Deck 19: Managing Quality and Performance

Question 1

 A feedback control model can help managers meet strategic goals by monitoring and regulating the organization's activities and using feedback to determine whether performance meets established standards.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

 The cash budget estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations.

Answer 3

True

Question 4

 The level of funds flowing through the organization and the nature of cash disbursements is shown through the capital budget.

Question 5

 Effective management control involves subjective judgment and employee discussions, as well as objective analysis of performance data.

Question 6

 Customer service, external business processes, financial performance, and the organization's potential for learning and growth are the four major perspectives of the balanced scorecard.

Question 7

 Effectively controlling an organization requires information about performance standards and actual performance, as well as actions taken to correct any deviations from the standards.

Question 8

 Although work processes can be controlled and regulated, it is impossible to control and regulate employee behavior.

Question 9

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

Question 10

 The systematic process of regulating organizational activities to make them consistent with the expectations established in plans, targets, and standards of performance refers to organizational control.

Question 11

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

Question 12

 Within the balanced scorecard, customer service indicators measure information such as employee retention and satisfaction.

Question 13

 In most companies, managers rely exclusively on financial measures to measure actual performance.

Question 14

 Zero-based budgeting requires a complete justification for every line item in a budget.

Question 15

 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 16

 The capital budget lists planned investments in major assets such as buildings, heavy machinery, or complex information technology systems, often involving expenditures over more than a year.

Question 17

 Auto-analytics is the practice of voluntarily collecting and analyzing data about oneself in order to improve.

Question 18

 The first step in the feedback control model is to determine what changes, if any, are needed.

Question 19

 The feedback control model is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors.

Question 20

 The fourth step in the control process is comparing actual activities to performance standards.

Question 21

 A responsibility center involves the coordination of multiple managers from various departments to carry out an activity.

Question 22

 Under hierarchical control, employees are actively engaged and committed to their work.

Question 23

 Common financial ratios include activity ratios, passivity ratios, profitability ratios, and leverage ratios.

Question 24

 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.

Question 25

 Companies today are increasingly shifting from a hierarchical control process to one that is more decentralized.

Question 26

 The balance sheet shows the firm's financial position with respect to expenses and credits at a specific point in time.

Question 27

 Liabilities are the firm's debts, including both current debt and long-term debt.

Question 28

 Decentralized control relies on cultural values, traditions, shared beliefs, and trust to foster compliance with organizational goals.

Question 29

 Closed-book management helps employees appreciate why efficiency is important to the organization's success as well as their own.

Question 30

 A balance sheet budget is a budget that plans and reports investments in major assets to be depreciated over several years.

Question 31

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

Question 32

 ISO 9000 standards represent an international consensus of what constitutes effective quality management as outlined by the International Organization for Standardization.

Question 33

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

Question 34

 The Six Sigma approach is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors.

Question 35

 Open-book management ties employee rewards to the company's overall success.

Question 36

 Bottom-up budgeting is a process in which lower-level managers anticipate their departments' resource needs and pass them up to top management for approval.

Question 37

 An activity ratio that measures how many times the inventory is used up to meet the total sales figure is called the inventory turnover.

Question 38

 Return on assets is an activity ratio that is a percentage representing what a company earned from its assets.

Question 39

 A Six Sigma process will typically result in one defective package of products for every three truckloads shipped.

Question 40

 The liquidity ratio indicates an organization's ability to meet its current debt obligations.

Question 41

 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 42

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

Question 43

 Six Sigma is an organization-wide effort to infuse quality into every activity in a company through continuous improvement.

Question 44

 All of the following are major perspectives of the balanced scorecard except:

A) competitors.
B) customer service.
C) the organization's capacity for learning and growth.
D) financial performance.
E) internal business processes.

Question 45

 ISO certification has become the recognized standard for evaluating and comparing companies on a global basis.

Question 46

 A group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work refers to a quality circle.

Question 47

 The goal of open-book management is to:

A) infuse quality into every activity in a company through continuous improvement.
B) get every employee thinking and acting like a business owner.
C) reduce overall costs in an effort to increase organizational profits.
D) identify opportunities for quality improvements throughout the work process.
E) keep tabs on what employees are doing practically all the time.

Question 48

 Total quality management tends to be most successful when it enriches jobs and improves employee motivation.

Question 49

 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 50

 Telecommunications is a term that describes technologies that wirelessly transmit data from remote sensors and GPS devices to computers for analysis.

Question 51

 Which of the following is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors?

A) Economic value-added system
B) Activity-based costing system
C) Market value-added system
D) Balanced scorecard
E) Open-book management system

Question 52

 __________ is a term that describes technologies that wirelessly transmit data from remote sensors and GPS devices to computers for analysis.

A) Telematics
B) Networking
C) Teletracking
D) Telecommunications
E) None of these

Question 53

 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 corrections as necessary.

Question 54

 Zachary, a manager at ExecuComp, receives quarterly reports, which track his department's production statistics. However, these reports lack key information regarding reject rates. Which of the following components of the feedback control model needs improvement?

A) Measuring actual performance
B) Establishing standards of performance 
C) Analyzing weaknesses and strengths
D) Taking corrective action when necessary
E) All of these

Question 55

 __________ indicators focus on production and operating statistics.

A) Financial performance
B) Business process
C) Critical success
D) Potential for learning and growth
E) Performance measurement

Question 56

 Which of the following is the systematic process through which managers regulate organizational activities to meet planned goals and standards of performance?

A) Strategic planning
B) Organizational control
C) Organizational goal setting
D) Strategic regulation
E) Organizational leading

Question 57

 The implementation of total quality management involves the use of many techniques, including quality circles, benchmarking, Six Sigma principles, quality partnering, and continuous improvement.

Question 58

 Six Sigma is most beneficial when employees have challenging jobs.

Question 59

 Outsourcing is defined as "the continuous process of measuring products, services, and practices against the toughest competitors or those companies recognized as industry leaders to identify areas for improvement."

Question 60

 To evaluate and reward employees effectively for the achievement of standards, managers need clear standards that:

A) allow the organization to learn and grow.
B) provide monetary compensation to employees that effectively meet them.
C) reflect activities that contribute to the organization's overall strategy in a significant way.
D) measure individual productivity so weak performers can be phased out.
E) all of these.

Question 61

 Which of the following is a financial budget that estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations?

A) Capital budget
B) Balance sheet budget
C) Cash budget
D) Revenue budget
E) Expense budget

Question 62

 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 63

 A(n) __________ center is defined as any organizational department or unit under the supervision of a single person who is responsible for its activity.

A) independent
B) responsibility
C) analysis
D) control
E) budgeting

Question 64

 Which of the following is the basic assumption of hierarchical control?

A) People work best when they are fully committed to the organization.
B) People are capable of self-discipline and can be trusted.
C) People need to be monitored closely.
D) People value intrinsic rewards more than extrinsic rewards.
E) People generally take initiative and seek responsibility.

Question 65

 Madison has been assigned to work on the development of a budget that lists planned investments in major assets such as buildings and heavy machinery. Madison is working on a(n) __________ budget.

A) cash
B) capital
C) revenue
D) operating
E) expense

Question 66

 Tiffany recently discovered that the reject rate for her department has exceeded the standard for performance in this area. What should Tiffany do to exercise effective control?

A) She should order more training for her workforce.
B) She should contact the maintenance department and have them come fix her machinery.
C) She should suspend the low-performing workers in her department.
D) She should investigate and discover the cause of the problem.
E) None of these

Question 67

 According to the feedback 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 68

 __________ control is the process of setting targets for an organization's expenditures, monitoring results and comparing them to the budget, and making changes as needed.

A) Quality
B) Income
C) Budgetary
D) Systems
E) Supply-chain

Question 69

 Kyle's work group consistently exceeds the goals the members set for themselves some months ago. In an attempt to better motivate the group, Kyle thought it would be a good idea to set new goals. This is an example of Kyle exercising control by:

A) comparing performance to standards.
B) developing adequate measures of performance.
C) taking corrective action.
D) comparing performance to standards and developing adequate measures of performance only.
E) all of these.

Question 70

 Use of the balanced scorecard can hinder or decrease organizational performance if it is implemented using a(n):

A) performance management orientation.
B) performance measurement approach.
C) customer orientation.
D) learning and growth orientation.
E) organizational strategy approach.

Question 71

 Ron meets with his company's accountant to discuss the budget of anticipated and actual expenses for each segment of the organization. This involves review of which type of budget?

A) Expense
B) Revenue
C) Cash
D) Capital
E) Nonfinancial

Question 72

 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 component of the balanced scorecard?

A) Customers
B) Learning and growth
C) Financials
D) External business processes
E) Internal business processes

Question 73

 CyberChasers Corporation sends a post-purchase questionnaire to all consumers who buy its products. It is interested in gathering data on product quality, customer service orientation, and customer satisfaction. This is an example of a __________ control.

A) concurrent 
B) feedback 
C) feedforward 
D) preliminary 
E) preventive 

Question 74

 Focusing on how well resources and human capital are being managed for the company's future refers to which component of the balanced scorecard?

A) Customer service
B) Potential for learning and growth
C) Financial performance
D) Internal business processes
E) External business processes

Question 75

 A(n) __________ budget includes anticipated and actual expenses for a responsibility center and for the total organization.

A) revenue
B) cash
C) capital
D) expense
E) operating

Question 76

 What is the first step in the feedback control system?

A) Establish strategic objectives
B) Establish standards of performance
C) Take corrective action
D) Compare performance to standards
E) Measure previous performance

Question 77

 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 of the following should she refer to?

A) Income statement
B) Activity ratio
C) Balanced scorecard
D) Balance sheet
E) None of these

Question 78

 Which of the following is the correct order of the steps in the feedback control model?

A) Establish standards of performance; Compare performance to standards; Measure actual performance; Take corrective action
B) Compare performance to standards; Measure actual performance; Establish standards of performance;  Take corrective action
C) Measure actual performance; Establish standards of performance; Compare performance to standards; Take corrective action
D) Establish standards of performance; Measure actual performance; Compare performance to standards; Take corrective action
E) Establish standards of performance; Establish strategic goals; Compare performance and goals to standards; Take corrective action

Question 79

 The __________ budget plans and reports investments in major assets to be depreciated over several years.

A) capital
B) balance sheet
C) cash
D) revenue
E) expense

Question 80

 Mistletoe Corporation has a detailed set of organizational goals and a management information system that delivers timely and accurate information. Mistletoe still has control problems, however, because its managers refuse to act on the information they receive. Mistletoe's control process has flaws in which of the following areas?

A) Its performance standards
B) Its management information systems
C) Its ability to take corrective action when necessary
D) Its measurement systems
E) None of these