Question 1

Financial controls are often used by firms that have relied on related diversification.

Accepted Answer

False

Question 2

One of the primary reasons for evaluation and control is that the firm's environment will change over time.

Accepted Answer

Evaluation and control are important because the firm's environment is dynamic and constantly changing. Without regular evaluation and adjustments, the firm may struggle to adapt to changing market conditions and may ultimately fail.

Question 3

A firm should not assume it is on the right path simply because it met its current goal for profitability.

Accepted Answer

Meeting the current goal for profitability does not necessarily mean that the firm is on the right path in terms of long-term sustainability, customer satisfaction, or social responsibility. It is important for the firm to regularly evaluate its strategies and objectives to ensure that it is moving in the right direction.

Question 4

The first step in gap analysis is the evaluation of the firm's future direction and its industry.

Accepted Answer

The first step in gap analysis is identifying the current state of the business to understand where it stands before determining its future direction or evaluating its industry.

Question 5

Denominator management occurs when a firm tries to increase its return on investment, or ROI by simply reducing the denominator (R,) while holding or increasing the numerator (I,) constant.

Accepted Answer

Denominator management occurs when a firm tries to increase its return on investment (ROI) by reducing the denominator (investment, I), while holding or increasing the numerator (return, R) constant, not the other way around. ROI is calculated as R/I, so reducing I while maintaining or increasing R would indeed increase ROI.

Question 6

The principal-principal problem occurs when employees do not do what is best for the shareholders.

Accepted Answer

The principal-principal problem occurs when there are conflicts of interest among different principals (shareholders), not between principals and agents (employees).

Question 7

Financial control focuses on gaps between desired financial outcomes and those actually produced by a firm.

Accepted Answer

Financial control is the process of monitoring and managing a firm's financial performance, with the goal of closing the gap between desired outcomes and actual results. It involves setting financial targets, measuring performance, identifying variances, and taking corrective action as needed to improve outcomes.

Question 8

The Delphi method of forecasting is faster than brainstorming sessions, and may help to reduce the problem of groupthink.

Accepted Answer

The answer of The Delphi method of forecasting is faster...

Question 9

Brainstorming is a forecasting method in which a broad topic is set out and a discussion among the participants is utilized to gain insights into what the future may look like.

Accepted Answer

Brainstorming is a forecasting method that involves generating ideas and insights through a free-flowing discussion among participants on a broad topic. This process is used to gain insights into what the future may look like.

Question 10

A global firm might conduct a gap analysis on a small scale twice a year, and on a larger scale with middle managers meeting from around the world every one to two years.

Accepted Answer

The answer of A global firm might conduct a gap...

Question 11

A quality circle is a group of workers that regularly confers on ways to improve both the quality of a product and its production process.

Accepted Answer

A quality circle is indeed a group of workers that meets regularly to discuss ways to improve the quality of a product and its production process.

Question 12

Organizational controls can be the most powerful in an organization, but they are also the hardest to change or institute.

Accepted Answer

Organizational controls can be deeply ingrained in the culture and structure of an organization, making them difficult to change or institute. It often requires significant effort and resources to implement new controls or modify existing ones.

Question 13

International firms need strategic controls that ensure appropriate actions are being taken today to help the firm tomorrow, but not if the short-term outcomes of these actions are costly.

Accepted Answer

Strategic controls in international firms are designed to ensure that actions taken today will benefit the firm in the long term, even if these actions may have costly short-term outcomes. The focus is on aligning actions with long-term objectives, not avoiding short-term costs.

Question 14

The easiest method to build forecasts of the future is simply scanning the environment for changes along the external, strategic, and internal dimensions.

Accepted Answer

Scanning the environment for changes along the external, strategic, and internal dimensions is one of the most basic methods of forecasting the future. It involves analyzing various factors that could impact the organization's operations, such as changes in technology, economic conditions, competitive landscapes, customer preferences, and internal capabilities. By monitoring these changes, organizations can identify potential opportunities and threats, and adjust their strategies accordingly to stay competitive and profitable.

Question 15

Changes in the evaluation and control of personnel facilitated the adoption of quality control techniques.

Accepted Answer

Effective evaluation and control of personnel is essential for the successful implementation of quality control techniques in an organization. By setting clear performance standards, implementing regular performance evaluations, and providing necessary training and development opportunities, personnel are better equipped to contribute to quality improvements. Therefore, changes in the evaluation and control of personnel can help facilitate the adoption of quality control techniques.

Question 16

Reengineering is a radical redesign of an organization's processes so that they can be executed in parallel, and the tasks undertaken by nonspecialists.

Accepted Answer

Reengineering involves a fundamental rethinking of how work is done in an organization, with the goal of improving efficiency, quality, and effectiveness. This often involves breaking down tasks to allow for parallel execution and delegating tasks to nonspecialists.

Question 17

Scenario planning tends to vary one quantifiable variable while holding others constant to see the likely effect.

Accepted Answer

Scenario planning typically involves creating and analyzing multiple complex future scenarios by varying several variables simultaneously, not just one, to understand potential outcomes and impacts on strategic decisions.

Question 18

In conducting gap analysis, managers can simply rely on a binary yes or no judgment.

Accepted Answer

Gap analysis is a more complex process than a simple yes or no judgment. It involves identifying gaps between desired and actual performance, determining the root causes of those gaps, and then developing strategies to bridge those gaps.

Question 19

A firm's competitiveness is indirectly affected by its external environment.

Accepted Answer

The answer of A firm's competitiveness is indirectly affected by...

Question 20

Business people often like to believe that firms will automatically make changes as their competitive environment changes.

Accepted Answer

Firms do not automatically make changes as their competitive environment changes. They must be proactive and make changes in order to stay competitive.

Quiz 11: Evaluation and Control