Deck 16: Control Systems and Quality Management: Techniques for Enhancing Organizational Effectiveness

Question 1

Recent productivity growth is likely the result of organizations' huge investment in information technology like computers, the Internet, other telecommunications advances, and computer-guided production line improvements.

Answer 1

True

Question 2

American-produced cars were perceived as better built than Japanese-produced cars which used American quality controls.

Answer 2

False

Question 3

Control systems cannot help managers anticipate, monitor, and react to environmental changes and uncertainties.

Answer 3

False

Question 4

Lumber mills that sell sawdust and wood chips are increasing their efficiency of materials input.

Question 5

One way to improve productivity is to offer less flextime.

Question 6

The control process begins with establishing standards.

Question 7

The four management functions are planning, organizing, leading, and motivating.

Question 8

Paying attention to the feedback is important because of its dynamic nature while progressing through the steps in the control process.

Question 9

Standards can be set for almost anything and be narrow or broad.

Question 10

Controls allow top management to decentralize decision-making at lower levels within the organization.

Question 11

The purpose of planning is to make sure that performance meets objectives.

Question 12

Planning is seeing that the right things happen at the right time in the right way.

Question 13

Productivity is defined by the formula of outputs divided by inputs for a specified period of time.

Question 14

A control standard, or performance standard (or simply standard), is the desired performance level for a given goal.

Question 15

Organizing is arranging tasks, people, and other resources to accomplish the work.

Question 16

Increasing gross domestic product in the United States depends on raising productivity, as well as on a growing workforce.

Question 17

All four management functions affect one another and in turn affect an organization's productivity.

Question 18

Performance measures can be obtained through oral reports.

Question 19

A markdown on certain grocery store items that results in a rush of customer demand for those products is an example of the use of control systems to detect opportunities, such as reducing prices for similar items.

Question 20

If a manager decreases the efficiency of labor and makes no improvements to the efficiency of capital, an increase in productivity will result.

Question 21

Drug tests at hiring are an example of the physical area of organizational control.

Question 22

The physical area of organizational control includes buildings, equipment, and tangible products.

Question 23

One of the reasons that measurement-managed firms succeed is due to strong teamwork and cooperation among the management team and more willingness to take risks.

Question 24

When performance exceeds the standards set in the control systems, managers should give rewards.

Question 25

The acceptable deviation depends on the range of variation built into the standards when they were set.

Question 26

A strategy map is a visual representation of the organizational flowchart.

Question 27

Tactical control is monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed.

Question 28

Except for in rare instances, employees at George's Pro Painting take responsibility for their own work and how it is done, rather than being governed by a rigid set of rules. George's Pro Painting is using decentralized control.

Question 29

Strategy maps show the cause-and-effect links by which specific improvements create desired outcomes, such as objectives for revenue growth, targeted customer markets, the role of excellence and innovation in products.

Question 30

Strategic control is monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed.

Question 31

Decentralized control is characterized by the use of rules, regulations, and formal authority to guide performance.

Question 32

Bureaucratic control is most appropriate for an organization in which the tasks are explicit and certain.

Question 33

Corrective action is a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards.

Question 34

Traditional financial measures improve customer satisfaction, quality, and employee motivation.

Question 35

Six primary performance areas for measurement management include financial performance, operating efficiency, customer satisfaction, employee performance, innovation/change, and community/environment.

Question 36

Internal process is one of the four indicators used in the balanced scorecard.

Question 37

Customer satisfaction and financial measures are two of four indicators of the balanced scorecard.

Question 38

The internal business perspective, including business processes such as quality, employee skills, and productivity, is what the company must do internally to meet its customers' expectations.

Question 39

Supervisors are responsible for operational control.

Question 40

The three levels of control are strategic, tactical, and corrective.

Question 41

Incremental budgeting allocates increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed.

Question 42

The RATER scale enables customers to rate the quality of service along five dimensions.

Question 43

Only incremental changes in the budget request are reviewed in incremental budgeting.

Question 44

A variable budget does not allow the allocation of resources to vary in proportion with various levels of activity.

Question 45

In Deming's PDCA cycle, "D" stands for "do," which means to implement the change or make a small-scale test.

Question 46

A capital expenditures budget anticipates investments in major assets such as land, buildings, and major equipment.

Question 47

One advantage with incremental budgets is that they are flexible in meeting environmental demands.

Question 48

On her first visit to a new doctor's office, Candace noted the fine furniture in the pristine lobby and the crisp white coats that each of the staff wore. Candace was judging the tangibles dimension of the RATER scale.

Question 49

The point of an audit is to provide a yardstick against which managers can measure performance and make comparisons as with other departments or previous years.

Question 50

A variable budget can be adjusted over time to accommodate pertinent changes in the environment.

Question 51

A principle of Deming management is that quality should be aimed at meeting the needs and expectations of the ultimate user.

Question 52

TQM assumes that, if given empowerment, employees will focus on quality.

Question 53

The singular task of internal auditors is to verify that the organization, in preparing its financial statements, followed generally accepted accounting principles.

Question 54

An external audit is a verification of an organization's financial accounts and statements by the organization's own professional staff.

Question 55

A formal financial projection is known as an external audit.

Question 56

A balance sheet summarizes an organization's overall financial worth, or its assets and liabilities, at a specific point in time.

Question 57

Ratio analysis is the practice of evaluating financial ratios to determine an organization's financial health.

Question 58

TQM assumes that continuous improvement must be an everyday matter and that no improvement is too small.

Question 59

The two core principles of TQM are people orientation and productivity orientation.

Question 60

An income statement summarizes an organization's financial results over a specified period of time, such as a quarter or a year.

Question 61

Liquidity ratios indicate how much cash an organization has accessible.

Question 62

Six Sigma means being 99.9997% perfect.

Question 63

Involving employees in both the planning and execution of control systems can bring legitimacy to the process and heighten employee morale.

Question 64

The ISO 9000 quality designation is accepted in over 100 countries around the world.

Question 65

Control systems should be flexible.

Question 66

Managers should develop control standards when they are developing strategic plans to measure how well the plans are being achieved.

Question 67

Debt management ratios indicate the degree to which an organization can meet its short-term financial obligations.

Question 68

GlobalSatellite, applying TQM, restructured its service call procedures and eliminated some steps involved so that employees can finish each call faster. This is an example of reduced cycle time.

Question 69

Lean Six Sigma focuses on problem solving and performance improvement, or speed with excellence of a well-defined project.

Question 70

Undue emphasis on reports can lead even to falsification of data.

Question 71

Gina was recently promoted to facilities director at Wholesome Grains. Which of the following should she do immediately as she tries to improve productivity?

A) Use the established technology with which her employees are most familiar.
B) Rotate all personnel so that each has an opportunity to try something new.
C) Hire new employees such that they are similar to those already on the team.
D) Establish a system of measurement.
E) Cut costs.

Question 72

Return ratios-often called return on investment (ROI) or return on assets (ROA)-indicate how effective management is in generating a return, or profits, on its assets.

Question 73

Productivity equals _____.

A) labor, capital, energy, and materials, divided by goods and services produced
B) goods and services produced, divided by labor, capital, energy, and materials
C) labor, energy, and capital, divided by goods, services, and materials
D) goods and services and energy and materials, divided by labor and capital produced
E) energy and materials, divided by labor and capital

Question 74

Productivity is important because it determines whether the organization will make a profit or even survive.

Question 75

Reduced cycle time means an increase in steps in a work process.

Question 76

Which of the following is a primary function of management?

A) communicating
B) globalizing
C) cooperating
D) organizing
E) influencing

Question 77

Twice daily, factory workers at Mountain CopperWorks select random samples from the production runs and test them for quality, rejecting runs if too many samples fall outside a standard range of acceptability. These workers are engaged in statistical process control.

Question 78

The more goods and services that are produced and made easily available to us and for export, the higher our standard of living.

Question 79

Which of the following is a not one of the seven challenges a manager must deal with in the 21^st century?

A) sustainability
B) ethical standards
C) economic stagnation
D) globalization
E) diversity

Question 80

Asset management ratios indicate how effectively an organization is managing its assets, such as whether it has obsolete or excess inventory on hand.