Deck 14: The Essentials of Control

Question 1

The Baldrige Award is given to organizations only in the manufacturing industry.

Answer 1

False

Question 2

When properly designed, controls lead to better performance by enabling the organization to execute its ______________ better.

Answer 2

strategy

Question 3

Well-designed, organizational controls can provide benefits such as

A) responsive costs.
B) culture and reputation costs.
C) direct and indirect financial costs.
D) better ability to manage uncertainty and complexity.

Answer 3

D

Question 4

An example of _____________ financial costs is paying for an accountant who conducts an audit for the organization.

Question 5

The process by which an organization influences its subunits and members to behave in ways that lead to the attainment of organizational goals and objectives refers to ________________.

Question 6

How can good controls help an organization be efficient and effective?

Question 7

How was Hewlett-Packard's extreme form of control turned to indictment on spying on the Board of Directors?

Question 8

What is the Malcolm Baldrige Performance Excellence Program Award?

Question 9

How is culture and reputation a cost for organizational control?

Question 10

An example of financial __________ is the fact that organizations are often required to perform and report the results of a financial audit.

Question 11

Culture and reputation costs might include a damaged relationship with employees.

Question 12

When properly designed, organizational control should lead to better performance because an organization is able to execute its ______________ better.

Question 13

What are the four steps of organizational control?

Question 14

Decentralized decision-making is a key cost of organizational controls.

Question 15

can be controlled by comparing how much each person can produce, in terms of service or products.

Question 16

Recognizing that organizational controls can be categorized in many ways, it is helpful to distinguish between two sets of controls: strategic controls and employee controls.

Question 17

Costs can be controlled using __________, where managers compare actual expenses to forecasted ones.

Question 18

Controls can cost the organization through

A) decentralized decision-making.
B) opportunity recognition.
C) failed implementation.
D) layoffs.

Question 19

Organization researchers have long argued that ______________ is best when those individuals and areas of the organization that are closest to customers and pockets of uncertainty also have the ability to respond to them.

Question 20

_____________ are a way for banks, investors, and other key stakeholders to understand the firm's financial health.

Question 21

The controls for the level of proactivity function as a feedback mechanism to help leaders and managers make adjustments in the strategy.

Question 22

Strategic controls contribute to the successful execution of the current strategy.

Question 23

Outcome controls are effective when there's little external interference between managerial decision making on the one hand and business performance on the other.

Question 24

Operating controls allow managers to step back and look at the big picture and make sure all the pieces of the picture are correctly aligned.

Question 25

_______________ controls track aspects of the organization that are not immediately financial in nature.

Question 26

Monitoring problems in a way that provides their timely prevention rather than after the fact reaction refers to ______________.

Question 27

Behavioral controls are typically more appropriate when the actions of individuals can be clearly tied to the organization's performance.

Question 28

The control that permits managers to use information on past performance to bring future performance in line with planned objectives is referred to as

A) concurrent control.
B) feedback control.
C) feedforward control.
D) outcome control

Question 29

_____________ control involves the gathering of information about a completed activity, evaluating that information, and taking steps to improve the similar activities in the future.

Question 30

Proactivity, one of the types of control, includes which of the following?

A) Initiate.
B) concurrent.
C) fastforward.
D) outcome control.

Question 31

______________ control involves the management of a firm's cost and expenses in order to control them in relation to budgeted amounts.

Question 32

The direct evaluation of managerial and employee decision-making involves _________________ controls.

Question 33

The process of monitoring and adjusting ongoing activities and processes is known as ________________ control.

Question 34

Examples of feedback control include preventive maintenance on machinery and equipment and due diligence on investments.

Question 35

The feedback control is the most proactive of controls, and is generally a basis for reactions.

Question 36

Proactivity, or _______________ control, can be defined as the monitoring of problems in a way that provides their timely prevention, rather than after the fact reaction.

Question 37

_____________ controls are generally preferable performance can be measured through tangible performance metrics.

Question 38

______________ control is concerned with executing the strategy and function within the framework established by the strategy.

Question 39

_________________ control is concerned with tracking the strategy as it is being implemented, detecting any problem areas or potential problem areas.

Question 40

Across the different types of controls in terms of level of proactivity and outcome versus behavioral, controls can take on which form(s)?

A) financial and non-financial
B) financial
C) non-financial
D) strategic

Question 41

Cash flow is the most immediate indicator of an impending problem in the firm.

Question 42

If $20,000 is made as a down payment and $80,000 is financed with a bank note to buy land and a building, the $80,000 is the

A) short term debt.
B) assets.
C) accounts receivable.
D) long-term debt.

Question 43

The advantage of breaking out sales and cost of goods sold/sales into separate categories over combining all sales and costs into one category is that this

A) enables you to make inventory and sales decisions about each product individually.
B) enables the P&L statement to show the gross profit.
C) shows a reasonable return on investment.
D) maximizes gross profit.

Question 44

The only financial statement that managers need to manage their business effectively is the P&L statement.

Question 45

______________ controls help managers know if a chosen strategy is working.

Question 46

The net income portion of the P&L statement is the bottom line and is a measure of a firm's ability to operate at a profit.

Question 47

An example of variable expenses includes

A) employee wages.
B) contractual agreements.
C) internet connections charges.
D) legal retainer services.

Question 48

Balance sheets are usually done at the beginning of each month.

Question 49

The cost of goods sold/sales portion of the income statement shows the cost of products purchased for resale, or the direct labor cost for service.

Question 50

The key to operating a profitable business is to maximize your budget.

Question 51

The income/profit and loss statement represents the relation of income and expenses for the life of the firm.

Question 52

The portion of a bank note that is not payable in the coming year is short-term debt.

Question 53

Assets show the results of the organization's operations, such as revenues, expenses, and profit or loss.

Question 54

How are financial controls executed?

Question 55

A business's noncurrent assets would be those that have a useful life of more than one year.

Question 56

A comparison of the company's current assets and its current liabilities reveals its working debt.

Question 57

Examples of current liabilities include all of the following EXCEPT

A) employment.
B) formulas.
C) salaries payable.
D) income and sales tax.

Question 58

Profit and cash flow mean the same thing in the short run.

Question 59

An example of fixed assets is

A) land.
B) patents.
C) inventory.
D) equipment.

Question 60

Current liabilities are those coming due in the long term.

Question 61

The _____________ portion of the income/P&L statement tells the difference between what you sold the product or service for and what the product or service cost you.

Question 62

_____________ expenses are those expenses that vary with the level of sales.

Question 63

The sales or ______________ portion of the income statement is where the retail price of the product is expressed in terms of dollars times the number of units sold

Question 64

________________ are formal investigations to ensure that financial management practices follow generally accepted procedures, policies, laws, and ethical guidelines.

Question 65

Proactive managers plan ahead for the problems the business is likely to encounter and the opportunities that may arise by preparing ___________ financials.

Question 66

Describe what is typically included in an overall budget.

Question 67

_____________ expenses are those expenses that do not vary with the level of sales, thus, you will have to cover these expenses even if the sales are less than the expenses.

Question 68

The balance sheet, the P&L statement and the cash flow statement are collectively referred to as "the ______________. "

Question 69

What is owner's equity

Question 70

In the case of intangible assets, ___________ means the value of intangible assets minus amortization.

Question 71

________________ may be bank notes or loans made to purchase the business's fixed asset structure.

Question 72

Those assets that are not easily converted to cash in the short term are referred to as ?????________________.

Question 73

The _______________ section of the P&L statement is a measurement of all the operating expenses.

Question 74

______________ refers to a simple listing of all planned expenses and revenues.

Question 75

What are operating expenses

Question 76

What is the advantage of breaking out sales and cost of good sold/sales into separate categories over combining all sales and costs into one category

Question 77

The _______________ statement is the detail of cash received and cash expended for each month of the year.

Question 78

The _______________ is a snapshot of the business's financial position at a certain point in time.

Question 79

__________________ examines the relationship between specific figures on the financial statements and helps explain their significance.

Question 80

Those assets that are cash or can be readily converted to cash in the short term are called ______________.