Question 1

FedEx focuses on top line - quality and customer satisfaction.UPS focuses on bottom line - efficiency and cost.They have differences in ____.

Accepted Answer

The statement highlights differences in their strategic priorities, which falls under strategic control.

Question 2

Which of the following are important elements of decentralized control?

Accepted Answer

Decentralized control emphasizes group norms and employee responsibility, allowing for more autonomy and decision-making at lower levels of the organization. A tall organization structure is more characteristic of centralized control.

Question 3

Johnson & Johnson does not require its various divisions to report in frequently.It believes in letting each manager have the authority to respond quickly to environmental changes.These changes do not have to be approved by Johnson & Johnson before they are implemented.Johnson & Johnson has ____ strategic control.

Accepted Answer

Johnson & Johnson's strategic control is decentralized, as it allows each manager to have quick response authority without requiring approval from the company before implementing changes.

Question 4

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

Accepted Answer

The bureaucratic approach to organizational control is characterized by limited employee participation, rewards focused on individual performance, tall structure, and minimum levels of acceptable performance. However, the approach relies on formal rules and procedures, rather than group norms, to regulate behavior and decision-making within the organization.

Question 5

____ control is characterized by ____ rules and a(n)____ structural arrangement.

Accepted Answer

Decentralized control is characterized by informal rules and an organic structural arrangement, which allows for flexibility and adaptability.

Question 6

John Hamann began his company making herb vinegars from a recipe his grandmother had given him.As demand grew,he had to buy a large commercial kitchen.Which of the following ratios would a banker have been most interested in before allowing Hamann to borrow $500,000?

Accepted Answer

A banker would have been most interested in debt ratios to assess John Hamann's ability to repay the borrowed amount. The debt ratio measures the amount of debt a company has relative to its assets, providing insight into its ability to take on additional debt without jeopardizing its financial stability.

Question 7

GE is highly leveraged.Financial analysts look at its ____ ratio to determine if it can make interest payments.

Accepted Answer

The coverage ratio is used to determine a company's ability to make interest payments on its debt. Given that GE is highly leveraged, analysts would want to assess whether it can meet its interest payment obligations by looking at the coverage ratio.

Question 8

Which of the following statements about financial audits is true?

Accepted Answer

All of the statements about financial audits are true. Financial audits are independent appraisals that may be conducted internally or externally to the organization. They are used to monitor accounting, financial, and operation systems within an organization, and may be conducted on a continual or intermittent basis. Therefore, all options are correct.

Question 9

International firms,which use a ____ strategic control system keep ____ decision-making power in their headquarters,while firms that use a ____ strategic control system give ____ decision-making power to each local facility.

Accepted Answer

In a centralized strategic control system, decision-making power is retained at the headquarters, while in a decentralized system, decision-making power is distributed to local facilities.

Question 10

Two years after purchasing a home,Victor received a check in the mail from his attorney.An accountant had found a discrepancy.The accountant conducted a(n)

Accepted Answer

An internal audit is conducted within a company or organization to assess its operations and financial procedures. In this case, Victor's attorney commissioned an accountant to conduct an internal audit of the home purchase, which led to the discovery of a discrepancy.

Question 11

Organizations make the decision to have a centralized or decentralized international control system when they are addressing issues of ____ control.

Accepted Answer

Centralized or decentralized international control systems are typically implemented when addressing issues of strategic control. Operational control refers to day-to-day management and decision-making, financial control refers to budgeting and accounting, and bureaucratic control refers to adherence to rules and regulations.

Question 12

Which of the following is the most common means of financial control within organizations?

Accepted Answer

Budgets are the most common means of financial control within organizations. They provide a plan for income and expenses over a certain period of time and enable the organization to monitor and adjust spending in order to meet financial objectives. Financial statements, ratio analysis, and financial audits are all tools used to analyze financial performance, but they are not control mechanisms in themselves. Benchmarking may be used to compare financial performance to industry peers, but it is not a direct means of financial control.

Question 13

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

Accepted Answer

Reliance on group norms is not a characteristic of the bureaucratic approach to organizational control. Bureaucratic control is characterized by a tall organizational structure, limited employee participation, and reliance on rules and a rigid hierarchy. Rewards are usually based on individual performance in the bureaucratic approach.

Question 14

According to your text,strategic control is especially critical for which type of organizations?

Accepted Answer

Strategic control is especially critical for international organizations due to the complexity of operating in multiple countries with different cultural, legal, and economic environments. These organizations must regularly monitor and adjust their strategies to ensure they are aligned with local conditions and achieve the desired goals. Conglomerates, small, and entrepreneurial organizations may also benefit from strategic control, but not to the same extent as international organizations. Therefore, option D is the best choice.

Question 15

The ratios that assess the ease with which the assets of the organization can be converted into cash are

Accepted Answer

Liquidity ratios assess the ability of an organization to meet its short-term obligations through the conversion of its assets into cash. Examples of liquidity ratios include current ratio, quick ratio, and cash ratio.

Question 16

Which type of financial statement summarizes the organization's revenues and expenses over the previous year?

Accepted Answer

The income statement summarizes the organization's revenues and expenses over the previous year. The balance sheet shows the organization's assets and liabilities at a specific point in time, the liquidity statement evaluates the organization's ability to meet short-term obligations, the cash flow statement shows the inflows and outflows of cash during a particular period, and the debt statement shows the organization's debt obligations.

Question 17

Which of the following would be viewed as a measure of the firm's ability to meet its long-term financial obligations?

Accepted Answer

The debt ratio measures the proportion of a company's assets that are financed by debt, which indicates the extent to which the firm is relying on borrowed funds to finance its operations. A higher debt ratio may indicate a greater risk of defaulting on long-term financial obligations.

Question 18

One way managers can improve the effectiveness of the control system is to

Accepted Answer

Integrating control with planning allows managers to set realistic and attainable performance standards and goals, as well as anticipate potential deviations and take corrective action before they occur. This improves the overall effectiveness of the control system and helps ensure that the organization stays on track to achieve its objectives. Changing performance standards, controlling too many things, and correcting every deviation may lead to micromanagement and cause unnecessary stress for employees. Computerizing the system may improve efficiency but does not necessarily improve effectiveness.

Question 19

The ____ explicit and the ____ precise the link between planning and control,the ____ effective the control system.

Accepted Answer

The answer of The ____ explicit and the ____ precise...

Question 20

The purpose of bureaucratic control is to

Accepted Answer

The purpose of bureaucratic control is to get employees to comply with the rules, regulations, and procedures established by the organization, thus ensuring that standards are met consistently. It does not necessarily focus on enhancing employee participation, increasing group performance, or promoting employee self-control. The goal is to ensure that employees follow the established protocol to achieve a minimum acceptable standard.

Quiz 14: Basic Elements of Control

FedEx focuses on top line - quality and customer satisfaction.UPS focuses on bottom line - efficiency and cost.They have differences in ____.

Which of the following are important elements of decentralized control?

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

control is characterized by rules and a(n) structural arrangement.

John Hamann began his company making herb vinegars from a recipe his grandmother had given him.As demand grew,he had to buy a large commercial kitchen.Which of the following ratios would a banker have been most interested in before allowing Hamann to borrow $500,000?

GE is highly leveraged.Financial analysts look at its ____ ratio to determine if it can make interest payments.

Which of the following statements about financial audits is true?

International firms,which use a strategic control system keep decision-making power in their headquarters,while firms that use a strategic control system give decision-making power to each local facility.

Two years after purchasing a home,Victor received a check in the mail from his attorney.An accountant had found a discrepancy.The accountant conducted a(n)

Organizations make the decision to have a centralized or decentralized international control system when they are addressing issues of ____ control.

Which of the following is the most common means of financial control within organizations?

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

According to your text,strategic control is especially critical for which type of organizations?

The ratios that assess the ease with which the assets of the organization can be converted into cash are

Which type of financial statement summarizes the organization's revenues and expenses over the previous year?

Which of the following would be viewed as a measure of the firm's ability to meet its long-term financial obligations?

One way managers can improve the effectiveness of the control system is to

The explicit and the precise the link between planning and control,the effective the control system.

The purpose of bureaucratic control is to

Quiz 14: Basic Elements of Control

FedEx focuses on top line - quality and customer satisfaction.UPS focuses on bottom line - efficiency and cost.They have differences in ____.

Which of the following are important elements of decentralized control?

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

____ control is characterized by ____ rules and a(n) ____ structural arrangement.

John Hamann began his company making herb vinegars from a recipe his grandmother had given him.As demand grew,he had to buy a large commercial kitchen.Which of the following ratios would a banker have been most interested in before allowing Hamann to borrow $500,000?

GE is highly leveraged.Financial analysts look at its ____ ratio to determine if it can make interest payments.

Which of the following statements about financial audits is true?

International firms,which use a ____ strategic control system keep ____ decision-making power in their headquarters,while firms that use a ____ strategic control system give ____ decision-making power to each local facility.

Two years after purchasing a home,Victor received a check in the mail from his attorney.An accountant had found a discrepancy.The accountant conducted a(n)

Organizations make the decision to have a centralized or decentralized international control system when they are addressing issues of ____ control.

Which of the following is the most common means of financial control within organizations?

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

According to your text,strategic control is especially critical for which type of organizations?

The ratios that assess the ease with which the assets of the organization can be converted into cash are

Which type of financial statement summarizes the organization's revenues and expenses over the previous year?

Which of the following would be viewed as a measure of the firm's ability to meet its long-term financial obligations?

One way managers can improve the effectiveness of the control system is to

The ____ explicit and the ____ precise the link between planning and control,the ____ effective the control system.

The purpose of bureaucratic control is to

control is characterized by rules and a(n) structural arrangement.

International firms,which use a strategic control system keep decision-making power in their headquarters,while firms that use a strategic control system give decision-making power to each local facility.

The explicit and the precise the link between planning and control,the effective the control system.