Deck 15: Managing Quality and Performance
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Deck 15: Managing Quality and Performance
1
A cash budget estimates receipts and expenditures of money on a daily or weekly basis..
True
2
Effectively controlling an organization requires information about product standards and actual products, as well as actions to correct any deviations from the standards.
False
3
The feedback control model is a comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes, and the organization's capacity for learning and growth.
False
4
The capital budget lists planned investments in major assets such as buildings, heavy machinery, or complex information technology systems.
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5
An expense budget lists forecasted and actual revenues of the organization.
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6
Although work processes can be controlled and regulated, it is impossible to control and regulate employee behavior.
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7
A balance sheet budget is a budget that plans and reports investments in major assets to be depreciated over several years.
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8
Bottom-up budgeting is a process in which lower level managers anticipate their department's resource needs and pass them up to top management for approval.
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9
In most companies, managers rely exclusively on qualitative measures to measure actual performance.
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10
Within the balanced scorecard, customer service indicators measure things such as employee retention and satisfaction.
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11
The level of funds flowing through the organization and the nature of cash disbursements is shown through the capital budget.
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12
The fourth step in the control process is comparing actual activities to performance standards.
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13
The balance sheet shows the firm's financial position with respect to expenses and credits at a specific point in time.
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14
The final step of the feedback control model is to do nothing if performance is adequate or to take corrective action if performance is inadequate.
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15
An expense budget lists forecasted and actual revenues of the organization.
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16
A standard for performance is included in an organization's overall strategic plan to compare organizational activities against.
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17
Customer service, external business processes, financial performances, and the organization's capacity for learning and growth are the four major perspectives of the balanced scorecard.
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18
The systematic process of regulating organizational activities to make them consistent with the expectations in plans, targets, and standards of performance refers to organizational control.
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19
Effective management control involves subjective judgment and employee discussions, as well as objective analysis of performance data.
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20
Zero-based budgeting requires a complete justification for every line item in a budget.
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21
The system of governing an organization so that the interests of corporate owners are protected refers to corporate governance.
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22
A Six Sigma process will typically result in one defective package of product for every three truckloads shipped.
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23
An organization-wide commitment to infusing quality into every activity through continuous improvement defines Six Sigma.
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24
The use of cultural values, traditions, shared beliefs and trust to increase compliance with goals refers to decentralized control.
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25
The Six Sigma approach is a comprehensive management control system that balances traditional financial
measures with operational measures relating to a company's critical success factors.
measures with operational measures relating to a company's critical success factors.
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26
The income statement shows revenues coming into the organization from all sources and subtracts all expenses.
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27
A process in which lower level managers anticipate their department's resource needs and pass them to top management for approval is called top-down budgeting.
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28
TQM tends to be most successful when it enriches jobs and improves employee motivation.
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29
Open-book management ties employee rewards to the company's overall success.
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30
Liabilities are the firm's debts, both current and long-term.
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31
The goal of open-book management is to get every employee thinking and acting like a business owner.
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32
The implementation of total quality management involves the use of many techniques such as quality circles, benchmarking, Six Sigma principles, reduced cycle time, and continuous improvement.
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33
Closed-book management helps employees appreciate why efficiency is important to the organization's success as well as their own.
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34
The liquidity ratio shows the company's ability to meet its current debt obligations and a measurement of the firm's margin of safety.
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35
Companies today are increasingly shifting from a hierarchical control process to one that is more decentralized.
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36
A group of six to twelve volunteer employees who meet regularly to discuss and solve problems affecting their common work activities refers to a quality team.
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37
The return on total assets ROA) is an activity ratio that is the percentage returned to investors on total assets.
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38
Under hierarchical control, employees are actively engaged and committed to their work.
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39
An activity ratio that measures how many times the inventory is turned over to meet the total sales figure is called the inventory turnover.
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40
Frequently calculated ratios typically pertain to activity, passivity, and profitability.
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41
Outsourcing is the continuous process of measuring products, services, and practices against the toughest competitors or the industry leaders.
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42
Benchmarking is the age-old practice of allowing the artisan to sign his name to the finished product.
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43
Which of the following is the systematic process through which managers regulate organizational activities?
A) Strategic planning
B) Organizational control
C) Organizational goal setting
D) Strategic regulation
E) Organizational leading
A) Strategic planning
B) Organizational control
C) Organizational goal setting
D) Strategic regulation
E) Organizational leading
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44
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?
A) Customers
B) Learning and growth
C) Financials
D) External business processes
E) Internal business processes
A) Customers
B) Learning and growth
C) Financials
D) External business processes
E) Internal business processes
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45
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:
A) comparing performance to standards.
B) developing adequate measures of performance.
C) taking corrective action.
D) comparing performance to standards and developing adequate measures of performance only.
E) all of these.
A) comparing performance to standards.
B) developing adequate measures of performance.
C) taking corrective action.
D) comparing performance to standards and developing adequate measures of performance only.
E) all of these.
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46
All of the following are major perspectives of the Balanced Scorecard EXCEPT .
A) competitors
B) customers
C) learning and growth
D) financial
E) internal business processes
A) competitors
B) customers
C) learning and growth
D) financial
E) internal business processes
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47
Focusing on how well resources and human capital are being managed for the company's future refers to which component of the balanced scorecard?
A) Customers
B) Learning and growth
C) Financials
D) Internal business processes
E) External business processes
A) Customers
B) Learning and growth
C) Financials
D) Internal business processes
E) External business processes
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48
Zachary, a manager at ExecuComp, receives quarterly reports, which track his department's production statistics. However, these reports lack key information regarding reject rates. Which of the following components of the control model need improvement?
A) Measuring actual performance
B) The planning and setting of performance standards
C) SWOT analysis
D) The ability to take corrective action when necessary
E) All of these
A) Measuring actual performance
B) The planning and setting of performance standards
C) SWOT analysis
D) The ability to take corrective action when necessary
E) All of these
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49
Which of the following is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors?
A) Economic value-added system
B) Activity-based costing system
C) Market value-added system
D) Balanced scorecard
E) Open-book management system
A) Economic value-added system
B) Activity-based costing system
C) Market value-added system
D) Balanced scorecard
E) Open-book management system
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50
All of the following are key steps of setting up feedback control systems EXCEPT:
A) comparing performance to standards.
B) establishing standards.
C) getting employee opinions.
D) measuring performance.
E) making necessary corrections.
A) comparing performance to standards.
B) establishing standards.
C) getting employee opinions.
D) measuring performance.
E) making necessary corrections.
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51
Ophelia, the new CEO at Odyssey Inc., plans to implement a highly effective systematic process of regulating organizational activities to make them consistent with the expectations that are established by managers within the company. This is referred to as control.
A) organizational
B) feedback
C) budgetary
D) systems
E) quality
A) organizational
B) feedback
C) budgetary
D) systems
E) quality
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52
What is the first step in the feedback control system?
A) Establishing strategic objectives
B) Establishing standards of performance
C) Taking corrective action
D) Comparing performance to standard
E) Measuring previous performance
A) Establishing strategic objectives
B) Establishing standards of performance
C) Taking corrective action
D) Comparing performance to standard
E) Measuring previous performance
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53
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:
A) concurrent control.
B) feedback control.
C) feedforward control.
D) preliminary control.
E) preventive control.
A) concurrent control.
B) feedback control.
C) feedforward control.
D) preliminary control.
E) preventive control.
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54
Use of the balanced scorecard can hinder or decrease organizational performance if it is implemented using which type of orientation?
A) Performance management orientation
B) Performance measurement orientation
C) Customer orientation
D) Learning and growth orientation
E) Internal business process orientation
A) Performance management orientation
B) Performance measurement orientation
C) Customer orientation
D) Learning and growth orientation
E) Internal business process orientation
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55
The certification based on a set of international standards for quality management, setting uniform guidelines for processes to ensure that products conform to customer requirements is the ISO certification.
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56
Very high expectations from senior management and a desire to share authority by middle managers are two of the positive factors leading to success of TQM.
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57
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?
A) Taking corrective action when necessary
B) An information system
C) Establishing performance standards
D) Engaging strategic analysis
E) None of these
A) Taking corrective action when necessary
B) An information system
C) Establishing performance standards
D) Engaging strategic analysis
E) None of these
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58
indicators focus on production and operating statistics.
A) Financial performance
B) Business process
C) Critical success
D) Potential for learning and growth
E) Performance measurement
A) Financial performance
B) Business process
C) Critical success
D) Potential for learning and growth
E) Performance measurement
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59
All well-designed control systems involve the use of to determine whether performance meets established standards.
A) opinions
B) advice
C) consultants
D) benchmarks
E) feedback
A) opinions
B) advice
C) consultants
D) benchmarks
E) feedback
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60
Continuous improvement is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis.
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61
Brad is a department manager at Home Theater, Inc. His sole role in the budget process is to implement the budget that is developed for him. This is an example of:
A) strategic budgeting.
B) operational budgeting.
C) top-down budgeting.
D) management by objectives.
E) bottom-up budgeting.
A) strategic budgeting.
B) operational budgeting.
C) top-down budgeting.
D) management by objectives.
E) bottom-up budgeting.
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62
An advantage of the bottom-up budgeting process is:
A) its emphasis on bureaucratic control.
B) lower managers are more involved.
C) top managers control the information flow.
D) top managers are often not committed to achieving budget targets.
E) all of these.
A) its emphasis on bureaucratic control.
B) lower managers are more involved.
C) top managers control the information flow.
D) top managers are often not committed to achieving budget targets.
E) all of these.
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63
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?
A) Income statement
B) Activity ratio
C) TQM report
D) Balance sheet
E) Balance scorecard
A) Income statement
B) Activity ratio
C) TQM report
D) Balance sheet
E) Balance scorecard
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64
The conversion ratio is considered to be an ratio.
A) activity
B) liquidity
C) profitability
D) leverage
E) cash
A) activity
B) liquidity
C) profitability
D) leverage
E) cash
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65
The firm's financial position with respect to assets and liabilities at a specific point in time is shown by its:
A) activity ratio.
B) profitability ratio.
C) income statement.
D) liquidity ratio.
E) balance sheet.
A) activity ratio.
B) profitability ratio.
C) income statement.
D) liquidity ratio.
E) balance sheet.
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66
control is the process of setting targets for an organizations expenditures.
A) Quality
B) Income
C) Budgetary
D) Systems
E) Supply chain
A) Quality
B) Income
C) Budgetary
D) Systems
E) Supply chain
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67
Tammy is a production manager at Eagle's Nest, Inc.. She is concerned that too much money is being wasted on inventory that is sitting in the warehouse too long. She should calculate an:
A) current ratio.
B) inventory turnover ratio.
C) conversion ratio.
D) profitability ratio.
E) leverage ratio.
A) current ratio.
B) inventory turnover ratio.
C) conversion ratio.
D) profitability ratio.
E) leverage ratio.
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68
Which of the following includes anticipated and actual expenses for a responsibility center?
A) Revenue budget
B) Cash budget
C) Capital budget
D) Expense budget
E) Operating budget
A) Revenue budget
B) Cash budget
C) Capital budget
D) Expense budget
E) Operating budget
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69
The plans future investments in major assets to be depreciated over several years.
A) capital budget
B) balance sheet budget
C) cash budget
D) revenue budget
E) profit budget
A) capital budget
B) balance sheet budget
C) cash budget
D) revenue budget
E) profit budget
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70
provide the basic information used for financial control of an organization.
A) Owners equity
B) Income statements
C) Financial position
D) Mission Statements
E) 100-K's
A) Owners equity
B) Income statements
C) Financial position
D) Mission Statements
E) 100-K's
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71
Which of the following is a ratio that measures the firm's internal performance with respect to key activities defined by management?
A) A liquidity ratio
B) An activity ratio
C) Return on total assets
D) A current ratio
E) Profit margin on sales
A) A liquidity ratio
B) An activity ratio
C) Return on total assets
D) A current ratio
E) Profit margin on sales
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72
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?
A) Capital expenditure budget
B) Balance sheet budget
C) Cash budget
D) Revenue budget
E) Profit budget
A) Capital expenditure budget
B) Balance sheet budget
C) Cash budget
D) Revenue budget
E) Profit budget
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73
The is purchase orders divided by customer inquiries.
A) current ratio
B) inventory turnover ratio
C) conversion ratio
D) profit margin on sales
E) none of these
A) current ratio
B) inventory turnover ratio
C) conversion ratio
D) profit margin on sales
E) none of these
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74
Net income divided by sales is the correct formula for calculating:
A) return on total assets.
B) a current ratio.
C) a liquidity ratio.
D) profit margin on sales.
E) a corporate evaluation.
A) return on total assets.
B) a current ratio.
C) a liquidity ratio.
D) profit margin on sales.
E) a corporate evaluation.
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75
Pauline is an area manager at Ironman Gym. She anticipates her area's needs and formulates a proposed budget every quarter. She then sends this proposal to her manager. This is an example of:
A) top-down budgeting.
B) strategic budgeting.
C) revenue budgeting.
D) bottom-up budgeting.
E) none of these.
A) top-down budgeting.
B) strategic budgeting.
C) revenue budgeting.
D) bottom-up budgeting.
E) none of these.
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76
According to the control model, after establishing standards of performance the manager should:
A) compare performance to standards.
B) get the standards approved by the supervisors and subordinates.
C) measure actual performance.
D) take corrective action.
E) provide feedback.
A) compare performance to standards.
B) get the standards approved by the supervisors and subordinates.
C) measure actual performance.
D) take corrective action.
E) provide feedback.
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77
refers) to the difference between assets and liabilities and is the company's net worth in stock and retained earnings.
A) Assets
B) Current debt
C) Net profit
D) Owners' equity
E) Liabilities
A) Assets
B) Current debt
C) Net profit
D) Owners' equity
E) Liabilities
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78
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 an budget.
A) cash
B) capital
C) revenue
D) operating
E) expense
A) cash
B) capital
C) revenue
D) operating
E) expense
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79
The ratio refers to the ability of the organization to meet its current debt obligation.
A) activity
B) liquidity
C) profitability
D) conversion
E) growth
A) activity
B) liquidity
C) profitability
D) conversion
E) growth
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80
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?
A) Expense budget
B) Revenue budget
C) Cash budget
D) Capital budget
E) Nonfinancial budget
A) Expense budget
B) Revenue budget
C) Cash budget
D) Capital budget
E) Nonfinancial budget
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