Deck 14: Basic Elements of Control

Question 1

Which of the following is a form of operations control?

A) Financial control
B) Screening control
C) Strategic control
D) Structural control
E) Budgetary control

Answer 1

B
The three forms of operations control are preliminary, screening, and postaction control.

Question 2

An organization's attempt to control the behavior of their employees by directing them toward higher performance is an example of control of _____ resources.

A) physical
B) financial
C) human
D) information
E) inventory

Answer 2

C
Control of human resources includes selection and placement, training and development, performance appraisal, and compensation. Relatedly, organizations also attempt to control the behavior of their employees-directing them toward higher performance and away from unethical behaviors.

Question 3

Which of the following is true of organizational control?

A) Control always results in higher costs for an organization.
B) Sales and marketing forecasting is a part of financial control.
C) Control can help an organization adapt to environmental change.
D) Control systems increase organizational complexity.
E) Public relations is a part of human resources control.

Answer 3

C
A properly designed control system can help managers anticipate, monitor, and respond to changing circumstances.

Question 4

When large firms merge, the results are often initially disappointing due to control systems trying to cope with a(n) _____.

A) rise in error accumulation
B) increase in organizational complexity
C) lack of environmental change
D) increase in costs
E) reduction in output

Question 5

The control of _____ affects all the other resources in an organization.

A) physical resources
B) human resources
C) financial resources
D) information resources
E) inventory resources

Question 6

Performance appraisals are part of _____ control.

A) physical
B) human resources
C) information
D) financial
E) inventory

Question 7

The final step in the control process is:

A) establishing standards.
B) expressing standards in measurable terms.
C) measuring performance.
D) comparing performance against standards.
E) considering corrective action.

Question 8

The first step in the control process is:

A) modifying control standards.
B) comparing performance against standards.
C) measuring performance.
D) establishing control standards.
E) determining the need for corrective action.

Question 9

An organization shifts its budget from a few, large projects to accommodate a number of smaller projects every year. It also decentralizes power and gives additional responsibilities to individual project managers. This is an example of the use of _____ control.

A) physical
B) information
C) structural
D) financial
E) screening

Question 10

Monitoring the administrative ratio to make sure staff expenses do not become excessive is an example of _____ control.

A) postaction
B) strategic
C) structural
D) operations
E) information

Question 11

Monitoring receivables to make sure customers are paying their bills on time is an example of _____ control.

A) operations
B) strategic
C) structural
D) financial
E) physical

Question 12

A manufacturer of health foods ensures that at least 90 percent of all its raw materials is grown organically. This is an example of _____ control.

A) preliminary
B) postaction
C) feedback
D) screening
E) concurrent

Question 13

Quality control is a type of _____ control.

A) physical
B) human
C) operations
D) financial
E) structural

Question 14

Google partnered with Nielsen Co. to poll users about ads on Google+. Nielsen then packaged the information for advertisers. This was a response to advertiser complaints about the effectiveness of ads on the social network. This indicates that Google is placing an emphasis on _____ controls.

A) operations
B) development
C) strategic
D) financial
E) structural

Question 15

In the control process, which of the following steps follows the measurement of performance?

A) Considering corrective action
B) Comparing performance against standards
C) Establishing standards
D) Developing effective performance measures
E) Setting standards consistent with organizational goals

Question 16

A company that carefully evaluates job applicants is using _____ control.

A) screening
B) cybernetic
C) postaction
D) preliminary
E) information

Question 17

The report issued about a major packaging defect showed a culture at an organization that did not listen when small safety issues were raised. Each issue by itself might not have caused the flaw. This example illustrates:

A) the need to understand organizational complexity.
B) that changing conditions are influenced by innovation.
C) the need for control in order to reduce the accumulation of errors.
D) the way that control helps organizations respond to changing standards.
E) the way that organizations cope with multiple control standards.

Question 18

Following the accidental release of a batch of phones that failed screening control, a manufacturer of mobile phones replaces all such phones at no cost to the user-even taking care of shipping and delivery. Which step in the control process does this example represent?

A) Taking corrective action
B) Measuring performance
C) Comparison of performance to standards
D) Setting performance standards

Question 19

Ensuring that receivables are collected in a timely manner is part of _____ control.

A) physical
B) strategic
C) information
D) financial
E) structural

Question 20

In organizations, sales forecasting, economic forecasting, and environmental analysis are examples of the control of _____ resources.

A) physical
B) human
C) information
D) financial
E) inventory

Question 21

_____ controls are an effective way to catch problems early in the transformation process.

A) Postaction
B) Structural
C) Screening
D) Strategic
E) Financial

Question 22

At a high school, final examinations are held online. During the examination, the difficulty level of questions assigned to students is modified based on how well individual students perform. This is an example of _____ operations control.

A) preliminary
B) screening
C) structural
D) postaction
E) decentralized

Question 23

A policy think tank requires all candidates applying for the position of vice-president to have a minimum of 10 years of experience in governmental organizations, international business, or multinational non-profits. This is an example of _____ operations control.

A) preliminary
B) screening
C) structural
D) postaction
E) decentralized

Question 24

Postaction control is applied to _____.

A) resources
B) transformation processes
C) subsystems
D) controllers
E) outputs

Question 25

Hermes is a taxi service that asks customers to fill out an online feedback form once their ride is complete. Hermes is making use of _____ operations control.

A) preliminary
B) screening
C) structural
D) postaction
E) decentralized

Question 26

_____ control attempts to monitor the quality or quantity of resources before they enter an organization.

A) Structural
B) Postaction
C) Preliminary
D) Screening
E) Financial

Question 27

Intertek's product quality inspections help protect brand reputations by minimizing defective merchandise, customer complaints, non-compliant products, and late shipments. This is an example of _____ control.

A) preliminary
B) postaction
C) screening
D) financial
E) structural

Question 28

A publishing firm will use a(n) _____ budget to forecast and plan the demand for young adult books in Southeast Asia in the coming year.

A) labor
B) capital expenditures
C) operating
D) balance sheet
E) space

Question 29

Inspection reports are used to monitor the quality of raw materials delivered to manufacturers. This is an example of _____ control.

A) financial
B) structural
C) preliminary
D) screening
E) postaction

Question 30

Which of the following types of operations control relies heavily on feedback processes?

A) Strategic control
B) Financial control
C) Postaction control
D) Preliminary control
E) Screening control

Question 31

_____ control provides a basis for rewarding employees.

A) Preliminary
B) Strategic
C) Postaction
D) Structural
E) Screening

Question 32

A publisher of children's books only uses recycled paper for all its products. This is an example of _____ operations control.

A) preliminary
B) screening
C) structural
D) postaction
E) decentralized

Question 33

Before submitting a final policy memo, analysts may modify certain recommendations based on feedback from experts and the general public. This is an example of _____ control.

A) preliminary
B) postaction
C) screening
D) financial
E) structural

Question 34

Everyone working or volunteering for Girl Scouts goes through a background check before they can work with girls or handle money. This is an example of:

A) screening control.
B) preliminary control.
C) postaction control.
D) information control.
E) structural control.

Question 35

The _____ budget shows the anticipated differences between sales or revenue and expenses.

A) expense
B) profit
C) labor
D) capital expenditure
E) cash flow

Question 36

Which of the following is true of screening control?

A) It takes place during the transformation process.
B) It involves interviewing potential employees.
C) It is the same as preliminary control.
D) It is present only in organizations with bureaucratic control.
E) It is a part of structural control.

Question 37

During the scheduling of a project, a plant manager is told that she has 30 workers for 6 hours a day, 5 days a week. This is part of a(n) _____ budget.

A) capital expenditure
B) master
C) space
D) labor
E) personnel

Question 38

A state university develops a budget that shows its projected income from sources that include government funding, tuition fees, alumni contributions, and research grants. This is an example of a(n) _____ budget.

A) operations
B) capital expenditures
C) nonmonetary
D) output
E) revenue

Question 39

Which of the following types of control is used for resources such as retained earnings?

A) Financial control
B) Structural control
C) Operating control
D) Interim control
E) Nonmonetary control

Question 40

_____ control is the form of operations control that tends to be used most often.

A) Human resources
B) Financial
C) Screening
D) Postaction
E) Preliminary

Question 41

Which of the following statements is true of auditing?

A) External audits tend to be more expensive than internal audits.
B) External audits are handled by employees of the organization.
C) Publicly held corporations are required by law to have internal audits regularly.
D) All organizations are required to have a permanent internal auditing staff.
E) Organizations contract with certified public accountants for external audits.

Question 42

Which of the following ratios assesses the ease with which an organization's assets can be converted into cash?

A) Liquidity ratio
B) Profitability ratio
C) Debt ratio
D) Operating ratio
E) Coverage ratio

Question 43

A company that specializes in indoor farming has recently acquired a large warehouse. Which of the following budgets will this company use to determine and plan the area available for various functions?

A) Operating budget
B) Space budget
C) Labor budget
D) Revenue budget
E) Expense budget

Question 44

Which of the following is a weakness associated with budgeting?

A) Budgets do not allow managers to identify problem areas.
B) Budgets do not facilitate effective control.
C) Budgets fail to link planning and controlling.
D) Budgets can limit innovation and change.
E) Budgets hamper coordination between departments.

Question 45

The financial ratio that reflects the ability to meet long-term financial obligations is the _____ ratio.

A) return
B) operating
C) liquidity
D) debt
E) coverage

Question 46

John began his company making herb vinegars from a recipe his grandmother had given him. As demand grew, he had to buy a large commercial kitchen. Which of the following ratios would a banker be most interested in before allowing John to borrow $500,000?

A) Liquidity ratio
B) Balance sheet
C) Return on investment
D) Operating ratio
E) Debt ratio

Question 47

Financial analysts look at a company's _____ ratio to determine if it can make interest payments on borrowed capital.

A) coverage
B) operating
C) debt
D) return
E) liquidity

Question 48

Which of the following is true of the liquidity ratio?

A) It indicates how easily an organization's assets are converted into cash.
B) It reflects an organization's ability to meet long-term financial obligations.
C) It shows managers and investors how much return an organization is generating relative to its assets.
D) It helps estimate an organization's ability to cover interest expenses on borrowed capital.
E) It indicates the effectiveness of specific functional areas in an organization.

Question 49

A(n) _____ budget forecasts the organization's assets and liabilities in the event that all other budgets are met.

A) balance sheet
B) revenue
C) fixed asset
D) expense
E) labor

Question 50

Which of the following is a nonmonetary budget?

A) Labor budget
B) Capital expenditures budget
C) Sales budget
D) Balance sheet budget
E) Revenue budget

Question 51

Which of the following reflects a firm's ability to meet its long-term financial obligations?

A) Debt ratio
B) Balance sheet
C) Return on investment
D) Profit budget
E) Liquidity ratio

Question 52

Which of the following statements about financial audits is true?

A) Audits can only be conducted by experts who are not employees of the organization.
B) Financial audits are always internal to an organization.
C) Audits are used to monitor accounting and financial systems within an organization.
D) Organizational operating systems are not audited.
E) Publicly held corporations are required by law to have internal audits regularly.

Question 53

A budget that deals with costs of major assets such as a new plant, machinery, or land is known as a _____ budget.

A) revenue
B) balance sheet
C) cash flow
D) expense
E) capital expenditures

Question 54

If an energy company wants to discover the effectiveness of its wind-turbine division in a particular state, it will use a(n):

A) liquidity ratio.
B) balance sheet ratio.
C) return on investment.
D) operating ratio.
E) debt ratio.

Question 55

Which of the following financial documents shows a listing of all the organization's assets and liabilities at a given point in time?

A) Balance sheet
B) Expense budget
C) Income statement
D) Revenue budget
E) Capital expenditures budget

Question 56

Which of the following shows income that the organization expects to receive from normal operations?

A) Profit budget
B) Balance sheet budget
C) Cash flow budget
D) Space budget
E) Revenue budget

Question 57

Which of the following is true of the debt ratio?

A) It reflects ability to meet long-term financial obligations.
B) It shows managers and investors how much return the organization is generating relative to its assets.
C) It indicates how liquid an organization's assets are.
D) It indicates the effectiveness of specific functional areas.
E) It helps estimate the organization's ability to cover interest expenses on borrowed capital.

Question 58

Which of the following is the most common means of financial control within organizations?

A) Financial statements
B) Ratio analysis
C) Budgets
D) Financial audits
E) Benchmarking

Question 59

A(n) _____ compares different elements of a balance sheet or an income statement to one another.

A) expense budget
B) profit budget
C) internal audit
D) operations budget
E) financial ratio

Question 60

Which of the following summarizes the financial performance of an organization over a period of time?

A) Balance sheet
B) Liquidity ratio
C) Cash flow statement
D) Income statement
E) Debt statement

Question 61

An organization that relies on strict rules and a rigid hierarchy and insists that employees meet minimally acceptable levels of performance most likely uses _____ structural control.

A) strategic
B) decentralized
C) bureaucratic
D) organic
E) screening

Question 62

A multinational construction firm does not require its various divisions to report frequently to the head office. The organization believes in letting each manager have the authority to respond quickly to environmental changes. These managerial actions do not have to be approved by the head office before they are implemented. This firm uses _____ strategic control.

A) bureaucratic
B) mechanistic
C) decentralized
D) formalized
E) inflexible

Question 63

Which of the following types of control focuses on leadership and technology control systems?

A) Bureaucratic
B) Structural
C) Operations
D) Strategic
E) Screening

Question 64

An appraisal of an organization's accounting and financial procedures conducted by employees of that organization is known as a(n):

A) internal audit.
B) debt audit.
C) ratio audit.
D) external audit.
E) liquidity audit.

Question 65

Which of the following is characteristic of the bureaucratic approach to organizational control?

A) Rewards are directed at group performance.
B) Organizational structure is flat.
C) Employee participation is extended and informal.
D) Reliance is on strict rules and a rigid hierarchy.
E) Performance expectations extend above and beyond the minimum.

Question 66

Which of the following is an important element of decentralized control?

A) Group norms
B) Rigid hierarchy
C) Tall organization structure
D) Individual performance
E) Employee compliance

Question 67

Which of the following is a characteristic of effective control?

A) It provides timely information.
B) It is separate from planning.
C) It is rigid.
D) It is subjective.
E) It directly controls employee behavior.

Question 68

Decentralized control is characterized by:

A) formal rules
B) an organic structural arrangement.
C) focus on employee compliance.
D) a tall structure.
E) limited employee participation.

Question 69

An organization that switches to a different type of functional design is changing its method of _____ control.

A) postaction
B) bureaucratic
C) screening
D) strategic
E) preliminary

Question 70

At Circlet, a mid-size technology firm, employees are encouraged to participate in various organizational roles and decision-making functions. Top management relies on a strong corporate culture to foster employee commitment to the organization. Circlet uses _____ structural control.

A) bureaucratic
B) strategic
C) decentralized
D) mechanistic
E) operational

Question 71

An organization whose goal is employee commitment to the organization most likely uses _____ structural control.

A) bureaucratic
B) decentralized
C) financial
D) mechanistic
E) strategic

Question 72

_____ control is an approach to organization design characterized by formal and mechanistic structural arrangements.

A) Decentralized
B) Screening
C) Bureaucratic
D) Financial
E) Preliminary

Question 73

Managers can improve the effectiveness of the control system by:

A) preventing the development of verification procedures.
B) controlling as many things in the organization as possible.
C) focusing only on quantifiable variables.
D) integrating control with planning.
E) correcting all deviations from standards.

Question 74

Organizations that use the bureaucratic control are characterized by:

A) flat structures.
B) rewards focused on group performance.
C) limited employee participation.
D) heavy reliance on group norms.
E) organic structural arrangements.

Question 75

International firms which use ____ strategic control require each organization unit around the world to frequently report the results of its performance to headquarters.

A) decentralized
B) organic
C) screening
D) centralized
E) postaction

Question 76

Organizations make the decision of whether to have a centralized or decentralized international control system when they are addressing issues of ____ control.

A) screening
B) strategic
C) financial
D) bureaucratic
E) preliminary

Question 77

A manager at a supermarket needs to know how easily the store's assets can be converted into cash. Which of the following ratios will he use?

A) Debt ratio
B) Return ratio
C) Liquidity ratio
D) Coverage ratio
E) Operating ratio

Question 78

The purpose of bureaucratic control is to:

A) support employee participation in the control function.
B) produce performance above minimum acceptable standards.
C) get employee compliance.
D) increase group performance.
E) increase employee self-control.

Question 79

Organizations that use _____ strategic control believe it is effective because it allows the home office to keep better informed of the performance of foreign units.

A) organic
B) centralized
C) mechanistic
D) bureaucratic
E) environmental

Question 80

Which of the following is true of the operating ratio?

A) It reflects ability to meet long-term financial obligations.
B) It shows managers and investors how much return the organization is generating relative to its assets.
C) It indicates how liquid an organization's assets are.
D) It indicates the effectiveness of specific functional areas rather than that of the total organization.
E) It helps estimate the organization's ability to cover interest expenses on borrowed capital.