MGMT 371: Chapter 11

Organizational control is...

B. the regulation of organizational activities to facilitate goal attainment.

The basic purpose of control is...

E. All of these choices

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

E. Reliance on group norms.

World Vision has a flat structure that allows workers in countries scattered around the globe to respond to unique local cultures, situations, and needs. What control structure does World Vision use?

a. Decentralized

____ control is an approach to organizational control characterized by informal and organic structural arrangements.

a. Decentralized

Which of the following is NOT one of the characteristics of an effective control system?

a. Developed and implemented by top management

____ ratios assess the ease with which the assets of the organization can be converted into cash.

a. Liquidity

Which of the following statements is TRUE concerning what happens to control as the level of uncertainty increases?

a. Measurements need to be taken more frequently.

What characteristic of effective control systems is lacking when a control system reports production output as being better than average, satisfactory, marginal, or unsatisfactory?

a. Objectivity

Everyone working or volunteering for Girl Scouts has a background check before they can work with girls or handle money. What kind of operations control is this?

a. Preliminary

Which of the following is NOT a type of operating budget?

a. Production

To what part of a system are preliminary controls applied?

a. Resources

Which of the following is NOT characteristic of decentralized control?

a. Rewards focused on individual performance

Apple iPhones are notorious for cracked screens. When a customer brings one in to an iStore, the employee checks the customer records and may replace the screen for free. Which step in the control process does this represent?

a. Taking corrective action

A(n) ____ is a financial statement that lists all of the organization's assets and liabilities at a given point in time.

a. balance sheet

The ____ shows an organization's bottom line (profit or loss) and summarizes activities over a period of time.

a. income statement

Deirdre is a freelance editor. She knows how many chapters she needs to edit and approximately how long each chapter takes. She is calculating what she needs to do to meet her next deadline. She is making a ____ budget.

a. labor

90. On the end-of-year report for Yoplait yogurt, the division manager noted that "the gross margin for the product was lower than expected." This statement indicates that the control system used by Yoplait might lack

a. objectivity.

Booz Allen Hamilton requires employees to use a key that keeps track of how many copies they make on copy machines. Some employees resent the lack of trust. This is an example of...

a. overcontrol.

At the beginning of the planning-controlling process, planning

a. plays a major role in shaping the control process.

The University of Michigan develops a budget that shows its projected income from sources such as the state of Michigan, tuition and fees, alumni contributions, and research grants. This is an example of a(n) ____ budget.

a. revenue

During episodes of the Biggest Loser, contestants compete to lose weight and stay at the ranch, because someone leaves each week. This is an example of a ____ control.

a. screening

Secretary of Defense, Gates, shifted the pentagon's budget from expensive, high tech weapon systems to timely, responsive systems. Small defense contractors were more responsive to the change and won more contracts. In this case ____ control helped the small companies.

a. structural

Screening controls...

a. take place during the transformation process.

One barrier to effective communication is the filtering of upward communication. Which characteristic of effective control systems would this affect?

b. Accuracy

Where would you expect to find the following information: "XYZ Corporation has $746 million in assets and $593 million in liabilities on October 1, 2012?"

b. Balance sheet

A college admissions board required students to have certain grade point averages and SAT scores to be accepted at the school. What form of operations control do these requirements represent?

b. Preliminary

As the product being produced becomes more complex, which of the following types of operations controls would logically become more important?

b. Screening

General Plastics Corporation instituted a new absenteeism control policy that took effect the first day of June. It expects the new policy to result in a 25 percent reduction in absenteeism the first year. Like the previous policy, the new program counts vacation days as absenteeism. On the first of September, the personnel director evaluated the results of the program for the first three months and was disappointed to find that absenteeism had dropped only half of 1 percent. What is the likely problem?

b. The indicator of success was inappropriate.

A properly designed control system is important to an organization because it can be used to...

b. anticipate, monitor, and respond to changing circumstances.

The term objective as it relates to controls means that the controls...

b. are quantifiable.

The purpose of control is to...

b. assess organizational performance relative to some desired goal.

The last step in the control process is to...

b. determine the need for corrective action.

Cody Kretsinger was charged with a computer breach at Sony Pictures Entertainment. User data was stolen. Hackers now threaten companies of all sizes and require constant security updates. This is an example of the need for ____ control.

b. information

Participation in a control system...

b. is a technique for overcoming resistance to controls.

Internal audits tend to be...

b. more specific than external audits.

Politicians transform information from many sources into decisions about policies for the area they govern. When politicians "float an idea" by having a staff member leak it to the press to gauge reaction, the politician's staff is using ____ control.

b. preliminary

Thousands of people audition each year to be contestants on American Idol. The audition is an example of a ____ control.

b. preliminary

eBay partnered with Nielsen Co. to poll users about ads on eBay. Nielsen then packaged the information for advertisers. This was a response to advertiser complaints about the effectiveness of ads on the Internet. Verifying ad effectiveness of other companies before buying ad space on eBay is a ____ control for the businesses.

b. preliminary

Politicians transform information from many sources into decisions about policies for the area they govern. When politicians follow poll results during legislative debate, the politicians are using ____ control.

b. screening

Some investment firms require traders to take two consecutive weeks of vacation, so the traders' books can be reviewed. This is an example of..

b. verification procedures.

Which of the following is NOT a characteristic of effective controls?

c. Accountability

According to the text, what are the two broad schemes by which controls can be classified?

c. Area and level

Which of the following is NOT one of the areas on which strategic control should focus?

c. Audits

Which of the following statements does NOT describe a weakness associated with budgeting?

c. Budgets link planning and controlling.

You are a banker reviewing a loan application from a local business. Which of the following ratios would you look at to get a quick measure of the business's ability to meet its long-term financial obligations?

c. Debt ratio

John Hamann began his company making herb vinegars from a recipe his grandmother had given him. As demand grew, he had to buy a large commercial kitchen. Which of the following ratios would a banker have been most interested in before allowing Hamann to borrow $500,000?

c. Debt ratios

What is the problem with a university reward system that encourages faculty members to publish numerous research articles but fails to consider the quality of the articles?

c. Inappropriate focus

____ ratios indicate the effectiveness of specific functional areas rather than that of the total organization.

c. Operating

Cody Kretsinger was charged with a computer breach at Sony Pictures Entertainment. User data was stolen. Hackers now threaten companies of all sizes and require constant security updates. This example illustrates how a control system can be used to...

c. adapt to the environmental change.

The purpose of bureaucratic control is to...

c. get employee compliance.

Standards used in organizational control are most like...

c. goals.

Overcontrol is most problematic in areas dealing with ____ resources

c. human

A(n) ____ is a financial statement that presents a picture of the organization's financial performance over a period of time as opposed to a single point in time.

c. income statement

When Boeing bought the aviation parts and services company Aviall, it stated that it expected to have no initial change in earnings and the following year a modest gain. It was

c. integrating planning with control.

A plant manager is told that she has 8,000 labor hours to allocate in a week. This is an example of a(n) ____ budget.

c. nonmonetary

If Suzlon Energy Ltd. wants to focus on the strength of its wind-turbine division, it will use ____ ratios.

c. operating

Some managers at J.P. Morgan Chase viewed the CEO monitoring all of their expenses as too much involvement. They saw it as

c. overcontrol.

Amazon asks customers to rate their experience with the product and service. This is an example of ____ control.

c. postaction

Once a year Boy Scout troops submit financial reports describing income and expenditures. This is an example of ____ control.

c. postaction

Politicians transform information from many sources into decisions about policies for the area they govern. When politicians follow poll results after the passage of legislation, the politicians are using ____ control.

c. postaction

The percentage of graduates who find a job within six months of graduation is a ____ control for colleges and universities.

c. postaction

38. Postaction control is most appropriate when the

c. product being produced is simple and routine.

Brokerage firms on Wall Street are now closely monitoring research analyst's e-mails. If the analysts view this as inappropriate, the control system will be characterized by

c. resistance to control.

American Greetings Corporation reported that "its sales have been hurt by people increasingly using the Internet to communicate" and by "lower-priced competition including Hallmark's Warm Wishes line of 99-cent cards." As a result, it decided to lay off 13 percent of its full-time workforce. This need for cost-cutting measures would have been detected by its ____ control system.

c. strategic

FedEx focuses on top line⎯quality and customer satisfaction. UPS focuses on bottom line⎯efficiency and cost. They have differences in ____ control.

c. strategic

The credit crisis and the Federal Reserve's response to it faced criticism from Congress. The Treasury Department requested a review of the central bank's structure and governance. There is now broad support for auditing the Fed using the Government Accountability Office. The change in the economic and political environment of the Fed means the Fed needs to adapt its ____ control.

c. strategic

Army helicopter pilots follow a preflight checklist because small things here and there can add up to disaster in the air later. This illustrates...

c. why control is necessary to reduce the accumulation of errors.

Which of the following is a type of financial budget that deals with forecasting the organization's assets and liabilities in the event all other budgets are met?

d. Balance sheet

If a manager has a directive leadership style and works in an organization in which performance expectations are minimal, which control structure is most appropriate?

d. Bureaucratic

____ control is a form of organizational control characterized by formal and mechanistic structural arrangements.

d. Bureaucratic

Oshkosh Corp. hired hundreds of workers to meet an order deadline. The employee training process had to adapt. Which of the characteristics of an effective control system did the training system need?

d. Flexibility

Which of the following is NOT a major form of operations control discussed in the text?

d. Functional

Which of the following would NOT be included in the typical balance sheet?

d. Revenues

Businesses that use H-form or M-form organizational design may have several ____ who are responsible for helping line managers with their control functions, for coordinating the organization's overall control system, and for gathering and assimilating relevant information.

d. controllers

Anu is comparing the performance of her small landscaping business against the standards she established. When she has finished her comparisons, any of the following actions may be appropriate EXCEPT...

d. eliminate the control if things went as planned.

At the end of each fiscal year, managers report in their performance report if they are under budget. This is an example of a(n) ____control.

d. finance

You are looking at a document that has entries for such items as revenues, expenses, and profit. You are looking at a(n)...

d. income statement.

Managers can improve the effectiveness of the control system by

d. integrating control with planning.

McDonald's fast-food restaurants aim to fill each order within 90 seconds and to have no customer wait longer than 3.5 minutes. This is derived from the company's

d. organizational goals.

To the extent possible, standards used for control purposes should be derived from...

d. organizational goals.

Initially California Closets tried to limit employee access to Facebook. However, when Facebook became part of the company communication strategy, CC relented to employee Facebook access. Employees were happy because they thought the restriction was unreasonable. The employees perceived ____.

d. overcontrol

The level of control designed to ensure that the organization meets its goals is ____ control.

d. strategic

The Sarbanes-Oxley Act, passed after the fall of Enron and Arthur Andersen, requires accounting firms to separate the auditing function from the consulting function. This example illustrates...

d.how control helps organizations respond to changing standards.

Budgets...

e. All of these choices

Implementing the control process includes which of the following steps

e. All of these choices

The best way to integrate planning and control is to...

e. All of these choices

Which of the following statements about financial audits is TRUE?

e. All of these choices

After evaluation, an appropriate decision may be to...

e. Do any of these choices

Which of the following is an example of a financial control that allows managers to compare different elements of a balance sheet and income statement to one another?

e. Financial ratios

Which of the following is NOT a type of financial budget?

e. Profit

What is the MOST important factor in effectively integrating the planning and control functions?

e. Provide for controls as plans are developed

A production manager argues that the increase in absenteeism is caused by decreased recruiting and placement standards. The argument is supported by personnel documents. This is an example of...

e. checks and balances.

The ____ at McDonald's fast-food restaurants is to fill each order within 90 seconds and to have no customer wait longer than 3.5 minutes.

e. control standard

GE is highly leveraged. Financial analysts look at its ____ ratio to determine if it can make interest payments.

e. coverage

A(n) ____ ratio is a measure of the firm's ability to meet its long-term financial obligations.

e. debt

MTV has a(n) ____ perspective toward international strategic control. It does not require its various divisions (MTV Europe, MTV Australia, MTV India, MTV Latin America, and so on) to report in frequently. It believes in letting each manager have the authority to respond quickly to environmental changes. These changes do not have to be approved by MTV before they are implemented.

e. decentralized

Income statements, balance sheets, and audits are examples of the control of...

e. financial resources.

The ____ budgets are organizational budgets that outline quantities of product/service to be produced and what resources will be used.

e. nonmonetary

Google partnered with Nielsen Co. to poll users about ads on Google+. Nielsen then packaged the information for advertisers. This was a response to advertiser complaints about the effectiveness of ads on the social network. This indicates that Google is placing an emphasis on ____ controls.

e. operations