Deck 19: Managing Quality and Performance

Question 1

Zero-based budgeting requires a complete justification for every line item in a budget.

Answer 1

True

Question 2

A cash budget estimates receipts and expenditures of money on a daily or weekly basis..

Answer 2

True

Question 3

The systematic process of regulating organizational activities to make them consistent with the expectations in plans, targets, and standards of performance refers to organizational control.

Answer 3

True

Question 4

Benchmark control focuses on the quantity of an end product or service.

Question 5

Effectively controlling an organization requires information about product standards and actual products, as well as actions to correct any deviations from the standards.

Question 6

The fourth step in the control process is comparing actual activities to performance standards.

Question 7

Managers focus on the various elements of the scorecard to set targets, evaluate performance, and guide discussion about what further actions need to be taken.

Question 8

Although work processes can be controlled and regulated, it is impossible to control and regulate employee behavior.

Question 9

The final step of the feedback control model is to do nothing if performance is adequate or to take corrective action if performance is inadequate.

Question 10

Managers are increasingly recognizing the need to measure intangible aspects of performance such as customer service.

Question 11

The feedback control model is a comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes, and the organization's capacity for learning and growth.

Question 12

An expense budget lists forecasted and actual revenues of the organization.

Question 13

The level of funds flowing through the organization and the nature of cash disbursements is shown through the capital budget.

Question 14

Customer service, external business processes, financial performances, and the organization's capacity for learning and growth are the four major perspectives of the balanced scorecard.

Question 15

Effective management control involves subjective judgment and employee discussions, as well as objective analysis of performance data.

Question 16

An expense budget lists forecasted and actual revenues of the organization.

Question 17

In most companies, managers rely exclusively on qualitative measures to measure actual performance.

Question 18

Within the balanced scorecard, customer service indicators measure things such as employee retention and satisfaction.

Question 19

The capital budget lists planned investments in major assets such as buildings, heavy machinery, or complex information technology systems.

Question 20

A standard for performance is included in an organization's overall strategic plan to compare organizational activities against.

Question 21

A responsibility center involves the coordination of mulitple managers from various departments to carry out an activity.

Question 22

Liabilities are the firm's debts, both current and long-term.

Question 23

Bottom-up budgeting is a process in which lower level managers anticipate their department's resource needs and pass them up to top management for approval.

Question 24

Companies today are increasingly shifting from a hierarchical control process to one that is more decentralized.

Question 25

The use of cultural values, traditions, shared beliefs and trust to increase compliance with goals refers to decentralized control.

Question 26

A Six Sigma process will typically result in one defective package of product for every three truckloads shipped.

Question 27

A process in which lower level managers anticipate their department's resource needs and pass them to top management for approval is called top-down budgeting.

Question 28

The goal of open-book management is to get every employee thinking and acting like a business owner.

Question 29

The balance sheet shows the firm's financial position with respect to expenses and credits at a specific point in time.

Question 30

Frequently calculated ratios typically pertain to activity, passivity, and profitability.

Question 31

The return on total assets (ROA) is an activity ratio that is the percentage returned to investors on total assets.

Question 32

A balance sheet budget is a budget that plans and reports investments in major assets to be depreciated over several years.

Question 33

Under hierarchical control, employees are actively engaged and committed to their work.

Question 34

The liquidity ratio shows the company's ability to meet its current debt obligations and a measurement of the firm's margin of safety.

Question 35

An activity ratio that measures how many times the inventory is turned over to meet the total sales figure is called the inventory turnover.

Question 36

Closed-book management helps employees appreciate why efficiency is important to the organization's success as well as their own.

Question 37

The system of governing an organization so that the interests of corporate owners are protected refers to corporate governance.

Question 38

Open-book management ties employee rewards to the company's overall success.

Question 39

The Six Sigma approach is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors.

Question 40

The income statement shows revenues coming into the organization from all sources and subtracts all expenses.

Question 41

Which of the following is a control system that measures performance in terms of after-tax profits minus the cost of capital invested in tangible assets?

A) Open-book management
B) Economic value-added system
C) Activity-based costing
D) Inappropriate control system
E) None of these

Question 42

An organization-wide commitment to infusing quality into every activity through continuous improvement defines Six Sigma.

Question 43

All of the following are key steps of setting up feedback control systems EXCEPT:

A) comparing performance to standards.
B) establishing standards.
C) getting employee opinions.
D) measuring performance.
E) making necessary corrections.

Question 44

Ophelia, the new CEO at Odyssey Inc., plans to implement a highly effective systematic process of regulating organizational activities to make them consistent with the expectations that are established by managers within the company. This is referred to as _____ control.

A) organizational
B) feedback
C) budgetary
D) systems
E) quality

Question 45

Six Sigma is most beneficial when employees have challenging jobs.

Question 46

All of the following are major perspectives of the Balanced Scorecard EXCEPT _____.

A) competitors
B) customers
C) learning and growth
D) financial
E) internal business processes

Question 47

The certification based on a set of international standards for quality management, setting uniform guidelines for processes to ensure that products conform to customer requirements is the ISO certification.

Question 48

Which of the following is the systematic process through which managers regulate organizational activities?

A) Strategic planning
B) Organizational control
C) Organizational goal setting
D) Strategic regulation
E) Organizational leading

Question 49

For control, this type of measure is an important part of achieving higher performance.

A) Statistical
B) Theoritical
C) Emotional
D) Employee conflict
E) Market

Question 50

A group of six to twelve volunteer employees who meet regularly to discuss and solve problems affecting their common work activities refers to a quality team.

Question 51

According to MANAGER'S SHOPTALK in Chapter 19, the interest in self-awareness is part of a growing discipline called _____.

A) employee self promotion
B) emotional development
C) self-leadership
D) emotional hueristics
E) auto-analytics

Question 52

_____ indicators focus on production and operating statistics.

A) Financial performance
B) Business process
C) Critical success
D) Potential for learning and growth
E) Performance measurement

Question 53

Very high expectations from senior management and a desire to share authority by middle managers are two of the positive factors leading to success of TQM.

Question 54

The implementation of total quality management involves the use of many techniques such as quality circles, benchmarking, Six Sigma principles, reduced cycle time, and continuous improvement.

Question 55

Continuous improvement is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis.

Question 56

Outsourcing is the continuous process of measuring products, services, and practices against the toughest competitors or the industry leaders.

Question 57

Zachary, a manager at ExecuComp, receives quarterly reports, which track his department's production statistics. However, these reports lack key information regarding reject rates. Which of the following components of the control model need improvement?

A) Measuring actual performance
B) The planning and setting of performance standards
C) SWOT analysis
D) The ability to take corrective action when necessary
E) All of these

Question 58

Benchmarking is the age-old practice of allowing the artisan to sign his name to the finished product.

Question 59

TQM tends to be most successful when it enriches jobs and improves employee motivation.

Question 60

Which of the following is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors?

A) Economic value-added system
B) Activity-based costing system
C) Market value-added system
D) Balanced scorecard
E) Open-book management system

Question 61

In the process of implementing the balanced scorecard approach at his company, operations manager Seth Howard wonders whether internal activities and processes add value for customers and shareholders. This involves which dimension of the balanced scorecard?

A) Customers
B) Learning and growth
C) Financials
D) External business processes
E) Internal business processes

Question 62

Use of the balanced scorecard can hinder or decrease organizational performance if it is implemented using which type of orientation?

A) Performance management orientation
B) Performance measurement orientation
C) Customer orientation
D) Learning and growth orientation
E) Internal business process orientation

Question 63

Tiffany recently discovered that the reject rate for her department has exceeded the standard for performance in this area. What should Tiffany do to exercise effective control?

A) She should order more training for her workforce.
B) She should contact the maintenance department and have them come fix her machinery.
C) She should suspend the poorer workers in her department.
D) She should investigate and discover the cause of the problem.
E) None of these

Question 64

According to the control model, after establishing standards of performance the manager should:

A) compare performance to standards.
B) get the standards approved by the supervisors and subordinates.
C) measure actual performance.
D) take corrective action.
E) provide feedback.

Question 65

Ron meets with his company's accountant to discuss the budget of anticipated and actual expenses for each segment of the organization. This involves review of which type of budget?

A) Expense budget
B) Revenue budget
C) Cash budget
D) Capital budget
E) Nonfinancial budget

Question 66

What is the first step in the feedback control system?

A) Establishing strategic objectives
B) Establishing standards of performance
C) Taking corrective action
D) Comparing performance to standard
E) Measuring previous performance

Question 67

Focusing on how well resources and human capital are being managed for the company's future refers to which component of the balanced scorecard?

A) Customers
B) Learning and growth
C) Financials
D) Internal business processes
E) External business processes

Question 68

Madison has been assigned to work on the development of a budget that plans future investments in major assets such as buildings and heavy machinery. Madison is working on a(n) _____ budget.

A) cash
B) capital
C) revenue
D) operating
E) expense

Question 69

All well-designed control systems involve the use of _____ to determine whether performance meets established standards.

A) opinions
B) advice
C) consultants
D) benchmarks
E) feedback

Question 70

Stella, a systems manager for a large technology company, would like to get an understanding of her company's financial position with respect to assets and liabilities at the end of the fiscal year. Which financial statement should she refer to?

A) Income statement
B) Activity ratio
C) TQM report
D) Balance sheet
E) Balance scorecard

Question 71

Which of the following includes anticipated and actual expenses for a responsibility center?

A) Revenue budget
B) Cash budget
C) Capital budget
D) Expense budget
E) Operating budget

Question 72

_____ control is the process of setting targets for an organizations expenditures.

A) Quality
B) Income
C) Budgetary
D) Systems
E) Supply chain

Question 73

CyberChasers Corporation sends a post-purchase questionnaire to all consumers who buy their products. They are interested in gathering data on product quality, customer service orientation, and customer satisfaction. This is an example of a:

A) concurrent control.
B) feedback control.
C) feedforward control.
D) preliminary control.
E) preventive control.

Question 74

_____ is any organizational department or unit under the supervision of a single person who is responsible for its activity.

A) Independent center
B) Responsibility center
C) Analysis center
D) Control center
E) Budgeting center

Question 75

The _____ plans future investments in major assets to be depreciated over several years.

A) capital budget
B) balance sheet budget
C) cash budget
D) revenue budget
E) profit budget

Question 76

Which of these is a financial budget that estimates cash flows on a daily basis or weekly basis to ensure that the company can meet its obligations?

A) Capital expenditure budget
B) Balance sheet budget
C) Cash budget
D) Revenue budget
E) Profit budget

Question 77

Mistletoe Corporation has a detailed set of organizational goals and management information system that delivers timely and accurate information. Mistletoe still has control problems, however, because its managers refuse to act on the information they receive. Mistletoe's control process has flaws in which of the following areas?

A) Its performance standards
B) Its management information systems
C) Its ability to take corrective action when necessary
D) Its measurement systems
E) None of these

Question 78

Your department has absenteeism standards, a way to measure absenteeism, and, based on your investigation, you have concluded that your department has an excessive absenteeism rate. What should your next step be?

A) Set new absenteeism standards.
B) Develop new measures of absenteeism.
C) Terminate three employees for excessive absenteeism.
D) All of these would be good examples of taking corrective action.
E) None of these

Question 79

Kendra is a manager at George's Goodies. On a regular basis Kendra and her subordinates set individual and organizational goals. This process is similar to which component of the control model?

A) Taking corrective action when necessary
B) An information system
C) Establishing performance standards
D) Engaging strategic analysis
E) None of these

Question 80

Kyle's work group consistently exceeds the goals the members set for themselves some months ago. In an attempt to better motivate the group, Kyle thought it would be a good idea to set new goals. This is an example of Kyle exercising control by:

A) comparing performance to standards.
B) developing adequate measures of performance.
C) taking corrective action.
D) all of these.
E) comparing performance to standards and developing adequate measures of performance only.