Principles of Management Chapter 14

What is the wording used to refer to the triple bottom line?

Profit, Planet, People

__ occurs when control systems prompt employees to follow the rules to an extreme that stifles creativity.

Rigid bureaucratic control

What type of budget includes date forecasting sales by month, sales area, and product?

Sales

Which step in the control process measures performance?

Step 2

Which of the following are steps in the control process?

Taking action to correct problems. Setting performance standards. Comparing performance to the standard. Measuring performance.

______ control establishes relationships among feedforward control, concurrent control, and feedback control.

budgetary

Although formal __ control systems are the most pervasive and most widely taught, they are not always the most efficient or flexible.

bureaucratic

_____ control systems are designed to measure progress toward set performance goals, and if necessary, to apply corrective measures to ensure that performance achieves managers' objectives.

bureaucratic

A company has gathered and analyzed information about its performance. Supervisors use the results to help employees improve their work.. This is an example of ______ control.

feedback

When managers tell employees what they are doing wrong and help them improve their performance, they are using __ control.

feedback

Which type of control gives managers information about results to correct problems after they arise?

feedback

______ control takes place before operations begin and allows managers to ensure that planned activities are carried out properly.

feedforward

Feedback control is used at the __ stage of the process of transforming inputs into finished goods and services.

final

Feedforward control is __ oriented.

future

In order to gain employee acceptance, __.

standards should be achievable and supported by an emphasis on positive behavior

What is the term for a measure that steers individuals toward reaching a company's goals?

Control

______ affect performance via economic forces and pricing mechanisms.

Market controls

Which of the following situations would be more likely to happen in a control system with open communication?

- Employees tell management when personal problems cause them to perform poorly at work. - Employees report faulty systems that are causing a drop in production.

Which of the following are characteristic of the most effective control systems?

- Managers tell workers why the control system is important. - Workers are given a critique of their performance on the job. - Workers recognize their own shortcomings and correct them without supervision.

Which two goals should an effective control system accomplish?

- Minimizing dysfunctional behaviors - Producing the most possible benefits

Which tools are often used to measure performance levels inside an organization?

- Personal observations - Oral reports - Written reports

Which of the following are steps in the budgetary control process?

- Take action - Establish expectancies - Perform budgetary operations

Which of the following characteristics describe an effective control system?

- The system should encompass all elements that affect performance significantly. - Standards should be objective. - It should be hard to sabotage or falsify the data being monitored.

Rank the following steps of the control process in order from first (at the top) to last (at the bottom).

1. Establish the standards of performance, goals, or targets against which performance is to be evaluated 2. Measure actual performance 3. Compare actual performance against chosen standards of performance 4. Initiate corrective action if the standard is not being achieved

Information should be as __ as possible, particularly when people must make decisions quickly and frequently.

Accessible

______ allocates costs across business processes.

Activity-based costing

Two statements that summarize a company's financial condition are the profit and loss statement and __.

Balance sheet.

During which stage of the process of transforming inputs into finished goods and services is Feedforward control used?

Before operations begin

During which stage of the process of transforming inputs into finished goods and services is feedforward control used?

Before operations begin

When activities are not proceeding as planned, what management tool will identify and correct significant variations?

Bureaucratic control system

Which of the following are examples of open communication?

Employees are willing to share bad news. Employees report deviation in production.

What is the purpose of a tentative profit and loss statement?

Establishing a performance goal

The balanced scorecard includes of feedforward, concurrent, and __ control.

Feedback

Which of the following are approaches to bureaucratic control?

Feedforward control, concurrent control, and feedback control.

Match each approach to bureaucratic control with its definition.

Feedforward: used before operations begin Concurrent: used while plans are being carried out Feedback: corrects deviations from the acceptable standard after they arise

Which three measures are included in a company's triple bottom line?

Impact on employees and local communities. Financial performance. Environmental impact.

How does budgetary control compare to other methods of managerial control?

It is commonly used. It is widely recognized.

__ should be conducted to measure the effectiveness and efficiency of an organization's systems.

Management audits.

What does the first step of the budgetary control process involve?

The broad plan for the company. Budget approval and publication. Estimating sales.

When are control systems less objectionable to employees?

When they feature useful standards of performance. When they feature standards that are possible not achieve. When they do not control too much.

When is concurrent control used?

While plans are being carried out

Performance date is commonly obtained from both __ reports, in addition to personal observation.

Written and oral

The most useful control systems are based on __ performance standards.

accurate

______ costing helps an organization recognize streams of activity and assign costs according to the time spent on particular activities.

activity-based

A balance sheet shows the financial health of a company at a specific time and reports __.

assets, liabilities, stockholders equity

The __ summarizes the financial condition of a company at a specific time.

balance sheet

Which control system includes performance standards regarding finances, customers, business processes, and learning?

balanced scorecard

What type of control is based on mutual respect and individual responsibility?

clan

_____ control involves creating relationships based on mutual respect and encouraging each individual to take responsibility for his or her actions.

clan

Which two of the following control systems tend to be the most flexible?

clan and market

____________ control includes directing, monitoring, and fine-tuning activities as they are performed.

concurrent

What type of audits have developed as a means of evaluating the effectiveness and efficiency of various systems within an organization?

management

Placing too much emphasis on short-term income and profits instead of pursuing a longer-term strategy is known as __.

management myopia

Which of the following is a type of control that relies on economic forces?

market

Effective control systems __.

maximize benefits and minimize dysfunction

What is the second step in the control process?

measuring performance

Feedforward control is sometimes referred to as __ control.

preliminary

An itemized financial statement of income and expenses is a(n) ______.

profit and loss statement

The balance sheet and the ______ are financial statements that help control overall organizational performance.

profit and loss statement

No matter how it is measured, performance data must be ______ to be of value to the organization.

reported promptly

If managers use too much ______, they can discourage employee innovation.

rigid control

Luvo is setting a ______ budget by reviewing forecasts of sales by month, sales area, and product.

sales

What is the first step of a control system?

set performance standards

Step 1 of a typical control system involves ______ performance standards.

setting

Fixating on ______ and profits while neglecting long-term strategy is known as management myopia.

short-term earnings

To be of value, the reporting of performance standards must be __.

timely

__ is any process that directs the activities of individuals toward the achievement of organizational goals.

to control