Deck 9: Control Processes and Systems

Question 1

Quality of production and error rates are output standards used by businesses.

Answer 1

True

Question 2

The bureaucratic control system influences behavior through norms and expectations set by the organizational culture.

Answer 2

False

Question 3

Business firms show the influence of market control in the way that they adjust products,pricing,promotions,and other practices in response to customer feedback and what competitors are doing.

Answer 3

True

Question 4

Steering controls are largely reactive.

Question 5

Controlling is the process of setting directions and allocating resources in an organization.

Question 6

Earnings per share,sales growth,and market share are the input standards used by businesses.

Question 7

Management by exception is the practice of giving attention to situations that show the greatest need for action.

Question 8

An internal control strategy requires a high degree of trust.

Question 9

The feedback provided by the control process about mistakes already made may not be able to correct them,but it can help improve things in the future.

Question 10

CPM/PERT graphically displays the scheduling of tasks required to complete a project.

Question 11

The critical path is the pathway from project start to conclusion that involves activities with the longest completion times.

Question 12

Planning ensures that performance is consistent with plans,and that accomplishments throughout an organization are coordinated in a means-ends fashion.

Question 13

The goal of concurrent controls is to solve problems as they occur.

Question 14

The clan control influences employees and members to display common behavior patterns.

Question 15

The second step in the control process is to set the performance objectives and standards.

Question 16

Feedforward control focuses on what happens during the work process.

Question 17

Output standards measure work efforts that go into performing a task.

Question 18

Normative control flows through an organization's hierarchy of authority.

Question 19

Historical comparisons benchmark performance against that being achieved by other people,work units,or organizations.

Question 20

Preliminary control is also known as steering control.

Question 21

The function of steering control is to _____.

A) focus on the quality of end results rather than throughputs
B) focus on activities before they begin
C) ensure a proactive and forward-thinking approach to problem solving
D) solve problems as they occur
E) correct mistakes already made

Question 22

Leverage measures the ability of a firm to meet short-term obligations.

Question 23

The management function,which sees to it that the right things happen,in the right way,and at the right time,is known as _____.

A) controlling
B) organizing
C) planning
D) leading
E) staffing

Question 24

_____ controls are largely reactive.

A) Input
B) Concurrent
C) Steering
D) Post-action
E) Feedforward

Question 25

Inventory turnover is calculated as Sales/Total Assets.

Question 26

A manager spots and corrects problems in the manufacturing cycle.Which of the following types of control does the manager practice?

A) Output control
B) Concurrent control
C) Preliminary control
D) Feedback control
E) Post-action control

Question 27

Feedback control takes place to:

A) correct mistakes already made.
B) solve problems as they occur.
C) focus on activities before they begin.
D) ensure the implementation of a proactive approach to problem solving.
E) ensure direct supervision during the work process.

Question 28

Just-in-time scheduling automatically orders a fixed number of items every time an inventory level falls to a predetermined point.

Question 29

_____ control is also known as preliminary control.

A) Concurrent
B) Steering
C) Feedback
D) Feedforward
E) Throughput

Question 30

Which of the following is true of feedforward control?

A) It focuses on what happens during the work process.
B) It is preventive in nature.
C) It is largely reactive.
D) It solves problems as they occur.
E) It focuses on the quality of end results rather than on inputs.

Question 31

When a hair stylist at a salon asks a customer if she liked their services after a haircut,the hair stylist is engaging in _____ control.

A) feedforward
B) steering
C) feedback
D) concurrent
E) throughput

Question 32

Which of the following best describes controlling?

A) The process of deciding where an individual should go and how to best go about it
B) The process of inspiring people to best utilize the resources
C) The process of bringing people and material resources together in working combinations
D) The process of setting directions and allocating resources
E) The process of measuring performance and taking action to ensure desired results

Question 33

_____ control is also known as steering control.

A) Feedback
B) Post-action
C) Concurrent
D) Feedforward
E) Preliminary

Question 34

_____ is a function of the controlling process.

A) Creating structures
B) Setting directions
C) Measuring performances
D) Allocating resources
E) Inspiring efforts

Question 35

Steering control takes place _____.

A) during the work process
B) reactively in an organization
C) before work begins
D) after the work is completed
E) to correct mistakes already made

Question 36

Which of the following is true of controlling?

A) It is all about setting goals and making plans.
B) It is primarily involved in creating structures.
C) It sees to it that the right things happen, in the right way, and at the right time.
D) It sets the directions and allocates resources.
E) It brings people and material resources together in working combinations.

Question 37

Feedforward control differs from feedback control,in that feedforward control:

A) corrects mistakes already made.
B) focuses on the quality of end results rather than inputs.
C) solves problems as they occur.
D) focuses on what happens during the work process.
E) takes place before a work activity begins.

Question 38

Through _____ control,managers can manage in ways that allow and expect people to control their own behavior.

A) normative
B) internal
C) regulatory
D) clan
E) bureaucratic

Question 39

Developing a balanced scorecard for any organization begins with a clarification of the organization's mission and vision.

Question 40

A balance sheet shows profits or losses of a business at a point in time.

Question 41

The first step to the control process is to _____.

A) measure actual performance
B) compare results with objectives
C) establish performance objectives and standards
D) take corrective actions
E) compare results with standards

Question 42

Which of the following is the control equation?

A) Need for Action = Desired Performance - Actual Performance
B) Breakeven Point = Fixed Costs - (Price - Variable Costs)
C) Acid Test = Current Assets - Inventories/Current Liabilities
D) Debt Ratio = Total Debts/Total Assets
E) Net Income = Sales - Expenses

Question 43

_____ is essentially the influence of customers and competition on the behavior of organizations and their members.

A) Normative control
B) Market control
C) Clan control
D) Bureaucratic control
E) Administrative control

Question 44

Output standards differ from input standards in that output standards measure _____.

A) work efforts
B) actual outcomes
C) efficiency in the use of resources
D) conformance with rules
E) work attendance

Question 45

Which of the following is true of clan control?

A) It influences behavior through norms and expectations set by the organizational culture.
B) It uses budgets for personnel, equipment, travel expenses, and the like to keep behavior targeted within set limits.
C) It flows through the organization's hierarchy of authority.
D) It refers to the influence of customers and competition on the behavior of organizations and their members.
E) It gives people freedom to work on their own.

Question 46

After establishing standards of performance,which of the following is the next step in the control process?

A) Identifying the key results
B) Comparing results with standards
C) Comparing results with objectives
D) Implementing management by exception
E) Measuring the actual performance

Question 47

The potential for _____ is enhanced when capable people have a clear sense of organizational mission,know their goals,and have the resources necessary to do their jobs well.

A) bureaucratic control
B) normative control
C) regulatory control
D) clan control
E) internal control

Question 48

Which of the following increases the potential for self-control?

A) Enforcing authority, policies, procedures, job descriptions, budgets, and day-to-day supervision to make sure that people act in harmony with organizational interests
B) Ensuring participative organizational cultures in which everyone treats each other with respect and consideration
C) Preparing budgets for personnel, equipment, travel expenses, and the like to keep behavior targeted within set limits
D) Influencing behavior through norms and expectations set by the organizational culture
E) Harnessing the power of group cohesiveness and collective identity

Question 49

Input standards differ from output standards in that input standards measure _____.

A) actual outcomes
B) earnings per share
C) work results
D) work efforts
E) error rates

Question 50

Calculate the need for action from the following information:
Desired performance = 800 work units
Actual performance = 580 work units

A) 1380
B) 220
C) 800
D) 1600
E) 510

Question 51

Clan control influences:

A) behavior of organizations and the members through market competition.
B) managers to give workers freedom to work on their own.
C) hierarchy of authority.
D) budgets for personnel, equipment, and travel expenses.
E) employees and members to display common behavior patterns.

Question 52

Which of the following is true of market control?

A) It is the way business firms use budgets for personnel, equipment, travel expenses, and the like to keep behavior targeted within set limits.
B) It is the way business firms emphasize hierarchy and authority.
C) It is the way business firms influence employees and members to display common behavior patterns.
D) It is the way business firms adjust products, pricing, promotions, and other practices in response to customer feedback and what competitors are doing.
E) It is the way business firms harness the power of group cohesiveness and collective identity.

Question 53

Which of the following best describes bureaucratic control?

A) It refers to the controls that influence behavior through norms and expectations set by the organizational culture.
B) It refers to the influence of market competition on the behavior of organizations and their members.
C) It involves the use of authority, policies, procedures, job descriptions, budgets, and day-to-day supervision to make sure that people act in harmony with organizational interests.
D) It refers to the control that is implemented when capable people have a clear sense of the organizational mission, know their goals, and have the resources necessary to do their jobs well.
E) It refers to the existence of participative organizational cultures in which everyone treats each other with respect and consideration.

Question 54

Which of the following is true of a bureaucratic control system?

A) It influences employees and members to display common behavior patterns.
B) It harnesses the power of group cohesiveness and collective identity.
C) It expects people to work on their own as they are given the freedom to do so.
D) It allows and encourages people to exercise self-discipline in performing their jobs.
E) It provides laws and regulations that govern the behavior of an organization's top executives.

Question 55

Bureaucratic control differs from clan control in that bureaucratic control:

A) influences behavior through norms and expectations set by the organizational culture.
B) emphasizes hierarchy and authority.
C) harnesses the power of group cohesiveness and collective identity.
D) gives people freedom to work on their own.
E) encourages participation, empowerment, and involvement.

Question 56

A shoe manufacturing company produced 300,000 pairs of shoes at the end of a certain month.If the need for action was 150,000 pairs of shoes,calculate the desired performance using the control equation.

A) 650,000
B) 150,000
C) 250,000
D) 450,000
E) 750,000

Question 57

Which of the following statements is true about the first step of the control process?

A) It involves the identification of key results that one wants to accomplish, by the performance objectives.
B) It first involves the identification of the standards of measuring performance and then the identification of key results.
C) It identifies the point where output standards and input standards are used to carefully document results.
D) It involves relative comparisons that benchmark performance against that being achieved by other people, work units, or organizations.
E) It focuses attention on substantial differences between actual and desired performance.

Question 58

In the context of the control process,which of the following statements is true about measuring actual performance?

A) It is the point where performance objectives identify key results that one wants to accomplish.
B) It involves a situation where outputs are difficult or expensive to measure.
C) It is the point where output standards and input standards are used to carefully document results.
D) It is the point where past experience becomes the baseline for evaluating current performance.
E) It is the practice of giving attention to situations that show the greatest need for action.

Question 59

In which of the following systems of control do organizations use budgets for personnel,equipment,travel expenses,and so on to keep behavior targeted within set limits?

A) Bureaucratic control
B) Clan control
C) Normative control
D) Regulatory control
E) Self-control

Question 60

_____ is also known as normative control.

A) Self-control
B) Bureaucratic control
C) Regulatory control
D) Clan control
E) Administrative control

Question 61

According to financial controls,liquidity measures _____.

A) the ability to meet short-term obligations
B) the use of debt
C) asset and inventory efficiency
D) the ability to earn revenues greater than costs
E) the ability to operate at minimum cost

Question 62

Acid Test = _____

A) Net Income/Total Assets
B) Net Income/Owner's Equity
C) Sales - Expenses
D) Total Debts/Total Assets
E) Current Assets - Inventories/Current Liabilities

Question 63

_____ is a combination of the critical path method and the program evaluation and review technique.

A) Gantt chart
B) CPM/PERT
C) Pie chart
D) Bar diagram
E) Run chart

Question 64

Which of the following is true of critical path?

A) It is essential to perform what-if calculations under different projected cost and revenue conditions.
B) It acts as the foundation for analysis using financial controls by using the firm's balance sheet and income statement.
C) It automatically orders a fixed number of items every time an inventory level falls to a predetermined point.
D) It represents the quickest time in which the entire project can be finished, assuming everything goes according to schedule and plans.
E) It gives top managers, a fast, but comprehensive view of the business.

Question 65

The _____ form of inventory control automatically orders a fixed number of items every time an inventory level falls to a predetermined point.

A) just-in-time scheduling
B) breakeven
C) balanced scorecard
D) asset management
E) economic order quantity

Question 66

In the context of financial controls,asset management refers to the ability to _____.

A) use resources efficiently and operate at minimum cost
B) earn more in returns than the cost of debt
C) earn revenues greater than costs
D) meet short-term obligations
E) generate cash to pay bills

Question 67

Leverage differs from profitability in that leverage measures:

A) the ability to operate at minimum cost.
B) the ability to meet short-term obligations.
C) the ability to earn revenues greater than costs.
D) the use of debt.
E) asset and inventory efficiency.

Question 68

Which of the following is the formula for calculating breakeven point?

A) Fixed Costs/(Price - Variable Costs)
B) Fixed Costs - Variable Cost/Price
C) (Fixed Costs/Variable Costs) - Price
D) (Fixed Costs/Price) - Variable Costs
E) Fixed Cost - (Price + Variable Costs)

Question 69

In the context of financial controls,which of the following best describes leverage?

A) It is the ability to operate at minimum cost.
B) It is the ability to earn revenues greater than costs.
C) It is the ability to earn more in returns than the cost of debt.
D) It is the ability to meet short-term obligations.
E) It is the ability to generate cash to pay bills.

Question 70

A bag manufacturing company proposed a selling price of $80 per bag for their new range of bags.Fixed costs are $10,000 and variable costs are $40 per bag.At this point their break even point was 250 units.What will be the breakeven point if the variable costs can be brought down to $30?

A) 150 units
B) 350 units
C) 300 units
D) 200 units
E) 100 units

Question 71

Which of the following ratios is also known as acid test?

A) Current Ratio
B) Debt Ratio
C) Asset Turnover Ratio
D) Inventory Turnover Ratio
E) Quick Ratio

Question 72

_____ = Current Assets/Current Liabilities

A) Acid Test
B) Current Ratio
C) Debt Ratio
D) Assets Turnover ratio
E) Net Current Margin

Question 73

Rex's doughnuts can produce only 100 doughnuts a day.The variable cost incurred per unit is $2 and fixed costs incurred per day is $500.At what price should a doughnut be sold to break even?

A) $10
B) $5
C) $7
D) $4
E) $8

Question 74

What is management by exception?

A) It is the point where performance objectives identify key results that one wants to accomplish.
B) It is the situation where outputs are difficult or expensive to measure.
C) It is the point where output standards and input standards are used to carefully document results.
D) It is the point where past experience becomes the baseline for evaluating current performance.
E) It is the practice of giving attention to situations that show the greatest need for action.

Question 75

Managers rely on _____ to perform what-if calculations under different projected cost and revenue conditions.

A) CPM/PERT
B) Gantt charts
C) critical path method
D) breakeven analysis
E) just-in-time scheduling

Question 76

Traxer shoes launches baby shoes at a price of $10 per unit.The fixed costs are $15,000 and variable costs are $5 per unit.What sales volume is required to break even?

A) 7500 units
B) 3000 units
C) 4000 units
D) 6500 units
E) 3500 units

Question 77

Liquidity differs from leverage in that liquidity is the:

A) ability to operate at minimum cost.
B) ability to use resources efficiently.
C) ability to generate cash to pay bills.
D) ability to earn more in returns than the cost of debt.
E) ability to earn revenues greater than costs.

Question 78

Calculate the current ratio from the following information:
Sales = $14,000
Bills receivable = $100,000
Cash in hand = $40,000
Current liabilities = $50,000
Inventories = $40,000
Net Income = $5,600

A) 8:5
B) 3.6:1
C) 0.4:1
D) 3:5
E) 2:3

Question 79

A Gantt chart differs from a PERT chart in that a Gantt chart:

A) uses charts to break a project into a series of small sub-activities that each has clear beginning and end points.
B) represents the quickest time in which the entire project can be finished.
C) helps with event or activity sequencing to make sure that things get accomplished in time for later work to build upon them.
D) shows all the interrelationships that must be coordinated for the entire project to be successfully completed.
E) combines critical path method and the program evaluation and review technique.

Question 80

Calculate the quick ratio from the following information of a manufacturing firm. Cash in hand = $200,000
Cash at bank = $100,000
Inventories = $100,000.
Current Liabilities = $100,000

A) 2:1
B) 1:2
C) 3:1
D) 4:1
E) 2:2