Question 1

Management control can best be described as:&#10;A) A system of financial and management accounting&#10;B) A balance between financial and non-financial performance measurement&#10;C) The process of achieving organizational goals in a changing environment&#10;D) A sophisticated computer system based on an organization's predictive model.

Accepted Answer

Management control is primarily about steering the organization towards its goals while adapting to changes in the environment, rather than just about accounting, balancing performance measures, or relying on computer systems.

Question 2

Which of the following may be elements of a management control system:&#10;A) Budgets, strategic plans, and performance measures&#10;B) Incentives, targets, and information feedback loops&#10;C) Supervision, recruitment, and socialization&#10;D) All of the above.

Accepted Answer

All of the options listed (A, B, and C) are elements that can be part of a management control system. These elements work together to ensure that an organization's strategies and goals are effectively implemented and achieved.

Question 3

The process by which results are compared with plan, with variations leading to corrective action is termed:&#10;A) Performance gap&#10;B) Feedback&#10;C) Feedforward&#10;D) Budgeting

Accepted Answer

Feedback is the process where outcomes are compared against the plan, and any deviations are addressed through corrective actions. This ensures that performance aligns with goals or plans.

Question 4

A cybernetic control system requires:&#10;A) The ability to predict the effect of potential control actions&#10;B) Previous time periods as a comparator&#10;C) A thermostat&#10;D) A communication network to transmit information.

Accepted Answer

The answer of A cybernetic control system requires:&#10;A) The ability...

Question 5

A predictive model is best described as:&#10;A) The organization's budget for the year&#10;B) The organization's strategy for the next 3-5 years&#10;C) The action-outcome relationships to meet the organization's competition&#10;D) The cause-effect relationships to meet the organization's strategy and competitive environment.

Accepted Answer

Predictive models are tools used to forecast future events or behaviors by analyzing the cause-effect relationships within data. They help organizations strategize and adapt to their competitive environments by predicting outcomes based on various inputs or conditions.

Question 6

Non-financial performance measures are more likely to be:&#10;A) Leading indicators&#10;B) Lagging indicators&#10;C) Short-term indicators&#10;D) Long-term indicators.

Accepted Answer

Non-financial performance measures, such as customer satisfaction and employee engagement, are often leading indicators. They can predict future financial performance by indicating how well the company is positioned to achieve future success.

Question 7

The four perspectives in Kaplan & Norton's Balanced Scorecard are:&#10;A) Financial, customer, strategic, operations&#10;B) Strategic, customer, financial, non-financial&#10;C) Financial, customer, business process, learning and growth&#10;D) Financial, business process, quality, delivery.

Accepted Answer

The Balanced Scorecard by Kaplan & Norton includes four perspectives: Financial, Customer, Business Process, and Learning and Growth. These perspectives help organizations measure and manage their strategies from different viewpoints.

Question 8

Kaplan & Norton suggested that the number of high level performance measures that managers should include in their Balanced Scorecard should be:&#10;A) Four&#10;B) 12-16&#10;C) Hundreds&#10;D) No number specified.

Accepted Answer

Kaplan & Norton, the creators of the Balanced Scorecard, suggest including 12-16 high level performance measures. This number is considered manageable and allows for a comprehensive view of the organization's performance across different perspectives without overwhelming managers.

Question 9

One of the criticisms of the Balanced Scorecard approach is the:&#10;A) Absence of unambiguous organizational goals&#10;B) Ability to accurately measure non-financial performance&#10;C) Assumption of accurate cause-effect relationships&#10;D) Number of performance measures to be monitored

Accepted Answer

The Balanced Scorecard approach assumes accurate cause-effect relationships between strategic objectives and outcomes, which is a point of criticism. This assumption may not always hold true in complex organizational environments.

Question 10

A strategy map for an organization would include:&#10;A) The cause-effect relationships and performance targets for each element in the strategy map&#10;B) Ongoing monitoring and review of performance&#10;C) Resource reallocations through changed budgets where performance does not meet expectations&#10;D) All of the above

Accepted Answer

A strategy map includes cause-effect relationships and performance targets, ongoing monitoring and review of performance, and resource reallocations through changed budgets where performance does not meet expectations.

Question 11

The main difference between Kaplan and Norton's Balanced Scorecard and Cranfield University's Performance Prism is the inclusion in the Performance Prism of:&#10;A) Stability&#10;B) Shareholders&#10;C) Stakeholders&#10;D) Learning.

Accepted Answer

The answer of The main difference between Kaplan and Norton's...

Question 12

The main difference between operational and strategic performance measures is that strategic measures focus on:&#10;A) Financial performance&#10;B) Implementation of strategy&#10;C) Control rather than learning&#10;D) A balance between financial and non-financial measures.

Accepted Answer

The answer of The main difference between operational and strategic...

Deck 4: Management Control, Accounting, and Its Rationaleconomic Assumptions