MGMT 371 Chap 5, 6, 7, and 8

At the end of the year, you check your household budget and compare it to what you projected at the beginning of the year. This is a form of ___________ control. Feedback Feedforward Concurrent

Feedback Explanation Because it occurs after an action (a years worth of spending in this case), it is a form of feedback control. The initial budget at the beginning of the year is a form of feedforward control. Maintaining the budget during the year is a form of concurrent control.

You're thinking about opening a restaurant. You know that production planning is critically important to your business. Which of the following isn't an important decision to made in order to ensure that your operations are as effective as possible? How food will be produced and served to customers Where your restaurant is located The floor plan of the restaurant that allows for smooth and efficient service How your customers will find parking.

How your customers will find parking. Explanation There are four important decisions to make to be effective: how the product is made, where it is made, designing an efficient layout, and detailed production plans. Customer parking is important, but it isn't part of production planning.

When I travel, I plan every step of the trip. I have all of the hotels booked. I have all of the transportation tickets purchased. I know exactly how much money I have to spend on the trip. During the trip, I track how much I have spent and monitor how much is left. Which of the following benefits of control is described by this scenario? Improved quality Opportunity recognition Improved cost control Managing uncertainty

Improved cost control Explanation I'm controlling my costs by having a defined budget for the trip.

Control in the life of managers is how they learn what works and doesn't work for the organization through feedback. True False

True Explanation The control step of the managerial life cycle is the basis of learning. By measuring performance in the organization, it tells managers what works and doesn't work through a feedback loop into the next stage of planning.

Barriers to entry act to prevent competitors already in the industry from competing against your company. True False

False Explanation Barriers to entry exist to prevent NEW competitors from entry the industry. It does nothing to help with current competitors.

You come in to work one day to find out that you've been loaned out to another department that needs help. You go to see what you need to do and your new supervisor gives you some work. When you get back to your desk, your primary supervisor is standing there and asks when you're going to finish the project she gave you. You get frustrated and start to feel sick your stomach from stress. What is the problem in this situation? Unity of Command Line of Authority Span of Control Formalization

Unity of Command Explanation In the ideal world, everyone just has a single supervisor to direct their actions at work. It prevents confusion and stress on the part of employees.

The first step of the control process is to _______________. measure performance using observations, statistical evaluation, and reports establish standards by which you'll measure performance take managerial action to correct performance compare results of measurement to performance

establish standards by which you'll measure performance Explanation The first step is always to have standards aligned with your strategic goals that you can measure performance against.

It is really important to your career for you to have good social relationships with people beyond your department because the informal organization is an important source of all of the following except _____________. information about the culture information flows gossiping about your co-worker's private lives recognition

gossiping about your co-worker's private lives Explanation All of these are important, except for the gossiping about co-workers private lives. People do gossip about the organization and that's fine. However, gossip about private lives is really tricky, but nothing good can happen to you if you do it. Otherwise, being in on information flows, recognition, and understanding the culture of the organization is really important to your career.

Which if the following would give a company a sustainable competitive advantage? Your products are on sale and customers are buying them more than your competitors. You have a new advertising campaign that does a great job of showing the benefits of your products when compared to your competitors. A secret and proprietary method for enhancing the value of your product to customers that other companies don't know and will not be able to figure out for many years. The trucking company that operates your supply chain is the best in the country.

A secret and proprietary method for enhancing the value of your product to customers that other companies don't know and will not be able to figure out for many years.

Which of the following is an intangible barrier to imitation? A perfect location for a distribution center The world's fastest machine for manufacturing your products An effective and efficient operations team A patent that protects your intellectual property

An effective and efficient operations team Explanation The only real intangible barrier to imitation is the people who work for you because it is impossible to identify how and why teams work the way they do. Anything that you can definitely point to as a VRIO resource can be copied.

Business has been going great, but you feel like it is time to expand. In your strategic analysis, you noticed that one of your vulnerabilities is supplier power. In particular, you have a very important supplier who leverages their power over you to extract higher than prices than you want to give. Which strategic action should you take to fix this problem? Forward vertical integration Backward vertical integration Horizontal integration Single product growth development

Backward vertical integration Explanation Your supplier is down the supply chain. By engaging in backward vertical integration, you are purchasing your supplier and making it part of your organization. Therefore, you less the effects of supplier power in your strategic plans.

Every year, managers perform evaluations of their employee's performance. Some managers give each employee the same score regardless of how they performed. So, the good workers receive the same rating as the bad workers. This causes the good workers to become demotivated and reinforces the poor effort of the bad workers. What cost of control is this scenario describing? Decreased responsiveness Bad implementation Damage to culture and reputation Financial costs

Bad implementation Explanation By not thinking of the consequences of their control decisions, the managers are rewarding the wrong behaviors. There are no more financial costs in this scenario, nor are there unseen events causing decreased responsiveness. This is the opposite of tight controls as the managers are actually being lazy about their ratings.

Your company follows strategic plan based on the differentiation of your product. You've been assigned to create a plan for your business unit. Which of the following plans should you choose if you want to ensure that the organization gets the most benefit from your plan? Change the quality assurance plan to allow higher defect rates, but faster production speed. Put a plan into place to off shore all of your manufacturing to countries where labor is cheaper. Create a budget that cuts as much Research and Development cost as you can. Budget time in each person's work week that allows them to be innovative and creative in their job tasks.

Budget time in each person's work week that allows them to be innovative and creative in their job tasks. Explanation The operational plan must fit with the company's strategic plan. In this case, the strategic plan is based on differentiation. That means the operational plan must be differentiation as well, which means it must be number 4. Answer 1-3 are all focused on cost reduction. Faster production at the expense of quality. Cheaper labor. Cutting R&D costs. These are all plans that align with cost leadership.

If you were trying to figure out what your competitors were doing so you could form an effective strategic response, which of following should you do as an ethical manager? Have one of your employees hired in to you competitor so that can send trade secrets to you Hire away your competitor employees and encourage them to violate their non-disclosure agreements Carefully analyze your competitors SEC filings Hire someone to hack your competitor's email system so you can have access to all internal communications

Carefully analyze your competitors SEC filings Explanation It is only ethical to use publicly available information to base a strategic response, so using SEC filings is the correct answer. All of the other options are forms of information theft.

Which common organizational structure would you recommend in the following situation? You've owned a business that provides clothing for science fiction fans that allows them to look like their favorite characters. You expanded your business to have product lines for Star Trek, Star Wars, Marvel, and DC. The business is currently has a functional structure, but you've starting wondering if you shouldn't change that structure. Your recent strategic plan identified the need to place focus on the needs of each of those product lines because they're each unique with different opportunities and challenges and the lack of focus has been harming your business. Which organizational structure should you choose based on the information in this question? Stay with the functional structure Change to a product structure Change to a customer structure Change to a matrix structure

Change to a product structure Explanation The answer to these questions is to always follow the strategy. The strategic plan said focus on products, so you should switch to a product structure

If you consider overall performance in this course as the goal of interest (i.e., how much you've learned as reflected by the final grade), these in-lecture quizzes would be considered what type of control? Feedforward Concurrent Feedback

Concurrent Explanation With the goal being learning management by the end of the semester, these in-lecture quizzes would be considered to be occurring in the process of you learning. So, they would be considered concurrent controls. Feedforward controls would have to occur before the course started. Feedback control is your final grade.

Personhood is a defining characteristic of what form of ownership? Corporation Sole proprietorship Partnership Limited Partnership

Corporation Explanation Corporate personhood is an important characteristic of corporations.

Which of the following is not a reason for you to use just in time inventory management? Decreased use of EDI Warehouse space is expensive Every time you order, there are costs associated with it. Decreased possibility of damage in the warehouse

Decreased use of EDI Explanation Decreased EDI would actually be detrimental to JIT inventory. You want to keep inventory levels as low as possible because storage is not free, there is a possibility of damage when product is in the warehouse, and every time we reorder there are costs associated with it.

Once you have a plan in place to accomplish something, there is typically no reason to revisit it and adjust based on what happens as a result of the plan. True False

False

Which is the following is not a characteristic of an operational plan? One to six month time frame Not very complex Limited to a single department or functional unit Integrates resources and capabilities from across the organization

Integrates resources and capabilities from across the organization

You decide that you want to pursue a cost leadership strategy with your company. Which of the following should you pursue to ensure that your strategy is successful. Invest in research and development Purchase only the highest quality materials for your products. Invest heavily in branding and product design. Invest in machinery that allows the most efficient production in the industry.

Invest in machinery that allows the most efficient production in the industry. Explanation By investing in efficient machinery, you are using special technology to become the lowest cost producer. All of the other options should be used if you're trying to differentiate your product.

All of the following are benefits of a geographic structure except? Deep understanding of regional markets Less duplication of functional units across regions Regional managers feel ownership over their divisions Increased responsiveness to changes in the general environment of a geographic region.

Less duplication of functional units across regions

An embargo would be considered what time of force in a PESTEL analysis? Political Environmental Technological Sociocultural

Political

You're trying to decide whether to start a new business in the tea industry. You have an agreement to purchase one of the three most popular tea brands in the world. Although coffee is popular in the US, worldwide the market for tea is 4 times that of coffee and it is expanding at 8% per year, which is great. One of the reasons that this brand is so popular is that it has exclusive access to the best region in India to grow tea, so its teas are the highest quality. The ten year contract for these teas was signed nine years ago, so it will be negotiated again soon. Although there is competition in the industry, tea is a differentiated product with different flavors and quality and each company has identified and established their distinctive competency. Which of the five forces would you be most worried about in this scenario? Threat of entry Threat of substitutes Power of suppliers Intensity of rivalry

Power of suppliers

One day, Tupelo Furniture Company (TFC) might make couches and the next day it might make dining room tables on its production floor. It has dozens of products that it hand crafts from raw materials this way. What would you consider TFC's facility design to be? Fixed position Process Cellular Product

Process Explanation It is process because there is a small quantity of a large number of products made. Assembly line would just be a large number of couches. Fixed position would have just a single couch or table being made per day. Cellular would just have them assembling the product from pre-crafted pieces.

If you're in a course and the professor takes three weeks to return graded assignments to you, what key to control success is the professor failing at? Regular feedback Impartial results Strategically derived controls Validity of links between control and performance

Regular feedback Explanation In this case, the professor isn't providing regular feedback. Because you're not getting timely feedback, you don't know how to adjust your learning activities quickly enough for you to be successful. By the time you get feedback, you've already passed three weeks worth of assignments and three weeks of learning opportunities.

You start your first job out of Ole Miss and your company sees your potential very quickly. So, less than a year out, they tell you that want to make you a supervisor of a group and they let you pick which one you want to supervise. Given that you're new without a lot of experience, which of the following groups should you choose if you want to ensure being successful? Large group with some employees in Boston and some employees in Memphis Small group with some employees in Boston and some employees in Memphis Large group with everyone in the same location Small group with everyone in the same location

Small group with everyone in the same location Explanation As a new supervisor, you want to the smallest group possible in a single location so you can maximize the amount of attention you give to ensuring that your managerial actions are effective.

Which of the following is a good idea to include when planning? A small group of people who take all available information and make a comprehensive plan for the entire organization. Someone who's job it is to question the underlying assumptions that form the basis of the plan A full description of what competitive rivals have done in the past.

Someone who's job it is to question the underlying assumptions that form the basis of the plan Explanation You want someone to be a devil's advocate in the planning process, so #2 is the correct answer. #1 falls in the pitfall of being too decentralized. #3 describes a rivals past actions, not their future ones.

At the beginning of the semester, a student decides that they would like to achieve an A in a course. To do this, they know that they need to achieve a 90% on assignments on average. They also know that their typical performance on assignments is + or - 5%. On their first exam, they achieve a score of 82%. As a result, they know they need to make changes to how they're working on the class. This is an example of using what kind of tool to control performance? Gantt chart Lean manufacturing Statistical process control Balanced scorecard

Statistical process control Explanation By having a mean and an upper and lower bound, the student is setting acceptable performance standards. When they deviated beyond the lower standard, they enacted changes to their processes. This is statistical process control.

What is the benefit of being a franchisee? Easy to expand because someone else is providing the investment into the location They do not control its product or service, so there is potential for bad actions. Strong branding and effective operational processes are supplied to them They have full control over operations and can run their store as they please.

Strong branding and effective operational processes are supplied to them Explanation The primary benefit to being the person who purchases a franchise is that all of the details about branding, operations, and supply chain are complete, so none of that has to be figured out.

Why should you use a networked structure? You're able to focus your efforts on distinctive competencies instead of being distracted by other organizational activities. You're much better able to pursue a differentiation strategy with a networked structure over others. By outsourcing your procurement, you're able to protect your important intellectual property. Through the outsourcing of important functions, your define your strategy by what you don't do as much as by what you do.

You're able to focus your efforts on distinctive competencies instead of being distracted by other organizational activities. Explanation The primary reason to use a networked structure is to allow you to focus on the thing you do well and is important to your competitive advantage, while being able to let the things you don't do well be handled by others.

The main reason companies use ________________ is that there are factors other than financial performance that are important to the success of firm over the long term. financial controls feedback controls a balanced scorecard internal processes

a balanced scorecard Explanation By using a balanced scorecard to measure performance, companies can evaluate overall performance in addition to financial performance to ensure that they're achieving their non-financial strategic objectives.

When conducting an internal analysis, it is important to ______________. be able to identify one primary activity as a distinctive competency be able to identify logistics as a distinctive competency be able to identify one secondary activity as a distinctive competency be able to identify After-sale service as a distinctive competency

be able to identify one primary activity as a distinctive competency Explanation Your company must be good at something that is a primary activity. It doesn't matter which one it is, but this is where profitability is generated for the firm.

Which of the following is a substitute for the information about politics that people receive from the television industry? movies streaming services newspapers computer games

newspapers

In order to start every day right, you plan to get up, exercise, and have coffee and a small breakfast. This plan is considered a _____________ plan. contingency standing single-use

standing

Planning is important because _________________. plans help managers focus only on their goals and not the organization's plans give a pathway for accomplishing a goal in the most efficient and effective way possible plans create a structure that prevents new ideas from being implemented plans create structure that locks organizations on to a path to ward off the negative influence of customer needs

plans give a pathway for accomplishing a goal in the most efficient and effective way possible

I'm starting a custom motorcycle shop where I take a customer's vision and I build a one-of-a-kind motorcycle for them to purchase. For example, you might want an Ole Miss motorcycle, so I would design and build one from scratch that has a giant shark fin. This would best be characterized as what kind of production system? jobbing project batch mass production

project Explanation Because the production is completely unique, this would be considered a project production system.

At your company picnic, they hold a sack race where each person has to put both of their feet in a sack, hop 25 meters, and then tag their team mate. Then their team mate does the same thing until all four team mates have completed their section of the race. What kind of interdependence is this sack race? reciprocal sequential pooled dependent

sequential Explanation In sequential interdependence, the first person completed their part of the task then hands it off to the next person who does the same thing until the task is complete. In pooled, each person completes there part and brings them together to put the parts together. Reciprocal is a little both in that each person works on their own but passes the parts around like sequential.

Competitive intelligence as described in Chapter 5 is a form of ___________ control. operational implementation strategic

strategic Explanation It fits broadly under strategic control because you are checking the environment for information about the state of the industry and, in particular, for any changes. Implementation is internally focused. Operational is your day to day activity.

The lines on an org chart represent _________. the organization's resources the people who work in the organization the authority of on person over another business units of the organization

the authority of on person over another Explanation The lines in the org chart represent who/what has authority to make decisions. The further up the chart you go, the more cascading lines of authority exist. The boxes represent some sort of entity, including people, businesses, and units.