Deck 11: Managing Control and Operations

Question 1

There are five steps in the control process.

Answer 1

False

Question 2

Giving stringent product specifications to suppliers in advance is an example of feedforward control.

Answer 2

True

Question 3

Information about customers' reactions to new goods and services is provided through feedback control.

Answer 3

True

Question 4

An effective control system does not have to be flexible,but it does need to provide accurate information to give manager's a true picture of organizational performance.

Question 5

Output standards refer to the quantity of the service or product the employee is to produce.

Question 6

All managers develop a system of output control for their organizations.

Question 7

An operations manager is responsible for managing an organization's production system.

Question 8

Concurrent control is at the heart of total quality management programs.

Question 9

Feedforward control measures are effective at the input stage.

Question 10

The conversion stage of any production system is focused on the acquisition of raw materials and other component parts.

Question 11

A system that alerts managers to excessive customer returns is an example of concurrent control.

Question 12

The first step in the control process is to measure actual results.

Question 13

The process by which managers monitor and regulate the organization to determine if the organization is operating efficiently and effectively is known as controlling.

Question 14

The first step in the control process is to measure actual performance.

Question 15

Time standards refer to the quantity of the service or product the employee is to produce.

Question 16

Feedback control measures are useful at the input stage.

Question 17

The first step in the control process is to establish standards for performance.

Question 18

A thermostat is an example of a control system.

Question 19

The control function is limited to reacting to events in a business after the events have already occurred.

Question 20

Feedback control measures are useful at the conversion stage.

Question 21

Once top managers have set organizational goals,they establish performance standards for every department and division.

Question 22

Control systems help managers uncover irregularities in product lines.

Question 23

In an organization with a conservative culture,planning is a formal top-down process.

Question 24

Administering ever harsher discipline should be progressive.

Question 25

Control systems help managers deal with complex decision making.

Question 26

Control systems can allow decentralized decision making and facilitate teamwork.

Question 27

Direct supervision,management by objectives,and bureaucratic rules are considered output control mechanisms.

Question 28

An operating budget is a blueprint that states how managers intend to use organizational resources to achieve organizational goals efficiently.

Question 29

Rules and SOP guides are fundamental to bureaucratic control.

Question 30

Since implementing a management by objectives system can be complex,very few companies make use of this process.

Question 31

In an organization with an innovative culture,managers use bureaucratic control.

Question 32

William Ouchi used the term "norms" to describe the control exerted on individuals in an organization through shared values,norms,standards of behaviour,and expectations.

Question 33

Return on investment is an example of a liquidity ratio.

Question 34

Activity ratios provide measures of how well managers are using organizational resources to generate profits.

Question 35

Control systems help managers adapt to change.

Question 36

A problem with relying on rules and regulations is that it can stifle creativity and innovation.

Question 37

Corporate governance principles are used to hold managers accountable for their behaviour.

Question 38

Corporate governance is the process companies use to be accountable to its stakeholders.

Question 39

The control arising from clan control is an externally imposed system of constraints.

Question 40

The long term is what managers should be most concerned about when it comes to output control.

Question 41

Formal target-setting,monitoring,evaluation,and feedback systems that provide managers with information about how well the organization's strategy and structure are working is known as:

A)concurrent control
B)control system
C)feedback control
D)feedforward control
E)behaviour control

Question 42

All of the following are mechanisms of behaviour control,except:

A)MBO
B)Direct supervision
C)Bureaucratic rules
D)Corporate governance
E)Output control

Question 43

Control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so that managers can correct problems as they arise is known as:

A)concurrent control
B)control system
C)feedback control
D)feedforward control
E)behaviour control

Question 44

Given the information below,determine this organization's gross profit margin: Net Sales Revenue $300,000
Cost of Goods Sold $150,000
Net Profit $20,000
Total Assets $250,00

A)15%
B)20%
C)50%
D)30%
E)40%

Question 45

A budget that states how managers intend to use organizational resources to achieve organizational goals is known as:

A)financial budget
B)capital budget
C)functional budget
D)operating budget
E)master budget

Question 46

Control that gives managers information about customers' reactions to goods and services so that corrective action can be taken if necessary,is known as:

A)concurrent control
B)control system
C)feedback control
D)feedforward control
E)behaviour control

Question 47

Top managers in an organizational culture that is innovative are likely to do all of the following,except:

A)Encourage participation of lower-level managers in planning and decision making
B)Use extensive bureaucratic systems of control
C)Create a flexible structure
D)Lead by example
E)Encourage risk-taking

Question 48

This type of ratio is used to determine if a company has the resources available to meet the claims of short-term creditors:

A)ROI
B)quick ratio
C)current ratio
D)inventory turnover
E)days sales outstanding

Question 49

When a division manager is told to "maximize revenue from the sales of goods and services produced," they are being told to take which approach?

A)A profit budget approach
B)A revenue budget approach
C)An expense budget approach
D)A cash flow budget approach
E)A capital budget approach

Question 50

Which of the five "Ps" of the organization's operations focuses on the facilities?

A)People
B)Plants
C)Parts
D)Processes
E)Planning and control systems

Question 51

When a division manager is given an operating budget of $2.2 million for the coming year and is evaluated based on the amount of goods that can be produced within that budget,this is called:

A)a revenue budget approach
B)a cash flow budget approach
C)an expense budget approach
D)a profit budget approach
E)a capital budget approach

Question 52

Which of the five "Ps" of the organization's operations focuses on standards and measures for quality control?

A)People
B)Plants
C)Parts
D)Processes
E)Planning and control systems

Question 53

Which of the five "Ps" of the organization's operations focuses on technology and workflow?

A)People
B)Plants
C)Parts
D)Processes
E)Planning and control systems

Question 54

The third step in the control process is:

A)establishing standards of performance
B)measuring actual performance
C)comparing actual levels to the standards of performance
D)evaluating actual levels of performance
E)ranking performance outcomes of competitors

Question 55

The type of control system within an organization that is characterized by shared values and standards of behaviour is known as:

A)bureaucratic control
B)feedforward control
C)clan control
D)feedback control
E)concurrent control

Question 56

An organization's production system involves all of the following,except:

A)acquiring raw materials
B)marketing finished products
C)converting inputs into outputs
D)distributing outputs
E)acquiring component parts

Question 57

A system designed to measure how consumer tastes are changing in order to determine the most efficient production levels is an example of:

A)feedforward control
B)feedback control
C)functional control
D)bureaucratic control
E)concurrent control

Question 58

When a division manager is evaluated based on the difference between the revenues and cost figures of his or her division,this is an example of:

A)a cash flow budget approach
B)a capital budget approach
C)a revenue budget approach
D)an expense budget approach
E)a profit budget approach

Question 59

The type of control system,which uses rules and SOPs to regulate the behaviour of workers within the organization,is known as:

A)a bureaucratic control system
B)an MBO system
C)a feedback control system
D)a feedforward control system
E)a concurrent control system

Question 60

The components of an effective output control system are:

A)Objective financial measures,performance standards derived from goals,and appropriate operating budgets
B)Subjective financial measures,performance standards derived from goals,and appropriate operating budgets
C)Cost budget analysis,divisional goals,and performance standards
D)Capital budget planning,evaluation of results,and corrective action taken when necessary
E)Feedforward,control mechanisms,capital budget planning,and operational goals

Question 61

Which of the following measures how efficiently managers are turning inventory over so that excess inventory is not carried?

A)Gross profit margin
B)Times-covered ratios
C)Investment ratios
D)Inventory turnover
E)Current ratios

Question 62

At the ________ stage of the process of transforming raw materials into finished goods,managers typically use ________ control procedures to anticipate problems before they occur.

A)input; concurrent
B)conversion; feedforward
C)output; concurrent
D)input; feedforward
E)conversion; feedback

Question 63

The process by which managers monitor and regulate the efficiency and effectiveness of the members of an organization in achieving its goals,is called:

A)Planning
B)Organizing
C)Leading
D)Controlling
E)Coordinating

Question 64

At the ________ stage of the process of transforming raw materials into finished goods,operations managers typically use ________ control procedures to obtain immediate feedback about how efficiently the raw materials are being transformed into finished goods.

A)conversion; concurrent
B)input; feedback
C)output; feedforward
D)input; concurrent
E)output; concurrent

Question 65

Control systems are intended to make organizations more successful by helping managers with all but which one of the following?

A)Adapt to change and uncertainty
B)Reduce costs
C)Increase routine decision making
D)Deal with complexity
E)Facilitate teamwork

Question 66

Which of the following terms describes an organization's net profit after taxes divided by its total assets?

A)Gross profit margin
B)Return on capital
C)Return on investment
D)Operating margin
E)The current ratio

Question 67

Which of the following terms describes the difference between the amount of revenue generated by a product and the resources used to produce the product?

A)Gross profit margin
B)Return on capital
C)Return on investment
D)Operating margin
E)The current ratio

Question 68

Which of the following terms measures the degree to which managers use debt (borrow money)or equity (issue new shares)to finance ongoing operations?

A)Gross profit margin
B)Times-covered ratio
C)Return on investment
D)Quick ratio
E)The current ratio

Question 69

An effective control system:

A)is flexible enough to allow managers to deal with unexpected events
B)provides accurate information
C)gives managers a true picture of organizational performance
D)provides managers with timely information
E)is flexible,provides accurate information,in a timely manner,and gives managers a true picture of performance

Question 70

For many organizational activities,output and behaviour controls are inappropriate for all but which one of the following reasons?

A)Professionals engage in work that is hard to apply SOPs to
B)SOPs are of little use in crisis situations
C)Output controls measure quality well
D)It is difficult to monitor all employees on a day-to-day basis
E)Rules are of little use in situations requiring innovation

Question 71

All of the following practices characterize an organization with a conservative culture,except:

A)Encourage participation of lower-level managers in planning and decision making
B)Use extensive bureaucratic systems of control
C)Have closed door corporate governance
D)Use MBO
E)Have a well-defined hierarchy of authority

Question 72

Which of the following measures how well managers are creating value from organizational assets?

A)Liquidity rations
B)Times-covered ratios
C)Investment ratios
D)Activity ratios
E)Current ratios

Question 73

Clan control arises from:

A)An externally imposed system of constraints
B)Rules and SOPs
C)Procedures used in the organization
D)Direct supervision
E)Organizational culture

Question 74

When operations managers screen job applicants by using several interviews to select the most highly skilled people,this is an example of:

A)concurrent control
B)conversion control
C)output control
D)feedforward control
E)feedback control

Question 75

When an organization monitors the number of customer returns for each product model in an attempt to recognize when the organization is producing a large number of defective products,this is an example of:

A)feedforward control
B)concurrent control
C)production control
D)feedback control
E)bureaucratic control

Question 76

Which of the following terms tells managers whether they have the resources available to meet the claims of short-term creditors?

A)Gross profit margin
B)Return on capital
C)Return on investment
D)Operating margin
E)The current ratio

Question 77

Return on investment is:

A)net profit after taxes divided by total assets
B)net income before taxes divided by total assets
C)gross profit margin
D)operating profit
E)operating costs

Question 78

All of the following are measures of financial performance,except:

A)Profit ratios
B)Liquidity ratios
C)Leverage ratios
D)Activity ratios
E)Feedforward ratios

Question 79

The steps in the control process are:

A)Establishing standards,measuring performance,evaluating performance,and taking corrective action
B)Establishing standards,evaluating performance,comparing,and taking corrective action
C)Measuring performance,comparing,evaluating actual performance,and taking corrective action
D)Establishing standards,evaluating performance,measuring performance,and confirming appropriate standards
E)Establishing standards of performance,then measuring,comparing,and evaluating actual performance

Question 80

The variety of standards set by managers include all but one of the following:

A)time
B)clan control
C)output
D)quality
E)behavioural