Deck 16: Control Systems and Quality Management: Techniques for Enhancing Organizational Effectiveness

Question 1

Twice daily, factory workers at Fabulous Skeins and Yarn select random samples from the production runs and test them for quality, rejecting runs if too many samples fall outside a standard range of acceptability. These workers are engaged in statistical process control.

Answer 1

True
Explanation: The question is describing statistical process control, a statistical technique that uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability. If quality is not acceptable, production is stopped to allow corrective measures.

Question 2

Unlike the ISO 9000 series, the ISO 14000 series identifies standards for environmental performance.

Answer 2

True
Explanation: Unlike the ISO 9000 series, the ISO 14000 series identifies standards for environmental performance.

Question 3

Which of the following is a step in the control process?

A) complete a job redesign
B) evaluate opportunities
C) compare work units to one another
D) implement TQM
E) establish standards

Answer 3

E
Explanation: The four control process steps are (1) establish standards; (2) measure performance; (3) compare performance to standards; and (4) take corrective action, if necessary.

Question 4

Corrective action is a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards.

Question 5

Incremental budgeting allocates increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed.

Question 6

Rural Internet Services, applying TQM, restructured its service call procedures and eliminated some steps involved so that employees can finish each call faster. Rural Internet Services is attempting to reduce cycle time.

Question 7

The control process begins with establishing standards.

Question 8

Productivity is defined by the formula of outputs divided by inputs for a specified period of time.

Question 9

________ is defined as monitoring performance, comparing it with goals, and taking corrective action as needed.

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

Question 10

A balance sheet summarizes an organization's overall financial worth, or its assets and liabilities, at a specific point in time.

Question 11

Roberta, a customer service manager, tracks monthly complaints and has been trying over the past six months to reduce complaints to less than 0.2 percent through additional training for her staff. She is engaged in

A) organizing.
B) controlling.
C) measuring.
D) leading.
E) planning.

Question 12

Controls allow top management to decentralize decision making at lower levels within the organization.

Question 13

Which of the following best describes ERP systems?

A) popular recruiting systems that help maximize diversity in the workplace
B) comprehensive systems for identifying and measuring changes in productivity
C) software information systems that integrate all aspects of business, helping managers stay on top of the latest developments
D) training systems for employees that allow self-discovery and correction of weaknesses
E) control systems in which managers are made aware of all deviations from standards

Question 14

Charlotte is trying to measure her salon's productivity during the first quarter. For this period, she should divide ________ by the costs of her staff, loans, materials, and utility bills.

A) the number of clients
B) the average daily receipts
C) her budgeted costs
D) the total salon services and products sold
E) her projected revenue

Question 15

Managers can increase overall productivity by increasing the efficiency of all the following EXCEPT

A) goals.
B) energy.
C) materials.
D) labor.
E) capital.

Question 16

Which of the following is a primary function of management?

A) communicating
B) globalizing
C) cooperating
D) organizing
E) influencing

Question 17

Productivity equals

A) labor, capital, energy, and materials, divided by goods and services produced.
B) goods and services produced, divided by labor, capital, energy, and materials.
C) labor, energy, and capital, divided by goods, services, and materials.
D) goods and services and energy and materials, divided by labor and capital produced.
E) energy and materials, divided by labor and capital.

Question 18

Enright Industrial Leasing has effective control processes, allowing its managers to discover ________ in bookkeeping right away, before a would-be embezzler could seriously affect its business.

A) irregularities and errors
B) a potential merger
C) competence
D) team problems
E) tax breaks

Question 19

An income statement summarizes an organization's financial results over a specified period of time, such as a quarter or a year.

Question 20

Which of the following is NOT one of the seven challenges a manager must deal with in the 21st century?

A) sustainability
B) ethical standards
C) economic stagnation
D) globalization
E) diversity

Question 21

Some managers use ________, which provides four indicators with which organizations can set goals and measure performance.

A) a strategic map
B) the balanced scorecard
C) measurement management
D) a strategic scorecard
E) evidence-based management

Question 22

Monitoring performance to ensure that day-to-day goals are being implemented and taking corrective action as needed is known as ________ control.

A) strategic
B) functional
C) operational
D) tactical
E) managerial

Question 23

Tre'quon's supervisor noticed that he was struggling with the computerized setup for production runs at his new job. The supervisor observed him while he tried it again and gave suggestions for improvement. The supervisor is doing which step of the control process?

A) taking corrective action
B) establishing standards
C) comparing performance to standards
D) measuring performance
E) controlling productivity

Question 24

________ perspective helps top management focus on what the organization must excel at to effectively meet its financial objectives and customers' expectations.

A) Operational
B) Internal business
C) Customer
D) Financial
E) Innovation and learning

Question 25

________ control is an approach to organizational control that is characterized by informal and organic structural arrangements.

A) Relational
B) Functional
C) Decentralized
D) Bureaucratic
E) Market

Question 26

Which of the following is NOT a perspective of the balanced scorecard?

A) internal business
B) external processes
C) financial
D) innovation and learning
E) customer

Question 27

Kimberli manages employees at Mountaintop Ski Resorts. She has noticed that one of her employees submits via the computer system the same suggestions for continuous improvement multiple times, knowing that performance is evaluated on the number of suggestions only. This problem is typical of ________ control.

A) bureaucratic
B) market
C) decentralized
D) autocratic
E) functional

Question 28

Charmaine was required to take an Excel spreadsheet test as part of her application for an executive assistant position. This control is part of the ________ area.

A) structural
B) physical
C) financial
D) informational
E) human resources

Question 29

All of the following are reasons why performance falls significantly short of the standard EXCEPT

A) unrealistic standards.
B) changing conditions.
C) insufficient resources.
D) insufficient management attention.
E) unawareness of performance drop.

Question 30

Tactical control is performed mainly by

A) the CEO.
B) top managers.
C) middle managers.
D) first-level managers.
E) team leaders.

Question 31

Typically, operational control is accomplished through reports issued

A) weekly.
B) daily.
C) monthly.
D) annually.
E) randomly.

Question 32

One characteristic of incremental budgeting is that it

A) allows comparison using various units, like labor hours and dollars.
B) is flexible toward changing environmental demands.
C) allows easy comparison of different departments doing different activities.
D) locks managers into stable spending arrangements.
E) requires more time from managers than zero-based budgeting.

Question 33

A sales forecast is an example of an organizational control from the ________ area.

A) informational
B) physical
C) human resources
D) financial
E) capital

Question 34

Which of the following areas of control for organizations exerts informal control?

A) structural
B) human resources
C) informational
D) competitive
E) cultural

Question 35

Which of the following may be done as a corrective action in the control process?

A) Establish standards.
B) Renew standards.
C) Compare performance to standards.
D) Align processes with goals.
E) Evaluate performance and take action.

Question 36

Standards are best measured when they are

A) broad.
B) quantifiable.
C) narrow.
D) efficient.
E) ethical.

Question 37

________ is the amount of acceptable deviation from a standard, determined when the standard was established.

A) Span of exception
B) Breadth control
C) Range of variation
D) Benchmark
E) Zero-based control

Question 38

Examining how the organization looks to shareholders is part of which of the balanced scorecard perspectives?

A) external perspective
B) customer perspective
C) internal business perspective
D) financial perspective
E) innovation and learning perspective

Question 39

According to Kaplan and Norton, ________ maps are "visual representations of a company's critical objectives and the crucial relationships among them that drive organizational performance."

A) strategy
B) positioning
C) multidimensional
D) customer
E) graphic interface

Question 40

A(n) ________ budget allocates increased or decreased funds to a department by using the last budget period as a reference point.

A) standardized
B) fixed
C) ero-based
D) incremental
E) tactical

Question 41

At Taylor Activewear, orders have significantly exceeded projections, and Macon, the operations director, has decided to hire for a third shift in the plant. Macon is clearly operating with the use of a(n) ________ budget.

A) zero-based
B) incremental
C) cash
D) fixed
E) variable

Question 42

A(n) ________ budget allocates resources on the basis of a single estimate of costs.

A) unitary
B) zero-based
C) cash
D) incremental
E) fixed

Question 43

TQM's two core principles are

A) employee commitment and customer satisfaction.
B) financial health and financial stability.
C) management and leadership.
D) people orientation and improvement orientation.
E) radical innovation and continuous improvement.

Question 44

A(n) ________ represents the profits or losses incurred by an organization.

A) expense budget
B) income statement
C) ratio analysis
D) capital expenditures budget
E) balance sheet

Question 45

Which kind of organization is most likely to try to exert too much control?

A) bureaucratic
B) market
C) employee-driven
D) decentralized
E) matrix

Question 46

________ is the process of instituting ongoing small, incremental improvements in all parts of an organization.

A) MBO
B) Reengineering
C) Radical innovation
D) Continuous improvement
E) Productivity

Question 47

When describing Deming's principles to a colleague, which of the following would you NOT discuss?

A) Quality should be aimed at the needs of the consumer.
B) Companies should determine which workers are to blame for problems.
C) Improved quality leads to increased market share and employment.
D) Quality can be improved on the basis of hard data.
E) Companies should aim at improving the system.

Question 48

Which of the following is NOT characteristic of an external audit?

A) performed by CPAs
B) primarily used when management suspects embezzlement
C) performed by an independent organization
D) verifies that generally accepted accounting principles have been followed
E) verifies the accuracy and fairness of financial statements

Question 49

A(n) ________ budget is one that can be adjusted over time for changing environmental conditions.

A) operating
B) incremental
C) zero-based
D) variable
E) cash

Question 50

Recruiters for Eastern Shore University were under extreme pressure to increase enrollment by 15 percent. As a result, they admitted many students who were marginally qualified and who performed poorly in classes. This is an example of which problem associated with control systems?

A) overemphasis on means instead of ends
B) overemphasis on paperwork
C) overemphasis on one instead of multiple approaches
D) too much control
E) too little participation

Question 51

Which of the following is part of Deming's PDCA cycle?

A) check
B) direct
C) apply
D) process
E) decide

Question 52

At Fresh Bakery, Simon pulls six samples an hour from an assembly line to examine them for quality defects. If he finds any, he makes adjustments to various pieces of equipment in his area. Simon's job involves

A) feed-forward control.
B) benchmarking.
C) reduced cycle time.
D) statistical process control.
E) strategic control.

Question 53

Current assets, fixed assets, and liabilities are all part of an organization's

A) cash flow statement.
B) capital expenditures budget.
C) income statement.
D) expense budget.
E) balance sheet.

Question 54

At Hamilton Hardware, employees were asked how the quality of the company's customer service could best be measured, and management then implemented a survey system based on the feedback. The company has overcome which of the following barriers to success of control systems?

A) overemphasis on one instead of multiple approaches
B) overemphasis on paperwork
C) overemphasis on means instead of ends
D) too little employee participation
E) too much control

Question 55

Which of the following is NOT a characteristic of a successful control system?

A) strategic and results-oriented
B) timely, accurate, and objective
C) realistic, positive, and understandable
D) flexible and encourages self-control
E) inflexible to optimize control

Question 56

Before the fall term began, professors at Pinetops Community College were required to fill out numerous forms, including performance objectives, surveys, and lists of their summer contacts with prospective students. Many professors complained that their time would be better spent preparing for their courses. This situation is an example of which barrier to successful control?

A) overemphasis on paperwork
B) overemphasis on one instead of multiple approaches
C) too much control
D) overemphasis on means instead of ends
E) too much flexibility

Question 57

Installing quality-control procedures that can be audited by independent quality-control experts is fundamental to

A) ISO 9000.
B) restructuring.
C) reduced cycle time.
D) the RATER system.
E) statistical process control.

Question 58

Anchor Resort and Casino requires its casino dealers to have licenses, observes them using closed-circuit TV, and requires detailed reports at the end of each shift. This organization has overcome the control system barrier of

A) too much control.
B) overemphasis on paperwork.
C) overemphasis on means instead of ends.
D) overemphasis on one instead of multiple approaches.
E) too little participation.

Question 59

TQM is a comprehensive approach dedicated to continuous

A) measurement of quantifiable goals and quick corrections.
B) product innovation and organizational learning, over fast cycles.
C) quality improvement, training, and customer satisfaction.
D) customer input into management strategy and decision making.
E) focus on components of service success: tangibles, questions, and margins.

Question 60

Techniques for improving quality include all of the following EXCEPT

A) Six Sigma.
B) outsourcing.
C) reduced cycle time.
D) statistical process control.
E) market share.

Question 61

Which of the following is NOT a belief measure on the balanced scorecard in relation to customers?

A) customer acquisition
B) market share
C) response time
D) percentage of bids won
E) innovation

Question 62

How would innovation and learning be measured on the balanced scorecard?

A) employee retention
B) external audits
C) decentralized controls
D) personality tests
E) strategic controls

Question 63

Why is it important for management to use a balanced scorecard?

A) to help employees understand how their work contributes to the company's goals
B) to view performance in several areas simultaneously
C) to save companies in payroll costs
D) to actually see the sequence of suppliers that contribute to a product
E) to characterize informal structural arrangements

Question 64

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

A) drug test
B) sales forecast
C) production schedule
D) organizational chart
E) car speedometer

Question 65

How is management using controls when they allow decision making at lower levels and encourage employees to work together in teams?

A) They are adapting to change and uncertainty.
B) They are discovering irregularities and errors.
C) They are detecting opportunities and increasing innovation.
D) They are providing performance feedback.
E) They are decentralizing decision making.

Question 66

Evan accidentally quoted a customer a price for new flooring that was more than $1,000 less than the actual price. His manager had a choice of punishing Evan or providing him coaching and retraining on how to calculate the cost of flooring correctly. His manager chose to retrain Evan, using the control of

A) feedforward.
B) concurrent.
C) feedback.
D) evaluation.
E) monitoring.

Question 67

What is the dominant approach for budgeting used today?

A) planning programming budgeting system
B) zero-base budgeting
C) incremental budgeting
D) financial control cost systems
E) expense contracting systems

Question 68

Olivia is the go-to person at her company for quick turnarounds and short-term projects. She stays focused and meets all deadlines. Even though she seems successful, which time management mistake may Olivia be making?

A) ignoring the more important and difficult activities
B) motivation and passion for her career
C) career readiness
D) competing priorities
E) producing effective long-term results

Question 69

Which of the following more closely aligns with a job versus a career?

A) It belongs to you and lasts a lifetime.
B) It can be managed and nurtured.
C) It is temporary and in service of someone else.
D) It can be created to fit your values and needs.
E) There is no distinction, they are the same thing.

Question 70

A strategy map helps employees to feel engaged because it

A) helps the employees calculate their productivity metric.
B) shows how their work contributes to organizational effectiveness.
C) explains the importance of their personal relationships with clients.
D) influences the work process and levels of employee performance.
E) aims to get increased employee commitment.

Question 71

Which of the following best defines Kaizen?

A) ideas for making organizations more responsive, more democratic, and less wasteful
B) a comprehensive approach dedicated to continuous quality improvement, training, and customer satisfaction
C) a cycle using observed data for continuous improvement of operations
D) a philosophy of small continuous improvement that seeks to involve everyone at every level of the organization
E) a rigorous statistical analysis process that reduces defects in manufacturing and service-related processes

Question 72

How is a control chart used?

A) to compare measured performance against the standards established
B) to show a significant deviation from standards
C) to recognize and reinforce positive performance
D) to establish the normal or desired performance with upper and lower limits
E) to quantify the performance level for a given goal

Question 73

King Power and Light has a goal of reducing its electric costs by installing solar panels on all of its building and supporting an increase of solar farms in the area. This will help to not only reduce company costs but also the costs passed down to its consumers. How would you describe King Power and Light's control system?

A) It overemphasizes a means to an end.
B) It seems like it will require a lot of paperwork.
C) It will require new hires with new skill sets.
D) It is setting a new standard that is behind the times.
E) It is strategic and results oriented.

Question 74

Colin was working on his budget. He had compiled his receipts, his employee's time sheets, the invoices he has sent to his suppliers and his bills that he owed others. He was now ready to assess his

A) assets.
B) income statement.
C) external audit.
D) fixed budget.
E) liabilities.

Question 75

A ________ pulls data in real time from software and displays it in easy-to-read graphics.

A) dashboard
B) strategy map
C) balanced scorecard
D) control chart
E) budget

Question 76

Janis is the CEO of Global Marketplace. She is reviewing the company's five-year plan and deciding if any corrective actions are needed. How would you describe her level of control?

A) operational
B) tactical
C) strategic
D) physical
E) informational

Question 77

Service firms are different from for-profit businesses in all of the following ways EXCEPT

A) They cannot hold inventory.
B) They develop personal relationships.
C) They offer services that are highly perishable.
D) They provide services on demand.
E) They require controls at many different points.

Question 78

Internal business processes influence all of the following EXCEPT

A) productivity.
B) quality.
C) access.
D) safety.
E) efficiency.

Question 79

Why is it important to control the supply chain?

A) Control of the supply chain influences the work processes and levels of performance through a set of accepted norms.
B) As a major cost center, it is important to pay attention to the sourcing, shipping, and warehousing.
C) It is effective in ensuring that performance standards are being met.
D) It increases employee commitment and workers taking responsibility for their performance.
E) Controlling the supply chain means it can be used to monitor employees and assess job satisfaction, engagement, and leadership.

Question 80

All Round, a new virtual music store, is trying to compete with iTunes. One thing All Round did was count the number of products sold and units produced. Where are they in the control process?

A) establishing standards
B) measuring performance
C) comparing performance
D) taking corrective action
E) making changes