Chapter 11 - Ruhe Sticker Flashcards
11) ________ is the process by which managers monitor and regulate the efficiency and effectiveness of workers in performing activities necessary to achieve organizational goals.
A) Planning
B) Organizing
C) Leading
D) Controlling
E) Coordinating
Answer: D
Explanation: Controlling is the process by which managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals.
Difficulty: 1 Easy
Topic: Control systems
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
12) ________ systems are the formal monitoring, evaluation, and feedback systems that allow managers to determine if the organization’s strategy and structure are working according to plan.
A) Cultural
B) Routine
C) Control
D) Nonprogrammed
E) Organizing
Answer: C
Explanation: Control systems are formal target-setting, monitoring, evaluation, and feedback systems that provide managers with information about whether the organization’s strategy and structure are working efficiently and effectively.
Difficulty: 1 Easy
Topic: Control systems
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Remember
AACSB: Knowledge Application
13) In order to anticipate problems before they arise, managers should develop a system for ________ control.
A) feedforward
B) concurrent
C) behavior
D) bureaucratic
E) clan
Answer: A
Explanation: Feedforward control is control that allows managers to anticipate problems before they arise.
Difficulty: 1 Easy
Topic: Feedforward control
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
14) When working with suppliers, TechCo provides detailed product specifications to help control the quality of inputs it will receive. This is an example of ________ control.
A) conversion
B) concurrent
C) output
D) feedforward
E) feedback
Answer: D
Explanation: At the input stage, managers use feedforward control to anticipate problems before they arise so problems do not occur later during the conversion process.
Difficulty: 2 Medium
Topic: Feedforward control
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Understand
15) To ensure the right clerk is selected for an opening, a law firm reviews all résumés electronically and assesses candidates through several interviews. This is an example of ________ control.
A) concurrent
B) feedforward
C) output
D) bureaucratic
E) clan
B
16) A manufacturing company that produces bolts and washers decides to use a new steel supplier. The manufacturing company wants to ensure that the materials from the supplier are delivered on time and within the specifications needed to meet the manufacturing company’s product goals. What form of control system could the manufacturing company implement to ensure its needs are met?
A) concurrent
B) feedforward
C) output
D) bureaucratic
E) clan
B
17) During the conversion stage, managers use ________ control to recognize when problems are arising.
A) feedforward
B) bureaucratic
C) concurrent
D) input
E) clan
Answer: C
Explanation: At the conversion stage, concurrent control gives managers immediate feedback on how efficiently inputs are being transformed into outputs so managers can correct problems as they arise.
Difficulty: 2 Medium
Topic: Concurrent control
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
18) In concert with quality management programs, ________ controls help monitor the quality of goods or services at each step in the production process to alert managers to problems.
A) feedforward
B) concurrent
C) feedback
D) bureaucratic
E) clan
Answer: B
Explanation: Concurrent control is at the heart of total quality management programs, in which workers are expected to constantly monitor the quality of the goods or services they provide at every step of the production process and inform managers as soon as they discover problems.
Difficulty: 1 Easy
Topic: Concurrent control
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
19) A coffee shop uses an online system to engage customers. After each transaction, customers receive a text asking them to rate their experience with either a smiley, neutral, or sad face emoji. This practice is an example of ________ control.
A) behavioral
B) concurrent
C) bureaucratic
D) feedforward
E) feedback
Answer: E
Explanation: At the output stage, managers use feedback control to provide information about customers’ reactions to goods and services so corrective action can be taken if necessary.
Difficulty: 2 Medium
Topic: Feedback control
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
20) An online clothing retailer discovered that the majority of the returns it received were the result of incorrect sizing. The retailer then worked with the clothing manufacturing company to improve the accuracy of its sizing patterns. This demonstrates the use of ________ control.
A) feedforward
B) concurrent
C) input
D) feedback
E) bureaucratic
Answer: D
Explanation: At the output stage, managers use feedback control to provide information about customers’ reactions to goods and services so corrective action can be taken if necessary.
Difficulty: 2 Medium
Topic: Feedback control
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Understand
21) A control process begins with
A) measuring actual performance.
B) comparing actual performance against chosen standards.
C) implementing feedback measures.
D) establishing performance standards.
E) initiating corrective action.
Answer: D
Explanation: At step 1 in the control process, managers decide on the standards of performance, goals, or targets that they will use in the future to evaluate the performance of the entire organization or part of it.
Difficulty: 2 Medium
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
22) A customer service team identifies a goal of three business days for addressing all customer concerns. In the context of a control process, this goal is
A) measuring actual performance.
B) comparing actual performance against chosen standards.
C) implementing a feedback measure.
D) establishing a standard of performance.
E) initiating corrective action.
Answer: D
Explanation: At step 1 in the control process, managers decide on the standards of performance, goals, or targets that they will use in the future to evaluate the performance of the entire organization or part of it.
Difficulty: 2 Medium
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
23) Organizational performance can be hindered when managers
A) adopt performance standards geared toward employee behavior.
B) set stretch goals for employees.
C) establish operating budgets that regulate how goals are attained.
D) take corrective action on all performance outputs.
E) focus on only one performance standard instead of many different standards.
Answer: E
Explanation: The number of standards or indicators of performance that an organization’s managers use to evaluate efficiency, quality, and so on can run into the thousands or hundreds of thousands. If managers focus on just one standard (such as efficiency) and ignore others (such as determining what customers really want and innovating a new line of products to satisfy them), managers may end up hurting their organization’s performance.
Difficulty: 2 Medium
Topic: Operational control
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
24) School attendance records in the context of a control process are an example of
A) evaluating performance.
B) initiating corrective action.
C) measuring actual performance.
D) comparing results.
E) revising performance standards.
Answer: C
Explanation: Once managers have decided which standards or targets they will use to evaluate performance, the next step in the control process is to measure actual performance. Managers can measure outputs or behavior.
Difficulty: 2 Medium
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Analytical Thinking
25) What is true regarding measuring actual performance?
A) Managers only evaluate outputs, as behaviors are intrinsically complex.
B) Outputs and behaviors are both important and easily measured.
C) It is easier to measure the outputs and behaviors of nonroutine activities.
D) Outputs are generally easier to measure than behaviors because they are more tangible and objective.
E) Managers typically measure behaviors first and then outputs.
Answer: D
Explanation: In general, the more nonroutine or complex organizational activities are, the harder it is for managers to measure outputs or behaviors. Outputs, however, are usually easier to measure than behaviors because they are more tangible and objective.
Difficulty: 2 Medium
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
26) Which of these performance standards would managers find the most difficult to measure?
A) the creativity of a research engineer
B) an employee’s ability to meet deadlines
C) the success of a product
D) an employee’s adherence to rules
E) the money spent on organizational resources
Answer: A
Explanation: When an organization and its members perform complex, nonroutine activities that are intrinsically hard to measure, it is more challenging for managers to measure outputs or behavior. It is impossible for a manager to measure how creative an engineer or scientist is by watching his or her actions.
Difficulty: 3 Hard
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
27) Once managers have measured actual performance, they should
A) revise accepted standards.
B) compare actual performance to the standards.
C) establish the standards of performance.
D) initiate corrective action.
E) develop goals and objectives.
Answer: B
Explanation: Once managers have measured actual performance, they should compare actual performance to the standards. During step 3, managers evaluate whether—and to what extent—performance deviates from the standards of performance chosen in step 1 of the control process.
Difficulty: 2 Medium
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
28) After evaluating measures of performance, managers must
A) decide whether to take corrective action.
B) define acceptable standards in detail.
C) measure outputs and behaviors.
D) define detailed corrective action.
E) compare standards to results.
Answer: A
Explanation: The final step in the control process is to evaluate results and bring about change as appropriate. If performance is too low and standards were not reached, or if standards were set so high that employees could not achieve them, managers must decide whether to take corrective action. It is easy to take corrective action when the reasons for poor performance can be identified—for instance, high labor costs.
Difficulty: 2 Medium
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
29) The managers at a research company interview members of an underperforming team. They determine the team’s office is too distracting, so they decide to build a dedicated lab environment to enable the team to meet its deadlines. This is an example of
A) initiating corrective action.
B) measuring actual performance.
C) establishing the standards of performance.
D) comparing actual performance to the standards.
E) measuring employee behaviors.
Answer: A
Explanation: The final step in the control process is to evaluate the results and bring about change as appropriate.
Difficulty: 2 Medium
Topic: Control process steps
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
30) The company’s top executives meet quarterly to review its performance. They focus on the results of several measures regarding efficiency, quality, customer responsiveness, and innovation compared to previously established goals. Based on these results, the leadership team decides on the next steps for addressing performance gaps. This activity reflects a
A) clan control strategy.
B) management by objectives strategy.
C) bureaucratic system.
D) control system.
E) feedforward process.
Answer: D
Explanation: Control systems are formal, target-setting, monitoring, evaluating, and feedback systems that provide managers with information about how well strategies and structures are working.
Difficulty: 2 Medium
Topic: Control systems
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
31) Why is return on investment (ROI) the most commonly used financial performance measure?
A) It predicts whether profits will cover fixed costs.
B) It helps monitors the level of debt an organization is carrying in order to maintain a good credit rating.
C) It shows whether organizations can pay creditors without selling assets.
D) It measures how efficiently managers are turning inventory over.
E) It allows managers of one organization to compare performance with that of other organizations in its industry.
Answer: E
Explanation: Return on investment (ROI), an organization’s net income before taxes divided by its total assets, is the most commonly used financial performance measure because it allows managers of one organization to compare performance with that of other organizations.
Difficulty: 2 Medium
Topic: Ratio analysis
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
32) ________ is a company’s operating profit divided by its sales revenues.
A) Gross profit margin
B) Return on investment
C) Net profit margin
D) Operating margin
E) Return on sales
Answer: D
Explanation: Operating margin is calculated by dividing a company’s operating profit (the amount it has left after all the costs of making the product and running the business have been deducted) by sales revenues.
Difficulty: 1 Easy
Topic: Ratio analysis
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
33) Why would a company calculate its operating margin?
A) to evaluate how well resources are being used to generate profits
B) to determine how efficiently it is using resources to make and sell products
C) to assess if it has the resources to meet the claims of short-term creditors
D) to evaluate how efficiently managers are turning inventory over
E) to monitor if managers are collecting revenue from customers
Answer: B
Explanation: Operating margin is calculated by dividing a company’s operating profit by sales revenues. This measure tells managers how efficiently an organization is using its resources; for example, every successful attempt to reduce costs will be reflected in increased operating profit.
Difficulty: 2 Medium
Topic: Ratio analysis
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
34) ________ ratios measure the ability of an organization to pay its short-term debts.
A) Leverage
B) Liquidity
C) Activity
D) Profit
E) Inventory turnover
Answer: B
Explanation: Liquidity ratios measure how well managers have protected organizational resources to be able to meet short-term obligations.
Difficulty: 1 Easy
Topic: Ratio analysis
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
35) You are a CEO who wants to determine whether the company has sufficient resources available to address loan and interest payments that are due to some short-term creditors. Which measure would you find most useful?
A) days sales outstanding ratio
B) operating margin
C) return on investment
D) current ratio
E) debt-to-assets ratio
Answer: D
Explanation: The current ratio (current assets divided by current liabilities) tells managers whether they have the resources available to meet the claims of short-term creditors.
Difficulty: 2 Medium
Topic: Current ratio
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
36) A(n) ________ calculation helps managers assess a firm’s ability to meet payments to short-term creditors without impacting inventory levels.
A) quick ratio
B) current ratio
C) days sales outstanding ratio
D) inventory turnover ratio
E) profit ratio
Answer: A
Explanation: The quick ratio (current assets minus inventory divided by current liabilities) tells managers whether they have the resources available to meet the claims of short-term creditors without selling inventory.
Difficulty: 1 Easy
Topic: Ratio analysis
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
37) The times-covered ratio, which measures the degree to which managers use debt or equity to finance ongoing operations, is a type of ________ ratio.
A) current
B) liquidity
C) leverage
D) activity
E) profit
Answer: C
Explanation: Leverage ratios, such as the debt-to-assets ratio and the times-covered ratio, measure the degree to which managers use debt or equity to finance ongoing operations.
Difficulty: 1 Easy
Topic: Ratio analysis
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
38) To measure how well the managers of an equipment rental service are converting the company’s assets into value, ________ ratios would be used.
A) leverage
B) liquidity
C) profit
D) current
E) activity
Answer: E
Explanation: Activity ratios show how well managers are creating value from organizational assets.
Difficulty: 2 Medium
Topic: Ratio analysis
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application
39) To establish stretch goals for an organization, managers should
A) set goals optimized for each team and independent of the goals in other teams.
B) let subordinates set goals for themselves.
C) set specific and challenging goals that are within reach.
D) define easy to achieve goals not previously attempted.
E) set visionary goals that might not be unattainable but are directionally correct.
Answer: C
Explanation: The best goals are specific, difficult goals—goals that challenge and stretch managers’ ability but are not out of reach and do not require an impossibly high expenditure of managerial time and energy. Such goals are often called stretch goals.
Difficulty: 2 Medium
Topic: Stretch goals
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking
40) What is an operating budget?
A) a measure of how much profit a company is earning on sales
B) the actual cost of running the business for a specified time period
C) the amount an organization has left after all the costs of making the product and running the business have been deducted
D) the amount of money the business’s owners are willing to spend during a fiscal year
E) a blueprint that states how managers intend to use organizational resources to achieve organizational goals efficiently
Answer: E
Explanation: An operating budget is a blueprint that states how managers intend to use organizational resources to achieve organizational goals efficiently.
Difficulty: 2 Medium
Topic: Operating budget
Learning Objective: 11-03 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application