Narrative 16-2
Interpublic is the world's third-biggest marketing services group. In 2005, the company informed the Securities and Exchange Commission (SEC) that it "had found accounting errors resulting from incompetence as well as falsified books and records, violations of the laws and company policies, and inappropriate customer charges" that required it to restate its earnings for every year in the decade. Interpublic is guilty of overstating both its expenses and its revenues in its earnings reports. The company blames its faulty revenue reporting on "inadequate procedures for review of customer contracts." This fraudulent activity will more than likely result in a default on the company's debt and the loss of its stock market listing.
-Refer to the Narrative 16-2.It appears that the control method Interpublic believed it should have used was one that focused on whether rules and policies were being followed.Which of the following defines this approach?
A) bureaucratic control
B) objective control
C) suboptimization
D) self-control

Question

Quizplus · Accepted Answer

The approach described in the narrative is consistent with bureaucratic control, which places a heavy emphasis on following rules and procedures. This can often lead to an inability to adapt to changing circumstances or take necessary risks.

Narrative 16-2 Interpublic Is the World's Third-Biggest Marketing Services Group. in 2005