Deck 8: Control, Change, and Entrepreneurship

Question 1

The process by which managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals is known as _______.

A) organizing
B) leading
C) controlling
D) coordinating

Answer 1

C
Explanation: Controlling is the process whereby managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals. Controlling helps managers monitor and evaluate whether the organization's strategy and structure are working as intended, how they could be improved, and how they might be changed if they are not working.

Question 2

The most commonly used financial performance measure in organizations is the debt-to-equity ratio.

Answer 2

False
Explanation: Return on investment (ROI), an organization's net income before taxes divided by its total assets, is the most commonly used financial performance measure because it allows managers of one organization to compare performance with that of other organizations.

Question 3

Organizational culture makes control possible in situations where managers cannot use behavior control.

Answer 3

True
Explanation: Organizational culture makes control possible in situations where managers cannot use output or behavior control.

Question 4

An inert culture is one that controls employee behavior and attitudes through its strong and cohesive organizational culture.

Question 5

Control by means of a comprehensive system of rules and standard operating procedures that shape and regulate the behavior of divisions, functions, and individuals is known as bureaucratic control.

Question 6

At the output stage, managers use feedforward control to provide information about customers' reactions to goods.

Question 7

The inventory turnover ratio is an example of the activity ratio of an organization.

Question 8

Output control procedures are used at every management level of an organization.

Question 9

A standard of performance that measures efficiency at the functional level is operating costs.

Question 10

Managers use feedforward control to anticipate problems.

Question 11

During the input stage, the most common type of control procedure is concurrent control, which gives managers immediate feedback.

Question 12

Adaptive cultures are those whose values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective.

Question 13

Managers at Zeppel Construction Company set up a stringent job interview process by which management applicants are carefully screened at different levels of the organization before they are hired, attempting to increase the chance that newly hired managers will have the knowledge and skills they need to be successful within the organization. By using this process, Zeppel is using ________ control.

A) concurrent
B) feedforward
C) feedback
D) MBO

Question 14

Using the controlling function, managers monitor and evaluate the organization's strategy to evaluate whether it is working as intended.

Question 15

The type of control that managers typically use in the input stage of the process of transforming raw materials into finished goods is ________ control.

A) feedforward
B) concurrent
C) feedback
D) bureaucratic

Question 16

Standard operating procedures are mechanisms for clan control.

Question 17

Organizational control procedures can give managers feedback about the quantity, but not the quality, of products produced by the organization.

Question 18

The formal target-setting, monitoring, evaluation, and feedback systems that provide managers with information about whether the organization's strategy and structure are working efficiently and effectively are known as ________ systems.

A) operating
B) organizational
C) control
D) recurrent

Question 19

Action Explosives gives specifications to its suppliers of raw materials in an attempt to improve the quality of those raw materials and to minimize and anticipate the problems they are likely to face in the conversion process. This is an example of ________ control.

A) concurrent
B) feedforward
C) feedback
D) bureaucratic

Question 20

The first step in the control process is to evaluate results in terms of performance standards.

Question 21

At the output stage, managers usually utilize ________ control.

A) MBO
B) bureaucratic
C) feedforward
D) feedback

Question 22

Management by objectives is a mechanism of control with ________ organizational control systems.

A) input
B) clan
C) output
D) behavior

Question 23

A mechanism of control utilized in organizational culture is ________.

A) direct supervision
B) management by objectives
C) socialization
D) organizational goals

Question 24

The manager of Inkman, a convenience store, keeps track of the average sale amount for each customer as a way of deciding on the product mix to be carried in the store. This is an example of ________ control.

A) feedforward
B) output
C) input
D) MBO

Question 25

The standard of performance that measures efficiency at the corporate level of the organization is known as ________.

A) cost of goods sold
B) capital costs
C) net sales
D) operating costs

Question 26

The final step in the control process is to ________.

A) evaluate results and initiate corrective action
B) measure actual performance
C) compare actual performance to the standards
D) measure the standards of performance

Question 27

Brandon, the manager of Flipflop Footwear, checked the weekly records and discovered that the number of shoes produced in one week by 20 employees was 250 against the set target of 220 shoes. With reference to the control process, Brandon is ________.

A) establishing the standards of performance
B) measuring the actual level of performance of employees
C) comparing the actual performance against chosen standards of performance
D) evaluating the result of the set standards

Question 28

Danny, the manager of Wader Shoes, installed new machinery to speed up the production process after the assigned targets were not achieved for the third week of the month. With regard to the control process, Danny is ________.

A) establishing the standards of performance
B) measuring the actual level of performance of employees
C) evaluating the result of the set standards
D) initiating corrective actions

Question 29

Ben, the production manager of Pace Shoes, sets a production target of 220 shoes to be distributed among 20 employees in a week. In the context of the control process, Ben is ________.

A) establishing the standards of performance
B) measuring the actual level of performance of employees
C) comparing the actual performance against chosen standards of performance
D) evaluating the result of the set standards

Question 30

The managers of Foodex, a fast food restaurant, record outputs on a daily basis by counting how many customers their employees serve, the time each transaction takes, and how much money each customer spends every day. With reference to the control process, the managers of Foodex are ________.

A) establishing the standards of performance
B) measuring the actual level of performance of employees
C) comparing the actual performance against chosen standards
D) evaluating the result of the set standards

Question 31

The control system that managers use at the conversion stage of transforming raw materials into finished goods is ________ control.

A) feedforward
B) bureaucratic
C) concurrent
D) feedback

Question 32

Beswick Widget Ltd. sets up a system to monitor unit sales of its products to measure changes taking place in customer tastes and the possible resulting impact on future sales. With this system, Beswick is using ________ control.

A) feedforward
B) feedback
C) MBO
D) bureaucratic

Question 33

Brennan Manufacturing monitors the number of customer returns for each product model to track when the organization is producing a large number of defective products. In this case, Brennan Manufacturing is using ________ control.

A) feedforward
B) concurrent
C) MBO
D) feedback

Question 34

An organization's net income before taxes divided by the total assets of the organization is known as ________.

A) gross profit margin
B) return on investment
C) the debt-to-assets ratio
D) days sales outstanding

Question 35

The step of the control process utilized by managers to evaluate whether the actual performance of the organization differs significantly from the standards of performance that assess the organization is ________.

A) measuring actual performance
B) comparing actual performance to the standards
C) initiating corrective action
D) measuring standards of performance

Question 36

Hanover Insurance set up a management information system that gives its regional managers information about changes in the task environment that may affect the organization at some future time. By using this system, Hanover is utilizing ________ control.

A) feedforward
B) feedback
C) bureaucratic
D) MBO

Question 37

The manager of Triks Burgers keeps track of the number of customers served at different periods of the day in an attempt to plan a schedule for workers that matches the demand for the restaurant's products. By using this tracking system, the manager of Triks Burgers is utilizing ________ control.

A) output
B) bureaucratic
C) input
D) MBO

Question 38

The performance ratio that measures the efficiency of the organization in terms of how well the resources of the organization have been used to generate profit is a(n) _______ ratio.

A) activity
B) leverage
C) profit
D) liquidity

Question 39

The most commonly used financial performance measure that allows managers of one organization to compare performance with that of other organizations is ________.

A) gross profit margin
B) the debt-to-assets ratio
C) the inventory turnover ratio
D) return on investment

Question 40

The control system that is typically used in a garment plant to solve problems like substandard inputs, broken machine parts, or a worker's skill deficiency to produce a particular type of garment is ________ control.

A) feedforward
B) MBO
C) feedback
D) concurrent

Question 41

A divisional manager's performance is evaluated on the basis of the difference between the sales revenues generated by that division and the cost of making those goods and services. The divisional manager is being evaluated using the _______ budget approach.

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

Question 42

The financial ratio that indicates whether or not the organization is capable of paying off its short-term debts without having to sell its inventory is the ________ ratio.

A) quick
B) current
C) days sales outstanding
D) profit

Question 43

The financial ratio that measures the ability of the organization to pay its short-term debts is the ________ ratio.

A) leverage
B) liquidity
C) activity
D) profit

Question 44

When a manager is evaluated on the difference between sales revenue and the budgeted cost of making those goods and services, this is an example of a(n) ________ budget approach.

A) revenue
B) cash flow
C) expense
D) profit

Question 45

The manager of a profit center is evaluated on the basis of the amount of sales that have been generated from the goods or services produced in his/her division. The divisional manager is being evaluated using the _______ budget approach.

A) expense
B) cash flow
C) revenue
D) profit

Question 46

The managers of a division are given a fixed budget and are then evaluated on the basis of their ability to produce goods or services. This is an example of a(n) ________ budget approach.

A) expense
B) profit
C) cash flow
D) revenue

Question 47

The financial ratio that measures how well the managers of the organization are creating value from the organization's assets is the ________ ratio.

A) leverage
B) liquidity
C) current
D) activity

Question 48

The ratio that is computed by dividing the difference between current assets and inventory by current liabilities is the ________ ratio.

A) inventory turnover
B) quick
C) current
D) debt-to-assets

Question 49

When a manager is told to maximize the revenues from the sales of goods and services produced, this is an example of a(n) ________ budget approach.

A) profit
B) revenue
C) expense
D) cash flow

Question 50

Calculate the return on investment from the information given below. Net Income = $18,000; Advertising Expenses = $220,000; Total Liabilities = $120,000; Total Assets = $160,000; Gross Margin = $80,000; Taxes Paid = $2,000

A) 16.67 percent
B) 15 percent
C) 11.25 percent
D) 12.5 percent

Question 51

When a divisional manager is evaluated based on the operating income of his division, this is an example of a(n) ________ budget approach.

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

Question 52

Calculate the current ratio of the organization from the information given below. Sales = $200,000; Gross Profit = $40,000; Total Assets = $450,000; Current Assets = $250,000; Current Liabilities = $300,000

A) 0.44
B) 0.56
C) 0.67
D) 0.83

Question 53

The financial ratio that indicates the degree to which the organization uses debt or equity to finance its ongoing operations is the ________ ratio.

A) leverage
B) liquidity
C) activity
D) profit

Question 54

From the information given below, calculate the organization's current ratio. Total Liabilities = $750,000; Current Liabilities = $220,000; Total Assets = $700,000; Current Assets = $176,000

A) 0.25
B) 0.93
C) 0.29
D) 0.80

Question 55

With management by objectives, the first things established are ________.

A) evaluations
B) organizational objectives
C) management goals
D) subordinate goals

Question 56

The most immediate and potent form of behavior control is ________.

A) direct supervision
B) clan control
C) bureaucratic control
D) socialization

Question 57

The financial ratio that indicates how efficiently the managers of the organization are collecting the revenue due to the organization from the sale of its products or services is the ________ ratio.

A) debt-to-assets
B) quick
C) current
D) days sales outstanding

Question 58

From the information given below, calculate the organization's return on investment. Total Liabilities = $300,000; Total Assets = $600,000; Gross Margin = $200,000; Net Income Before Taxes = $30,000; Total Expenses = $240,000

A) 50 percent
B) 5 percent
C) 10 percent
D) 12.5 percent

Question 59

The CEO of a company would like to know whether his managers can pay off claims of short-term creditors without selling inventory. What ratio will help him understand the company's liquidity?

A) Inventory turnover ratio
B) Quick ratio
C) Current ratio
D) Debt-to-assets ratio

Question 60

The current assets of Global Acorn are valued at 25 million dollars and its current liabilities are at 6 million dollars. If its inventory is worth 1 million dollars, what is its quick ratio?

A) 4
B) 0.25
C) 0.14
D) 3.6

Question 61

The process of comparing one company's performance on specific dimensions with the performance of high-performing organizations, to decide how successful a change effort has been, is known as ________.

A) socialization
B) diversification
C) social facilitation
D) benchmarking

Question 62

When actions are performed by employees the same way time and time again and the outcomes of their work are predictable, employee behavior is ________.

A) generalized
B) standardized
C) maximized
D) minimized

Question 63

When an organization has a strong and cohesive organizational culture that controls employee attitudes and behaviors, that company has a(n) ________ culture.

A) networked
B) inert
C) adaptive
D) bureaucratic

Question 64

Rules and SOPs are used to regulate the behavior of workers within the organization with a ________ control system.

A) bureaucratic
B) feedback
C) feedforward
D) concurrent

Question 65

Organizational change can affect practically all aspects of organizational functioning, ________.

A) including organizational culture and strategies
B) including response to opportunities but not threats
C) excluding the human resource management system
D) excluding communication, motivation, and leadership

Question 66

The company PinnTaxx has opted for a control system policy that deals with problems after they arise. What type of control should they be using and at what stage?

A) Feedforward control at the input stage
B) Concurrent control at the feedback stage
C) Feedback control at the output stage
D) Feedforward control at the conversion stage

Question 67

Which of the following stages in making organizational change includes deciding whether change will occur from the top down or from the bottom up?

A) Assess the need for change
B) Decide on the change to make
C) Implement the change
D) Evaluate the change

Question 68

Which of the following stages in making organizational change includes benchmarking?

A) Assess the need for change
B) Decide on the change to make
C) Implement the change
D) Evaluate the change

Question 69

Companies with an inert culture ________.

A) closely supervise their employees within a hierarchical system
B) develop long-term career paths for their employees
C) invest heavily in training and development of employees
D) encourage the development of supportive work attitudes and behaviors

Question 70

The set of values, norms, and expectations of behavior that control the ways in which workers interact with one another within the organization is known as ________.

A) bureaucratic culture
B) organizational culture
C) feedback control
D) feedforward control

Question 71

The control that is imposed on workers within the organization by the shared values, norms, standards of behavior, and expectations is ________ control.

A) bureaucratic
B) operating
C) clan
D) leverage

Question 72

In an adaptive culture, employees often receive rewards based on their ________.

A) performance
B) contracts
C) length of service
D) organizational commitment

Question 73

In assessing the need for organizational change, managers must ________.

A) identify the obstacles to change at the corporate and individual levels
B) plan how they are going to attain the organization's ideal future state
C) recognize that there is a problem and identify its source
D) implement change from the top down or from the bottom up

Question 74

A worker at a motorcycle plant comes up with a new way to attach the fuel injection system to the motor, increasing the efficiency of the assembly process. The managers instruct all employees to attach fuel injection systems the same way so that every car would come off the assembly line with its fuel injection system attached in the new way. The managers are using ________ control.

A) bureaucratic
B) clan
C) output
D) input

Question 75

Which of the following happens in the conversion stage?

A) Anticipating possible problems
B) Managing problems as they occur
C) Dealing with problems that have arisen
D) Managing without correction of problems

Question 76

When an organization has a culture that leads to values and norms that fail to motivate or inspire employees, which eventually leads to stagnation and often failure over time, that company has a(n) ________ culture.

A) adaptive
B) inert
C) communal
D) bureaucratic

Question 77

The process through which managers try to increase members' abilities to understand and appropriately respond to changing conditions is known as ________.

A) clan control
B) socialization
C) organizational learning
D) bureaucratic control

Question 78

In companies that have an adaptive culture, employees are ________.

A) content to be told what to do during work hours
B) not motivated to perform beyond minimum requirements
C) closely supervised within a hierarchical authority
D) likely to have long-term career paths to follow

Question 79

Top managers in a company decide between themselves to implement an employee stock ownership plan for all their employees. This is an example of a company taking a ________.

A) top-down approach to promote adaptive culture
B) bottom-up approach to promote adaptive culture
C) top-down approach to promote inert culture
D) bottom-up approach to promote inert culture

Question 80

Rules and SOPs are of little use in telling a scientist how to discover something new. Thus, which of the following forms of control should not be applied to scientists?

A) feedforward
B) feedback
C) bureaucratic
D) concurrent