Deck 15: Managing Quality and Performance

Question 1

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.

Answer 1

False

Question 2

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

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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 7

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

Question 8

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 9

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

Question 10

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 11

Most organizations measure and control performance using qualitative financial measures.

Question 12

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 13

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 14

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

Question 15

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

Question 16

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 17

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 18

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

Question 19

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 20

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 21

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 22

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 23

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.

Question 24

The initial cost of implementing the SOX reforms is relatively minor for a small business once it becomes public.

Question 25

Silver n' Gold Inc.recently introduced a new control philosophy where all employees have access to the same information that owners have,such as what money is coming in and where it is going.This is an example of which control philosophy?

A)Balanced scorecard
B)Six Sigma
C)Continuous improvement
D)Total quality management
E)Open-book management

Question 26

Decentralized control is usually implemented in all of the following areas,except:

A)self-control.
B)peer group.
C)corporate culture.
D)employee selection and socialization.
E)the quality control department.

Question 27

A quality circle is a group of _____ volunteer employees.

A)2 to 4
B)6 to 12
C)10 to 20
D)15 to 25
E)30 to 50

Question 28

Which of the following is a quality control approach that emphasizes a relentless pursuit of higher quality and lower costs?

A)Continuous improvement
B)Cycle time
C)Quality circles
D)Six Sigma
E)Benchmarking

Question 29

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 30

The basic assumption of hierarchical control is that people are incapable of self-discipline and cannot be trusted.

Question 31

Tammy is a production manager at Eagle's Nest,Inc.She is concerned that too much money is being wasted on inventory that is sitting in the warehouse too long.She should calculate a(n):

A)current ratio.
B)inventory turnover ratio.
C)conversion ratio.
D)profitability ratio.
E)leverage ratio.

Question 32

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 33

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 34

At LBK Industries,responsibility for quality control rests with a team of quality control inspectors and supervisors rather than with employees.LBK uses what type of organizational control?

A)Matrix control
B)Hierarchical control
C)Decentralized control
D)Bottom-up control
E)Balanced control

Question 35

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 36

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 37

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 38

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 39

Which of the following is the process of measuring your organizational process against the best in the industry?

A)Outsourcing
B)Continuous improvement
C)Environmental analysis
D)Benchmarking
E)Competitive measurement

Question 40

Net income divided by sales is the correct formula for calculating:

A)return on total assets.
B)a current ratio.
C)a liquidity ratio.
D)profit margin on sales.
E)a corporate evaluation.

Question 41

The implementation of a large number of small,incremental improvements in all areas of the organization on an ongoing basis is referred to as _____.

Question 42

_____ control uses cultural values,traditions,shared beliefs,and trust to generate compliance with organizational goals.

Question 43

_____ focuses on whether performance meets established standards.

Question 44

List the four major perspectives of a balanced scorecard.

Question 45

Which of the following countries has the most secretive economy?

A)Russia
B)Nigeria
C)Mexico
D)Germany
E)Singapore

Question 46

_____ standards represent an international standard for quality management.

A)ISO 9000
B)Six Sigma
C)TQM
D)Kaizen
E)Foreign Economy Index

Question 47

A(n)_____ ratio indicates an organization's ability to meet its current debt obligations.

Question 48

Contingency factors that can influence the success of a TQM program in a negative way include all of the following,except:

A)tasks make high skill demands on employees.
B)management expectations are unrealistically high.
C)middle managers are dissatisfied about loss of authority.
D)workers are dissatisfied with other aspects of organizational life.
E)managers wait for big, dramatic innovations.

Question 49

A budgeting process in which lower-level managers budget their departments' resource needs and pass them up to top management for approval is called _____ budgeting.

Question 50

The highest total number of ISO 9000 certifications is held in:

A)the United States.
B)South America.
C)Europe.
D)China.
E)Africa.

Question 51

The continuous process of measuring products,services,and practices against major competitors or industry leaders is called _____.

Question 52

When _____ deviates from a(n)_____,managers must interpret the deviation.

Question 53

The _____ provides three types of information: assets,liabilities,and owners' equity.

Question 54

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

Question 55

In a traditional _____ approach,budgeted amounts for the coming year are imposed on middle- and lower-level managers.

Question 56

A(n)_____ ratio measures internal performance with respect to key activities defined by management.

Question 57

A(n)_____ includes anticipated and actual expenses for each responsibility center and for the total organization.

Question 58

Sharing financial information and results with all employees in the organization is called _____ management.

Question 59

Which of the following refers to the system of governing an organization so that the interests of corporate owners are protected?

A)Quality circle
B)Corporate governance
C)ISO certification
D)Open-book management
E)Balance scorecard

Question 60

The _____ lists planned investments in major assets such as buildings,trucks,and heavy machinery,often involving expenditures over more than a year.

Question 61

Describe the difference between a balance sheet and an income statement.

Question 62

Discuss open-book management and the balanced scorecard.

Question 63

List the four steps in the feedback control model.

Question 64

In a TQM program,what is benchmarking?

Question 65

Compare hierarchical control with decentralized control.