Chapter 16

Prescribed control attempts to elicit employee compliance using strict rules, a rigid hierarchy, well-defined job descriptions, and other administrative mechanisms. T/F

FALSE Bureaucratic control attempts to elicit employee compliance using strict rules, a rigid hierarchy, well-defined job descriptions, and other administrative mechanisms.

A balance sheet summarizes an organization's financial results, its revenues and expenses, over a specified period of time. T/F

FALSE Income statement summarizes an organization's financial results, its revenues and expenses, over a specified period of time.

Among the mechanisms that contribute to measurement-managed companies' success are that top executives agree on strategy and the organizational culture emphasizes teamwork and allows risk taking. T/F

TRUE

Productivity is defined by the formula of outputs divided by inputs for a specified period of time. T/F

TRUE

A company that determines the acceptable number of consumer complaints it will expect for the upcoming year has set a a. control standard. b. corrective course. c. mission. d. measurement objective. e. statistical target.

a. control standard.

The six areas of control are physical, human, informational, financial, structural, and a. cultural. b. functional. c. governmental. d. material. e. categorical.

a. cultural.

A budget is a formal financial a. projection. b. summary. c. audit. d. scorecard. e. statement.

a. projection.

The two core principles of TQM are a. uniform focus on delivering customer value, and continuous improvement of work processes. b. development of strong organizational culture, and continuous improvement of work processes. c. improvement of employee morale, and enhancement of shareholder satisfaction. d. improvement of customer relationships, and development of strong corporate culture. e. uniform focus on delivering

a. uniform focus on delivering customer value, and continuous improvement of work processes.

Which of the following is not a reason why control is needed? a. Control helps an organization to deal with complexity. b. Control allows one to maintain authority over employees. c. Control increases productivity or adds value. d. Control allows one to adapt to change and uncertainty. e. Control helps one to discover irregularities and errors.

b. Control allows one to maintain authority over employees.

The CEO and senior managers at Ford review the performance of the company's suppliers to determine which should be kept as part of their ______ control of the organizations. a. executive b. strategic c. leadership d. tactical e. operational

b. strategic

A(n) ______ is a visual representation of the balanced scorecard that enables managers to communicate their goals. a. pattern map b. strategy map c. innovation map d. positioning map e. objective map

b. strategy map

The PDCA cycle is part of a. applying the RATER dimensions. b. Six Sigma. c. Deming management. d. total quality management. e. statistical process control.

c. Deming management.

The first step in the control process is to a. determine the problem. b. measure the performance. c. establish standards. d. determine what corrective action is necessary. e. develop an ideal.

c. establish standards.

An organization that is examining its return on investment (ROI) is using a. financial statements. b. internal auditing. c. ratio analysis. d. external auditing. e. flexible budgeting.

c. ratio analysis.

_____ budgeting allocates increased or decreased funds to a department by using the last budget period as a reference point. a. Marginal b. Fixed c. Variable d. Incremental e. Zero-based

d. Incremental

Control systems operate best when they are made acceptable to the organization's members who are guided by them, so they should be all of the following except which? a. Realistic b. Encouraging of self-control c. Understandable d. Permanent e. Positive

d. Permanent

A company that works to create a culture that encourages rank-and-file employees to make suggestions and question the status quo, and also measures employee growth is developing which perspective of the balanced scorecard? a. Employee perspective b. Financial perspective c. Customer perspective d. Internal business perspective e. Innovation and learning perspective

e. Innovation and learning perspective

______ focuses on problem solving and performance improvement, or speed with excellence, of a well-defined project. a. ISO 14000 b. Benchmarking c. Six Sigma d. ISO 9000 e. Lean Six Sigma

e. Lean Six Sigma

The purpose of the management function of controlling is to a. ensure that subordinates follow instructions fully and completely. b. determine a method to achieve goals. c. arrange resources to accomplish the work. d. motivate people. e. ensure that performance meets objectives.

e. ensure that performance meets objectives.

Management by ______ is a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards. a. measurement b. divergence c. walking around d. objectives e. exception

e. exception