mgt chapter 16 questions

Incremental budgeting allocates

increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed.

The PDCA cycle is part of _____. Six Sigma applying the RATER dimensions Deming management management by exception statistical process control

Dening management Deming management proposed ideas for making organizations more responsive, more democratic, and less wasteful. These included the principle that quality can be improved on the basis of hard data, using the PDCA cycle.

Installing quality-control procedures that can be audited by independent quality-control experts is fundamental to _____. A. statistical process control B. restructuring C. ISO 9000 D. ISO 14000 E. reduced cycle time

ISO 9000 The ISO 9000 series consists of quality-control procedures companies must install, from purchasing to manufacturing to inventory to shipping that can be audited by independent quality-control experts, or "registrars."

______ focuses on problem solving and performance improvement, or speed with excellence, of a well-defined project. Benchmarking Reduced cycle time ISO 14000 ISO 9000 Lean Six Sigma

Lean Six Sigma Lean Six Sigma focuses on problem solving and performance improvement, or speed with excellence, of a well-defined project.

Which of the following is the best example of bureaucratic control? a. Ritz Carlton b. Monica's Diner c. Southwest Airlines d. Levi Strauss e. U.S. Army

U.S. Army The foremost example of use of bureaucratic control is perhaps the traditional military organization.

Which of the following is an example of an informational resource control? a. a leadership survey b. a competition analysis c. a delivery-tracking system d. a debt-repayment schedule e. a personality test

a competition analysis Production schedules, sales forecasts, environmental impact statements, analyses of competition, and public relations briefings are all controls on an organization's various information resources.

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.

Employees' knowledge, courtesy, and ability to convey trust and confidence make up which dimension of the RATER scale? a. tangibles b. reliability c assurance d. responsiveness e. empathy

assurance The meaning of the RATER dimension of assurance is the employees' knowledge, courtesy, and ability to convey trust and confidence.

Ensuring that employees follow instructions fully and completely is the purpose of which one of the following management functions? lead plan control organize motivate

control Controlling is the fourth management function, along with planning, organizing, and leading, and its purpose is to ensure that performance meets objectives.

Which of the following is part of Deming's PDCA cycle? a. apply b. process c. direct d. check e. decide

check The PDCA cycle is a plan-do-check-act cycle using observed data for continuous improvement of operations.

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

continuous improvement Continuous improvement is defined as ongoing small, incremental improvements in all parts of an organization, including all products, services, functional areas, and work processes.

Which of the following is not a reason why control is needed? a. Control allows one to maintain authority over employees. b. Control helps one discover irregularities and errors. c. Control helps an organization deal with complexity. d. Control allows one to adapt to change and uncertainty and detect opportunities. e. Control increases productivity or adds value.

control allows one to maintain authority over employees Control is needed to adapt to change and uncertainty; to discover irregularities and errors; to reduce costs, increase productivity, or add value; to detect opportunities; to deal with complexity; and to decentralize decision making and facilitate teamwork.

Kim, a customer service manager, tracks monthly complaints and has been trying over the past six months to reduce complaints to less than 0.2% through additional training for her staff. She is engaged in _____. a. leading b. organizing c. planning d. controlling e. measuring

controlling Controlling is defined as monitoring performance, comparing it with goals, and taking corrective action as needed. Kim is undertaking this process with customer complaints, one measure of performance.

Which of the following is a mechanism that contributes to a measurement-managed company's success? a. measuring activities of all types b. using mostly "soft" objectives that are not quantifiable c. developing the measurement systems without interference from employees d. trusting in informal feedback systems e. developing focus and alignment between individual, unit, and strategic performance

developing focus and alignment between individual, unit, and strategic performance One of the four mechanisms that contribute to the success of measurement-managed firms is better focus and alignments. Measurement-managed companies reported more frequently that unit (division or department) performance measures were linked to strategic company measures and that individual performance measures were linked to unit measures.

Bureaucratic control attempts to

elicit employee compliance using strict rules, a rigid hierarchy, well-defined job descriptions, and administrative mechanisms such as budgets, performance appraisals, and compensation schemes.

Which of the following is a frequent barrier to effective measurement? a. The organizational culture allows too much risk taking. b. Employees resist new measurement systems. c. Top executives create the organization's strategy. d. The organizational culture overemphasizes teamwork. e. Communication is bureaucratic.

employees resist new measurement systems One barrier to effective measurement is that employees resist new measurement systems. Employees want to see how well measures work before they are willing to tie their financial futures to them. Measurement-managed companies involve the workforce in developing measures.

Gina was recently promoted to facilities director at Wholesome Grains. Which of the following should she do immediately as she tries to improve productivity? a. establish a system of measurement b. rotate all personnel so that each has an opportunity to try something new d. use the established technology with which her employees are most familiar d. hire new employees such that they are similar to those already on the team e. cut costs

establish a system of measurement One suggestion for improving productivity is to establish base points, set goals, and measure results. To be able to tell whether your work unit is becoming more productive, you need to establish systems of measurement.

Which of the following is a step in the control process? a.compare work units to one another b. implement TQM c. evaluate opportunities d. establish standards e. complete a job redesign

establish standards The four control process steps are (1) establish standards; (2) measure performance; (3) compare performance to standards; and (4) take corrective action, if necessary.

The six areas of organizational control include _____, physical, informational, financial, structural, and cultural. a. human b. categorical c. material d. governmental e. functional

human The six areas of organizational control are physical, human, informational, financial, structural, and cultural.

A company that works to create a culture that encourages rank-and-file employees to make suggestions and question the status quo, and also measures employee growth, is developing which perspective of the balanced scorecard? a. employee perspective b. customer perspective c. internal business perspective d. financial perspective e. innovation and learning perspective

innovation and learning perspective In the innovation and learning perspective, the focus is on learning and growth of employees, which is the foundation for innovation and creativity. Thus, the organization must create a culture that encourages rank-and-file employees to make suggestions and question the status quo and it must provide employees with the environment and resources needed to do their jobs. The company can use employee surveys and analysis of training data to measure the degree of learning and growth.

Which balanced scorecard perspective helps top management's judgment to be better linked to measures of employee actions at lower levels? a. innovation and learning perspective b. customer perspective c. internal business perspective d. operational perspective e. financial perspective

internal business perspective The internal business perspective translates what the company must do internally to meet its customers' expectations. These are business processes such as quality, employee skills, and productivity. Top management's judgment about key internal processes must be linked to measures of employee actions at the lower levels, such as time to process customer orders, get materials from suppliers, produce products, and deliver them to customers.

Strategic control is

monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed. Strategic control is mainly performed by top managers, such as those at the CEO and VP levels, who have an organization-wide perspective.

Controlling is

monitoring performance, comparing it with goals, and taking corrective action. Productivity is defined by the formula of outputs divided by inputs for a specified period of time.

Monitoring performance to ensure that day-to-day goals are being implemented and taking corrective action as needed is known as ______ control. a. tactical b functional c. managerial d. operational e. strategic

operational Operational control is monitoring performance to ensure that operational plans, or day-to-day goals, are being implemented and taking corrective action as needed.

The income statement summarizes

organization's financial results, its revenues and expenses, over a specified period of time such as a quarter or a year.

Recruiters for Mountainview College were under extreme pressure to increase an enrollment goal by 10%. As a result, they admitted many students who were marginally qualified and who performed poorly in classes. This is an example of which problem associated with control systems? a. too much control b. overemphasis on paperwork c. overemphasis on one instead of multiple approaches d. overemphasis on means instead of ends e. too little participation

overemphasis on means instead of ends One barrier to successful control systems is overemphasis on means instead of ends. Control activities are not ends in themselves but the means to eliminating problems. Too much emphasis on means can lead to game playing, or "beating the system," as managers and employees manipulate data to seem to fulfill short-run goals instead of the organization's strategic plan.

Harbor Casino and Resort requires its casino dealers to have licenses, observes them using closed-circuit TV, and requires detailed reports at the end of each shift. This organization has overcome the control system barrier of _____. a. overemphasis on paperwork b. overemphasis on means instead of ends c. too little participation d. overemphasis on one instead of multiple approaches e. too much control

overemphasis on one instead of multiple approaches One control may not be enough especially in those cases when large amounts of cash are handled by employees as in the case of casinos. Using multiple controls overcomes the barrier of overemphasizing one rather than multiple approaches.

Before the fall term began, professors at Hillview College were required to fill out numerous forms, ranging from performance objectives, surveys, reports to lists of summer contacts with prospective students. Many professors complained that their time would be better spent preparing for their courses. This is an example of which barrier to successful control? overemphasis on means instead of ends too much control too much flexibility overemphasis on one instead of multiple approaches overemphasis on paperwork

overemphasis on paperwork One barrier to successful control systems is overemphasis on paperwork. A specific kind of misdirection of effort is management emphasis on getting reports done, to the exclusion of other performance activity. Reports are not the be-all and end-all. Undue emphasis on reports can lead to too much focus on quantification of results and even to falsification of data.

A budget is a formal financial _____. a. projection b. statement c. scorecard d. audit e. summary

projection

TQM is defined as a comprehensive approach dedicated to continuous _____. a. focus on components of service success: tangibles, questions, and margins b. measurement of quantifiable goals and quick corrections c. quality improvement, training, and customer satisfaction d. product innovation and organizational learning, over fast cycles e. customer input into management strategy and decision making

quality improvement, training, and customer satisfaction (TQM) is defined as a comprehensive approach, led by top management and supported throughout the organization, dedicated to continuous quality improvement, training, and customer satisfaction.

The amount of acceptable deviation from a standard, determined when the standard was established, is called the _____. a. span of exception b. zero-based control c. benchmark d. range of variation e. breadth control

range of variation How much deviation is acceptable depends on the range of variation built into the standards in the establishment of those standards.

An organization that is examining its return on investment (ROI) is using _____. a. flexible budgeting b. internal auditing c. external auditing d. trend analysis e. ratio analysis

ratio analysis Managers often use ratio analysis, the practice of evaluating financial ratios, to determine an organization's financial health. Return ratios, often called return on investment (ROI) or return on assets (ROA), indicate how effective management is in generating a return, or profits, on its assets.

Control systems should be

realistic, positive, understandable, and flexible and encourage self-control.

A team that meets to solve a onetime problem is called a _____. a. continuous improvement team b. self-managed team c. work group d. unit e. special-purpose team

special-purpose team Sometimes an organization needs a special-purpose team to meet to solve a special or onetime problem. The team then disbands after the problem is solved.

Oakley Lumber Mill formed a team to help the organization determine a course of action in the wake of a forest fire that temporarily closed access to its mountain satellite office. This is an example of a _____. a. JIT team b. continuous improvement team c. self-managed team d. cross-functional team e. special-purpose team

special-purpose team Sometimes an organization needs a special-purpose team to meet to solve a special or onetime problem. The team then disbands after the problem is solved.

At Phoenix Instruments, Claudia pulls six samples an hour from an assembly line to examine them for quality defects. If she finds any, she makes adjustments to various pieces of equipment in his area. Claudia job involves _____. a. reduced cycle time b. benchmarking c. strategic control d. feed-forward control e. statistical process control

statistical process control Statistical process control uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability.

Which of the following is not a common characteristic of successful control systems? a. encouragement of self-control b. strategic and results-oriented c. realistic d. subjective e. flexible

subjective Successful control systems have a number of common characteristics: (1) They are strategic and results oriented. (2) They are timely, accurate, and objective. (3) They are realistic, positive, and understandable, and they encourage self-control. (4) They are flexible.

Jimmy's supervisor noticed that he was struggling with the computerized setup for production runs at his new job. The supervisor observed him while he tried it again and gave suggestions for improvement. The supervisor is doing which step of the control process? a. Control productivity. b. Measure performance. c. Take corrective action. d. Compare performance to standards. e. Establish standards.

take corrective action In the corrective action step, when performance falls short of the standard, managers should examine the reasons why and take appropriate action. Sometimes employees may need more attention from management if they have been performing inadequately.

__________ is the last step in the control process. a. Establish standards b. Develop an ideal c. Take corrective action if.necessary d. Determine the problem e. Measure the performance

take corrective action if necessary The four control process steps are (1) establish standards, (2) measure performance, (3) compare performance to standards, and (4) take corrective action, if necessary.

Among the mechanisms that contribute to measurement-managed companies' success are

that top executives agree on strategy and the organizational culture emphasizes teamwork and allows risk taking.

A control standard, or performance standard, is

the desired performance level for a given goal. For-profit organizations might have standards of financial performance, employee hiring, manufacturing defects, percentage increase in market share, percentage reduction in costs, number of customer complaints, and return on investment.

All of the following are reasons why performance falls significantly short of the standard except _____. a. unrealistic standards b. insufficient resources c. unawareness of performance drop d. changing conditions e. insufficient management attention

unawareness of performance drop Reasons why performance falls significantly short of the standard may include the following: sometimes it may turn out the standards themselves were unrealistic, owing to changing conditions, in which case the standards need to be altered. Sometimes it may become apparent that employees haven't been given the resources for achieving the standards. And sometimes the employees may need more attention from management as a way of signaling that their efforts have been insufficient in fulfilling their part of the job bargain.

The two core principles of TQM are _____. a. uniform focus on delivering customer value, and improvement of management-employee relationships b. improvement of employee morale, and enhancement of shareholder satisfaction c. uniform focus on delivering customer value, and continuous improvement of work processes d. improvement of customer relationships, and development of strong corporate culture e. development of strong organizational culture, and continuous improvement of work processes

uniform focus on delivering customer value, and continuous improvement of work processes The two core principles of TQM are (1) people orientation: everyone involved with the organization should focus on delivering value to customers; and (2) improvement orientation: everyone should work on continuously improving the work processes.

The type of budget that can be adjusted over time for changing environmental conditions is known as a(n) ______ budget. a. variable or flexible b. zero-based c. incremental d. operating e. cash

variable or flexible Also known as a flexible budget, a variable budget allows the allocation of resources to vary in proportion with various levels of activity. That is, the budget can be adjusted over time to accommodate pertinent changes in the environment.

A strategy map is a

visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals so that everyone in the company can understand how their jobs are linked to the overall objectives of the organization.