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

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

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 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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.

Question 15

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 16

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

Question 17

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 18

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 19

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

Question 20

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

Question 21

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

Question 22

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 23

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

Question 24

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

Question 25

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

Question 26

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

Question 27

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 28

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

Question 29

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

Question 30

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

Question 31

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

Question 32

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 33

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

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

Question 36

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

Question 37

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

Question 38

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

Question 39

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

Question 40

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

Question 41

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 42

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 43

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 44

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 45

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 46

Six Sigma is most beneficial when employees have challenging jobs.

Question 47

_____ 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 48

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 49

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

Question 50

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

Question 51

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.

Question 52

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 53

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 54

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 55

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 56

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 57

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 58

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 59

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

Question 60

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

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

Question 61

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 62

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 63

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 64

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 65

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 66

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 67

The firm's financial position with respect to assets and liabilities at a specific point in time is shown by its:

A) activity ratio.
B) profitability ratio.
C) income statement.
D) liquidity ratio.
E) balance sheet.

Question 68

_____ provide the basic information used for financial control of an organization.

A) Owners equity
B) Income statements
C) Financial position
D) Mission Statements
E) 100-K's

Question 69

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 70

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 71

Pauline is an area manager at Ironman Gym. She anticipates her area's needs and formulates a proposed budget every quarter. She then sends this proposal to her manager. This is an example of:

A) top-down budgeting.
B) strategic budgeting.
C) revenue budgeting.
D) bottom-up budgeting.
E) none of these.

Question 72

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 73

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 74

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 75

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

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

Question 76

_____ 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 77

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 78

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 79

An advantage of the bottom-up budgeting process is:

A) its emphasis on bureaucratic control.
B) lower managers are more involved.
C) top managers control the information flow.
D) top managers are often not committed to achieving budget targets.
E) all of these.

Question 80

Brad is a department manager at Home Theater, Inc. His sole role in the budget process is to implement the budget that is developed for him. This is an example of:

A) strategic budgeting.
B) operational budgeting.
C) top-down budgeting.
D) management by objectives.
E) bottom-up budgeting.