Exam 2 (Chapters 5 & 6)

Question 1

specifies the actions that will be taken to achieve a set of goals or objectives

Answer 1

a plan

Question 2

express preferred results

Answer 2

goal

Question 3

specific statements of desired outcomes

Answer 3

objectives

Question 4

What is widely used to define goals?

Answer 4

balanced scorecard

Question 5

What are the 4 distinct areas that a balanced scorecard recommends each company define goals?

Answer 5

1. customers
2. internal business processes
3. learning
4. growth

Question 6

when there are multiple business units within one company, goals are often set for each unit and are termed…

Answer 6

strategic business unit goals

Question 7

What might strategic business unit goals include?

Answer 7

• improving the company’s marketing material

- enhancing communication between the sales force and marketing team

Question 8

tends to be more vague and typically includes descriptive language

Answer 8

goals

Question 9

more detailed and are closely linked to a company’s strategic plan

Answer 9

objectives

Question 10

acronym used to define the qualities of successful objectives

Answer 10

SMART

Question 11

What are SMART objectives?

Answer 11

• Specific
• Measurable
• Attainable
• Relevant
• Time Bound

Question 12

What does the SMART Objective ‘specific’ refer to?

Answer 12

objectives should be well defined with sufficient details

Question 13

What does the SMART Objective ‘measurable’ refer to?

Answer 13

objectives should have associated measurements so it is clear when they have been reached

Question 14

What does the SMART Objective ‘attainable’ refer to?

Answer 14

objectives should be realistic and achievable

Question 15

What does the SMART Objective ‘relevant’ refer to?

Answer 15

objectives should be focused on matters of importance

Question 16

What does the SMART Objective ‘time bound’ refer to?

Answer 16

objectives should have deadlines, starting points, ending points, and fixed durations

Question 17

anticipates unexpected events and outlines how the company should react to these events

Answer 17

contingency plan

Question 18

the practice of continually measuring an organization’s performance and practices in key areas and comparing them with other organizations, to find ways of achieving better results

Answer 18

benchmarking

Question 19

What are the 6 steps to benchmarking?

Answer 19

1. Select the business to benchmark
2. Determine appropriate metrics (KPIs) to gauge performance and take measurements
3. Select competitors and/or leading companies in different industries against which to compare
4. Calculate the differences between internal metrics and the performance metrics of the comparison companies; determine the causes of any shortcomings revealed by the benchmarking comparison
5. Develop improvement programs to close performance gaps
6. Implement improvement programs and repeat benchmarking comparison

Question 20

Why is benchmarking used?

Answer 20

to find ways of achieving better results

Question 21

the systematic process of making sure that plans, targets or standards of performance within an organization are met

Answer 21

management control or controlling

Question 22

What are the 5 steps of controlling?

Answer 22

1. Establish performance standards
2. Perform the work
3. Measure the process involved
4. Compare that measurement data to the plan, target the standards
5. Take corrective action, either adjusting performance or revising the plan, target or standards

Question 23

involves reviewing performance and taking corrective action when necessary

Answer 23

control

Question 24

ensures that organizational processes are functioning as efficiently as expected

Answer 24

control systems

Question 25

What can control systems be categorized as (based on organizational work stream)?

Answer 25

1. Feedforward 2. Concurrent 3. Feedback Systems

Question 26

controls the process from the beginning | ex: ice cream manufacturer sampling his raw materials before producing to ensure quality

Answer 26

feedforward

Question 27

controls the process as it runs by monitoring specific points in the process (ex: beer breweries sampling their product several times as it ferments)

Answer 27

concurrent

Question 28

controls the process by measuring performance at the end | ex: a restaurant surveying their customers after their meal to determine customer's satisfaction

Answer 28

feedback

Question 29

What can control systems be categorized as (based on business area they are designed to manage)?

Answer 29

1. Inventory 2. Financial 3. Scheduling and Program Planning

Question 30

controls aim to ensure that its use and costs are within expected limits (ex: prioritizing according to dollar value or importance)

Answer 30

inventory

Question 31

strive to keep the company's operations within their budget | ex: capital, operating, and variable budgets

Answer 31

financial

Question 32

strive to organize project work so that it is completed on time and within the expected budget (ex: Gantt and PERT charts)

Answer 32

scheduling and program planning

Question 33

a cost control technique that shows the point at which a product becomes profitable based on its price, sales volume, and cost

Answer 33

break even chart

Question 34

the system of relationships governing tasks, reporting, and authority that is required for an organization to do its work

Answer 34

organization structure

Question 35

What are the two fundamental needs for successful operation that organization structure addresses?

Answer 35

1. provides for the division of labor | 2. combines and coordinates the divided work of the organization's members to achieve the desired goals

Question 36

the act of drawing up plans for an organization's future direction to attain its goals

Answer 36

planning

Question 37

a hierarchy decision-making structure where all decisions and processes are handled strictly at the top or the executive level

Answer 37

centralized structures

Question 38

daily operations and decision-making responsibilities are delegated by top management to middle and lower-level mangers within the organization, allowing top management to focus more on major decisions

Answer 38

decentralized structures

Question 39

grouping employees into units or departments

Answer 39

departmentalization

Question 40

What are the 2 main approaches of departmentalization?

Answer 40

1. functional structure | 2. divisional structure

Question 41

separates employees based on the function of the business they perform (ex: marketing department, sales department, etc.)

Answer 41

functional structure

Question 42

groups employees by product, geographic, or market divisions

Answer 42

divisional structure

Question 43

the number of employees that report to one manager

Answer 43

span of control

Question 44

the relationships that are in an organization that keep ingoing from the CEO to the floor worker

Answer 44

administrative hierarchy

Question 45

how tasks are divided among employees

Answer 45

division of labor

Question 46

the manner in which an organization operates in reality, as opposed to its formal distribution of roles and responsibilities

Answer 46

informal organization

Question 47

What are the 4 main contingencies that can impact a company's organizational structure over time?

Answer 47

1. size 2. strategy 3. technology 4. environment

Question 48

What does SIZE refer to in impacting a company's organizational structure over time?

Answer 48

the number of people employed at the company and generally, as a company grows, its workforce becomes more specialized

Question 49

What is an example of STRATEGY referring to impacting a company's organizational structure over time?

Answer 49

a company that wants to add another product to its line might have to add a new functional unit

Question 50

What does TECHNOLOGY refer to in impacting a company's organizational structure over time?

Answer 50

the type of technology used at the company affects how much manual labor is performed by employees

Question 51

What does ENVIRONMENT refer to in impacting a company's organizational structure over time?

Answer 51

companies operate in a market that changes quickly, while others do not

Question 52

expresses, in numbers, management's plan of action for a future period of time, it helps coordinate what needs to be done to execute that plan

Answer 52

budget

Question 53

the process of preparing a budget and part of an organizations planning process

Answer 53

budgeting

Question 54

method in which senior management develops a high level budget for the company

Answer 54

top down budgeting

Question 55

method that attempts to determine the underlying costs for each individual department or segment of an organization and then total up each department

Answer 55

bottom up budgeting

Question 56

the sum of the actions a company intends to take to achieve long term goals

Answer 56

organizational strategy

Question 57

a comprehensive budget plan which encompasses the organization's operating and financial plans

Answer 57

master budget

Question 58

What does the master budget include?

Answer 58

all of the individual budgets related to sales, cost of goods sold, operating expenses, capital expenditures, and cash as well as the firms pro forma statements

Question 59

charting a decision based ongoing term goals and a longer term vision

Answer 59

strategic decision

Question 60

a type of short term decisions by a company in the lieu of long term strategies at the time of acquisition of company assets

Answer 60

operational decision

Question 61

What are the decision making steps?

Answer 61

1. Gather information to determine the cause of the problem 2. Identify alternative options 3. Choose the best option 4. Implement the solution 5. Evaluate the decision

Question 62

When does certainty occur?

Answer 62

when a manager has complete information about the goals, options, and outcomes associated with each alternative solution

Question 63

When does risk occur?

Answer 63

when the manager knows the goals and options but cannot predict the exact outcomes

Question 64

What is important to understand before beginning the risk management process?

Answer 64

the difference between risk propensity and risk impact

Question 65

What must be considered during the risk management process?

Answer 65

risk propensity and risk impact

Question 66

the likelihood that a risk will occur; often expressed as some sort of probability

Answer 66

risk propensity

Question 67

the total effect that the occurrence of the risk has on a project or venture; includes but is not limited to financial considerations

Answer 67

risk impact

Question 68

What are the 3 decision making models?

Answer 68

1. Classical Models 2. Administrative Models 3. Political Model

Question 69

grunded in economics and assumes that the manager makes the decision that is in the best economic interests of the company; assumes that the problems can be easily defined and that the decision maker understands the goals of the company; assumes that the information for making the decision is readily available and that economic criteria should fee sued to evaluate possible options

Answer 69

classical model

Question 70

views decision-makers as less rational

Answer 70

administrative model

Question 71

assumes that there are no objective decision problem definitions or criteria. Instead, the political process is used to determine what needs to be addressed. Consensus and bargaining are then used to devise the best solution

Answer 71

political model