. McDonald goes for a walk to
relax in hopes that he can unconsciously search for a solution. McDonald is in the
__________ stage of the creative process.
a. realization
b. brainstorming
c. incubation
d. actualization


37. During the creative process of developing new software, Elvira Melendez experienced a
moment of discovery, an instant recognition in which she realized what needed to be
done to solve a problem. Elvira is in the __________ stage of the creative process.
a. incubation
b. brainstorming
c. realization
d. illumination

ANSWER: D, Application, Moderate, p. 249

38. At the __________ stage of the creative process, confirmation and acceptance of the
new approach is sought.
a. verification
b. confirmation
c. realization
d. validation


39. __________ is not a phase in Osborn’s creativity model.
a. Fact finding
b. Application finding
c. Solution finding
d. Idea finding


40. Which of the following statements is not true regarding the Osborn creativity model?
a. It is designed to help overcome blockages to creativity and innovation.
b. External pressure and self-generated tension are harmful.
c. It can be used with all types of groups.
d. Intense pressure and threats from the wrong sources can easily undermine the
process.


234


41. Distinguishing between a symptom and an actual problem occurs in the __________
phase of the Osborn creativity model.
a. fact-finding
b. idea-finding
c. solution-finding
d. application-finding

ANSWER: A, Knowledge, Difficult, p. 249

42. Brainstorming occurs in the __________ phase of the Osborn creativity model.
a. fact-finding
b. solution-finding
c. idea-finding
d. application-finding


43. Which of the following is not one of the basic rules that should be followed in a
brainstorming session?
a. Criticism is encouraged.
b. Freewheeling is welcomed.
c. Quantity is wanted.
d. Combination and improvement are sought.


44. The __________ phase of the Osborn creativity model involves generating and
evaluating possible courses of action and deciding how to implement the chosen course
of action.
a. fact-finding
b. idea-finding
c. application-finding
d. solution-finding


45. Skilled brainstorming facilitators at IDEO perform all of the following functions except
__________.
a. lead the sessions
b. enforce rules
c. write and record the suggestions
d. All of the above are performed by facilitators.


235


46. In the illustration of the Teamwork Competency at IDEO, by using __________, the
company’s clients gain insight and learn because they join IDEO designers in the
creative process.
a. fact finding
b. brainstorming
c. synthesis
d. incubation


47. The Osborn creativity model is based on the assumption that __________.
a. few people can be creative if the proper environment is in place
b. most people have the potential for greater creativity than they use
c. most people are not creative
d. creativity is not natural, but can be acquired under the proper circumstances


48. __________ makes use of technology to input and automatically disseminate ideas in
real time over a computer network to all team members, each of whom may be
stimulated to generate additional ideas.
a. Virtual reality
b. Group decision support systems
c. Management information systems
d. Electronic brainstorming



Fostering Quality
49. __________ is the extent to which a product or service meets and/or exceeds
customers’ expectations.
a. Value
b. Excellence
c. Quality
d. Conformance to specifications


50. __________ is a systematic and continuous process of measuring and comparing an
organization’s goods, services, and practices against industry leaders anywhere in the
world to gain information that will help the organization improve performance.
a. Benchmarking
b. Quality
c. Total Quality Management (TQM)
d. Reengineering

ANSWER: A, Knowledge, Easy, p. 253

236


51. Benchmarking includes __________ stages.
a. five
b. six
c. seven
d. eight


52. __________ includes a careful study of the organization’s own products and processes
that are to be compared to benchmark products and processes.
a. Defining the domain
b. Identifying the best performers
c. Collecting and analyzing data to identify gaps
d. Setting improvement goals


53. __________ is not among the functions that may be benchmarked.
a. Finance
b. Marketing
c. Transportation
d. All of the above may be benchmarked.


54. Xerox compared its warehousing and distribution process with that of L. L. Bean, the
catalog sales company, because of its excellent reputation in this area. Xerox has
completed which step in the benchmarking process?
a. identifying the best performers
b. defining the domain
c. collecting and analyzing data to identify gaps
d. setting improvement goals

ANSWER: A, Application, Easy, p. 254

55. __________ are not usually a good source of information for learning about best-in-
class organizations.
a. Customers
b. Suppliers
c. Government agencies
d. Trade journals


237


56. Pedro Rodriquez is a vice president with Wal-Mart. Rodriquez is interested in improving
the performance of the “pet supplies” departments in all stores. He identified some of
the country’s best pet stores and in the process of gathering financial data from these
stores so that he can understand how to improve performance Wal-Mart. Rodriquez is
using a process known as __________.
a. Deming cycle
b. benchmarking
c. total quality management (TQM)
d. reengineering


57. Which of the following statements regarding benchmarking is not true?
a. Over time, the things that are benchmarked should remain the same.
b. Benchmarking needs to be linked to other sources of information, such as changing
customer expectations and preferences.
c. Benchmarking typically looks at the present in terms of how some process or quality
dimension is being achieved by others.
d. Benchmarking is often used to help an organization adapt, but less commonly to
innovate.

ANSWER: A, Knowledge, Difficult, p. 254

58. When benchmarking is used simply to copy the best-in-class competitors, it may lead to
__________.
a. sustained competitive advantage
b. short-term competitive advantage
c. competitive disadvantage
d. competitive parity


59. The Deming cycle involves __________ stages.
a. two
b. three
c. four
d. five


60. Which of the following is not among the questions that need to be answered in the plan
stage of the Deming cycle?
a. What are we trying to accomplish?
b. Do we have the resources for what we are trying to accomplish?
c. What changes can we make that will result in improvement?
d. How will we know that a change is an improvement?


238


61. __________ is not one of the stages of the Deming cycle.
a. Plan
b. Do
c. Will
d. Check


62. Truett Fontenot is a famous chef in New Orleans. He has tested some new recipes in a
laboratory. Next he intends to establish a pilot production process and try out the
recipes on a small number of customers. Truett is operating in the __________ stage of
the Deming cycle.
a. plan
b. do
c. will
d. check


63. Anna Lyn is the production supervisor for a manufacturing company that is
implementing a new quality control process. She is trying to determine if the new
process is working as it was intended and whether any revisions need to be made.
Anna is operating in the __________ stage of the Deming cycle.
a. plan
b. will
c. do
d. check


64. The __________ stage of the Deming cycle focuses on implementing the process within
the organization or with its customers and suppliers.
a. act
b. will
c. do
d. plan


65. In the textbook example, the owner of the Deluxe diner applied __________ to solve
the problem of customers having to wait too long to be seated.
a. benchmarking
b. reengineering
c. total quality management (TQM)
d. the Deming cycle


239


66. Which of the following was not one of the problems identified by Billie Boyd, the owner
of Deluxe Diner, as she used her communication competency to solve the problem of
long lines at lunchtime?
a. Customers were waiting in line for as long as 15 minutes.
b. Usually, tables were available.
c. Many of the customers were regulars.
d. All of the above were problems that Billie Boyd identified.


67. Which of the following was not one of the changes developed by Billie Boyd, the owner
of Deluxe Diner, to solve the problem of long lines at lunchtime?
a. Allow customers to fax their orders in ahead of time.
b. Encourage customers to open corporate charge accounts.
c. Install a preparation table for fax orders in the kitchen.
d. Devote one of the two cash registers to handling fax orders.


68. The balanced scorecard looks at all of the following strategic perspectives except
__________.
a. internal perspective
b. competitive perspective
c. innovation perspective
d. customer perspective


69. Edwin Kaycee is evaluating his motorcycle parts assembly operations in Mexico for the
amount of manufacturing defects that are being caused by poor workmanship. This
balanced scorecard factor is addressed in the __________.
a. learning perspective
b. financial perspective
c. internal perspective
d. quality perspective


70. __________ is a method for gaining wider perspective on strategic decisions by
considering the role of finances, customers, and innovation.
a. Benchmarking
b. Brainstorming
c. Balanced scorecard
d. Knowledge management


240


71. Southwest Airlines took an innovative approach to using the balanced scorecard in
linking operational goals, such as baggage delivery, to __________.
a. internal perspectives of safety
b. learning perspectives of employee training
c. customer perspectives of satisfaction
d. financial perspectives of profitability

ANSWER: D, Knowledge, Difficult, pp. 257–258

72. Customer perspectives of Southwest Airlines’ balanced scorecard include all of the
following except __________.
a. seat revenue
b. lowest prices
c. on-time flights
d. Number 1 ranking


73. The balanced scorecard is criticized because __________.
a. it does not link the perspectives to each other
b. innovation is internal, but it is not included in the internal perspective
c. managers are not given autonomy to pursue perspective goals
d. the balanced scorecard model is too technical for most managers


Essay Questions


1. What is knowledge management (KM)? What is the difference between tacit and explicit
knowledge? Give examples of each.

Knowledge management (KM) involves recognizing, generating, documenting,
distributing, and transferring between persons useful information to improve
organizational effectiveness. KM is generally viewed as consisting of three main
components: explicit knowledge, tacit knowledge and enabling technologies.

Explicit knowledge is knowledge that is contained in books, magazines, journals, reports
and manuals. Information published by the U.S. Census Bureau is an example.

Tacit knowledge is knowledge that is unconsciously understood and applied. It is difficult
to express and often developed from direct experiences and action. The knowledge of
how to play golf or ride a bicycle is an example.

Moderate, pp. 238–239

241


2. Describe how SchlumbergerSema applied knowledge management to improve
organizational effectiveness under challenging operating conditions.

SchlumbergerSema designed the InTouch system to immediately connect on-site
employees with subject-matter experts. The firm operates in remote locations in 100
countries and faces huge challenges in conducting sensitive technical operations. The
InTouch system is designed to use the global Schlumberger infrastructure through a
standard computer platform and a single portal into the technical resource base. Help
desks are available, with just-in-time online distance learning, and a centralized
document authoring and publishing system.

An example of the system in operation took place on a remote location in Indonesia,
late in the day. Wrong instructions programmed into a computerized drilling tool were
not noticed until after drilling had started. Although it was 4 a.m. in Houston, the head
of the department that oversees the specific tool was able to respond within 15 minutes
and transmit a solution back to the Indonesian job. Within an hour, the job was
corrected and underway again.

Moderate, p. 238


3. What is the Delphi technique? Describe in detail the use of the Delphi technique.

The Delphi technique is a forecasting aid based on a consensus of a panel of experts.
The experts refine their opinions, step by step, until they reach a consensus. Because
the technique relies on opinions, it obviously isn’t foolproof. But the consensus arrived
at tends to be much more accurate than a single expert’s opinion. The Delphi process
replaces face-to-face communication and debate with a carefully planned, orderly
program of sequential discussions.

The Delphi technique involves three basic steps: A questionnaire is sent to a group of
experts. A summary of the first round is prepared (it may show such things as the
average, medium and quartile range of response). This summary, along with a revised
questionnaire, is sent to those who completed the first questionnaire. A summary of the
second round is prepared (this often shows that a consensus is developing). The
experts are then asked in a third questionnaire to indicate whether they support this
emerging consensus. Three rounds generally are recommended.

Difficult, pp. 243–244

4. What is a simulation? What is the goal of a simulation and how is it used?

A simulation is a representation of a real system. A simulation model usually describes
the behavior of the real system (or some aspect of it) in quantitative and/or qualitative
terms. Simulation often is used to forecast the effects of environmental changes and
internal management decision on an organization, department, or SBU. The goal of
simulation is to reproduce or test reality without actually experiencing it. Most
simulations are intended to let management ask numerous “what-if” questions.

Moderate, p. 245

242


5. Discuss three of the five stages in the creative process.

a. Preparation involves a thorough investigation to ensure that all parts of an issue or
problem are identified or understood. This stage involves searching for and
collecting facts and ideas.
b. Concentration occurs when energies and resources are focused on identifying and
solving an issue or problem. A commitment must be made in this stage to
implementing a solution.
c. Incubation involves an internal and unconscious ordering of gathered information. A
successful incubation stage yields fresh ideas and new ways of thinking about the
nature of an issue or a problem and alternative solutions.
d. Illumination is the moment of discovery, the instant of recognition, as when a light
seems to be turned on mentally. The mind instantly connects an issue or a problem
to a solution.
e. Verification is the testing of the created solution or idea. At this stage, confirmation
and acceptance of the new approach is sought.


6. What are three of the rules that should be followed in a brainstorming session? A
brainstorming session should include about how many people?

a. Criticism is ruled out.
b. Freewheeling is welcomed.
c. Quantity is wanted.
d. Combination and improvement are sought.
e. From 5 to 12 people should be included in a brainstorming session.

Moderate, p. 250


7. What is benchmarking? What are the seven stages in the benchmarking process?

Benchmarking is a systematic and continuous process of measuring and comparing an
organization’s goods, services, and practices against industry leaders anywhere in the
world to gain information that will help the organization improve performance.

1. Define the domain to be benchmarked.
2. Identify the best performers.
3. Collect and analyze data to identify gaps.
4. Set improvement goals.
5. Develop and implement plans to close gaps.
6. Evaluate results.
7. Repeat the evaluations.


243


8. Describe how Billie Boyd, the owner of Deluxe Diner, applied the Deming cycle to solve
the problem of customers having to wait too long to be seated during lunchtime at the
diner.

Billie Boyd promoted two-way communication by soliciting feedback, listening, seeking
out contrary opinions; creating give and take conversations; informing employees of
relevant data and activities and keeping them up to date; and appearing to be
persuasive and comfortable in her managerial role.

One process in the plan stage involved several team meetings with her employees.
They identified four main aspects of this problem: (1) customers were waiting in line for
as long as 15 minutes, (2) usually, tables were available, (3) many of the customers
were regulars, and (4) people taking orders and preparing food were getting in each
others’ way.

Boyd developed a plan that involved the following changes: (1) customers were allowed
to fax their orders in ahead of time, (2) a preparation table for fax orders was installed in
the kitchen, and (3) one of the two cash registers was devoted to handling fax orders.

Difficult, p. 255

244

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