Deck 19: Managerial and Quality Control

Question 1

Corrective action when performance is inadequate may be to simply adjust standards.

Answer 1

True

Question 2

An example of a feedforward control would be to survey customers regarding product quality.

Answer 2

False

Question 3

The systematic process of making activities consistent with standards and goals is called control.

Answer 3

True

Question 4

A ratio that measures the organisation's internal performance with respect to key activities defined by management is known as the activity ratio.

Question 5

The revenue budget shows the level of funds flowing through the organisation and the nature of cash disbursements.

Question 6

Concurrent control focuses on the organisation's outputs.

Question 7

An expense budget lists forecasted and actual revenues of the organisation.

Question 8

The use of cultural values,traditions,shared beliefs and trust to increase compliance with goals is called decentralised control.

Question 9

Feed-forward control is sometimes called preliminary or preventive quality control.

Question 10

Decentralised control represents the absence of control because visible rules,supervision and procedures are absent.

Question 11

An example of a concurrent control would be to analyse sales per employee per day.

Question 12

Total quality management engages the participation of all employees and has a defect target of 1.0 per cent or less.

Question 13

A financial statement that summarises the organisation's financial performance for a given time intervals is known as a balance sheet.

Question 14

A budget that plans and reports investments in major assets to be depreciated over several years is called a balance sheet budget.

Question 15

An example of a feedback control would be to hire only college graduates because of their previous success in your organisation.

Question 16

The fundamental unit of analysis for a budget control system is called a responsibility centre.

Question 17

The systematic process which manages regulate organisation activities to make consistent with expectations established implants,targets and standards of performance are known as organisational controls.

Question 18

A liquidity ratio shows the company's ability to meet its current debt obligations and is a measurement of the organisation's margin of safety.

Question 19

According to the feedback control model,feedback can be used to either establish strategic goals,or measure actual performance.

Question 20

The final step of the feedback control model is either to do nothing if performance is adequate or to take corrective action if performance is inadequate.

Question 21

The system of reviewing the operations within an organisation and aligning them with shareholder interests is referred to as corporate governance.

Question 22

Benchmarking refers to the process of identifying the minimum standards required by an organisation in order for it to compete against its most efficient and effective competitors.

Question 23

An organisation-wide commitment to infusing quality into every organisational activity is known as a quality circle.

Question 24

The implementation of total quality management is similar to that of other centralised control methods.

Question 25

Benchmarking is a continuous process of measuring products,services and practices against major competitors or industry leaders.

Question 26

Hierarchical control involves monitoring and influencing employee behaviour through extensive use of rules,policies,hierarchy of authority,written documentation,reward systems and other formal mechanisms.

Question 27

A quality controlled approach that emphasises a relentless pursuit of high quality and lower costs has been termed Six Sigma.

Question 28

Decentralised control is associated with rewarding individual performance standards,while hierarchical control is associated with rewarding individuals and teams and an emphasis on equity across employees.

Question 29

A zero-based budgeting system is a process that requires a complete justification for every item in the budget.

Question 30

A quality circle is a group of six to 12 onto employees who meet regularly to discuss and solve problems affecting the quality of their work.

Question 31

Activity-based costing is the control system that identifies various activities needed to provide a product and determines the cost of those activities.

Question 32

Continuous improvement is the implementation of a large number of small,incremental improvements in all areas of the organisation on an ongoing basis.

Question 33

Reduced cycle time is one of the common techniques of TQM,and refers to the ability of TQM to shorten the time required to receive inventory after placing an order for it.

Question 34

The basic assumption of hierarchical control is that people work best when they are fully committed to the organisation.

Question 35

A control system that produces a report concerning the organisation's impact upon its environment as well as its profitability is known as a balanced scorecard.

Question 36

The balanced scorecard is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors.

Question 37

When an organisation shares its financial information and results with all employees in the organisation it is said to have an open-book management style approach to control.

Question 38

Open-book management ties employee rewards to the company's overall success.

Question 39

The ISO9000 standards are internationally recognised as the benchmark for quality production.

Question 40

The implementation of a large number of small,incremental improvements in all areas of an organisation on an ongoing basis is known as quality partnering.

Question 41

According to the feedback 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.

Question 42

Associate Professor Knowsmore bought a new laptop for his upcoming conference in Japan.His Head of Department and the department's financial manager alerted Knowsmore that this purchase fell well outside the reasonable range for his expenditure that quarter.What measure of actual performance is being used in this instance?

A) Exception reporting
B) Sales revenue
C) Corrective action
D) Financial accounting
E) None of these choices.

Question 43

The systematic process through which managers regulate organisational activities is known as:

A) strategic planning
B) strategic regulation
C) organisational goal setting
D) organisational control
E) organisational leading.

Question 44

Your department has absenteeism standards,a way to measure absenteeism,and based on your investigation,you have concluded that your department has an excessive absenteeism rate.What should your next step be?

A) Set new absenteeism standards.
B) Develop new measures of absenteeism.
C) Terminate three offending employees for excessive absenteeism.
D) All of these choices would be good examples of taking corrective action.
E) None of these choices.

Question 45

Helena is a manager at Oi-Oi-Oi! Corporation.On a regular basis she and her subordinates set individual and organisational goals.This process is similar to which component of the control model?

A) Establishing performance standards
B) An information system
C) Taking corrective action when necessary
D) Engaging strategic analysis
E) None of these choices.

Question 46

Net income divided by sales is the correct formula for calculating:

A) profit margin on sale
B) a current ratio
C) a liquidity ratio
D) return on total assets s
E) a corporate evaluation.

Question 47

Which of the following types of control monitors ongoing employee activities?

A) Feedforward
B) Feedback
C) Concurrent
D) Strategic
E) All of these choices.

Question 48

A financial statement that shows the organisation's financial position with respect to assets and liabilities at a specific point in time is called a:

A) capital expenditure budget
B) balance sheet
C) cash budget
D) revenue budget
E) profit budget.

Question 49

The inspection of raw materials and the analysis of customer surveys are not examples of:

A) preliminary control
B) a feedback control
C) a feedforward control
D) a concurrent control
E) preventive control.

Question 50

Bianca recently discovered that the reject rate for her department has exceeded the standard for performance in this area.What should Bianca do to exercise effective control?

A) She should order more training for her workforce.
B) She should contact the maintenance department and have them fix her machinery.
C) She should investigate and discover the cause of the problem.
D) She should suspend the poorer workers in her department.
E) None of these choices.

Question 51

A pre-employment health check regime is an example of:

A) a concurrent control
B) a feedback control
C) a feedforward control
D) preliminary control
E) preventive control.

Question 52

A budget that identifies the forecasted and actual revenues of the organisation is called a:

A) capital expenditure budget
B) revenue budget
C) cash budget
D) balance sheet budget
E) profit budget.

Question 53

A financial statement that summarises the organisation's financial performance at a given time interval is called a:

A) capital expenditure budget
B) balance sheet
C) cash budget
D) profit budget
E) income statement.

Question 54

The first step in the feedback control model is to:

A) establish strategic objectives
B) measure previous performance.
C) take corrective action
D) compare performance to standard
E) establish standards of performance .

Question 55

A(n)__________ ratio indicates the ability of the organisation to meet its current debt obligations.

A) activity
B) liquidity
C) profitability
D) conversion
E) growth

Question 56

Wallaby TV Corporation sends a post-purchase questionnaire to all consumers who buy their products.They are interested in gathering data on product quality,customer service orientation and customer satisfaction.This is an example of:

A) a concurrent control
B) a feedback control
C) a feedforward control
D) preliminary control
E) preventive control.

Question 57

Clancy-of-the-Overflow Corporation has a detailed set of organisational goals and a management information system that delivers timely and accurate information.However,Clancy-of-the-Overflow still has control problems because its managers refuse to act on the information they receive.Clancy-of-the-Overflow's control process has flaws in which of the following areas?

A) Performance standards
B) Management information systems
C) Ability to take corrective action when necessary
D) Measurement systems
E) None of these choices.

Question 58

The process of setting specific financial plans,then managing them in real time to achieve those plans is called:

A) a capital expenditure budget
B) a balance sheet budget
C) a cash budget
D) a revenue budget
E) a budgetary control.

Question 59

Which of the following is an example of a feedforward control?

A) A manager observing a new employee to see how he/she is performing.
B) The performance appraisal interview.
C) An examination of an employee's work records.
D) Criteria used in the hiring process.
E) None of these choices.

Question 60

A budget that outlines the anticipated actual expenses for responsibility centre is called a(n):

A) capital expenditure budget
B) balance sheet budget
C) cash budget
D) revenue budget
E) expense budget.

Question 61

The control 'system' at 123 Corporation is based on the culture of the organisation and norms that develop in the individual work teams.This is an example of:

A) hierarchical control
B) feedback control
C) organisational control
D) decentralised control
E) None of these choices.

Question 62

An advantage of the bottom-up budgeting process is:

A) its emphasis on hierarchical control
B) top managers control the information flow
C) lower managers are more involved
D) top managers are often not committed to achieving budget targets
E) All of these choices.

Question 63

A __________ is a group of between six and 12 volunteer employees who meet regularly to discuss and solve problems affecting their common work activities.

A) feedforward control group
B) work team
C) quality circle
D) committee
E) problem team

Question 64

The basic philosophy of control at Australian ZXY Corporation is based on the policies found in the employee handbook,as well as a strict hierarchy of authority.This philosophy is consistent with:

A) heerarchical control
B) bottom-up control
C) hierarchical control
D) culture control
E) decentralised control.

Question 65

That people are incapable of self-discipline and cannot be trusted is an assumption of:

A) hierarchical control
B) bottom-up control
C) hierarchical control
D) culture control
E) decentralised control.

Question 66

Hierarchical control is most consistent with which of the following budget processes?

A) Bottom-up budgeting
B) Revenue budgeting
C) Operational budgeting
D) Top-down budgeting
E) Horizontal budgeting

Question 67

Total quality management is most consistent with which type of control system?

A) Hierarchical control
B) Systematic control
C) Decentralised control
D) Feedforward control
E) Centralised control

Question 68

With TQM,employees must be trained to think in terms of __________ and not __________.

A) prevention; detection
B) detection; prevention
C) measurement; prevention
D) innovation; improvement
E) None of these choices.

Question 69

Total quality management:

A) is based on the ideas of Frederick Taylor
B) gives all employees the responsibility for achieving quality goals
C) gives managers total responsibility for achieving quality goals
D) was first successfully implemented in Australia, following attempts in the USA and Japan
E) All of these choices.

Question 70

A budgeting process in which middle and lower level managers set their budget targets in accord with overall organisational revenues and expenditures as specified by top management is an example of:

A) strategic budgeting
B) operational budgeting
C) top-down budgeting
D) management by objectives
E) bottom-up budgeting.

Question 71

Sam has been assigned to work on the development of a budget that plans future investments in major assets such as buildings and heavy machinery.Sam is working on a(n):

A) cash budget
B) capital budget
C) revenue budget
D) operating budget
E) expense budget.

Question 72

A financial budget that estimates cash flows on a daily or weekly basis to ensure that the company can meet its obligations is called a:

A) capital expenditure budget
B) cash budget
C) balance sheet budget
D) revenue budget
E) profit budget.

Question 73

Type A personalities would be more effectively controlled by ___________________.

A) hierarchical control
B) bottom-up control
C) hierarchical control
D) culture control
E) decentralised control.

Question 74

That people work best when they are fully committed to the organisation is an assumption of:

A) hierarchical control
B) bottom-up control
C) hierarchical control
D) culture control
E) decentralised control.

Question 75

The limited success of the implementation of TQM systems in Australian companies in the 1980s can be attributed to:

A)long established adversarial relationships between management and their workforce
B)labour unions intervening in manager staff relations
C)Australian industrial relations systems and laws
D)rising customer expectations
E)A,B and C.

Question 76

Quality circles are based on the assumption(s)that:

A) quality can be increased by increasing the size of the organisation
B) the people who do the job know it better than anyone else
C) quality can be increased by talking more about it
D) the more employees talk, the more satisfied they will be
E) All of these choices.

Question 77

Minimum standards,little direction and trust are all characteristics of which type of control?

A) Feedforward
B) Hierarchical
C) Decentralised
D) Concurrent
E) Centralised

Question 78

The use of rules,policies,reward systems and other formal devices to reference employee behaviour and assess performance is known as:

A) hierarchical control
B) bottom-up control
C) hierarchical control
D) culture control
E) decentralised control.

Question 79

Tomek is a department manager at Sly-Old-Fox Corporation.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.

Question 80

Large organisations such as Rio Tinto,WMC and the Commonwealth Bank assign financial analysts to work exclusively on developing __________ and monitoring whether actual __________ is going according to plan.

A) financial budgets; cash expenditure
B) capital budgets; capital expenditure
C) cash budgets; gross expenditure
D) expense budgets; net expenditure
E) None of these choices.