Management 300 Chapter 15

12. The process in which lower-level managers anticipate their departments' resource needs and pass them to top management for approval is called top-down budgeting. a. True b. False

False

15. Six Sigma is an organization-wide effort to infuse quality into every activity in a company through continuous improvement. a. True b. False

False

18. TQM is more likely to be successful when senior management has very high expectations and middle managers want to share authority. a. True b. False

False

2. The four major perspectives of the balanced scorecard are customer service, external business processes, financial performances, and the organization's capacity for learning and growth. a. True b. False

False

20. Most organizations measure and control performance using qualitative financial measures. a. True b. False

False

21. Technologies that wirelessly transmit data from remote sensors and GPS devices to computers for analysis are referred to as biometrics. a. True b. False

False

5. An expense budget lists forecasted and actual revenues of the organization. a. True b. False

False

1. The systematic process of regulating organizational activities to make them consistent with the expectations established in plans, targets, and standards of performance refers to organizational control. a. True b. False

True

10. The liquidity ratio shows the company's ability to meet its current debt obligations. a. True b. False

True

11. An activity ratio that measures how many times the inventory is turned over to meet the total sales figure is called the inventory turnover. a. True b. False

True

13. The goal of open-book management is to get every employee thinking and acting like a business owner. a. True b. False

True

14. TQM tends to be most successful when it enriches jobs and improves employee motivation. a. True b. False

True

16. The implementation of total quality management involves the use of many techniques such as quality circles, benchmarking, Six Sigma principles, quality partnering, and continuous improvement. a. True b. False

True

17. Continuous improvement is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis. a. True b. False

True

19. ISO certification is based on a set of international standards for quality management. a. True b. False

True

22. The basic assumption of hierarchical control is that people are incapable of self-discipline and cannot be trusted. a. True b. False

True

23. Too much emphasis on close electronic monitoring can damage employee trust, create unhealthy levels of stress for employees, and hurt performance a. True b. False

True

24. During the recent economic recession, companies cut discretionary spending, such as travel expenses, to improve the bottom line, and managers are pushing to keep those expenses from creeping back up. a. True b. False

True

25. According to Valeant Pharmaceuticals CFO Howard Schiller, zero-based budgeting forces managers to ask themselves whether they really need to make a particular expenditure. a. True b. False

True

3. A standard for performance is included in an organization's overall strategic plan to compare organizational activities against. a. True b. False

True

4. The final step of the feedback control model is to do nothing if performance is adequate or to take corrective action if performance is inadequate. a. True b. False

True

6. A cash budget estimates receipts and expenditures of money on a daily or weekly basis. a. True b. False

True

7. Bottom-up budgeting is a process in which lower-level managers anticipate their department's resource needs and pass them up to top management for approval. a. True b. False

True

8. The income statement shows revenues coming into the organization from all sources and subtracts all expenses. a. True b. False

True

9. A survey from the American Management Association found about two-thirds of employers monitor the Internet use of their employees a. True b. False

True

52. Which ratio tells whether a company has sufficient assets to convert into cash to pay off its debts? a. Current b. Quick c. Inventory turnover d. Conversion e. Gross margin

a. Current

44. __________ standards represent an international standard for quality management. a. ISO 9000 b. Six Sigma c. TQM d. Kaizen e. Foreign Economy Index

a. ISO 9000

33. The __________ budget lists planned investments in major assets. a. capital b. balance sheet c. cash d. revenue e. profit

a. capital

53. The D of Six Sigma's DMAIC stands for _______. a. define b. detail c. develop d. deduct e. devote

a. define

26. Ophelia, the new CEO at Odyssey Inc., plans to implement a highly effective systematic process of regulating organizational activities to make them consistent with the expectations that are established by managers within the company. This is referred to as __________ control. a. organizational b. feedback c. budgetary d. systems e. quality

a. organizational

45. Factors that can influence the success of a TQM program in a negative way include all of the following, EXCEPT _______. a. tasks make high-skill demands on employees b. management expectations are unrealistically high c. middle managers are dissatisfied about loss of authority d. workers are dissatisfied with other aspects of organizational life e. managers wait for big, dramatic innovations

a. tasks make high-skill demands on employees

41. A quality circle is a group of __________ volunteer employees. a. 2 to 4 b. 6 to 12 c. 15 to 20 d. 21 to 25 e. 30 to 50

b. 6 to 12

30. What is the first step in the feedback control system? a. Establishing strategic objectives b. Establishing standards of performance c. Taking corrective action d. Comparing performance to standards e. Measuring actual performance

b. Establishing standards of performance

38. At LBK Industries, responsibility for quality control rests with a team of quality control inspectors and supervisors rather than with employees. LBK uses which of the following types of organizational control? a. Matrix b. Hierarchical c. Decentralized d. Bottom-up e. Balanced

b. Hierarchical

36. Tammy is a production manager at Eagle's Nest, Inc. She is concerned that too much money is being wasted on inventory that is sitting in the warehouse too long. She should calculate a(n) _______ ratio. a. current b. inventory turnover c. conversion d. profitability e. leverage

b. inventory turnover

48. Actions associated with hierarchical control include ________. a. relying on flexible authority, flat structure, expert power; everyone monitors quality b. using detailed rules and procedures, formal control systems c. relying on results-based job descriptions; emphasizes goals to be achieved d. emphasizing extrinsic and intrinsic rewards (meaningful work, opportunities for growth) e. recognizing culture as means for uniting individual, team, and organizational goals for overall control

b. using detailed rules and procedures, formal control systems

27. All of the following are key steps of setting up feedback control systems, EXCEPT ______. a. comparing performance to standards b. establishing standards of performance c. getting employee opinions d. measuring actual performance e. taking corrective action

c

50. Which budget shows the level of funds flowing through the organization and the nature of disbursements? a. Expense b. Revenue c. Cash d. Capital e. Discretionary

c. Cash

47. _____ continues to lead in the total number of ISO 9000 certifications. a. The United States b. South America c. Europe d. China e. Africa

c. Europe

46. The recognized standard for evaluating and comparing companies on a global basis is _______. a. The Quality Circle Seal of Approval b. Corporate Governance inspection results c. ISO certification d. open-book management audits e. Balanced Scorecard results

c. ISO certification

31. According to the control model, after establishing standards of performance, the manager should ______. a. compare performance to standards b. get the standards approved by the supervisors and subordinates c. measure actual performance d. take corrective action e. provide feedback

c. measure actual performance

35. Brad is a department manager at Home Theater, Inc. His sole role in the budget process is to implement the budget that is developed for him. This is an example of _______. a. strategic budgeting b. operational budgeting c. top-down budgeting d. management-by-objectives e. bottom-up budgeting

c. top-down budgeting

34. Stella, a systems manager for a large technology company, would like to get an understanding of her company's financial position with respect to assets and liabilities at the end of the fiscal year. To which of the following should she refer? a. Income statement b. Activity ratio c. TQM report d. Balance sheet e. Balance scorecard

d. Balance sheet

42. Which of the following refers the process of measuring organizational process against the best in the industry? a. Outsourcing b. Continuous improvement c. Environmental analysis d. Benchmarking e. Competitive measurement

d. Benchmarking

51. Saturn Party Supplies has invested heavily in a social media campaign and managers want to know how many inquiries about their products result in actual sales. Which ratio will give them that information? a. Current b. Quick c. Inventory turnover d. Conversion e. Gross margin

d. Conversion

32. Which of the following budgets includes anticipated and actual expenses for a responsibility center? a. Revenue b. Cash c. Capital d. Expense e. Operating

d. Expense

43. Which of the following is a quality control approach that emphasizes the relentless pursuit of higher quality and lower costs? a. Continuous improvement b. Cycle time c. Quality circles d. Six Sigma e. Benchmarking

d. Six Sigma

54. The C of Six Sigma's DMAIC stands for ______. a. critique b. correct c. comply d. control e. contain

d. control

37. Net income divided by sales yields the _______. a. return on total assets b. current ratio c. liquidity ratio d. profit margin on sales e. corporate evaluation

d. profit margin on sales

49. Which of the following is characteristic of a decentralized control system? a. Decentralized control system emphasizes extrinsic rewards. b. In a decentralized control system, employees follow instructions, and do exactly as they are told. c. Decentralized control system has a rigid organizational culture. d. Decentralized control system relies on task-related job descriptions. e. Decentralized control system is based on the belief that people work best when they are committed to their organization.

e. Decentralized control system is based on the belief that people work best when they are committed to their organization.

28. In the process of implementing the balanced scorecard approach at his company, operations manager Seth Howard wonders whether internal activities and processes add value for customers and shareholders. This involves which of the following dimensions of the balanced scorecard? a. Customer service b. Potential for learning and growth c. Financial performance d. External business processes e. Internal business processes

e. Internal business processes

40. Silver n' Gold Inc. recently introduced a new control philosophy in which all employees have access to the same information that owners have, such as what money is coming in and where it is going. This is an example of which of the following? a. Balanced scorecard b. Six Sigma c. Continuous improvement d. Total quality management e. Open-book management

e. Open-book management

29. All well-designed control systems involve the use of __________ to determine whether performance meets established standards. a. opinions b. advice c. consultants d. researchers e. feedback

e. feedback

39. Decentralized control is characterized by reliance on all of the following, EXCEPT _______. a. self-control b. peer group c. corporate culture d. employee selection and socialization e. the quality control department

e. the quality control department