Deck 13: Foundations of Control

Question 1

Application of Types of Control
Sam has not been receiving the information that he needs from his current control system. By the time Sam receives the information, the activity has occurred and there is nothing that can be done. Direct supervision is used extensively on the floor now, so some activities have been changed before they became costly mistakes. But Sam would like to do better. He would like to fix things before they break and anticipate more of the problems that occur.
Which form of control would Sam like to use?

A)feedforward
B)feedback
C)management
D)concurrent

Answer 1

A

Question 2

An effective control system ensures that activities are completed in ways that

A)lead to attainment of the organization's goals.
B)motivate employees.
C)minimize conflict.
D)maximize profits.

Answer 2

A

Question 3

Organizations that have clearly specified and distinct products and services, and considerable competition typically use

A)clan control.
B)market control.
C)bureaucratic control.
D)price control.

Answer 3

B

Question 4

Control systems such as _____________ are used by companies operating in less advanced countries.

A)direct supervision
B)informal control
C)centralization
D)standardized rules and regulations

Question 5

_____________determines, to a great extent, what people in the organization will attempt to excel at.

A)What we measure
B)How we measure
C)How often we measure
D)When we measure

Question 6

Which of the following is not a feedback control measure for reducing employee theft and fraud?

A)evaluate the organization's culture
B)employ personal investigators
C)let employees know when employee thefts or fraud incidents occur
D)openly communicate the costs and consequences of stealing

Question 7

Which of the following is not a feed forward control measure for reducing employee theft and fraud?

A)involving employees in developing theft and fraud deterrent policies
B)anti- theft education and training
C)treating employees with respect
D)pre- hire screening

Question 8

_____________is one of the most important goals of an entrepreneur.

A)Growth
B)Profit
C)Establishing a family- owned business
D)Stability

Question 9

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
If Gina looks at her unit as a profit center, which form of control will she be using?

A)market
B)regulated
C)bureaucratic
D)clan

Question 10

Beta Corp. managers are allowed a great deal of autonomy and freedom, but they must stay within their budgets and follow corporate guidelines. Beta uses _____________control.

A)sector analysis
B)bureaucratic
C)accounting
D)market

Question 11

The most popular type of control is _____________ control.

A)feedforward
B)feedback
C)concurrent
D)budgetary

Question 12

Controls in organizations with more open and supportive the cultures are

A)elaborate, formal.
B)informal, personal, management by walking around.
C)informal, self controlled.
D)formal, externally imposed, impersonal.

Question 13

The more important the activity and the more centralized the organization, the

A)more elaborate, comprehensive, formal rules and regulations.
B)more loose, informal controls.
C)less elaborate, comprehensive controls, formal rules and regulations.
D)more informal, management by walking around.

Question 14

Application of Qualities of Effective Control Systems
Jared has been hired to establish a control system for SRP Inc. Jared knows several decisions must be made before the control system can be implemented. Several contingencies must also be considered. One of the first decisions that must be made is where to place the controls and what needs to be controlled. Jared also knows the organization is relatively small and will be for some time, and that management intends to decentralize extensively. Furthermore, management has indicated that
if- then guidelines are to be implemented. Jared looks forward to designing a system that will work well for the company for years to come.
Since the organization is small, Jared should recommend that

A)control should be formal, impersonal, and include extensive rules and regulations.
B)an increase should be made in the number of controls and they should monitor everything.
C)there be a reduced number of controls.
D)control should be informal, personal, and include management by walking around.

Question 15

The key to an effective control system is to design one that

A)requires a minimum of management involvement.
B)monitors everything happening in the organization.
C)helps the organization to effectively and efficiently reach its goals.
D)monitors only the important activities in the organization.

Question 16

Very large organizations have_____________ controls.

A)highly informal, impersonal feedback
B)highly informal, personal feedback
C)highly formal, personal feedback
D)highly formal, impersonal feedback

Question 17

Which of the following statements is false?

A)Manipulation of control data is random.
B)Bureaucratic control systems are usually more effective than informal control systems.
C)Controls must be both flexible and accurate.
D)Sometimes the controls can run the organization.

Question 18

Direct supervision is the best- known form of _____________control.

A)feedback
B)feedforward
C)management
D)concurrent

Question 19

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
What form of control is her unit currently using?

A)clan
B)bureaucratic
C)regulated
D)market

Question 20

_____________is the process of monitoring activities and correcting any significant deviations.

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

Question 21

Application of Qualities of Effective Control Systems
Jared has been hired to establish a control system for SRP Inc. Jared knows several decisions must be made before the control system can be implemented. Several contingencies must also be considered. One of the first decisions that must be made is where to place the controls and what needs to be controlled. Jared also knows the organization is relatively small and will be for some time, and that management intends to decentralize extensively. Furthermore, management has indicated that
if- then guidelines are to be implemented. Jared looks forward to designing a system that will work well for the company for years to come.
The if- then guidelines refer to which of the following characteristics of control systems?

A)strategic placement
B)understandability
C)economy
D)corrective action

Question 22

Which is not one of the entrepreneurial business valuation methods mentioned in the text?

A)asset valuation
B)earnings valuation
C)cost valuation
D)cash flow valuation

Question 23

In a multinational company spread out across many locations, methods of controlling employee behavior

A)are highly centralized.
B)are similar from one foreign country to another.
C)are quite different in different countries.
D)are based on indirect control devices.

Question 24

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
The organizational culture at Gina's company is very top down and threatening, what is the most likely form of control that will be adopted by the leaders of the company?

A)informal, self- directed controls
B)formal standards and regulations
C)formal, externally imposed controls
D)elaborate, comprehensive controls

Question 25

There are three different approaches to designing control systems. Which of the following is not one of these approaches?

A)clan control
B)bureaucratic control
C)market control
D)economic control

Question 26

If organizational culture is open and supportive, controls should be

A)elaborate and comprehensive.
B)clearly defined.
C)formal and externally imposed.
D)informal and self- controlled.

Question 27

Which of the following is characteristic of managerial control in less advanced countries?

A)standardized rules
B)highly centralized decision making
C)indirect control devices
D)computer- related reports and analysis

Question 28

Since the_____________ belong to the company, they have a right to monitor anything on them.

A)desks
B)computers
C)floors
D)all of the above

Question 29

Application of Types of Control
Sam has not been receiving the information that he needs from his current control system. By the time Sam receives the information, the activity has occurred and there is nothing that can be done. Direct supervision is used extensively on the floor now, so some activities have been changed before they became costly mistakes. But Sam would like to do better. He would like to fix things before they break and anticipate more of the problems that occur.

-_____________control would require Sam to gather timely and accurate information that may be hard to develop.

A)Concurrent
B)Feedforward
C)Feedback
D)Management

Question 30

When measured performance does not meet the set standard, the first thing employees are apt to attack is

A)technology.
B)the standard.
C)management.
D)processes used.

Question 31

Alta Corp. has turned each of its divisions into profit centers and evaluates each division by the percentage of total corporate profits that it generates. Alta uses _____________control.

A)market
B)sector analysis
C)accounting
D)bureaucratic

Question 32

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
As Gina moves up the organizational hierarchy to higher positions and levels in the company, she finds that

A)there are more extensive and comprehensive controls.
B)managers rely on formal, impersonal rules and regulations.
C)managers monitor only the important activities in the unit.
D)many criteria are used in the design of control systems.

Question 33

The greater the distance between countries within a multinational firm, the greater the tendency to

A)use bureaucratic control.
B)use formalized controls.
C)use informal control.
D)use highly centralized decision- making.

Question 34

According to recent studies, employee theft and fraud are _____________resulting in an estimated loss of _____________to U.S. companies annually.

A)at a record high point; $75 billion
B)increasing; $30 billion
C)increasing; $50 billion
D)decreasing; $10 billion

Question 35

A company in which teams are widely used, like SAS Institute, will frequently use which type of control?

A)clan
B)price
C)market
D)bureaucratic

Question 36

Which of the following is not a step in the control process?

A)Measure actual performance.
B)Take appropriate action to correct any deviations.
C)Compare actual performance against the standard.
D)Develop the standard.

Question 37

Which of the following is not on the list of suggestions for achieving a supportive growth- oriented culture?

A)Be flexible.
B)Don't delegate too many duties to others.
C)Establish trust.
D)Be a good listener.

Question 38

Which of the following methods of measurement reports only on key areas and may ignore important facts?

A)oral reports
B)written reports
C)statistical reports
D)personal observation

Question 39

Which of the following is not a concurrent control measure for reducing employee theft and fraud?

A)set a good example for employees to follow
B)treat employees with respect
C)use video surveillance to monitor employee behavior
D)anti- theft education and training

Question 40

Mary's job is to compare each department's monthly budget to its actual expenditures. Mary is performing part of the_____________ function.

A)organizing
B)leading
C)controlling
D)planning

Question 41

Which is probably most cost effective for a small business?

A)concurrent control
B)empirical control
C)feedforward control
D)feedback control

Question 42

_____________is a control approach that emphasizes authority and relies heavily on administrative rules, policies, and procedures.

A)Clan control
B)Price control
C)Bureaucratic control
D)Market control

Question 43

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
A reorganization is announced in which Gina's unit is going to be consolidated along with the other four units into a centralized structure to reduce cost. The consolidated unit will report to the VP of sales as a part of a much larger group. In this situation what form of control system will most likely be adopted by the unit?

A)market
B)bureaucratic
C)centralized
D)clan

Question 44

The third and final step in the control process is

A)setting standards.
B)managerial action.
C)comparing actual performance with standard.
D)measuring actual performance.

Question 45

Control that depends on standardization of activities, well- defined job descriptions, and budgets would be an example of

A)market control.
B)clan control.
C)bureaucratic control.
D)price control.

Question 46

Entrepreneurs may take a turn for the worse in their business. What kind of control can be used to help prevent this?

A)functionality
B)feedforward
C)harvest
D)all of the above

Question 47

The_____________ , the more managers will need feedback on the performance of their employees' decisions.

A)greater the degree of centralization
B)smaller the span of control
C)greater the degree of decentralization
D)smaller the organization

Question 48

A recent survey of US businesses indicated that more than_____________ of employees admitted to stealing from their employer.
Of employees admitted to

A)10%
B)50%
C)75%
D)35%

Question 49

If a manager asks how and why performance has deviated, and then corrects the source of the deviation, she is using

A)remedial corrective action.
B)mechanistic control.
C)basic corrective action.
D)immediate corrective action.

Question 50

Planning must _____________control.

A)precede
B)follow
C)occur at the same time
D)Planning has no relationship to control.

Question 51

All of the following are characteristics of an effective control system except

A)reasonable criteria.
B)timeliness.
C)low cost.
D)accuracy.

Question 52

The standards that management uses as specific performance indicators are developed in the _____________function.

A)organizing
B)leading
C)controlling
D)planning

Question 53

Which of the following is a quality of an effective control system?

A)stability
B)economy
C)complexity
D)singular criteria

Question 54

_____________is the approach to control that emphasizes the use of external market mechanisms such as price competition and market share.

A)Clan control
B)Market control
C)Price control
D)Bureaucratic control

Question 55

Application of Qualities of Effective Control Systems
Jared has been hired to establish a control system for SRP Inc. Jared knows several decisions must be made before the control system can be implemented. Several contingencies must also be considered. One of the first decisions that must be made is where to place the controls and what needs to be controlled. Jared also knows the organization is relatively small and will be for some time, and that management intends to decentralize extensively. Furthermore, management has indicated that
if- then guidelines are to be implemented. Jared looks forward to designing a system that will work well for the company for years to come.
The need for the standards of a control system to have a dual positive effect is termed

A)reasonable criteria.
B)multiple criteria.
C)understandability.
D)strategic placement.

Question 56

Control that takes place while an activity is in progress is known as which of the following?

A)concurrent control
B)management control
C)feedforward control
D)feedback control

Question 57

_____________is a natural and desirable outcome for entrepreneurial ventures.

A)Corrective action
B)Control
C)Growth
D)Variation

Question 58

The higher one's position in the organizational hierarchy

A)the greater the need for a multiple set of criteria
B)the greater the reliance on a few criteria
C)the greater the reliance on bureaucratic control
D)the greater the reliance on informal control

Question 59

The type and extent of controls in an organization

A)depend on the resources of the organization.
B)are designed to monitor everything happening in the organization.
C)are directly related to bottom- line profitability.
D)should be consistent with the organization's culture.

Question 60

_____________is a control approach often used in organizations in which teams are common and technology is changing rapidly.

A)Bureaucratic control
B)Clan control
C)Market control
D)Price control

Question 61

A control approach where employee behaviors are regulated by shared values, norms, traditions, rituals, and other aspects of the organization's culture is known as

A)clan control.
B)price control.
C)market control.
D)bureaucratic control.

Question 62

Having enough_____________ is a key challenge facing growing entrepreneurial ventures.

A)capital
B)courage
C)stamina
D)buyers

Question 63

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
Any form of control that Gina chooses should ultimately help her to

A)effectively and efficiently reach the organization's goals.
B)monitor everything that happens in the unit.
C)monitor only the important activities in the unit.
D)involve a minimum of management involvement.

Question 64

An organization typically chooses to emphasize either _____________ or _____________control and then add some market control measures.

A)clan; tribe
B)price; budget
C)autocratic; democratic
D)bureaucratic; clan

Question 65

There are three different approaches to designing control systems. Which of the following is used primarily in team- based, or less bureaucratic types of organizations?

A)clan control
B)economic control
C)market control
D)bureaucratic control

Question 66

Financial statements are an example of _____________ control.

A)concurrent
B)management
C)feedback
D)feedforward

Question 67

When the entrepreneur hopes to cash in on the investment in the venture, it is called

A)selling out.
B)monitoring out.
C)harvesting.
D)exiting.

Question 68

An organization that hires additional personnel as soon as a major contract has been awarded is using which control system?

A)feedforward control
B)management control
C)feedback control
D)concurrent control

Question 69

Control that prevents anticipated problems is

A)feedforward control.
B)feedback control.
C)management control.
D)concurrent control.

Question 70

Which of the following is not a characteristic of managerial control in less advanced countries?

A)standardized rules and procedures
B)direct control devices
C)direct supervision
D)highly centralized decision making

Question 71

Which of the following is not listed as a key challenge for an entrepreneur?

A)growing the organization
B)finding capital
C)using operational controls
D)finding people

Question 72

In a large organization, which control recommendations should be made?

A)formal, impersonal, and extensive rules and regulations
B)few, easy to measure criteria
C)decreased number and breadth of controls
D)elaborate, comprehensive controls covering every area

Question 73

Application of Qualities of Effective Control Systems
Jared has been hired to establish a control system for SRP Inc. Jared knows several decisions must be made before the control system can be implemented. Several contingencies must also be considered. One of the first decisions that must be made is where to place the controls and what needs to be controlled. Jared also knows the organization is relatively small and will be for some time, and that management intends to decentralize extensively. Furthermore, management has indicated that
if- then guidelines are to be implemented. Jared looks forward to designing a system that will work well for the company for years to come.
Because Jared cannot control all activities, he should place the strategic control devices where those devices can call attention only to

A)the deficiencies.
B)the exceptions.
C)ambiguous elements.
D)the inequities.

Question 74

When a performance indicator cannot be stated in_____________ terms, managers should look for and use subjective measures.

A)financial
B)standard
C)quantifiable
D)acceptable

Question 75

When a manager discovers a variation between actual performance and the standard, managers should

A)do nothing and see if performance improves.
B)reevaluate the standard.
C)determine the acceptable range.
D)take action to control the actual performance.

Question 76

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
What form of control would the home office prefer that Gina use?

A)market
B)clan
C)bureaucratic
D)regulated

Question 77

Correcting any significant deviations is an important part of_____________ .

A)planning
B)monitoring
C)control
D)organizing

Question 78

Multinational organizations tend to rely on _____________controls.

A)informal
B)direct supervision
C)externally imposed
D)formal

Question 79

Application of Designing a Control System
Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms.
Which of the following statements is correct?

A)No control mechanisms are necessary.
B)Planning must precede control.
C)Everything within Gina's unit must be monitored.
D)Control must precede planning.

Question 80

Implementing the control process includes which of the following steps?

A)compare performance against standards
B)establish standards
C)determine the need for corrective action
D)all of the above