Chapter 19 MGMT
Aaliyah is reviewing a list of the assets and liabilities that the company currently holds. What is Aaliyah looking at?
A balance sheet
Which of the following control systems is likely to be highly effective?
A control system that provides objective information
Why should a firm periodically examine its structure?
To determine whether it is facilitating the attainment of its strategic goals
Marah is reviewing how well her employee, Ozlem, managed her budget this year. Why would Marah review how well Ozlem managed her budget?
To evaluate the performance of Ozlem and her organizational unit
Why are more and more companies adopting screening controls in the transformation process?
To increase employee participation
What is the goal of effective controls in organizations?
To successfully regulate and monitor activities
Why is it important to provide checks and balances in control systems?
To verify the accuracy of performance indicators
Timeliness means providing information when necessary. When would the need for timely information be high?
When circumstances are unstable
When are attempts to control procedures in the workplace most likely to become problematic, and when are employees more likely to resist control?
When employees feel they are unreasonable
When is a control system considered to be flexible?
When it can accommodate change
When do postaction controls occur?
When the transformation process is complete
Bureaucratic control is an approach to organization design that is characterized by _____.
formal and mechanistic structural arrangements
Sushil wants to ensure her employees are making enough effort to handle their responsibilities in a timely manner. To do this, Sushil set up performance standards, and employees fill in weekly control sheets that report their activities. Which element of control is Sushil implementing?
Accountability
Raj has been hired to review the financial records for a mid-sized company in the area. The company hired Raj to ensure the organization's accounting proceed and financial statements are compiled accurately, and information can be verified. What has this company asked Raj to conduct on its behalf?
An external audit
Raphael's department failed to meet standards set in the control process. Raphael needs to determine appropriate corrective action. What should Raphael use to determine which type of corrective action is most appropriate?
Analytic and diagnostic skills
Which of the following shows a list of assets and liabilities of an organization at a specific point in time?
Balance sheet
Which organizational design uses a tall structure with top-down influence?
Bureaucratic
Which type of control has the goal of employee compliance?
Bureaucratic
Gnomatics relies on numerous rules to regulate employee travel, expense accounts, and other expenses. Its performance appraisal system precisely specifies minimally acceptable levels of performance for everyone. These are characteristics of which approach to organizational design?
Bureaucratic control
RadTrek focuses rewards on individual performance. It insists that employees meet minimally acceptable levels of performance and allows limited and formal employee participation. These are aspects of which approach to organization design?
Bureaucratic control
What is the best way to integrate planning and control?
By accounting for control as plans develop
How can a manager help to overcome resistance to control?
By developing verification procedures
Managers at Sparky's Auto Parts decided to broaden their product line beyond spark plugs. They decided on the level of sales they wanted for each product for each of the next five years. How has Sparky's linked their control system?
By integrating it with planning
EMCW is a large international business with interests in most developed nations. In order to meet certain benchmarks, there must be a certain level of consistency throughout the operations, as well as regular reporting to the home office. Which type of strategic control function should be used here?
Centralized
Under which system of strategic control will managers from the home office visit foreign branches to observe firsthand how the units are functioning?
Centralized
Which control strategy allows the home office to stay better informed of the performance of foreign units and have more control over how decisions are made?
Centralized
During a review, Zereth found that the established standards were too difficult to reach without sacrificing quality. What should Zereth do about the current standards?
Change the standard.
While testing new computer code, Software Is Us found the program does not work the way it intended. Which step has it reached in the control process?
Considering corrective action
Which of the following is true of organizations using bureaucratic control?
They rely on strict rules and a rigid hierarchy.
How do organizations describe the regulation of organizational activities in such a way as to facilitate goal attainment?
Control
Before the control process can be implemented, a firm needs to set a target against which it will compare performance. What needs to be established?
Control standard
Teresita is responsible for helping managers control activities and gathering and assimilating relevant information for decision making. Which type of position does Teresita have in the organization?
Controller
Maria has been analyzing the company's various financial statements, and she has some concerns regarding the company's ability to make the interest payments on its loans. What type of ratio should she calculate to fully assess this aspect of the company's financial health?
Coverage
Pallavi is a manager who practices decentralized control, and she has a good detail of control over what is acceptable in terms of employee behavior, and what is not. Last week, one of Pallavi's employees wore shorts to work. While there is no formal dress code, Pallavi found this attire to be too casual and unacceptable. She is now concerned that other employees will wear shorts to work as well. What can Pallavi do to ensure this behavior does not continue?
Deal with inappropriate attire on a case-by-case basis.
Raul wants to determine the company's ability to meet long-term financial obligations. Which type of ratio should Raul look at to find this information?
Debt
Purity Water Filtration Systems (PWFS) is a large international business with interests in most emerging nations. Varying conditions in each nation require that each division be free to develop localized approaches to satisfy the unique needs of each market. Actions that grow sales in one country are not necessarily effective in the others. Which strategic control perspective should this company use?
Decentralized
TravelTrek is an international company that specializes in the travel industry. The home office does set some standards and benchmarks, but the local offices have a lot of freedom to make their own decisions toward meeting those goals. Which strategic control perspective does TravelTrek take with their international offices?
Decentralized
As a small business owner, Azim wants to hire only those people who will show a high level of commitment to the company. If that were the only factor to consider, which approach to organization design would be most appropriate for Azim?
Decentralized control
What is the focus of a strategic control strategy?
Determining how well strategies achieve organizational goals
When Mikel began the redesign of the plant floor layout, he knew some employees would resist the changes he was likely to propose. What should Mikel do to overcome this resistance?
Encourage employee participation.
Which of the following is an example of control of information resources?
Environmental analysis
Which area of control is considered to be the most important area because it is related to the control of all other resources in an organization?
Financial
Which type of control is used for managing resources that flow into the organization, such as revenue and shareholder investments, and those resources that flow out of the organization, such as wages, salaries, and expenses?
Financial
One of Mikel's suppliers experienced a fire at its plant, and shipments were going to be delayed by three weeks. Which type of control system would help Mikel respond to this change?
Flexibility
In a decentralized organization, where are rewards generally directed?
Group performance
Even though internal audits are more expensive than external audits, many employers do them. What is the advantage to an internal audit?
Identification of significant aspects of accounting systems, other than technical correctness
One of Amina's employees reported increased customer satisfaction levels and reductions in the time it took to handle customer complaints. However, Amina's employee overinflated these claims, and they were simply inaccurate. What is the likely result of this inaccurate information for Amina?
Inappropriate managerial action
Which of the following is used to summarize financial performance over a period of time?
Income statement
In an organization with bureaucratic control, where are rewards generally directed?
Individual performance
What is the focus of preliminary controls?
Inputs
Which of the following is true of an organization with decentralized control?
It has organic structural arrangements.
Which of the following is a disadvantage of postaction control?
It is not as effective as preliminary or screening control.
Which of the following is a characteristic of an effective control system?
It is timely.
Which of the following is true of screening control?
It is useful in identifying the causes of problems.
Maria is the controller for a specialty spice company. She oversees the firm's budget process. When she first arrived at the company, top managers made resource allocation decisions as they saw fit for pursuing strategic goals. When Maria became the controller, she dissolved the committee in order to strengthen the budget process. What is the advantage of using a departmental budget instead of a top-down approach to budgeting?
It will enable coordination and communication between divisions.
Ramkumar asks each division head to provide him with operational plans that forecast production levels and the human resources needed to achieve them so that he can create a budget for this. Which type of budget does Ramkumar plan to develop?
Labor
Which of the following is one of the aspects of strategic control?
Leadership
Kaia has been analyzing the company's various financial statements. She knows that the value of the company's assets would more than cover the purchase price of some new equipment, but she needs to determine how quickly she can turn some of those assets into cash. Which type of ratio should she calculate?
Liquidity
Laura is the controller of Master Tractor Ltd., and she has extended the decentralized control systems in place at Master Tractor in an effort to better align the efforts of her department with the structural performance of the company. Which of the following conditions would explain Laura's decision to strengthen Master Tractor's decentralized control system?`
Master Tractor has a flat organizational structure.
Which type of budget is a budget for hours of direct labor considered to be?
Nonmonetary
Atmir is reviewing financial statements to understand the effectiveness of each specific functional area. Which type of ratio should Atmir review?
Operating
At which level of an organization is a nonmonetary budget most likely to be used?
Operating unit heads
Which level of control is quality control considered to be?
Operations
The customer service techs at LWC Co. wear uniforms so that they are easily recognizable when they go out to service accounts. Whenever changes need to be made to the uniforms, various options are assembled, and the service techs are polled to help choose the new uniforms. What is LWC Co. using to overcome any resistance to the new uniforms?
Participation
When managing the construction of a new building, Anke has a specific schedule that must be followed. An error or backup in one aspect could delay the entire project. What can Anke use to ensure the project is on track?
Performance indicators
Purity Water Filtration Systems uses a reverse osmosis double pass system to purify water for industrial applications. Water purity is monitored continuously through the filtration operation to achieve 99 percent removal of total dissolved solids (TDS) and 97 percent of naturally occurring organics. This afternoon, water tested at the end of the batch run indicated TDS levels of 1.8 percent. Which form of operations control was used to determine TDS and organic content levels after the filtration process?
Postaction
Quality assurance testing of the gold master version of a software program is an example of which type of control?
Postaction
Which type of control can alert managers that an employee has exceeded expectations and deserves recognition?
Postaction
A new employee training program represents which form of operations control?
Preliminary
Everyone who works at Smiles Elementary School must complete a thorough background check and drug testing before being hired. Which type of control is Smiles Elementary School using?
Preliminary
Hiring only qualified employees and ordering parts that meet high quality standards are two examples of which type of control?
Preliminary
Jacob's Kosher Deli ensures that all ingredients and food products that come into the restaurant are kosher. Which type of control is Jacob's Kosher Deli using?
Preliminary
Stan works at the receiving dock at Midwestern Textiles. He checks every bolt of fabric that is delivered to the warehouse to make sure it matches all of the specifications listed on the spec sheet before entering it into inventory. Any shipments not matching the specs are returned to the supplier. Which type of control is Stan using?
Preliminary
The local television network received a tip about a news story. Before the network shared the story, it investigated the accuracy of the information. Which type of control monitors the quality of information before it enters the organization?
Preliminary
Pallavi is determining how many units of production she has to complete each shift to make her goal this month. Which type of budget is she developing?
Production
L'Meese's organization has experienced rapid growth and has expanded into the South American market. Since completing the new facility three years ago, the company's South American division has struggled to meet strategic goals of growth and full-scale production. How should top management handle the strategic control variance?
Replace the leaders of the South American division.
Ugar manages his budget based on forecasts provided by each department manager. The amount of income each department expects to receive from normal operations is included in these forecasts. Which type of budget is Ugar using?
Revenue
Purity Water Filtration Systems uses a reverse osmosis double pass system to purify water for industrial applications. Water purity is monitored continuously through the filtration operation to achieve 99 percent removal of total dissolved solids (TDS) and 97 percent of naturally occurring organics. Which form of operations control is being used to monitor TDS and organic content during the filtration process>
Screening
Quality assurance testing of all alpha and beta versions of a software program is an example of which type of control?
Screening
On the production line, all employees must have a quality level of 99 percent or higher. Which of the following elements of control is this?
Standard
Aviva is attempting to establish control standards for her department. What should Aviva include in the standards she develops?
Standards that are expressed in measurable terms
Rabeya developed a line of gluten- and dairy-free power bars that is gaining the attention of health-minded consumers. Brand awareness is growing rapidly. Future sales growth will depend on rapid expansion into new locations and through new types of sales channels. The extent to which Rabeya is able to meet these expansion goals should be regulated through which control measures?
Strategic
Which type of control focuses on structure, leadership, technology, human resources, and information and control systems of organizations?
Strategic
Which type of control is aimed at ensuring that an organization is maintaining an effective alignment with its environment and moving toward achieving its strategic goals?
Strategic
When Lupita has a question about her work, she finds that she has a difficult time determining where to go for help. Sometimes she is directed to ask her manager, sometimes a client, and sometimes a coworker. Which element of control is ineffective in Lupita's department?
Structural
The new CEO of EMCW has started to initiate a number of changes to the company. One of his initiatives is to shift from a U-form to an M-form design to spur growth. This change falls into which aspect of strategic control?
Structure
Which of the following is a potential disadvantage of using a budget?
The budget can be applied too rigidly.
Laura is the controller of Master Tractor Ltd., an international tractor supply and equipment company with distribution outlets located in 18 countries. She is evaluating Master Tractor's organizational design and improving the company's structural controls based on systems that will work in each country where an outlet is located. Which of the following conditions calls for Laura to use a decentralized control system?
The company relies on group norms and a strong organizational culture.
Bhavik has established a timetable for comparing performance to standards. What should he keep in mind when he sets the timetable?
The complexity of the work
What does a screening control process rely heavily on?
The feedback process
Why are financial budgets considered to be critically important to an organization?
They indicate where resources will be coming from and how they will be used.
Moto To Go, a large rental car company, recently increased its fleet by purchasing a significant number of SUVs. Rentals have not increased as forecast because of the high cost of fuel, and many of these SUVs sit on the lots. A market review indicated that, while SUVs were quite popular the year the new vehicles were purchased, consumers are now looking for more fuel-efficient rental vehicles. This illustrates the need for control systems that _____.
adapt to environmental change
Control systems are more effective when they are timely, meaning that information is shared _____.
as often as necessary
Rapher Systems and Gibson Tech recently merged. Their many different systems needed to be revised to work together, and many decisions needed to be made about suppliers, processes, and goals. While the long-term forecast for the new entity is promising, the short-term results have been disappointing. This illustrates the need for control systems that _____.
cope with organizational complexity
Stan works for Moto To Go, a large rental car company. Before he was able to work independently in his job, he had to complete four training courses. Stan had to pass each course with a minimum achievement level of 90 percent. Moto To Go's new employee training program is a method of control over the company's _____.
human resources
LWC Co. publishes a weekly magazine. The editorial team is required to meet an exact deadline every week in order to secure the guaranteed press time. As a result, they are not always able to follow all leads or check facts in the stories they run. The magazine tends to have errors that could have been avoided. The control system at LWC suffers from _____.
inappropriate focus
Stan works for Moto To Go, a large rental car company. Before he was able to work independently in his job, he had to complete four training courses. Moto To Go's new employee training program serves to ensure tight control of the company's _____.
operational processes
Tariq finished his current project four days ahead of schedule. This is the second time this year he has beat his deadline. However, rather than turning in the completed work and securing his next assignment, Tariq holds on to the project until the due date. He is concerned that if he consistently beats his deadlines, the manager will start giving him shorter schedules on all his projects. Tariq's resistance to control is based on _____.
rewards for inefficiency
A capital expenditure budget shows _____.
the costs of major assets such as a new plant, machinery, or land
LWC Co. tracks errors made by employees on a daily basis. Any day that an employee makes three or more errors, a reprimand is entered into that employee's personnel file. At the start of each project, employees tend to make more errors. But after three or four days, most employees work error-free and do so for the remainder of the project. However, most employees at LWC have multiple reprimands in their files for exceeding the daily error allowance, which has led to a drop in morale and lower productivity. LWC is facing resistance to control because of _____.
too much accountability
