Question 1

The first and most basic component in a management control system is the employee's goals.

Accepted Answer

The first and most basic component in a management control system is typically the organization's objectives or goals, not the employee's goals.

Question 2

Planning in the management control system does NOT include ________.
A) defining goals
B) establishing plans to achieve goals
C) carrying out plans to achieve goals
D) measuring performance measures

Accepted Answer

Measuring performance measures is part of the control process, not the planning process. Planning involves defining goals and establishing plans to achieve them.

Question 3

To design a management control system that meets an organization's needs,managers must identify what motivates employees,________ and ________.
A) develop performance measures based on these employee motivators; establish a monitoring and reporting structure for the performance measures
B) develop performance measures to encourage managerial effort; establish a monitoring and reporting structure for productivity
C) develop performance measures that meet organizational objectives; establish an accounting system to measure productivity
D) develop performance measures based on goal congruence; establish an accounting system to measure goal congruence

Accepted Answer

In order to design a management control system that meets the organization's needs, managers must identify what motivates employees and develop performance measures based on those motivators. Additionally, they must establish a monitoring and reporting structure for the performance measures to ensure they are effective in driving employee behavior towards meeting organizational goals. option B focuses on encouraging managerial effort rather than employee motivation, option C focuses on measuring productivity rather than employee motivation, and option D only considers goal congruence rather than employee motivation. Therefore, option A is the best choice.

Question 4

The organizational goal of a hotel chain is to increase customer satisfaction.Which of the following is NOT a valid performance measure to meet the organizational goal?
A) number of repeat customers
B) number of complaints by customers
C) occupancy rate
D) average room rate

Accepted Answer

The average room rate is not directly related to customer satisfaction. It is a financial metric that measures the average revenue earned per room. In contrast, the number of repeat customers, complaints, and occupancy rate are more directly related to how satisfied customers are with their experience. Repeat customers and fewer complaints indicate higher satisfaction, while occupancy rate can reflect the hotel's popularity and indirectly, customer satisfaction.

Question 5

A hotel has the following organizational goal: Increase employee satisfaction.Which one of the following is the best performance measure of the organizational goal?
A) number of new employees trained
B) turnover rate of hotel employees
C) overall rating on employee service on guest satisfaction survey
D) percent of guests writing complaints about employees

Accepted Answer

The turnover rate of hotel employees directly reflects employee satisfaction, as higher satisfaction typically results in lower turnover rates. Employees are more likely to stay at their jobs if they are happy and satisfied with their work environment, making turnover rate a relevant and effective measure of employee satisfaction.

Question 6

Which of the following is the first and most basic component in a management control system?
A) the organization's long-range budget
B) the organization's goals
C) the stockholders' goals
D) managerial effort

Accepted Answer

The organization's goals are the first and most basic component in a management control system. This is because all other control activities are oriented towards achieving these goals. Without clear and well-defined goals, it would be difficult to develop an effective management control system.

Question 7

A management control system is a logical integration of techniques to gather and use data and to evaluate performance.

Accepted Answer

A management control system is designed to help organizations monitor their activities, identify potential problems or areas for improvement, and take corrective action as needed. This typically involves the use of various data collection and analysis techniques, such as financial reports, performance metrics, customer surveys, and employee feedback. By using these tools effectively, managers can gain a deeper understanding of how their organization is performing and make informed decisions about how to allocate resources and improve outcomes.

Question 8

Which of the following statements about performance measures is FALSE?
A) Organizational goals without performance measures do not motivate managers.
B) Every performance measure used to evaluate employees should be consistent with organizational goals.
C) An ideal management control system should include at least one performance measure related to every goal.
D) Performance measures become more specific at higher levels of the organization.

Accepted Answer

Performance measures typically become more specific at lower levels of the organization, not higher levels. At higher levels, measures are often more strategic and broad, focusing on overall organizational performance, while at lower levels, measures are more tactical and specific to individual or team performance.

Question 9

To increase and improve employees' work efforts in organizations,organizations should link ________ to ________ such as bonuses.
A) motivation; goal congruence
B) managerial effort; key success factors
C) managerial control; motivation
D) performance measures; personal rewards

Accepted Answer

Performance measures such as productivity, quality, and customer satisfaction should be linked to personal rewards, such as bonuses or promotions, to motivate employees to work harder and achieve better results. This approach also helps to align employees' goals with organizational goals, which is known as goal congruence. Therefore, the best choice is D) performance measures; personal rewards.

Question 10

________ are characteristics or attributes that managers must achieve to drive the organization toward its goals.
A) Nonfinancial performance measures
B) Targets
C) Key success factors
D) Objectives

Accepted Answer

Key success factors (KSFs) are the critical characteristics or attributes that a manager must achieve for the organization's success. They are unique to the organization and play a crucial role in driving the organization towards its goals. Nonfinancial performance measures, targets, and objectives are related concepts but not the same as KSFs.

Question 11

Which of the following statements about managerial effort is FALSE?
A) Managerial effort is the exertion towards a goal.
B) Goal congruence must be accompanied by managerial effort.
C) Managerial effort includes all conscious actions that result in more efficiency and effectiveness.
D) Managerial effort does not have to accompany goal congruence.

Accepted Answer

Managerial effort is an essential component of goal congruence, as it involves the exertion towards achieving a common goal. Therefore, statement D is false.

Question 12

The purpose of performance measures is to set direction and to motivate managers.

Accepted Answer

Performance measures are used to assess and evaluate the performance of managers and their teams. They provide a clear direction for managers to work towards and can help motivate them to achieve their goals. By setting performance measures, managers are held accountable for their results and can work towards improving their performance. Therefore, the purpose of performance measures is to set direction and to motivate managers to achieve their goals.

Question 13

________ is the logical integration of techniques to gather and use data for planning and control decisions and to evaluate performance.
A) An internal control system
B) A quality control system
C) A financial reporting system
D) A management control system

Accepted Answer

The description given in the question best matches a management control system, which is designed to help managers gather, analyze, and use data to make decisions about planning and controlling operations and evaluating performance. The other options listed (internal control system, quality control system, financial reporting system) are all important components of overall control systems in organizations, but do not fully capture the scope of what is described in the question.

Question 14

A management control system includes the techniques to gather and use information to ________.
A) motivate employee behavior
B) evaluate performance
C) make planning and control decisions
D) all of the above

Accepted Answer

A management control system is designed to gather and use information to motivate employee behavior, evaluate performance, and make planning and control decisions. Therefore, all of the above choices are included in a management control system.

Question 15

Measures of performance do not have to be consistent with organizational goals.

Accepted Answer

Measures of performance should be consistent with organizational goals to ensure that the organization is achieving its objectives effectively. If the measures of performance are not aligned with the goals, it may result in the organization focusing on the wrong things and failing to achieve its intended outcomes. Therefore, it is crucial to select performance measures that reflect the organization's strategic priorities and desired outcomes.

Question 16

In the management control system,feedback and learning affect all elements of the system.

Accepted Answer

Feedback and learning are essential components of the management control system, and they can impact all elements of the system, from goal setting to implementation and evaluation. Feedback and learning help organizations to identify areas of improvement, make necessary changes, and strategically plan for future success. Therefore, it is true to say that feedback and learning affect all elements of the management control system.

Question 17

Most employees perform better when performance reports lead to ________.
A) goal congruence
B) managerial effort
C) managerial control
D) personal rewards

Accepted Answer

Performance reports that lead to personal rewards are more likely to motivate employees to perform better, as they directly link their performance to tangible benefits or recognition.

Question 18

________ is the drive for some selected goal that creates effort and action toward that goal.
A) Goal congruence
B) Managerial effort
C) Motivation
D) Personal rewards

Accepted Answer

Motivation is defined as the drive to take action towards a selected goal. It generates effort and inspires individuals to perform at their best level to achieve set targets. Options A, B, and D are not the best choices as they do not accurately describe the concept of motivation.

Question 19

Elements of the planning and control process for a management control system do NOT include ________.
A) measure, monitor and report
B) plan and execute
C) evaluate and reward
D) feedback and control

Accepted Answer

The answer of Elements of the planning and control process...

Question 20

Goal congruence exists when ________.
A) short-run goals and long-run goals are the same
B) employees respond to incentives created by a management control system and make decisions that help meet the goals of the organization
C) the management control system reflects the organization's goals
D) performance reports are used constructively

Accepted Answer

Goal congruence exists when employees are motivated to make decisions that align with the goals of the organization. This is achieved through the use of incentives created by a management control system. Short-run and long-run goals may not necessarily be the same, and the fact that performance reports are used constructively may help achieve goal congruence, but it is not the defining factor. The management control system must reflect the organization's goals in order to achieve goal congruence.

Quiz 9: Management Control Systems and Responsibility Accounting

The first and most basic component in a management control system is the employee's goals.

Planning in the management control system does NOT include ________.

To design a management control system that meets an organization's needs,managers must identify what motivates employees, and .

The organizational goal of a hotel chain is to increase customer satisfaction.Which of the following is NOT a valid performance measure to meet the organizational goal?

A hotel has the following organizational goal: Increase employee satisfaction.Which one of the following is the best performance measure of the organizational goal?

Which of the following is the first and most basic component in a management control system?

A management control system is a logical integration of techniques to gather and use data and to evaluate performance.

Which of the following statements about performance measures is FALSE?

To increase and improve employees' work efforts in organizations,organizations should link to such as bonuses.

________ are characteristics or attributes that managers must achieve to drive the organization toward its goals.

Which of the following statements about managerial effort is FALSE?

The purpose of performance measures is to set direction and to motivate managers.

________ is the logical integration of techniques to gather and use data for planning and control decisions and to evaluate performance.

A management control system includes the techniques to gather and use information to ________.

Measures of performance do not have to be consistent with organizational goals.

In the management control system,feedback and learning affect all elements of the system.

Most employees perform better when performance reports lead to ________.

________ is the drive for some selected goal that creates effort and action toward that goal.

Elements of the planning and control process for a management control system do NOT include ________.

Goal congruence exists when ________.