Ch. 16 Management
30. To quantify hard to measure jobs, managers should use their best judgment rather than asking the people who actually do the work how to measure the job.
F
31. Strategic control is monitoring performance to insure that day-to-day goals are being met and taking corrective action when needed.
F
32. Middle level managers do operational planning and control.
F
34. Equipment controls used to monitor the use of computers are types of informational controls.
F
36. Most organizations emphasize either bureaucratic or clan control.
F
37. ABC Company stresses its shared values, beliefs, rituals, and trust. ABC is using bureaucratic control.
F
41. Zero-based budgeting uses the amount from the last budget period as the new budget amount.
F
46. A balance sheet summarizes an organization's financial results over a specified period of time.
F
47. An income statement summarizes an organization's overall financial worth at a specific point in time.
F
48. The practice of evaluating financial ratios is called budget analysis.
F
49. An external audit is a formal verification of an organization's opportunities and threats by management consultants.
F
50. An internal audit is a verification of an organization's financial accounts and statements by outside experts.
F
51. A principle of Deming management is that workers are at fault for production problems.
F
57. ABC Company workers pull random samples from production runs to see if quality is being maintained within a standard range of acceptability. These workers are engaged in benchmarking.
F
59. XYZ, Inc. has restructured its process of giving contracts to suppliers, significantly reducing the number of steps involved. XYZ has engaged in statistical process control.
F
6. The longest economic boom in America occurred during 1990-1995.
F
60. Six sigma is based on qualitative observations, not hard production and/or quality data.
F
63. Control systems should leave no room for individual judgment.
F
65. Involving employees in the planning and execution of control systems can lower employee morale.
F
56. Out-of-Control, an entertainment company, wants to investigate what types of quality entertainment it should focus on to meet the needs of tomorrow's consumer. It convened a special-purpose team to look into this and provide an answer for upper management. OOC is using employee involvement to improve the quality of OOC's offerings.
T
58. Reduced cycle time means a reduction in steps in a work process.
T
62. Managers should develop control standards when they are developing strategic plans.
T
5. During the 1960s, productivity in the United States averaged a spectacular 2.9% a year, then sank to a disappointing 1.5% right up until 1995.
T
52. PDCA stands for "plan, do, check, act."
T
53. The two core principles of TQM are a people orientation and an improvement orientation.
T
54. TQM assumes that it's better to do things right the first time than to do costly reworking.
T
55. The RATER scale enables customers to rate the quality of a service along five dimensions.
T
64. Bureaucratic organizations are more likely to try to exert too much control.
T
7. Productivity, argues William Lewis, founding director of McKinsey Global Institute, is produced by product market competition.
T
9. Control is making something happen the way it was planned to happen.
T
61. Lean Six Sigma focuses on problem solving and performance improvement.
T
8. The purpose of controlling is to make sure that performance meets objectives.
T
100. Which of the following is most likely the most bureaucratic organization? A) Southwest Airlines B) U.S. Army C) General Electric D) Levi Strauss E) Ritz Carlton
B
66. Mary Ann has just taken over as head of production for MAJ Company. She would like to improve the productivity of her unit. Which of the following should she immediately embark upon to achieve the best results? A) Use established technology since her employees are familiar with it. B) Establish a system of measurement. C) Assign her employees to a new operation so each has an opportunity to try something new. D) Hire any new employees such that they are similar to those already on the team. E) Immediately cut costs.
B
77. Which of the following is a step in the control process? A) evaluate opportunities B) take corrective action, if necessary C) complete a SWOT analysis D) implement TQM E) compare work units on standards
B
79. Which of the following is the best stated standard? A) high employee morale B) turnover less than 5% per quarter C) fewer sick days D) more workers volunteering for overtime E) more job applicants
B
85. Which of the following is an indicator of the balanced scorecard? A) internal threats B) financial measures C) external processes D) stakeholder satisfaction E) collaborative activities
B
44. A fixed budget allocates resources on the basis of a single estimate of costs.
T
23. A corporate scorecard gives top managers a fast but comprehensive view of the organization via four indicators.
F
45. A variable budget allows the allocation of resources to vary in proportion with various levels of activity.
T
25. Making improvements in the three operational perspectives of the balanced scorecard will translate into financial success.
F
69. Productivity equals A) goods and services, divided by labor and capital and energy and materials. B) labor and capital, divided by goods and services and energy and materials. C) energy and materials, divided by labor and capital and goods and services. D) goods and services and labor and capital, divided by energy and materials. E) goods and services and energy and materials, divided by labor and capital.
A
70. Managers can increase overall productivity by A) increasing the efficiency of labor. B) decreasing the efficiency of labor. C) decreasing outputs. D) decreasing efficiency of capital. E) decreasing service output.
A
71. Which of the following statements about productivity is most true? A) Productivity is a matter of survival. B) The more goods and services that are produced the lower our standard of living. C) Recent productivity growth is likely a result of more efficient production methods. D) Labor productivity in services decreased from 1995 to 2001. E) Productivity is sharpened by monopoly.
A
73. _____________ is concerned with arranging tasks, people and other resources to accomplish the work. A) Organizing B) Producing C) Controlling D) Leading E) Planning
A
75. Which of the following is a result of a small problem mushrooming into a big one? A) cost overruns B) a merger C) an economic stimulus package D) a tax break E) a labor contract
A
83. Managers often use ___________, which provides four indicators for progress to measure performance. A) the balanced scorecard B) a strategic map C) measurement management D) a strategic scorecard. E) evidence-based management
A
94. A quality control system is an example of a ___________resource control. A) physical B) human C) financial D) informational E) capital
A
29. One of the reasons that measurement-managed firms succeed is that managers put trust in informal feedback systems.
F
3. The four management functions are planning, leading, strategizing, and controlling.
F
26. A positioning map is a visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals.
F
27. Strategy maps show the strategies of the company's closest competitors.
F
88. A(n) __________ is a visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals. A) positioning map B) strategy map C) multi-dimensional map D) customer map E) graphical interface
B
96. A drug test employed by an organization in its hiring process is an example of a(n) _______ resource control. A) physical B) human C) financial D) informational E) capital
B
98. A __________ control style uses rules, regulations, and authority to elicit employee compliance. A) decentralized B) bureaucratic C) market D) clan E) flat
B
68. Which of the following is a primary function of management? A) segmentation B) cooperation C) controlling D) globalizing E) positioning
C
72. _____________ is defined as monitoring performance, comparing it with goals, and taking corrective action as needed. A) Organizing B) Producing C) Controlling D) Leading E) Planning
C
74. Carlos, a manager, keeps track of customer returns. He is engaged in A) organizing. B) producing. C) controlling. D) leading. E) planning.
C
82. The amount of acceptable deviation from a standard is called the A) benchmark. B) range of exception. C) range of variation. D) feedforward control. E) zero-based control.
C
84. A UPS driver fails to perform according to the standards set for the route and traffic conditions. A supervisor rides along and gives suggestions for improvement. This is the ____________ stage of the control process. A) compare performance to standards B) establish standards C) take corrective action D) measure performance E) control productivity
C
91. Operational control is performed by A) top managers. B) middle managers. C) first level managers. D) the CEO. E) team leaders.
C
81. Which of the following is the most difficult-to-measure stated standard? A) more insurance policies sold this month than last B) no increase in cost of each item produced C) .5% of products rejected for poor quality D) lower energy costs compared to same month last year E) positive corporate culture
E
67. Which of the following is a challenge a manager will deal with in the 21st century? A) cultural rationalization B) economic instability C) leadership vacuum D) competitive advantage E) religious issues
D
86. "What must we excel at" is the question to be answered by which of the following balanced scorecard perspectives? A) external perspective B) financial perspective C) customer perspective D) internal business perspective E) innovation & learning perspective
D
89. Which of the following is a barrier to effective measurement? A) top executives agree on strategy B) the organizational culture emphasizes teamwork and allows risk taking C) communication is clear D) companies measure activities rather than results E) there is better focus and alignment
D
90. Which of the following is a mechanism that contributes to a measurement-managed company's success? A) companies focus on measuring activities instead of results B) managers put trust in informal feedback systems C) managers develop the measurement systems D) clear communication E) actions used to fine-tune the organization
D
92. Typically, strategic control is accomplished through reports issued __________. A) daily B) weekly C) monthly D) quarterly or less frequently E) randomly
D
93. An organization might ask for more frequent strategic control reports if the organization is A) a consumer packaged goods company. B) very small. C) formal in organizational structure. D) operating in an uncertain environment. E) decentralized.
D
97. Which of the following is an example of an informational resource control? A) performance evaluation B) accounts receivable data C) inventory management system D) production schedule E) employee job satisfaction survey
D
99. XYZ Corporation competes in a stable environment with minimal competition and "cash cow" products. XYZ should use a __________ control style. A) clan B) market C) decentralized D) bureaucratic E) tall
D
76. Control helps an organization A) adapt to change & uncertainty. B) detect opportunities. C) deal with complexity. D) decentralize decision making. E) do all of the above.
E
78. The second step in the control process is. A) evaluate performance. B) take corrective action, if necessary. C) establish standards. D) compare performance to standards. E) measure performance.
E
80. Standards may be A) narrow. B) broad. C) quantifiable. D) part of a balanced scorecard. E) all of the above.
E
87. "Can we continue to improve and create value" is the question to be answered by which of the following balanced scorecard perspectives? A) external perspective B) financial perspective C) customer perspective D) internal business perspective E) innovation & learning perspective
E
95. Which of the following is one of the areas of control for organizations? A) external resources B) decentralized resources C) ethical resources D) cultural resources E) informational resources
E
10. Controlling is setting goals and deciding how to achieve them.
F
14. A markdown on certain grocery-store items may result in a rush of customer demand for those products, which is an example of the ability to deal with complexity.
F
16. The second step in the control process is to compare measured performance against the standards established.
F
18. Standards are best measured when they can be made qualitative.
F
2. Productivity equals inputs divided by outputs.
F
21. When performance falls significantly short of the standard, managers should take quick action to resolve the problem, without worrying about the reasons for the shortfall.
F
43. Zero-based budgeting works best in small work units and departments that are decreasing in resources.
T
1. One way to improve productivity is to improve the match between employees and jobs.
T
11. One reason why control is needed is to allow the organization to adapt to changing government regulations.
T
12. Control systems can reduce labor costs but cannot decrease waste.
T
13. Small problems can mushroom into big ones which can potentially bring about the downfall of an organization.
T
15. Control systems allow top management to decentralize decision making at lower levels within an organization and to encourage employees to work together in teams.
T
17. A standard is the desired performance level for a given goal.
T
19. How much deviation from a standard is allowable depends on the range of variation built into the standards.
T
20. Management by exception is a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards.
T
22. Managers often use the balanced scorecard, which provides four indicators for progress, to measure performance.
T
24. The balanced scorecard establishes goals and performance measures according to four "perspectives" or areas.
T
28. You simply can't manage anything you can't measure.
T
33. Operational control is monitoring performance to ensure that operational plans—day-to-day goals—are being implemented and taking corrective action as needed.
T
35. Production schedules are a type of informational control.
T
38. Bureaucratic control works well in organizations in which the tasks are explicit and certain.
T
39. Incremental budgeting uses the last budget period as a reference point.
T
4. To achieve an increase in productivity, a manager can increase the efficiency of labor, but does not have to increase the efficiency of capital.
T
40. One difficulty with incremental budgets is that they tend to lock departments into stable spending arrangements.
T
42. One difficulty with zero-based budgeting is that it requires managers to spend more time justifying the need for more funds.
T