Management Ch 16

102. One effect of incremental budgeting is that it A) locks managers into stable spending arrangements. B) is flexible to changing environmental demands. C) is easy to compare different departments doing different activities. D) requires more time from managers than zero-based budgeting. E) has all of the above effects.

A

110. Another term for the return ratio is the A) ROI. B) liquidity ratio. C) cash ratio. D) asset management ratio. E) debt management ratio.

A

116. The process by which a company compares its performance with that of high-performing organizations is called A) benchmarking. B) statistical process control. C) continuous improvement. D) JIT analysis. E) outsourcing.

A

117. Reduction in the steps of a work process is also called A) reduced cycle time. B) reduced process control. C) reduced resourcing. D) restructuring. E) quality analysis.

A

125. Gambling casinos require their dealers to have licenses, observe them using closed circuit TV, and require detailed reports at the end of each shift. These organizations have overcome the control system barrier of A) overemphasis on one instead of multiple approaches B) overemphasis on paperwork C) overemphasis on means instead of ends D) too much control E) too little participation

A

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

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

101. A budget that allocates increased or decreased funds to a department by using the last budget period as a reference point is called a(n) A) standardized budget. B) incremental budget. C) zero-based budget. D) fixed budget. E) tactical budget.

B

103. One effect of zero-based budgeting is that it A) tends to work better for large work units. B) takes more time for managers than incremental budgeting. C) works best in times of increasing resources. D) locks managers into stable spending patterns. E) has all of the above effects.

B

104. A budget that allocates resources on the basis of a single estimate of costs is called a(n) ________ budget. A) zero-based B) fixed C) cash D) incremental E) variable

B

105. A(n) _________ budget allows resources to vary in proportion with various levels of activity. A) incremental B) variable C) zero-based D) fixed E) cash

B

107. A budget that projects future sales is called a(n) A) expense budget B) revenue budget C) cash budget D) capital expenditures budget E) cash flow budget

B

109. A(n) ___________ indicates how easily an organization's assets can be converted into cash. A) return ratio B) liquidity ratio C) debt management ratio D) asset management ratio E) activity ratio

B

112. TQM holds to two core principles A) financial health and financial stability. B) people orientation and improvement orientation. C) management and leadership. D) employee satisfaction and commitment. E) radical innovation and continuous improvement.

B

118. In Harvey's job, he takes random samples of production runs to ascertain quality. His job involves A) benchmarking. B) statistical process control. C) reduced cycle time. D) feedforward control. E) strategic control.

B

122. At Friendly Insurance, managers spend significant amounts of time on completing end-of-year reports. As a result, at that time of year, sometimes dealing with important customer issues is postponed. This is an example of A) overemphasis on one instead of multiple approaches. B) overemphasis on paperwork. C) overemphasis on means instead of ends. D) too much control. E) too much flexibility.

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

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

106. Sales have exceeded expectations at ABC Company this year, and Pete, the head of manufacturing, has hired temporary workers to supplement the existing work force. Pete is clearly operating with the use of a(n) ___________ budget. A) zero-based B) incremental C) flexible D) fixed E) cash

C

108. A(n) __________ summarizes the organization's financial results over a specified period of time. A) budget B) balance sheet C) income statement D) expense statement E) ratio analysis

C

113. The process of ongoing small, incremental improvements in all parts of an organization is called A) reengineering B) radical innovation C) continuous improvement D) MBO E) MBWA

C

114. A team that meets temporarily to solve a particular problem is called a A) quality circle B) self-managed team C) special-purpose team D) work group E) department

C

115. Eleven workers from different subunits at the Springfield plant of ABC Company meet monthly with their supervisors to discuss workplace problems, particularly those connected with production and waste in the department. This is an example of a A) JIT team B) self-managed team C) quality circle D) work group E) special-purpose team

C

120. Which kind of organization is most likely to try to exert too much control? A) clan B) market C) bureaucratic D) decentralized E) matrix

C

124. Two years ago, Jersey Office Supply Company changed the maintenance schedule on its delivery trucks by increasing the number of miles between oil changes and other preventive maintenance activities. This allowed them to forego purchasing another truck to cover when vehicles were out of service for preventive maintenance. Last year, however, Jersey trucks broke down about 50% more than the prior year. This is an example of A) overemphasis on one instead of multiple approaches B) overemphasis on paperwork C) overemphasis on means instead of ends D) too much control E) too little participation

C

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

121. At Friendly Insurance, claims adjusters are required to take their coffee breaks at specific times. If an adjuster is on the phone with a claimant at the time the break is scheduled, the employee risks losing part of his break time. This is an example of A) overemphasis on one instead of multiple approaches B) overemphasis on paperwork C) overemphasis on means instead of ends D) too much control E) too much flexibility

D

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

111. Which of the following is a principle of Deming management? A) Quality should be aimed at the needs of the consumer. B) Companies should aim at improving the system. C) Improved quality leads to increased market share. D) Quality can be improved on the basis of hard data. E) All of the above are Deming management principles.

E

119. Good control systems deliver good information to managers: A) immediately. B) every week. C) every month. D) every quarter. E) often enough to allow corrective action.

E

123. At XYZ Company, employees set daily production goals and check the quality of their own products. XYZ has overcome which of the following barriers to success of control systems? A) overemphasis on one instead of multiple approaches B) overemphasis on paperwork C) overemphasis on means instead of ends D) too much control E) too little employee participation

E

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

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

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. T/F

False

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. T/F

False

16. The second step in the control process is to compare measured performance against the standards established. T/F

False

18. Standards are best measured when they can be made qualitative. T/F

False

2. Productivity equals inputs divided by outputs. T/F

False

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. T/F

False

23. A corporate scorecard gives top managers a fast but comprehensive view of the organization via four indicators. T/F

False

25. Making improvements in the three operational perspectives of the balanced scorecard will translate into financial success. T/F

False

26. A positioning map is a visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals. T/F

False

27. Strategy maps show the strategies of the company's closest competitors. T/F

False

29. One of the reasons that measurement-managed firms succeed is that managers put trust in informal feedback systems. T/F

False

3. The four management functions are planning, leading, strategizing, and controlling. T/F

False

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. T/F

False

31. Strategic control is monitoring performance to insure that day-to-day goals are being met and taking corrective action when needed. T/F

False

32. Middle level managers do operational planning and control. T/F

False

34. Equipment controls used to monitor the use of computers are types of informational controls. T/F

False

36. Most organizations emphasize either bureaucratic or clan control. T/F

False

37. ABC Company stresses its shared values, beliefs, rituals, and trust. ABC is using bureaucratic control. T/F

False

41. Zero-based budgeting uses the amount from the last budget period as the new budget amount. T/F

False

46. A balance sheet summarizes an organization's financial results over a specified period of time. T/F

False

47. An income statement summarizes an organization's overall financial worth at a specific point in time. T/F

False

48. The practice of evaluating financial ratios is called budget analysis. T/F

False

49. An external audit is a formal verification of an organization's opportunities and threats by management consultants. T/F

False

50. An internal audit is a verification of an organization's financial accounts and statements by outside experts. T/F

False

51. A principle of Deming management is that workers are at fault for production problems. T/F

False

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. T/F

False

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. T/F

False

6. The longest economic boom in America occurred during 1990-1995. T/F

False

60. Six sigma is based on qualitative observations, not hard production and/or quality data. T/F

False

63. Control systems should leave no room for individual judgment. T/F

False

65. Involving employees in the planning and execution of control systems can lower employee morale. T/F

False

1. One way to improve productivity is to improve the match between employees and jobs. T/F

True

11. One reason why control is needed is to allow the organization to adapt to changing government regulations. T/F

True

12. Control systems can reduce labor costs but cannot decrease waste. T/F

True

13. Small problems can mushroom into big ones which can potentially bring about the downfall of an organization. T/F

True

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/F

True

17. A standard is the desired performance level for a given goal. T/F

True

19. How much deviation from a standard is allowable depends on the range of variation built into the standards. T/F

True

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/F

True

22. Managers often use the balanced scorecard, which provides four indicators for progress, to measure performance. T/F

True

24. The balanced scorecard establishes goals and performance measures according to four "perspectives" or areas. T/F

True

28. You simply can't manage anything you can't measure. T/F

True

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/F

True

35. Production schedules are a type of informational control. T/F

True

38. Bureaucratic control works well in organizations in which the tasks are explicit and certain. T/F

True

39. Incremental budgeting uses the last budget period as a reference point. T/F

True

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/F

True

40. One difficulty with incremental budgets is that they tend to lock departments into stable spending arrangements. T/F

True

42. One difficulty with zero-based budgeting is that it requires managers to spend more time justifying the need for more funds. T/F

True

43. Zero-based budgeting works best in small work units and departments that are decreasing in resources. T/F

True

44. A fixed budget allocates resources on the basis of a single estimate of costs. T/F

True

45. A variable budget allows the allocation of resources to vary in proportion with various levels of activity. T/F

True

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/F

True

52. PDCA stands for "plan, do, check, act." T/F

True

53. The two core principles of TQM are a people orientation and an improvement orientation. T/F

True

54. TQM assumes that it's better to do things right the first time than to do costly reworking. T/F

True

55. The RATER scale enables customers to rate the quality of a service along five dimensions. T/F

True

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/F

True

58. Reduced cycle time means a reduction in steps in a work process. T/F

True

61. Lean Six Sigma focuses on problem solving and performance improvement. T/F

True

62. Managers should develop control standards when they are developing strategic plans. T/F

True

64. Bureaucratic organizations are more likely to try to exert too much control. T/F

True

7. Productivity, argues William Lewis, founding director of McKinsey Global Institute, is produced by product market competition. T/F

True

8. The purpose of controlling is to make sure that performance meets objectives. T/F

True

9. Control is making something happen the way it was planned to happen. T/F

True