Question 1

Managers conduct __________ audits of other companies and _________ audits of their own company.

Accepted Answer

Management audits may be external or internal. An external audit is an evaluation conducted by one organization, such as a CPA firm, on another. An internal audit is a periodic assessment of a company's own planning, organizing, leading, and controlling processes.

Question 2

Which of the following statements about the concept of six sigma is true?

Accepted Answer

Six Sigma was developed at Motorola in the late 1980s and is designed to reduce defects in all organization processes. The system indicates how often defects in a process are likely to occur. The lower the sigma number, the higher the level of variation or defects. Six sigma has come under criticism for not always delivering business results. One likely reason why six sigma doesn't always improve the bottom line is possibly that it focuses only on how to eliminate defects in a process, not whether the process is the best one for the organization.

Question 3

An evaluation conducted by one organization of another organization is referred to as a(n)

Accepted Answer

Management audits may be external or internal. An external audit is an evaluation conducted by one organization, such as a CPA firm, on another.

Question 4

A(n) ________ is the level of expected performance for a given goal; it is a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed.

Accepted Answer

As Figure 16.1 shows, a typical control system has four major steps: setting performance standards, measuring performance, comparing performance against the standards and determining deviations, and taking action to correct problems and reinforce successes.

Question 5

Control that focuses on the use of information about previous results to correct deviations from the acceptable standard is referred to as

Accepted Answer

Feedback control focuses on the use of information about results to correct deviations from the acceptable standard after they arise.

Question 6

External audits can be used for which of the following?

Accepted Answer

A company can conduct external audits of competitors or other companies for its own strategic decision-making purposes. This type of analysis can be used to investigate other organizations for possible merger or acquisition.

Question 7

Performance standards can be set with respect to which of the following?

Accepted Answer

Performance standards can be set with respect to quantity, quality, time used, and cost. For example, production activities include volume of output (quantity), defects (quality), on-time availability of finished goods (time use), and dollar expenditures for raw materials and direct labor (cost).

Question 8

Advances in information technology have created powerful

Accepted Answer

Advances in information technology have created powerful concurrent controls. Computerized systems give managers immediate access to data from the remotest corners of their companies.

Question 9

Which type of control is future oriented?

Accepted Answer

Feedforward control (sometimes called preliminary control ) is future oriented; its aim is to prevent problems before they arise. Instead of waiting for results and comparing them with goals, a manager can exert control by limiting activities in advance.

Question 10

At Performance Instruments, all assembly workers must wear specialized gear to reduce minute particles in the manufacturing environment. Products are then assembled in a controlled environment. This requirement reflects _______ control.

Accepted Answer

Feedforward control takes place before operations begin and includes policies, procedures, and rules designed to ensure that planned activities are carried out properly. Feedforward control is future oriented; its aim is to prevent problems before they arise. Instead of waiting for results and comparing them with goals, a manager can exert control by limiting activities in advance.

Question 11

Which type of control takes place before operations begin?

Accepted Answer

Feedforward control takes place before operations begin and includes policies, procedures, and rules designed to ensure that planned activities are carried out properly. Feedforward control is future oriented; its aim is to prevent problems before they arise.

Question 12

The final step in the control process is

Accepted Answer

As Figure 16.1 shows, a typical control system has four major steps: setting performance standards, measuring performance, comparing performance against the standards and determining deviations, and taking action to correct problems and reinforce successes.

Question 13

Jeremy is in charge of production at Renton Farm Equipment. Part of his job is to ensure few defects in the parts the factory produces. However, he has advised his crew to alert him to problems in production only when defects exceed 200 per million, which he considers a serious deviation from standards. Jeremy is using

Accepted Answer

The principle of exception states that control is enhanced by concentrating on the exceptions to, or significant deviations from, the expected result or standard.

Question 14

A managerial principle stating that control is enhanced by concentrating on the exceptions or significant deviations from the expected result or standard is referred to as

Accepted Answer

The principle of exception states that control is enhanced by concentrating on the exceptions to, or significant deviations from, the expected result or standard.

Question 15

An evaluation of the effectiveness and efficiency of various systems within an organization is called a(n)

Accepted Answer

Management audits are a means of evaluating the effectiveness and efficiency of various systems within an organization, from social responsibility programs to accounting control. Management audits may be external or internal.

Question 16

The six sigma approach is based on __________ analyses that contribute to __________.

Accepted Answer

The six sigma approach is based on an intense statistical analysis of business processes that contribute to customer satisfaction.

Question 17

________ is in effect when supervisors watch employees to ensure that they work efficiently and avoid mistakes.

Accepted Answer

Concurrent control, which takes place while plans are carried out, is the heart of any control system. Concurrent control is in effect when supervisors watch employees to ensure that they work efficiently and avoid mistakes.

Question 18

The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed, is referred to as

Accepted Answer

Concurrent control takes place while plans are being carried out. It includes directing, monitoring, and fine-tuning activities as they occur.

Question 19

Electronic monitoring of telemarketers' conversations with potential clients is an example of _______ control.

Accepted Answer