MANA3335 MindTap Assignment: Chapter 14: Basic Elements of Control

Which of the following is an example of a control standard?

*A minimum of 95% of all customers will be greeted within 3 minutes of their arrival {A control standard is a target against which performance will be judged. The correct answer provides a measure (95% of customers greeted within 3 minutes) for assessing performance. The other answers provide no quantitative measure for assessment}

You are reviewing your organization's financial statements, because you need to see how much debt the company has. Which statement will you use to get this information?

*Balance sheet {The balance sheet lists the assets and liabilities of the organization at a specific point in time, usually the last day of an organization's fiscal year. Liabilities are debts. Income statements reveal revenues and expenses. Budgets guide expenses and provide control standards. Cash flow statements show when revenues are realized and in what amounts}

You could say that control is like __________ , because control is the organizational function that keeps organizations moving in the proper direction.

*a compass {Control keeps an organization moving in the right direction. A compass fits as an analogy, because it allows you to identify the desired direction}

A ____________ is a good analogy for the concept of control. This is because control is the organizational function that keeps organizations moving in the proper direction.

*ship's rudder {The control function serves to regulate organizational activities to achieve some targeted element of performance. Because this function keeps the organization moving in the proper direction, we could say that control is akin to the rudder of a ship. All of the choices have an element of direction, but only the rudder actually influences the direction taken}

Your organizational design is tall. There are several levels, and influence always comes from above. Which form of structural control are you using?

*Bureaucratic {Bureaucratic control is an approach to organization design characterized by formal and mechanistic structural arrangements. The goal of bureaucratic control is employee compliance. Decentralized control, in contrast, is an approach to organizational control characterized by informal and organic structural arrangements. A tall structure is associated with bureaucratic control}

What is the final step in the control process?

*Determine need for corrective action {The steps in the control process are as follows: (1) establish standards, (2) measure performance, (3) compare performance against standards, and (4) determine need for corrective action}

Which of these is the second step in the control process?

*Measure performance {The steps in the control process are as follows: (1) establish standards, (2) measure performance, (3) compare performance against standards, and (4) determine need for corrective action}

Your chief financial officer has asked that you assess whether an acquisition of a small company is possible, given the company's current debt load. You have to figure out how much cash your company has access to and how much debt it has relative to income. Which financial control do you need to use?

*Ratio analysis {Ratio analysis will allow you to assess both liquidity and debt-to-income. These are the two areas of interest in this situation. The balance sheet lists the assets and liabilities of the organization at a specific point in time, usually the last day of an organization's fiscal year. Income statements reveal revenues and expenses. Budgets guide expenses and provide control standards}

Because of a low cash balance in the company's bank account, David is concerned about customers paying their bills on time. His concern deals with ___________ .

*financial control {Financial control is the control level concerned with the organization's financial resources and performance. Since this question deals with billing, it fits into the category of financial control}

Which financial tool will you use if you need to understand how much return the company has generated relative to its assets?

*Ratio analysis {Whenever you make a financial comparison, a ratio analysis is the best choice. In this case, you should choose a return ratio. The balance sheet lists the assets and liabilities of the organization at a specific point in time, usually the last day of an organization's fiscal year. Income statements reveal revenues and expenses. The income statement would have valuable information for you but would not provide a comparison. Budgets guide expenses and provide control standards}

Employees at KnowYourNetworks are required to log the time they spend on any billable project. Each time work is to begin on a project, employees must enter the project management database and enter the start time. When they are ready to stop and move on to another project, they must enter the end time and what was accomplished. Employees spend a significant portion of their day logging this information.

*Too much accountability {Managers need to control many aspects of the organization. Sometimes, though, control can be ineffective. When it is, employees may resist control. This typically happens when employees perceive there is overcontrol, too much accountability expected, rewards for inefficiency, or an inappropriate focus. In the scenario in this question, the issue is too much accountability. The employees may perceive that the time spent accounting for their work is actually detrimental to getting more work done}

Which control function is most critical for the health care facility in the scenario?

*Limit the accumulation of error {The control function serves four purposes: coping with organizational complexity, adapting to environmental change, limiting errors, and minimizing costs. The primary purpose of the system in the study is to increase the speed with which staff can reach patients, thereby reducing the risk of an accident or a delay in treatment that could in turn lead to an escalating patient crisis. Therefore, the most critical function of control in this scenario is to limit the accumulation of error}

For East Carolina University's football ticket sales in the student section, ________ is critically important. That's because students who aren't members of the student club can't buy until the university knows how many tickets are left unsold 48 hours prior to the event. The information must be reliable.

*accuracy {Accuracy means that the information is true. If some seats have been sold but information about the number sold is not accurate, the university may sell too many tickets. Then two people would show up for the same seat!}

Your project proposal must include an operating budget, so you are providing estimates for __________ .

*how much it will cost to implement each aspect of the project {An operating budget is concerned with planned operations within the organization. It outlines what quantities of products or services the organization intends to create and what resources will be used to create them. Resources must be available to cover costs. A financial budget indicates where the organization expects to get its cash for the coming time period and how it plans to use it. A nonmonetary budget is simply a budget expressed in nonfinancial terms, such as units of output, hours of direct labor, machine hours, or square-foot allocations}

Your project can only work if you can complete it within the cost approved by the company. Fortunately, budgets ___________ .

*help define standards for control, such as preventing budget overruns {Budgets fulfill four purposes. These are helping managers coordinate resources and projects, defining standards for control, providing guidelines for expectations, and providing input on managerial performance. In this case, the budget is defining standards for control}

Health care providers learn that Medicare will begin requiring higher performance on certain measures of patient safety.

*Adapt to environmental change {The control function serves four purposes: coping with organizational complexity, adapting to environmental change, limiting errors, and minimizing costs. A change in Medicare's safety standards is a change in the external environment of health care providers to which they must adapt}

Long-term care facilities evaluate ways to reduce the amount they charge patients without compromising quality.

*Minimize costs {The control function serves four purposes: coping with organizational complexity, adapting to environmental change, limiting errors, and minimizing costs. To reduce patient expenses, facilities will probably need to lower their costs, making this an important reason for control}

During your warehouse training, you learn that there has been an increase in the number of error notifications coming in from the Walmart stores the warehouse services. These error notifications suggest that the stores aren't getting all of the items ordered. Which form of operational control should you invoke if you are to figure out why these errors are occurring?

*Screening {Screening control occurs during the transformation process. Since the errors in the scenario are picking and packing errors, they are part of the transformation process}

Aimee is on the total quality management team at Insignia. Her job specifically relates to the ____________ level.

*operations control {Operations control is the control level focused on organizational efficiency and production performance. Total quality management falls into this category}

Suppose a firm using a functional design has an established goal of achieving 20% sales growth per year but performance has been only 10% per year. You decide to shift to a divisional structure. What kind of control are you utilizing?

*Strategic control {Strategic control is control that ensures the organization maintains an effective alignment with its environment and moves toward achieving its strategic goals}

Cash flow budget Expense budget Labor budget

*Financial *Operating *Nonmonetary {A financial budget indicates where the organization expects to get its cash for the coming time period and how it plans to use it. Usual sources of cash include sales revenue, short- and long-term loans, the sale of assets, and the issuance of new stock. An operating budget is concerned with planned operations within the organization. It outlines what quantities of products or services the organization intends to create and what resources will be used to create them. A nonmonetary budget is simply a budget expressed in nonfinancial terms, such as units of output, hours of direct labor, machine hours, or square-foot allocations}

Which budget includes estimates of differences between sales revenue and expenses? Which budget includes estimates of resources needed, such as space and labor? Which budget includes revenue estimates at different points in time?

From top to bottom *Operating *Nonmonetary *Financial {A financial budget indicates where the organization expects to get its cash for the coming time period and how it plans to use it. Usual sources of cash include sales revenue, short- and long-term loans, the sale of assets, and the issuance of new stock. An operating budget is concerned with planned operations within the organization. It outlines what quantities of products or services the organization intends to create and what resources will be used to create them. A nonmonetary budget is simply a budget expressed in nonfinancial terms, such as units of output, hours of direct labor, machine hours, or square-foot allocations}

Genesis HealthCare provides long-term skilled nursing at about 400 sites in 26 states, employs 70,000 people, and earns annual revenues of over $1 billion.

*Cope with organizational complexity {The control function serves four purposes: coping with organizational complexity, adapting to environmental change, limiting errors, and minimizing costs. Genesis HealthCare is a large company with a multistate presence, and its size and geographic spread creates a high level of organizational complexity, which can be addressed by control}

Training and development Quality control Profit margin Economic forecasting

*Human *Physical *Financial *Information {Control can focus on any area of an organization. Most organizations define areas of control in terms of the four basic types of resources they use: physical, human, information, and financial. Control of physical resources includes inventory management (stocking neither too few nor too many units in inventory), quality control (maintaining appropriate levels of output quality), and equipment control (supplying the necessary facilities and machinery). Control of human resources includes selection and placement, training and development, performance appraisal, and compensation. Control of information resources includes sales and marketing forecasting, environmental analysis, public relations, production scheduling, and economic forecasting. Financial control involves managing the organization's financial obligations, and profit margin is a measure of financial control}

You have to assess the likely costs needed to participate in a trade show. A big purchase is required—a new demonstration booth. It will take a lot of time to plan for a trade show, and this is not your only responsibility. You need a plan to ensure that you complete the full range of duties. You are planning an appearance for your company at a trade show. You must forecast the revenue your company may earn as a result of your participation.

*Operating *Nonmonetary *Financial {A financial budget indicates where the organization expects to get its cash for the coming time period and how it plans to use it. Usual sources of cash include sales revenue, short- and long-term loans, the sale of assets, and the issuance of new stock. An operating budget is concerned with planned operations within the organization. It outlines what quantities of products or services the organization intends to create and what resources will be used to create them. A nonmonetary budget is simply a budget expressed in nonfinancial terms, such as units of output, hours of direct labor, machine hours, or square-foot allocations}

Sales forecasting Compensation Inventory management Cash reserves

From top to bottom *Information *Human *Physical *Financial {Control can focus on any area of an organization. Most organizations define areas of control in terms of the four basic types of resources they use: physical, human, information, and financial. Control of physical resources includes inventory management (stocking neither too few nor too many units in inventory), quality control (maintaining appropriate levels of output quality), and equipment control (supplying the necessary facilities and machinery). Control of human resources includes selection and placement, training and development, performance appraisal, and compensation. Control of information resources includes sales and marketing forecasting, environmental analysis, public relations, production scheduling, and economic forecasting. Financial control involves managing the organization's financial obligations, including cash reserves}

Performance expectations that accept a minimum level of performance Control based on employee commitment Rewards based on individual performance

From top to bottom *Bureaucratic *Decentralized *Bureaucratic {Organizational structure can vary from one extreme, bureaucratic, to the other, decentralized. Each extreme has characteristics that are typical for that form of structure. Bureaucratic structures are formal in nature, and this formality extends to all aspects of the structure. Decentralized structures are informal and organic. Performance and rewards in a bureaucratic structure tend to focus on meeting the minimum standards and on individual rewards. In a decentralized structure, people try to exceed minimum performance standards and may have group rewards. Decentralized structures also encourage employee commitment}

Speedy Sales Group rewards salespeople based on the number of calls made per week but not on the size of the orders made. Some salespeople have responded by making more calls but spending less time per prospect.

*Rewards for inefficiency {Managers need to control many aspects of the organization. Sometimes, though, control can be ineffective. When it is, employees may resist control. This typically happens when employees perceive there is overcontrol, too much accountability expected, rewards for inefficiency, or an inappropriate focus. In the scenario in this question, the issue is a perceived reward for inefficiency. This answer is correct because the organization in the example is rewarding a measure that actually works against the desired outcomes. This scenario also exemplifies inappropriate focus, but inappropriate focus was not an answer option in the question}

At its warehouses, Walmart receives items manufactured elsewhere that it will stock and sell in its stores. Because Walmart doesn't actually control the manufacturing of the products it sells, ____________ could be the most critical type of operational control for Walmart.

*preliminary control {Walmart sells products manufactured by other companies. Therefore, it is important that Walmart check these products for adherence to standards before selling them. Because the scenario describes control that occurs at the start of the process, the control is preliminary control}

At the top levels of corporate leadership, decisions that affect the organization's ability to fulfill its mission are at the forefront. For that reason, ___________ is useful, because it addresses effectiveness at all levels of the organization.

*strategic control {Strategic control assesses the effectiveness of strategy at the corporate, business, and functional levels. Only strategic control addresses all organizational levels}

When managers assess _________ , they understand that the organization relies on multiple areas, and one area is inhibiting the attainment of goals.

*strategic control {Strategic control generally focuses on five aspects of organizations. The five aspects are structure, leadership, technology, human resources, and information and operational control systems. No other form of control is comprehensive in this way}

If a skilled nursing facility with an excellent patient safety record decides to purchase a WiFi-based localization system next year, what is the most likely reason for that decision?

*Adapt to environmental change {The control function serves four purposes: coping with organizational complexity, adapting to environmental change, limiting errors, and minimizing costs. If a facility that is historically successful at ensuring patient safety is interested in purchasing this system next year, it probably anticipates some change to its environment—perhaps a shift to a higher-risk patient population}

Suppose you are cross-training at one of Walmart's warehouses. You are there to learn about the operations side of the business, which is critical to Walmart because of its low-cost strategy. At the warehouse, your supervisor explains that preliminary control is a daily focus. Which reason explains your supervisor's approach?

*Your supervisor wants to ensure that resources entering the organization are of sufficient quality and quantity to meet production goals {Preliminary control concentrates on the resources an organization brings in from the environment and then uses to produce the product or service it sells. Focusing on preliminary control ensures that the inputs to the system are of proper quality and quantity. If a quality defect occurs later, the manager will know that the problem happened internally and not with inputs brought in from elsewhere}

Bureaucratic Control Employee compliance <- A Strict rules, formal controls, rigid hierarchy <- B Directed toward minimum levels of acceptable performance <- C Tall structure, top-down influence <- D Directed at individual performance <- E Limited and formal <- F Decentralized Control Employee commitment -> A Group norms, culture and self-control -> B Directed toward enhanced performance above and beyond the minimum -> C Flat structure, shared influence -> D Directed at group performance -> E Extended and informal -> F

A *Goal of control approach B *Degree of formality C *Performance expectations D *Organization design E *Reward system F *Participation {This question asks you to complete the figure that explains the characteristics of two types of structure. Organizational structure can vary from one extreme, bureaucratic, to the other, decentralized. Each extreme has characteristics that are typical for that form of structure. These characteristics are based on several dimensions, including goal of control approach, degree of formality, performance expectations, organization design, reward system, and participation. The completed figure illustrates how bureaucratic and decentralized organizational types vary on these dimensions}

Inventory management Performance appraisal Environmental analysis Accounts receivable

From top to bottom *Physical *Human *Information *Financial {Control can focus on any area of an organization. Most organizations define areas of control in terms of the four basic types of resources they use: physical, human, information, and financial. Control of physical resources includes inventory management (stocking neither too few nor too many units in inventory), quality control (maintaining appropriate levels of output quality), and equipment control (supplying the necessary facilities and machinery). Control of human resources includes selection and placement, training and development, performance appraisal, and compensation. Control of information resources includes sales and marketing forecasting, environmental analysis, public relations, production scheduling, and economic forecasting. Financial control involves managing the organization's financial obligations. Accounts receivable is part of financial control}

If a health care facility that does not already have WiFi installed considers adopting the localization system in this study, what reason for control is likely to be prominent in discussions of this decision?

*Minimize costs {The control function serves four purposes: coping with organizational complexity, adapting to environmental change, limiting errors, and minimizing costs. The localization system is inexpensive for facilities that already have WiFi, but the researchers imply that a facility without WiFi would incur greater costs. Therefore, controlling costs would feature prominently in a discussion of adopting the system at a facility without WiFi}

For your project, you've identified a process and set quality standards for all phases of implementation. To ensure that the project can be profitable after costs are considered, you need to develop __________ .

*a budget {A budget is a plan for limiting spending for expenses over a period of time. Audits can assess spending. Balance sheets and income statements look at cash flow, expenditures, and other financial concerns}

One image that relates to control is that of a _________ , because when organizations measure performance, they can then make adjustments when performance isn't what it should be.

*thermostat {For an organization to use the control function, it must measure various aspects of performance. A thermostat is an instrument for measuring temperature and is therefore a suitable analogy. A doctor can hear heartbeat with a stethoscope, but the instrument does not provide a measurement. Likewise, neither a remote control nor a policy manual can provide a measure of some variable}

Troy works in sports ticket sales for his university. He needs information when he needs it. Not before. Not after. In sports, that means knowing whether tickets are still available on game day. Troy is concerned with _____________ .

*timeliness {Control systems are most effective when they are integrated with planning and when they are flexible, accurate, timely, and objective. Timeliness is the major control component in this scenario, which describes a control system that provides information when needed. In this case, Troy needs information to be timely to know if he can sell tickets at the door on game day}