Deck 11: Management Decision and Control

Question 1

Amazon not only hosts third-party sellers,but the company also acts as a direct merchant itself.

Answer 1

True
Explanation: Amazon not only hosts third-party sellers, but the company also acts as a direct merchant itself. Amazon buys and sells merchandise, ships products, and warehouses inventory.

Question 2

Typically,multinational companies (MNCs)are likely to use indirect controls to monitor performance on a monthly basis,whereas direct controls are used semiannually or annually.

Answer 2

True
Explanation: Typically, multinational companies (MNCs) will use indirect controls to monitor performance on a monthly basis, whereas direct controls are used semiannually or annually. This dual approach often provides a company with effective control of its operations at a price that also is cost-effective.

Question 3

A legal system called codetermination requires workers and their managers to participate in the discussion of major decisions.

Answer 3

True
Explanation: Codetermination is a legal system that requires workers and their managers to discuss major discussions. In Germany, managers focus more on productivity and quality of goods and services than on managing subordinates, which often translates into companies pursuing long-term approaches.

Question 4

From an external control standpoint,a multinational company (MNC)is likely to focus on the things that it does best.

Question 5

The Japanese make heavy use of a decision-making process called ringisei or decision making by consensus.

Question 6

An assessment center is an evaluation tool that is used to evaluate employees.

Question 7

Concurrent engineering is a total quality management (TQM)technique which encourages designers,engineers,and product specialists to work independently to develop new products.

Question 8

Efficient processes become increasingly important as diversification or differences between the parent and subsidiary increase.

Question 9

Direct controls use reports and other written forms of communication to control operations.

Question 10

The degree to which a manager is involved in the decision-making process depends only on the structure of a subsidiary.

Question 11

Financial performance evaluation of a foreign subsidiary or affiliate is usually based on profit and return on investment.

Question 12

Direct controls are particularly important in international management because of the great expense associated with indirect methods.

Question 13

Surprisingly,one of the least common approaches to personnel performance evaluation is the periodic appraisal of work performance.

Question 14

While Alibaba's scale of operations is capital intensive,Amazon's approach allows for extra financial flexibility,as it does not need to build,staff,and maintain regional warehouses.

Question 15

The approaches to control employed by international managers are dictated by a multinational company's (MNC's)philosophy of control,the economic environment in which the overseas unit is operating,and the needs and desires of the managerial personnel who staff the unit.

Question 16

In domestic situations,when competition increases and profit margins are driven down,home-office management is likely to seek to standardize product and marketing decisions to reduce cost and maintain profitability.

Question 17

A quality control circle is a group of workers who meet on a regular basis to discuss ways of improving the quality of work.

Question 18

Although U.S.multinationals do not encourage lengthy stays in foreign management positions,European multinational companies (MNCs)often regard these positions as stepping-stones to higher offices.

Question 19

As a total quality management (TQM)technique,rewards and recognition tend to be effective universally.

Question 20

A key difference between how French and Danish managers view time is that Danish managers do not value time as much as their counterparts.

Question 21

ISO 9000 refers to the International Standards Organization (ISO)certification to ensure _____.

A) quality products and services
B) on-time delivery
C) safety standards
D) compliance with worldwide workplace equality standards

Question 22

If decentralized decision making is in place,decisions are:

A) made at the top management level.
B) made at the middle management level.
C) delegated to operating personnel.
D) contracted to external consultants.

Question 23

Which of the following is a new line of thought about quality that is now emerging?

A) Training is costly.
B) Quality is everyone's job.
C) Haste makes waste.
D) Quality improvement takes time.

Question 24

The process of giving individuals and teams the resources,information,and authority they need to develop ideas and effectively implement them is referred to as _____.

A) total quality management
B) reengineering
C) empowerment
D) kaizen

Question 25

The process of choosing a course of action among alternatives is referred to as _____.

A) supervision
B) directing
C) decision making
D) controlling

Question 26

Which of the following factors encourage the use of decentralized decision making in subsidiary operations?

A) Homogeneous product lines
B) Low level of product diversification
C) Weak volume-to-unit cost relationship
D) High degree of technology

Question 27

An organizational strategy and the accompanying techniques that result in the delivery of high-quality products or services to customers is referred to as _____.

A) total quality management
B) just-in-time management
C) reengineering
D) ISO 9000

Question 28

Kaizen is a Japanese term that means _____.

A) employee empowerment
B) continuous improvement
C) quality comes first
D) teamwork

Question 29

German automakers Audi,Mercedes-Benz,and BMW all share the same goal of leading the international luxury vehicle market.Audi has made the decision to target younger professionals in established markets and this decision is reflected in the company's new,trendy body designs.Audi's approach of targeting younger professionals in established markets is a strategic move aimed at _____.

A) reducing costs
B) increasing quality
C) attacking competition
D) diversifying risks

Question 30

Identify a factor that encourages the use of centralized decision making in subsidiary operations.

A) Little experience in international business
B) Moderate to low degree of technology
C) Small geographic distance between home office and subsidiary
D) Little importance attached to brand name and patent rights

Question 31

Researchers have found that _____ teams feature higher team orientation,flatter organizational hierarchies,and more open-minded and informal work attitudes.

A) Japanese
B) French
C) Indian
D) Swedish

Question 32

One of the primary areas where total quality management (TQM)is having a big impact is in _____.

A) human resources management
B) manufacturing
C) marketing
D) finance

Question 33

Which of the following statements is true in the context of the decision-making process?

A) The decision-making process is often linear, though looping back is common.
B) Decision-making process is limited to helping a subsidiary respond to economic and political demands of a host country.
C) Cultural differences fail to inspire and motivate both decision-making process and its outcome.
D) If decision-making process is centralized, decisions are delegated to operating personnel.

Question 34

In domestic situations,when competition increases,management of a multinational company (MNC)is likely to:

A) integrate product or service lines.
B) centralize authority.
C) decentralize authority.
D) diversify product and service lines.

Question 35

A multinational company (MNC)is likely to centralize its decision making when:

A) it has a mature product line and the subsidiary managers are experienced.
B) it is a high-tech, research-intensive firm dealing with sophisticated levels of technology.
C) a subsidiary has superior staff and resources which is likely to become increasingly skilled in manufacturing and marketing products at the local level over time.
D) the home office has more confidence in delegating to the local level and less to gain by making all the important decisions.

Question 36

Centralized decision making in a multinational company (MNC)is more likely when:

A) domestic competition increases and management wants a local subsidiary manager to have greater decision-making authority.
B) the home office has more confidence in delegating to the local level and less to gain by making all the important decisions.
C) there are important brand names or patent rights involved and a multinational company (MNC) wants to create as much protection as possible.
D) a subsidiary has superior staff and resources that is likely to become increasingly skilled in manufacturing and marketing products at the local level over time.

Question 37

Which of the following is a factor that influences centralization of decision making in subsidiary operations?

A) Heterogeneous product lines
B) High level of product diversification
C) Large geographic distance between home office and subsidiary
D) High degree of interdependence between units

Question 38

Today,multinational companies (MNCs)taking a total quality management (TQM)approach are _____.

A) decentralized
B) top heavy
C) customer-driven
D) reengineered

Question 39

A multinational company (MNC)is likely to decentralize its decision making when:

A) a subsidiary is selling new products in growing markets.
B) it is a high-tech, research-intensive firm dealing with sophisticated levels of technology.
C) the home office has a lot of confidence in delegating to a local level.
D) local subsidiary managers are inexperienced or ineffective.

Question 40

In Japan,what should be done is called _____,while what one really feels,which may be quite different,is called _____.

A) tatemae; honne
B) honne; ringisei
C) honne; tatemae
D) ringisei; tatemae

Question 41

Which of the following strategies is most likely to benefit when doing business with managers who use an external control approach?

A) Focusing more on others such as customers, partners, and colleagues
B) Understanding that there is comfort with waves, shifts, and cycles, which are regarded as naturals
C) Employing a flexible attitude and be willing to compromise and keep the peace
D) Remembering that it is of most importance to maintain one's relationships with others

Question 42

_____ controls involve face-to-face or personal meetings to monitor operations.

A) Direct
B) Indirect
C) Parallel
D) Circular

Question 43

In comparing the control mechanisms used by U.S.and European firms,it has been found that U.S.firms make greater use of _____ control,while European firms rely more heavily on _____ control.

A) output; behavioral
B) bureaucratic; participative
C) behavioral; output
D) participative; bureaucratic

Question 44

Personal computer (PC)firms are finding that they must keep on the cutting edge more than any other industry because of:

A) the relentless pace of technological change.
B) the tendency of customers to switch brands frequently.
C) the shrinking market.
D) their reliance on upscale retail outlets.

Question 45

Which of the following statements is true about external-oriented control process?

A) It often has a flexible attitude, willing to compromise and keep the peace.
B) It proves to be uncomfortable when the environment seems out of control or changeable.
C) It focuses on self, function, one's own group, and one's own organization.
D) It discourages harmony, responsiveness, and sensibility.

Question 46

According to the work of Horovitz,all of the following are common characteristics of British control except:

A) operating units had a large amount of marketing autonomy.
B) control was used more for general guidance than for surveillance.
C) financial reports were simple and lightly emphasized.
D) top management tended to focus attention on major problem areas and did not get involved in specific, detailed matters of control.

Question 47

Which of the following strategies is most likely to benefit when doing business with managers who use an internal control approach?

A) Remembering that it is of most importance to win one's objective
B) Employing a dominating attitude bordering on aggressiveness toward environment
C) Understanding that conflict and resistance means that person has convictions
D) Focusing on self, function, one's own group, and one's own organization

Question 48

Controls that are generally used by multinational companies (MNCs)to monitor performance on a monthly basis are _____.

A) direct
B) indirect
C) external
D) internal

Question 49

The amount remaining after all expenses are deducted from total revenues is referred to as _____.

A) remuneration
B) profit
C) returns
D) proceeds

Question 50

Visits by top executives to overseas affiliates or subsidiaries is a common form of _____.

A) indirect control
B) external control
C) cultural control
D) direct control

Question 51

Which of the following is a salient feature of direct control methods?

A) They are typically used by multinational companies to monitor performance on a monthly basis, whereas indirect controls are used semiannually or annually.
B) They are particularly important in international management because of the great expense associated with indirect control methods.
C) They allow top managers to learn firsthand the problems and challenges facing a unit and offer assistance.
D) They involve the use of reports and other written forms of communication to control operations.

Question 52

Areas that are examined by the ISO 9000 certification team include all of the following except _____.

A) design (product or service specifications)
B) process control (instruction for manufacturing or service functions)
C) purchasing service (e.g., instructions for conducting after-sales service)
D) environmental management standards

Question 53

The following are common problems that multinational companies (MNCs)face in attempting to control their overseas operations except:

A) the objectives of the foreign operation and the corporate objectives are similar.
B) the objectives of joint-venture partners and corporate management conflict.
C) amount of experience and competence in planning are widely diverse among foreign chief executive officers (CEOs).
D) basic philosophic conflicts exist about objectives and policies of foreign operations, largely because of cultural differences between home- and host-country managers.

Question 54

Three sets of financial statements usually are required from subsidiaries; they do not include:

A) statements prepared in response to investigations and queries from the Securities and Exchange Commission (SEC).
B) statements prepared to meet the national accounting standards and procedures prescribed by law and other professional organizations in the host country.
C) statements prepared to comply with the accounting principles and standards required by the home country.
D) statements prepared to meet the financial consolidation requirements of the home country.

Question 55

Which of the following is not a form of direct control?

A) Visits by top executives to overseas affiliates or subsidiaries
B) The staffing practices of multinational companies (MNCs)
C) The organizational structure of multinational companies (MNCs)
D) The use of financial ratios that provide insights into a unit's financial health

Question 56

Two common ways of looking at how multinational companies (MNCs)control operations are:

A) determining whether the organization uses accounting or strategic controls and by choosing whether the enterprise uses simple or complex controls.
B) by looking at the ways in which the organization uses hierarchical and bureaucratic controls and by looking at the ways in which the organization uses external or internal controls.
C) choosing whether the enterprise uses simple or complex controls and by determining whether the organization uses financial or strategic controls.
D) determining whether the enterprise chooses to use internal or external control and by looking at the ways in which the organization uses direct and indirect controls.

Question 57

The process of evaluating results in relation to plans or objectives and deciding what action,if any,to take is referred to as _____.

A) directing
B) decision making
C) supervising
D) controlling

Question 58

Which of the following statements is true about internal-oriented control process?

A) It has a flexible attitude, willing to compromise and keep the peace.
B) It proves to be uncomfortable when environment seems out of control or changeable.
C) It focuses on others such as customers, partners, and colleagues.
D) It encourages harmony, responsiveness, and sensibility.

Question 59

One technique associated with total quality management (TQM)is the use of ongoing training to achieve _____.

A) linear progress
B) continual improvement
C) total overhaul of the organization
D) recognition

Question 60

The use of monthly operating reports that are sent to the home office is a common example of _____.

A) direct control
B) indirect control
C) external control
D) cultural control

Question 61

Financial performance evaluation of a foreign subsidiary or affiliate usually is based on _____.

A) profits and assets
B) assets and return on investment
C) profit and return on investment
D) assets and owners' equity

Question 62

Explain with an example why decision making and controlling are considered vital and often interlinked functions of international management.

Question 63

Explain how U.S.multinational companies (MNCs)differ from European multinational companies (MNCs)in their approaches to control.

Question 64

The Japanese method of training workers for all jobs on the line,even though they eventually are assigned to a single workstation is known as _____.

A) training overkill
B) taguchi method
C) kaizen
D) ringisei

Question 65

A group of workers who meet on a regular basis to discuss ways of improving the quality of work is referred to as a _____.

A) task force
B) committee
C) self-managed team
D) quality control circle

Question 66

The philosophy,"Anything worth doing in the area of quality is worth overdoing," is the management attitude of the _____.

A) French
B) Danish
C) Japanese
D) Americans

Question 67

Return on investment (ROI)is measured by dividing _____.

A) profit by assets
B) revenues by profit
C) expenses by revenues
D) profit by expenses

Question 68

Explain with examples the total quality management (TQM)technique of rewards and recognition.

Question 69

Explain with an example how total quality management (TQM)impacts manufacturing.

Question 70

A(n)_____ is an evaluation tool that is used to identify individuals with the potential to be selected or promoted to higher-level positions.

A) behavior evaluation center
B) employment suitability center
C) assessment center
D) employment testing center

Question 71

The most common types of performance measures used for control purposes include the following except _____.

A) financial performance
B) quality performance
C) international monetary performance
D) personnel performance

Question 72

The amount of _____ directly relates to how well or how poorly a unit is judged to perform.

A) revenue
B) expense
C) asset
D) profit

Question 73

Which of the following is likely to happen to the bottom-line performance of subsidiaries if a country devalues its currency?

A) There will be an increase in export sales of subsidiaries.
B) The price of subsidiary export goods will be higher for foreign buyers.
C) The currencies of foreign buyers will have lower purchasing power.
D) There will be a decrease in the cost of imported materials and supplies for the subsidiary.

Question 74

What are assessment centers and how are they used by multinational companies (MNCs)?

Question 75

A typical assessment center would involve simulation exercises that would include the following except _____.

A) in-basket exercises
B) oral communications of a business plan
C) business decision exercises
D) preparation of a business plan