Deck 11: Evaluation and Control

Question 1

Financial controls are often used by firms that have relied on related diversification.

Answer 1

False

Question 2

One of the primary reasons for evaluation and control is that the firm's environment will change over time.

Answer 2

True

Question 3

A firm should not assume it is on the right path simply because it met its current goal for profitability.

Answer 3

True

Question 4

The first step in gap analysis is the evaluation of the firm's future direction and its industry.

Question 5

Denominator management occurs when a firm tries to increase its return on investment, or ROI by simply reducing the denominator (R,) while holding or increasing the numerator (I,) constant.

Question 6

The principal-principal problem occurs when employees do not do what is best for the shareholders.

Question 7

Financial control focuses on gaps between desired financial outcomes and those actually produced by a firm.

Question 8

The Delphi method of forecasting is faster than brainstorming sessions, and may help to reduce the problem of groupthink.

Question 9

Brainstorming is a forecasting method in which a broad topic is set out and a discussion among the participants is utilized to gain insights into what the future may look like.

Question 10

A global firm might conduct a gap analysis on a small scale twice a year, and on a larger scale with middle managers meeting from around the world every one to two years.

Question 11

A quality circle is a group of workers that regularly confers on ways to improve both the quality of a product and its production process.

Question 12

Organizational controls can be the most powerful in an organization, but they are also the hardest to change or institute.

Question 13

International firms need strategic controls that ensure appropriate actions are being taken today to help the firm tomorrow, but not if the short-term outcomes of these actions are costly.

Question 14

The easiest method to build forecasts of the future is simply scanning the environment for changes along the external, strategic, and internal dimensions.

Question 15

Changes in the evaluation and control of personnel facilitated the adoption of quality control techniques.

Question 16

Reengineering is a radical redesign of an organization's processes so that they can be executed in parallel, and the tasks undertaken by nonspecialists.

Question 17

Scenario planning tends to vary one quantifiable variable while holding others constant to see the likely effect.

Question 18

In conducting gap analysis, managers can simply rely on a binary yes or no judgment.

Question 19

A firm's competitiveness is indirectly affected by its external environment.

Question 20

Business people often like to believe that firms will automatically make changes as their competitive environment changes.

Question 21

Top management sets in motion the actions that implement the board's strategic choices.

Question 22

Which of the following statements about the first step in gap analysis is true?

A) An evaluation at this stage should include qualitative elements only.
B) The firm needs to periodically evaluate where it stands relative to its expectations.
C) The goals and objectives typically include only short-term time frames.
D) It is the evaluation of the firm's future direction and its industry.

Question 23

The department managers determine how to enact the mission, and determine what control actions are needed and when, where, and how to implement them in order to successfully complete the control process.

Question 24

Which of the following occurs when a firm tries to increase its ROI by simply reducing the denominator while holding or increasing the numerator constant?

A) Reengineering
B) Emergent strategy
C) Numerator management
D) Denominator management

Question 25

The decline in the value of the U.S. dollar and the rise in the value of the Euro has affected many exporters. This example shows that a firm's current status is affected by its:

A) strategic environment.
B) internal systems.
C) external environment.
D) technological advancements.

Question 26

According to _____, experts rank different potential future outcomes and through an iterative process these predictions are refined until a prediction of what the future may hold is reached.

A) the Delphi method
B) scenario planning
C) sensitivity analysis
D) the Balanced Scorecard

Question 27

Managers seeing opportunities and shifting the organization to that new direction are using a(n):

A) planned strategy.
B) deliberate strategy.
C) emergent strategy.
D) intended strategy.

Question 28

Sensitivity analysis:

A) is a forecasting method where participants are given potential situations and then asked to build likely responses and outcomes for the business.
B) is a forecasting method in which a broad topic is set out and a discussion among the participants is utilized to gain insights into what the future may look like.
C) can include anticipatory elements that are difficult to formalize, such as subjective interpretations of facts, shifts in values, new regulations, or inventions.
D) tends to vary one quantifiable variable while holding others constant to see the likely effect.

Question 29

Quality management standards are process standards, not product standards.

Question 30

Which of the following statements about strategic controls is true?

A) They are the most important category of control for an international firm.
B) They rely on more qualitative measures that are difficult to measure.
C) In all cases, the measure is easy to quantify, especially if it relates to market share or competitors' positions.
D) They are needed to ensure appropriate actions are being taken today to help the firm tomorrow, but not if the short-term outcomes of these actions are costly.

Question 31

_____ is a forecasting method in which a broad topic is set out and a discussion among the participants is utilized to gain insights into what the future may look like.

A) Scenario planning
B) Brainstorming
C) Mind mapping
D) Balanced Scorecard

Question 32

Which of the following is a forecasting method where participants are given potential situations and then asked to build likely responses and outcomes for the business?

A) Case study
B) Reengineering
C) Scenario planning
D) Brainstorming

Question 33

Which of the following statements about scenario planning is true?

A) It can include firms' competitive environment as summarized by the Five Forces Model and other anticipatory elements that are difficult to formalize.
B) Scenarios always include expectedly important situations and problems that exist in some form in the present day.
C) At the end of the scenario planning exercise, analysts recommend selecting an even number of scenarios that vary from low to high on a single key variable.
D) It tends to vary one quantifiable variable while holding others constant to see the likely effect.

Question 34

Which of the following statements about disruptive technological change is false?

A) History shows that most firms are successful in meeting disruptive challenges.
B) Firms need to be attuned to major disruptive changes in their environment.
C) Established firms start to suffer as they struggle to respond to disruptive change.
D) It is a common source of industry upheaval.

Question 35

Which of the following statements about financial controls is false?

A) They include goals such as becoming the market leader in a given product-market.
B) They are often used by firms that have relied on unrelated diversification.
C) They focus on gaps between desired financial outcomes and those actually produced by a firm.
D) International firms that have a strict focus on only financial controls risk encouraging a short-term perspective.

Question 36

_____ is a radical redesign of an organization's processes so that they can be executed in parallel, and the tasks undertaken by nonspecialists.

A) Total quality management
B) Scenario planning
C) Process management
D) Reengineering

Question 37

For an international firm that establishes a wholly owned subsidiary overseas, the firm's middle managers are key to helping prevent situations.

Question 38

Which of the following statements about the Delphi method is true?

A) This method of forecasting is faster than brainstorming sessions.
B) It is good for predicting the changes in a particular industry that will come about from technology.
C) It cannot reduce the problem of groupthink unlike other forecasting methods.
D) It can occur only when all of the group is present in the same location.

Question 39

According to the text, which category of control is perhaps the most important for an international firm?

A) Strategic control
B) Personnel control
C) Organizational control
D) Financial control

Question 40

"Can the firm change positioning by moving upmarket?" should be evaluated at which level of a firm's environment?

A) Internal systems
B) External environment
C) Technological advancements
D) Strategic environment

Question 41

The board of directors:

A) helps to establish control mechanisms and guide how the firm will respond to major changes in its environment.
B) should be involved even with the relatively minor variances between expected and actual results.
C) have a legal responsibility to ensure that top managements' best interests are served by the company.
D) is a group of individuals appointed by a firm's top management to supervise a firm's activities and its shareholders.

Question 42

Explain the role of top management in terms of institutionalizing control.

Question 43

Who determines how to enact a firm's control mission, and determine what control actions are needed and when, where, and how to implement them in order to successfully complete the control process?

A) Department managers
B) Top management
C) Boards of directors
D) Divisional managers

Question 44

Which of the following concerns operating a facility with strong concerns for pollution control and the environment?

A) ISO 9000
B) ISO 14001
C) ISO 9001
D) ISO 27001

Question 45

What is the Balanced Scorecard?

Question 46

A _____ is where employees do not do what is best for the shareholders.

A) principal dilemma
B) principal-agent problem
C) principal-stakeholder problem
D) principal-principal problem

Question 47

Which of the following is a system that summarizes an organization's strategic objectives into four main performance metrics: financial, internal processes, customers, and learning and growth?

A) ISO 9000
B) Delphi method
C) Balanced Scorecard
D) Quality circles

Question 48

Controls that occur at the individual level in a firm are:

A) strategic controls.
B) procedural controls.
C) financial controls.
D) personnel controls.

Question 49

What is reengineering? How is it helpful?

Question 50

Mention some of the criteria that successful firms utilize in their individual-level controls.

Question 51

Write a short note on ISO 9000.

Question 52

What is scenario planning? Explain its importance.

Question 53

What is organizational control? Why is it important for a worldwide firm?

Question 54

Organizational controls:

A) are typically the least quantifiable types of controls.
B) often include goals such as expanding into a new market.
C) focus on ensuring that a firm is meeting its strategic goals.
D) emphasize gaps between desired financial outcomes and those actually produced by a firm.

Question 55

_____ is a group of workers that regularly confers on ways to improve both the quality of a product and its production process.

A) Kaizen
B) TQM
C) Quality circle
D) Six Sigma