Question

The Ascent, a mountain bicycle manufacturer, has been in the bicycle industry for a year now. The CEO wishes to better the company. He starts by looking at the sales records of the year that they have been in business and notices that the company's sales have been declining at a steady pace for the past six months and that at present they are selling only half as many bicycles as they want to. In an attempt to increase sales, he either wants to bring down the prices of his bicycles or expand the company by opening a new branch in another area. The CEO shares his views with the sales manager and finance managers. Together they decide that reducing the prices would definitely increase sales, although the profits would come down. They also determine that opening a new branch would only increase expenses. They conclude that they will reduce the prices of the bicycles. The plan is implemented and the CEO keeps a record of the sales every month to make sure the change is effective.Which of the following steps in formal planning process is the CEO performing when he debates between opening a new branch and reducing the prices?
a. engaging in situational analysis
b. monitoring and controlling
c. implementing the plan
d. selecting the goals and plans
e. generating alternative goals and plans

Answer 1

Answer: e. generating alternative goals and plans.

Explanation:

The step in formal planning process is the CEO performing when he debates between opening a new branch and reducing the prices is referred to as generating alternative goals and plans.

Here, the CEO wants to increase the sales of the company and in an attempt to do that he's considering different alternatives in order to know and decide which one will be best for the company to undertake. This means he is generating alternative goals and plans.

Options A-D are wrong as the CEO isn't monitoring, controlling or implementing any plan. Option E is the right answer.