chapter 10 smartbook Flashcards
Which of the following is not a characteristic of decentralization?
Decentralization puts the decision-making authority in the hands of those who have the most information on day-to-day operations.
Decentralization reduces how accountable lower-level managers are for the outcomes of their decisions.
Decentralization helps to train lower-level managers for higher level positions.
Decentralization allows top management to concentrate on bigger issues such as overall strategy.
Decentralization reduces how accountable lower-level managers are for the outcomes of their decisions.
A balanced scorecard ___________.
will not identify an ineffective strategy based on faulty assumptions
should only focus on the financial measures needed to achieve success
presents a theory of how a company can take action to attain its desired outcomes
presents a theory of how a company can take action to attain its desired outcomes
The net operating income that an investment center earns above the minimum required return on its average operating assets is ______.
residual income
EBIT
return on investment (ROI)
residual income
Compensation should Blank______.
not be tied to scorecard measures because managers will be tempted to make decisions that do not benefit the overall company
only be tied to balanced scorecard measures after the organization has been successfully managed with it for some time
be tied to balanced scorecard measures immediately so that managers understand its importance
only be tied to balanced scorecard measures after the organization has been successfully managed with it for some time
The manager of a(n) ______ center does not have control over revenue or the use of investment funds.
cost
Net operating income is income before ________ and _________
interest and taxes or tax
net operating income is sometimes referred to as ________
EBIT
Which of the following statements is not a weakness of using return on investment (ROI) to evaluate performance?
Multiple choice question.
It may be difficult to assess the performance of a manager who takes over an existing business segment.
ROI does not include the investment in nonoperating assets, such as land held for investment or stock in other companies.
Managers may increase ROI in a way that is inconsistent with company strategy.
Managers may reject investment opportunities that would benefit the entire company but negatively affect the manager.
ROI does not include the investment in nonoperating assets, such as land held for investment or stock in other companies.
An advantage of using a(n) _________ _________is that it continually tests the theories underlying management strategies
balanced scoreboard
