Question 1

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 dimension of the balanced scorecard?

Accepted Answer

The dimension of the balanced scorecard that focuses on internal business processes is relevant to Seth Howard's question about whether these processes add value for customers and shareholders.

Question 2

Use of the balanced scorecard can hinder or decrease organizational performance if it is implemented using which type of orientation?

Accepted Answer

If the balanced scorecard is implemented with a performance measurement orientation, it may focus solely on measuring performance and meeting targets rather than on improving overall organizational performance. This could lead to employees prioritizing meeting the targets at the expense of other important actions, resulting in a decrease in overall performance. It is important to implement the balanced scorecard with a focus on learning and growth, internal business processes, customer satisfaction, and overall performance management to avoid this pitfall.

Question 3

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?

Accepted Answer

Tiffany should investigate and discover the cause of the problem. This will allow her to identify any underlying issues and implement effective solutions. Ordering more training or suspending workers may not address the root cause of the problem, and contacting the maintenance department may not be relevant if the issue is not related to machinery.

Question 4

According to the control model, after establishing standards of performance the manager should:

Accepted Answer

After establishing standards of performance, the next step in the control model is to measure actual performance to determine if it meets the established standards.

Question 5

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?

Accepted Answer

An expense budget is a financial plan that outlines the anticipated and actual expenses for a specific period. Ron is meeting with his accountant to discuss the company's expenses per segment, so this involves reviewing an expense budget.

Question 6

What is the first step in the feedback control system?

Accepted Answer

The first step in the feedback control system is to establish standards of performance. Establishing strategic objectives may come before this step, but it is not the first step in the feedback control system. Measuring previous performance and comparing performance to the standard come after establishing the standard. Taking corrective action comes after performance has been compared to the standard and found to be below the standard.

Question 7

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

Accepted Answer

The answer of Focusing on how well resources and human...

Question 8

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

Accepted Answer

Madison is working on a capital budget, which plans for long-term investments in major assets. A cash budget tracks the flow of cash in and out of an organization, a revenue budget predicts incoming revenue, an operating budget plans for day-to-day expenses, and an expense budget outlines specific expenses for a particular period.

Question 9

All well-designed control systems involve the use of _____ to determine whether performance meets established standards.

Accepted Answer

Feedback is essential in control systems to compare actual performance against established standards and make necessary adjustments.

Question 10

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 financial statement should she refer to?

Accepted Answer

The balance sheet provides an overview of a company's assets and liabilities at a specific point in time, giving Stella the information she needs to understand her company's financial position. The income statement is focused on the company's revenue and expenses over a period of time, and the activity ratio, TQM report, and balance scorecard are not directly related to understanding a company's assets and liabilities.

Question 11

Which of the following includes anticipated and actual expenses for a responsibility center?

Accepted Answer

An expense budget includes anticipated and actual expenses for a specific responsibility center. The other budgets listed focus on different aspects of financial planning, such as anticipated revenue (revenue budget), cash flow (cash budget), long-term investments (capital budget), and overall income and expenses (operating budget).

Question 12

_____ control is the process of setting targets for an organizations expenditures.

Accepted Answer

Budgetary control is the process of setting targets for an organization's expenditures. It involves creating a detailed plan of expected expenses and monitoring actual expenses against the set budget. This helps organizations to identify areas where expenses can be cut or optimized, and ensure that they are operating within their financial means.

Question 13

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

Accepted Answer

This is an example of feedback control because it involves gathering data on customer satisfaction after the purchase has been made. The data collected can then be used to make changes and improvements to the product and customer service in the future.

Question 14

_____ is any organizational department or unit under the supervision of a single person who is responsible for its activity.

Accepted Answer

A responsibility center is a decentralized unit within an organization that is assigned specific responsibilities and is held accountable for its activity by a designated manager. The manager is responsible for the center's performance and is the one who reports its results to higher levels of management. Therefore, a responsibility center is any organizational unit or department under the supervision of a single person who is responsible for its activity. Choices A, C, D, and E are not appropriate descriptions of a responsibility center.

Question 15

The _____ plans future investments in major assets to be depreciated over several years.

Accepted Answer

A capital budget outlines the planned investments in major assets that are expected to last for several years and will be depreciated over time. This budget helps organizations plan for and allocate resources towards long-term investments that are necessary for growth and development. The other options, such as balance sheet budget, cash budget, revenue budget, and profit budget do not specifically focus on the planning and allocation of resources towards major asset investments.

Question 16

Which of these is a financial budget that estimates cash flows on a daily basis or weekly basis to ensure that the company can meet its obligations?

Accepted Answer

A cash budget is a financial budget that estimates cash flows on a daily basis or weekly basis to ensure that the company can meet its obligations. It helps to forecast the company's cash inflows and outflows and ensures that there is always sufficient cash available to meet expenses and debt obligations. A capital expenditure budget is used to plan the company's long-term investments in fixed assets. A balance sheet budget is a budget that forecasts the company's assets, liabilities, and equity position. A revenue budget is used to forecast the company's expected revenues. A profit budget is used to forecast the company's expected profits.

Question 17

Mistletoe Corporation has a detailed set of organizational goals and 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?

Accepted Answer

The control process includes the following steps: establishing standards, measuring performance, comparing performance to standards, and taking corrective action when necessary. In this scenario, Mistletoe Corporation has established performance standards and has a management information system to deliver timely and accurate information. However, the managers are not taking corrective action despite receiving the information. Therefore, there is a flaw in the control process's ability to take corrective action when necessary.

Question 18

Your department has absenteeism standards, a way to measure absenteeism, and, based on your investigation, you have concluded that your department has an excessive absenteeism rate. What should your next step be?

Accepted Answer

Setting new absenteeism standards and developing new measures may be helpful in addressing the issue, but they should not be the only actions taken. Terminating employees should only be considered after other corrective measures have been tried and failed. Therefore, engaging in all three actions would be the best approach.

Question 19

Kendra is a manager at George's Goodies. On a regular basis Kendra and her subordinates set individual and organizational goals. This process is similar to which component of the control model?

Accepted Answer

Kendra and her subordinates setting individual and organizational goals is similar to establishing performance standards, which is a component of the control model that involves setting criteria for evaluating performance. Taking corrective action, an information system, and engaging strategic analysis are other components of the control model, but do not directly relate to setting performance standards/goals.

Question 20

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:

Accepted Answer

Kyle is taking corrective action by setting new goals to better motivate the group after they have consistently exceeded their previous goals.

Quiz 19: Managing Quality and Performance