Chapter 11 - Ruhe Sticker Flashcards

1
Q

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

A

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

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2
Q

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

A

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

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3
Q

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

A

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

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4
Q

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

A

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

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5
Q

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

A

B

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6
Q

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

A

B

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7
Q

17) During the conversion stage, managers use ________ control to recognize when problems are arising.
A) feedforward
B) bureaucratic
C) concurrent
D) input
E) clan

A

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.

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8
Q

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

A

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

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9
Q

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

A

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

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10
Q

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

A

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

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11
Q

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.

A

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

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12
Q

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.

A

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

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13
Q

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.

A

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

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14
Q

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.

A

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

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15
Q

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.

A

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.

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16
Q

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

A

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

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17
Q

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.

A

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

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18
Q

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.

A

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

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19
Q

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.

A

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

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20
Q

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.

A

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

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21
Q

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.

A

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

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22
Q

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

A

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

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23
Q

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

A

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

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24
Q

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

A

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

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25
Q

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

A

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

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26
Q

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

A

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

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27
Q

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

A

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

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28
Q

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

A

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

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29
Q

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.

A

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

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30
Q

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

A

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

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31
Q

41) As a regional manager, Maria’s performance is evaluated on the difference between her region’s sales revenues and the cost of making the goods and services sold. Maria is being evaluated using a(n) ________ budget approach.
A) profit
B) revenue
C) cash flow
D) cost
E) expense

A

Answer: A
Explanation: Large organizations often treat each division as a singular or stand-alone responsibility center. Corporate managers then evaluate each division’s contribution to corporate performance. Managers may be evaluated on the difference between the revenues generated by the sales of goods and services and the budgeted cost of making those goods and services, which is called a profit budget approach.
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

32
Q

42) Each fiscal year, Dwayne is allocated an operating budget and then evaluated based on the amount of goods produced by his organization. Dwayne’s performance is evaluated on a(n) ________ budget approach.
A) revenue
B) cash flow
C) expense
D) profit
E) capital

A

Answer: C
Explanation: Managers of a division may be given a fixed budget for resources and be evaluated on the amount of goods or services they can produce using those resources. This is a cost or expense budget approach.
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
Accessibility: Keyboard Navigation

33
Q

43) When evaluating performance based on a revenue budget approach, on what would you advise managers to focus?
A) whether the organization sells more product than other organizations
B) the organization’s efficiency in generating sales
C) how well the organization generates earnings from goods and services sold
D) how much profit the organization can make with a fixed cost structure
E) whether the organization manages inventory well relative to sales

A

Answer: C
Explanation: Managers may be asked to maximize the revenues from the sales of goods and services produced. This is called a revenue budget approach.
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: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

34
Q

44) ________ is a technique used to control behavior.
A) Clan control
B) Direct supervision
C) Output control
D) Force-field theory
E) Organizational change

A

Answer: B
Explanation: Managers can use three mechanisms of behavior control to keep subordinates on track and make organizational structures work as they are designed to work: direct supervision, management by objectives, and rules and standard operating procedures.
Difficulty: 1 Easy
Topic: Direct supervision
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Remember

35
Q

45) What is the most instantaneous and powerful form of behavior control?
A) SOPs
B) an MBO system
C) rules
D) direct supervision
E) bureaucracy

A

Answer: D
Explanation: The most immediate and potent form of behavior control is direct supervision.
Difficulty: 2 Medium
Topic: Direct supervision
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking

36
Q

46) Mitchell regularly walks through the manufacturing floor, checking each station and guiding workers on his team. This is an example of
A) clan control.
B) an MBO system.
C) bureaucratic control.
D) output control.
E) direct supervision.

A

Answer: E
Explanation: Direct supervision allows managers at all levels to become personally involved with their subordinates and allows them to mentor subordinates and develop their management skills.
Difficulty: 2 Medium
Topic: Direct supervision
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

37
Q

47) As a behavior control technique, direct supervision is
A) expensive and requires more managers.
B) less effective than other techniques.
C) best suited to complex jobs.
D) highly motivating to employees.
E) preferred over output control.

A

Answer: A
Explanation: Direct supervision is expensive because a manager can personally manage only a relatively small number of subordinates effectively. Therefore, if direct supervision is the main kind of control being used in an organization, a lot of managers will be needed and costs will increase.
Difficulty: 2 Medium
Topic: Direct supervision
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

38
Q

48) Jared is considering using a direct supervision technique to influence his subordinates’ behavior. What is a potential outcome of this choice?
A) Jared will be able to minimize his personal time spent managing the team.
B) Jared’s subordinates may feel scrutinized and become less motivated to work.
C) Jared will see some, but minimal, positive results as this is not a highly effective technique.
D) Jared will spend more time developing standardize operating procedures for his subordinates to follow.
E) Jared’s subordinates will appreciate having their behaviors standardized.

A

Answer: B
Explanation: Direct supervision can demotivate subordinates. This occurs if employees feel they are under such close scrutiny that they are not free to make their own decisions or if they feel they are not being evaluated in an accurate and impartial way.
Difficulty: 2 Medium
Topic: Direct supervision
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Apply
AACSB: Analytical Thinking

39
Q

49) ________ is a behavior control technique that provides a framework to monitor progress toward the achievement of goals.
A) Management by objectives
B) Direct supervision
C) Clan control
D) Top-down change
E) Bureaucratic control

A

Answer: A
Explanation: To provide a framework within which to evaluate subordinates’ behavior and, in particular, to allow managers to monitor progress toward achieving goals, many organizations implement some version of management by objectives.
Difficulty: 2 Medium
Topic: Management by objectives (MBO)
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

40
Q

50) Each year, employees of a real estate agency meet with their direct manager to set individual sales targets based on the agency’s overall goals. Each employee reviews his or her progress with his or her manager quarterly and is awarded a relative bonus. This is an example of
A) bureaucratic control.
B) an operating standard.
C) management by objectives.
D) total quality management.
E) clan control.

A

Answer: C
Explanation: Management by objectives (MBO) is a formal system of evaluating subordinates on their ability to achieve specific organizational goals or performance standards and to meet operating budgets.
Difficulty: 2 Medium
Topic: Management by objectives (MBO)
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

41
Q

51) MBO starts when top managers
A) determine subordinates’ goals.
B) review subordinates’ progress toward meeting goals.
C) implement direct supervision.
D) establish overall organizational objectives.
E) link performance evaluations to rewards.

A

Answer: D
Explanation: MBO starts when top managers establish overall organizational objectives, such as specific financial performance goals or targets.
Difficulty: 1 Easy
Topic: Management by objectives (MBO)
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

42
Q

52) Why is it advantageous to have subordinates participate in goal setting?
A) It strengthens subordinates’ commitment to achieving goals and meeting budgets.
B) It centralizes the responsibility of setting goals and achieving those goals.
C) It enables direct supervision and scrutiny of employees.
D) It permits complete evaluation of employees over relatively short periods.
E) It allows managers to set goals that are slightly above an employee’s reach.

A

Answer: A
Explanation: An important characteristic of management by objectives is its participatory nature. The participation of subordinates in the objective-setting process is a way of strengthening their commitment to achieving their goals and meeting their budgets.
Difficulty: 2 Medium
Topic: Management by objectives (MBO)
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

43
Q

53) ________ is control through a comprehensive system of rules and standard operating procedures (SOPs).
A) Bureaucratic control
B) Management by objective
C) Direct supervision
D) Clan control
E) Behavior control

A

Answer: A
Explanation: Bureaucratic control is control by means of a comprehensive system of rules and standard operating procedures (SOPs) that shapes and regulates the behavior of divisions, functions, and individuals.
Difficulty: 1 Easy
Topic: Bureaucratic control
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

44
Q

54) When faced with problems, ________ can help regulate employee behavior.
A) rules and SOPs
B) output controls
C) feedback controls
D) decentralized authority
E) management by objective

A

Answer: A
Explanation: Rules and SOPs guide behavior and specify what employees are to do when they confront a problem that needs a solution.
Difficulty: 2 Medium
Topic: Bureaucratic control
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

45
Q

55) A ________ control technique accomplishes standardized behavior and work outputs.
A) direct supervision
B) bureaucratic
C) management by objectives
D) feedforward
E) clan

A

Answer: B
Explanation: Bureaucratic control is control by means of a comprehensive system of rules and standard operating procedures. When employees follow the rules that managers have developed, their behavior is standardized to the degree that managers can make employees’ behavior predictable. There is no need to monitor the outputs of behavior because standardized behavior leads to standardized outputs, such as goods and services of the same uniform quality.
Difficulty: 2 Medium
Topic: Bureaucratic control
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

46
Q

56) What is a potential downside of using a bureaucratic approach to control behavior?
A) Increasing standardization requires greater investment in organizational learning.
B) Bureaucratic control is only useful for routine, well-understood organizational activities.
C) Too many rules can stop employees from thinking for themselves.
D) Bureaucratic control leads to the production of goods and services with inconsistent quality.
E) Rules and SOPs increase misunderstandings over responsibility and the use of power.

A

Answer: C
Explanation: Because rules constrain and standardize behavior and lead people to behave in predictable ways, people might become so used to automatically following rules that they stop thinking for themselves. Thus, too much standardization can reduce the level of learning taking place in an organization.
Difficulty: 2 Medium
Topic: Bureaucratic control
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

47
Q

57) The values, norms, and expectations of behavior that control how workers interact with one another within an organization represent the organization’s
A) objectives.
B) culture.
C) output controls.
D) SOPs.
E) feedback controls.

A

Answer: B
Explanation: Organizational culture is values and norms that specify appropriate and inappropriate behaviors and so determine the way its members behave.
Difficulty: 1 Easy
Topic: Organizational culture
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

48
Q

58) An online footwear company advertises that for every pair of shoes sold, a pair will be donated to someone in need. Employees at the company can multiply those donations by meeting specific sales and customer-service goals. The company is using ________ to influence employee behavior.
A) feedback
B) clan control
C) management by objectives
D) feedforward control
E) bureaucratic control

A

Answer: B
Explanation: Clan control is the control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations.
Difficulty: 2 Medium
Topic: Clan control
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

49
Q

59) Clan control
A) is independent of organizational culture.
B) has decreased in organizations over the past few years.
C) standardizes behavior and leads people to behave in predictable ways.
D) helps keep organization members goal-directed while remaining open to new opportunities.
E) does not apply to many of the most significant organizational activities.

A

Answer: D
Explanation: Clan control serves this dual function of keeping organization members goal-directed while open to new opportunities because it takes advantage of the power of organizational culture.
Difficulty: 2 Medium
Topic: Clan control
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating and motivating employees.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

50
Q

60) ________ is the movement of an organization away from its present state toward some preferred future state to increase its efficiency and effectiveness.
A) Benchmarking
B) Management by objectives
C) Evolutionary change
D) Bureaucratic control
E) Organizational change

A

Answer: E
Explanation: Organizational change is the movement of an organization away from its present state toward some preferred future state to increase its efficiency and effectiveness.
Difficulty: 1 Easy
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

51
Q

61) According to the force-field theory,
A) change occurs when factors forcing change balance with factors contributing to resistance.
B) a wide variety of forces arises from the way an organization operates that make organizations resistant to change.
C) forces that support clan control are significantly different from the forces that form the foundation of organizational culture.
D) the forces of evolutionary change and revolutionary change are equal and complement each other.
E) an organization is in a state of inertia when it reduces the forces for change and increases resistance to change.

A

Answer: B
Explanation: According to force-field theory, a wide variety of forces arises from the way an organization operates that make organizations resistant to change.
Difficulty: 2 Medium
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

52
Q

62) A state of inertia occurs when
A) an organization increases the forces for change.
B) an organization reduces resistance to change.
C) the forces for change and the resistance to change are evenly balanced.
D) the forces for change decrease, while the resistance to change decreases.
E) the forces for change decreases, while the resistance to change increases.

A

Answer: C
Explanation: When the forces are evenly balanced, the organization is in a state of inertia and does not change. To get an organization to change, managers must find a way to increase the forces for change, reduce resistance to change, or do both simultaneously.
Difficulty: 2 Medium
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Understand
AACSB: Analytical Thinking

53
Q

63) As the leader of a company, you want to see your company reach a higher level of sales performance. According to the Lewin’s force-field theory, what must you do?
A) increase the forces for change and resistance to change
B) decrease the forces for change and resistance to change
C) increase the forces for change and reduce resistance to change
D) increase the resistance to change
E) decrease the forces for change

A

Answer: C
Explanation: When the forces are evenly balanced, the organization is in a state of inertia and does not change. To get an organization to change, managers must find a way to increase the forces for change, reduce resistance to change, or do both simultaneously.
Difficulty: 2 Medium
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

54
Q

64) To achieve compliance with a new industry standard, a company develops a five-year plan in which goals are set for each year with incremental organizational changes focusing on one area of the new standard. This is an example of
A) revolutionary change.
B) managed change.
C) structural change.
D) cultural change.
E) evolutionary change.

A

Answer: E
Explanation: Evolutionary change is gradual, incremental, and narrowly focused.
Difficulty: 2 Medium
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

55
Q

65) A key characteristic of evolutionary change is that it is
A) widespread.
B) unexpected.
C) short-lived.
D) dramatic.
E) narrowly focused.

A

Answer: E
Explanation: Evolutionary change is gradual, incremental, and narrowly focused. Evolutionary change is not drastic or sudden but, rather, is a constant attempt to improve, adapt, and adjust strategy and structure incrementally to accommodate changes taking place in the environment.
Difficulty: 1 Easy
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

56
Q

66) When arriving at work Monday, Melissa learns that her entire organization is now reporting to a newly formed business unit focused on breaking into international markets. Her company is going through a(n) ________ change.
A) cultural
B) top-down
C) bottom-up
D) revolutionary
E) evolutionary

A

Answer: D
Explanation: Revolutionary change is rapid, dramatic, and broadly focused.
Difficulty: 2 Medium
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

57
Q

67) A key characteristic of revolutionary change is that it is
A) gradual.
B) incremental.
C) narrowly focused.
D) a continuous attempt to improve.
E) unexpected.

A

Answer: E
Explanation: Revolutionary change is rapid, dramatic, and broadly focused. Revolutionary change involves a bold attempt to quickly find new ways to be effective. It is likely to result in a radical shift in ways of doing things, new goals, and a new structure for the organization.
Difficulty: 1 Easy
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

58
Q

68) When deciding what change to make to address a problem, an organization must also consider
A) why the change is needed.
B) the source of the problem.
C) obstacles associated with the change.
D) how to introduce and manage the change.
E) how to evaluate the change.

A

Answer: C
Explanation: Once managers have identified the source of the problem, they must decide what they think the organization’s ideal future state would be. This step in the change process also includes identifying obstacles or sources of resistance to change.
Difficulty: 2 Medium
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Understand
AACSB: Analytical Thinking

59
Q

69) To continuously improve efficiency and effectiveness, an organization must first
A) evaluate the potential of change.
B) decide on what change to make.
C) implement desirable change.
D) assess the need for change.
E) identify obstacles to change.

A

Answer: D
Explanation: During the first step in the change process, managers need to recognize that there is a problem that requires change.
Difficulty: 1 Easy
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

60
Q

70) A ________ change is gradual, and managers at all levels work together to develop a detailed plan for change.
A) top-down
B) revolutionary
C) bottom-up
D) controlled
E) restructuring

A

Answer: C
Explanation: Bottom-up change is a gradual or evolutionary approach to change in which managers at all levels work together to develop a detailed plan for change.
Difficulty: 1 Easy
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
Difficulty: 1 Easy
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

61
Q

71) What is the purpose of benchmarking?
A) to help introduce and manage change
B) to assess the need for change
C) to decide on which change to make
D) to get buy-in on a proposed change
E) to evaluate the success of a change

A

Answer: E
Explanation: The last step in the change process is to evaluate how successful the change effort has been in improving organizational performance. Managers can use benchmarking to compare their performance on specific dimensions with the performance of high-performing organizations.
Difficulty: 1 Easy
Topic: Benchmarking
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

62
Q

72) ________ control allows managers to get immediate feedback on how efficiently inputs are being transformed into outputs.
A) Clan
B) Bureaucratic
C) Feedforward
D) Feedback
E) Concurrent

A

Answer: E
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: 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

63
Q

73) One of Sanjay’s work responsibilities is to check inspection stations periodically to monitor the quality of the products throughout the production process. This is an example of ________ control.
A) concurrent
B) clan
C) feedback
D) feedforward
E) bureaucratic

A

Answer: A
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.
Bloom’s: Understand
AACSB: Knowledge Application

64
Q

74) After measuring and evaluating the manufacturing performance of a new product, a manager raises the performance standard for the next production cycle. For what reason might a manager decide to raise the standard?
A) The quality of the product did not meet the original standards.
B) The manager wants to challenge subordinates.
C) The actual performance was lower than expected.
D) The performance standards were not precise.
E) Managers must constantly raise performance standards.

A

Answer: B
Explanation: During step 3, managers evaluate whether—and to what extent—performance deviates from the standards of performance chosen in step 1. If performance is higher than expected, managers might decide they set performance standards too low and may raise them for the next period to challenge their subordinates.
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: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

65
Q

75) To monitor financial performance, a(n) ________ ratio is used to assess cost of goods sold relative to inventory levels.
A) profit
B) operating
C) activity
D) leverage
E) liquidity

A

Answer: C
Explanation: Activity ratios show how well managers are creating value from assets. The inventory turnover measure looks at cost of goods sold divided by inventory.
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

66
Q

76) The owner of a food truck monitors employee efficiency by counting the number of customers served and the cost of goods sold. This is an example of ________ control.
A) feedforward
B) bureaucratic
C) concurrent
D) behavior
E) output

A

Answer: E
Explanation: Similarly, managers of a fast-food restaurant can easily measure outputs by counting how many customers their employees serve, the time each transaction takes, and how much money each customer spends.
Difficulty: 2 Medium
Topic: Control systems
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

67
Q

77) ________ control tends to be the first type of control that managers at all levels use to evaluate performance.
A) Bureaucratic
B) Feedforward
C) Feedback
D) Clan
E) Output

A

Answer: E
Explanation: Output control tends to be the first type of control that managers at all levels use to evaluate performance.
Difficulty: 1 Easy
Topic: Control systems
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: Analytical Thinking
Accessibility: Keyboard Navigation

68
Q

78) ________ is most likely to cause organizational costs to increase.
A) Direct supervision
B) Management by objectives (MBO)
C) Output control
D) Bureaucratic control
E) Clan control

A

Answer: A
Explanation: Direct supervision is expensive because a manager can personally manage only a relatively small number of subordinates effectively. Therefore, if direct supervision is the main kind of control being used in an organization, a lot of managers will be needed and costs will increase.
Difficulty: 2 Medium
Topic: Control systems
Learning Objective: 11-04 Identify the main behavior controls, and discuss their advantages and disadvantages as a means of coordinating

69
Q

79) Management by objectives (MOB) is a mechanism of
A) direct supervision.
B) top-down control.
C) behavior control.
D) output control.
E) bureaucratic control.

A

Answer: C
Explanation: To provide a framework within which to evaluate subordinates’ behavior and, in particular, to allow managers to monitor progress toward achieving goals, many organizations implement some version of management by objectives. Management by objectives (MBO) is a formal system of evaluating subordinates on their ability to achieve specific organizational goals or performance standards and to meet operating budgets.
Difficulty: 1 Easy
Topic: Management by objectives (MBO)

70
Q

80) The CEO of a large corporation mandates that new goals be implemented immediately. This is an example of
A) evolutionary change.
B) revolutionary change.
C) bottom-up change.
D) concurrent control.
E) management by objectives (MBO).

A

Answer: B
Explanation: Revolutionary change involves a bold attempt to quickly find new ways to be effective. It is likely to result in a radical shift in ways of doing things, new goals, and a new structure for the organization.
Difficulty: 2 Medium
Topic: Organizational change
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

71
Q

81) The managers at a theme park are comparing the number of annual passes they sold last year with the number of annual passes sold by other high-performing parks. This is an example of
A) concurrent control.
B) management by objectives.
C) feedback control.
D) benchmarking.
E) financial performance measurement.

A

Answer: D
Explanation: Benchmarking is the process of comparing one company’s performance on specific dimensions with the performance of other high-performing organizations.
Difficulty: 2 Medium
Topic: Benchmarking
Learning Objective: 11-05 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

72
Q

82) A restaurant manager routinely measures the number of customer complaints and how often customers leave negative reviews on its social media page. These controls help the restaurant improve its
A) efficiency.
B) quality.
C) innovation.
D) liquidity.
E) competitiveness.

A

Answer: B
Explanation: Today much of the competition among organizations centers on increasing the quality of goods and services. Organizational control is important in determining the quality of goods and services because it gives managers feedback on product quality.
Difficulty: 2 Medium
Topic: Control systems
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Apply
AACSB: Analytical Thinking

73
Q

83) Rentals Plus recently implemented a customer relationship management (CRM) system that tracks wait times and end-of-call evaluations for customer service representatives. This is an example of a control that helps manage
A) efficiency.
B) quality.
C) technology.
D) customer responsiveness.
E) innovation.

A

Answer: D
Explanation: Managers can help make their organizations more responsive to customers. For example, if they develop a control system, such as a CRM system, that allows them to evaluate how well customer-contact employees perform their jobs.
Difficulty: 2 Medium
Topic: Control systems
Learning Objective: 11-01 Define organizational control, and explain how it increases organizational effectiveness.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation

74
Q

84) An executive report lists divisional goals with related operating budget status and measures of financial performance. This report demonstrates
A) concurrent control.
B) management by objectives.
C) behavior control.
D) benchmarking.
E) output control.

A

Answer: E
Explanation: Output control can be achieved using mechanisms such as financial measures of performance, organizational goals, and operating budgets.
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

75
Q

85) At the output stage of a production process, ________ is used to detect problems and trigger management action.
A) feedback control
B) management by objectives
C) concurrent control
D) benchmarking
E) financial performance measurement

A

Answer: A
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: 1 Easy
Topic: Feedback control
Learning Objective: 11-02 Describe the four steps in the control process and the way it operates over time.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation