Deck 11: Managing Control and Operations

Question 1

Control systems can help an organization gain a competitive advantage by increasing all but which of the following?

A)Efficiency
B)Innovation
C)Bureaucracy
D)Responsiveness to customers
E)Quality

Answer 1

C

Question 2

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

Answer 2

B

Question 3

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

Answer 3

B

Question 4

The steps in the control process are:

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

Question 5

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

A)Profit ratios
B)Activity ratios
C)Leverage ratios
D)Liquidity ratios
E)All of these choices are incorrect

Question 6

When comparing actual performance against chosen standards, mangers must decide whether the deviation is substantial enough to warrant taking corrective action by:

A)Determining the cause and take corrective action
B)Determining an acceptable range of performance levels above and below the standard
C)Determining if the variance is significant
D)Computing the variance
E)All of these choices are correct

Question 7

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 8

Direct supervision can do the following:

A)Demotivate employees
B)Promote desirable behaviours which can increase efficiency
C)Teach employees
D)Be very expensive
E)All of these choices are correct

Question 9

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

Question 10

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

Question 11

When an organization sets up a system to measure the changes taking place in customer tastes so they can increase or decrease the production of specific products, this is an example of:

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

Question 12

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

A)Output
B)Behavioural
C)Time
D)Quality
E)Clan control

Question 13

An effective control system:

A)Provides accurate information
B)Provides managers with timely information
C)Is flexible enough to allow managers to deal with unexpected events
D)Gives managers a true picture of organizational performance
E)All of these choices are correct

Question 14

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 15

Clan control arises from:

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

Question 16

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

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

Question 17

In general, the more _________ organizational activities are, the it is for managers to measure outputs or behaviours.

A)routine; harder
B)complex; harder
C)complex; easier
D)routine; easier
E)none of these choices are correct

Question 18

When a division manager is told to "maximize the revenues from the sales of goods and services produced," this is an example of:

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

Question 19

The components of an effective output control system are:

A)Capital budget planning, evaluation of results, and corrective action taken when necessary
B)Objective financial measures, performance standards derived from goals, and appropriate operating budgets
C)Subjective financial measures, performance standards derived from goals, and appropriate operating budgets
D)Cost budget analysis, divisional goals, and performance standards
E)None of these choices are correct

Question 20

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)day sales outstanding
C)quick ratio
D)inventory turnover
E)current ratio

Question 21

Return on investment is:

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

Question 22

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)Increase routine decision making
C)Deal with complexity
D)Facilitate teamwork
E)Reduce costs

Question 23

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

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

Question 24

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

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

Question 25

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 profit budget approach
D)a revenue budget approach
E)an expense budget approach

Question 26

Which of the following is NOT one of the mechanisms of behaviour control that managers can use?

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

Question 27

The most immediate form of behaviour control is:

A)output control
B)rules
C)standard operating procedures
D)MBO
E)direct supervision

Question 28

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

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

Question 29

A goal-setting process in which a manager and his or her subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluates the extent to which the subordinate is achieving those goals is known as:

A)rules
B)output control
C)direct supervision
D)MBO
E)standard operating procedures

Question 30

Control systems are intended to make organizations more successful and competitive by increasing .

A)quality
B)innovation
C)efficiency
D)responsiveness to customers
E)all of these choices are correct

Question 31

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

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

Question 32

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

Question 33

Output standards set _.

A)the quantity of the service or product the employee is to produce
B)the quality expected in the delivery of goods or services
C)the standards that govern how long it is supposed to take to complete a task
D)the norms that govern how coworkers should interact with one another
E)the standards that govern the number of hours worked

Question 34

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)^30%
B)^20%
C)^50%
D)^15%
E)^{none of these choices are incorrect}

Question 35

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

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

Question 36

ratios measure how efficiently managers are using the organization's resources to generate profits.

A)Liquidity
B)Activity
C)Functional
D)Leverage
E)Profit

Question 37

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

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

Question 38

The is the most commonly used financial performance measure.

A)quick ratio
B)return on investment
C)current ratio
D)gross profit
E)inventory turnover

Question 39

This ratio measures the extent to which managers have used borrowed funds to finance investments:

A)quick ratio
B)debt-to-assets ratio
C)current ratio
D)times-covered ratio
E)all of these choices are incorrect

Question 40

The third step in the control process is:

A)evaluating actual levels of performance
B)establishing standards of performance
C)comparing actual levels to the standards of performance
D)measuring actual performance
E)all of these choices are incorrect

Question 41

How can organizational control help managers create a competitive advantage?

Question 42

Return on investment is an example of a liquidity ratio.

Question 43

Compare and contrast the ways that managers perform the functions of planning, organizing, leading and controlling when the managers are part of an innovative versus a conservative organizational culture.

Question 44

Management by objectives (MBO)is one way that managers can use goals or objectives to evaluate the performance of subordinates.Discuss the steps involved in using this technique in terms of a specific example of your choosing.

Question 45

Administering ever harsher discipline should be progressive.

Question 46

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

Question 47

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

Question 48

All organizations make use of bureaucratic control methods in their dealings with the employees of the organization.This type of control system can, however, create problems for the subordinates.Discuss these types of problems and
explain what an organization's managers can do to reduce these types of problems within the organization.

Question 49

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

Question 50

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

Question 51

The top managers of an organization typically use a variety of financial indicators to assess the performance of their organization.Discuss the four major types of financial measures used by these managers and give one specific example of each of these measures in terms of how it would be computed.

Question 52

Discuss the importance of organizational control in helping managers perform their work.

Question 53

Compare and contrast the old and new forms of corporate governance.

Question 54

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

A)disposing of outputs
B)marketing finished products
C)converting inputs into outputs
D)acquiring inputs
E)all of these choices are correct SHORT ANSWER.Write the word or phrase that best completes each statement or answers the question.

Question 55

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

Question 56

The control process can be broken down into four steps.Discuss these four steps, as they would apply to an important management situation of your choosing.

Question 57

Managers typically use three primary measures to assess the output performance of their organization.Discuss these three types of measures and give one specific example of how a manager would use each of the measures that you select in a situation of your choosing.

Question 58

Define and discuss feedforward control, concurrent control, and feedback control.

Question 59

An effective control system has five characteristics.

Question 60

Discuss the three characteristics of an effective control system in an organization and illustrate each of them with a specific example from an organization of your choosing.

Question 61

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

Question 62

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

Question 63

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

Question 64

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

Question 65

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 66

A thermostat is an example of a control system.

Question 67

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

Question 68

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

Question 69

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

Question 70

Control systems help managers uncover irregularities in product lines.

Question 71

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

Question 72

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

Question 73

There are five steps in the control process.

Question 74

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

Question 75

Control systems help managers adapt to change.

Question 76

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

Question 77

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

Question 78

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

Question 79

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

Question 80

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