Question 1

Distinguish between behavior and output controls.Provide examples of each.

Accepted Answer

Behavior controls specify how something is to be done through policies,rules,standard operating procedures,and orders from a superior.Output controls specify what is to be accomplished by focusing on the result of the behaviors through the use of objectives and performance targets or milestones.An example of a behavior control is a policy on arriving to work on time.An example of an output control is a sales quota.

Question 2

Corporations will emphasize all types of controls (output,input,and behavior) when they are following a strategy of

Accepted Answer

A)  conglomerate diversification. 
B)  concentric diversification. 
C)  retrenchment. 
D)  divestment. 
E)  vertical integration. 
A)  conglomerate diversification. 
B)  concentric diversification. 
C)  retrenchment. 
D)  divestment. 
E)  vertical integration. B

Question 3

Some takeover specialists look at the amount of money a new owner can take out of the firm without harming the business.This is known as

Accepted Answer

A)  leveraged buyout. 
B)  operating cash flow. 
C)  free cash flow. 
D)  dividends. 
E)  shareholder measure. 
A)  leveraged buyout. 
B)  operating cash flow. 
C)  free cash flow. 
D)  dividends. 
E)  shareholder measure. C

Question 4

A multidivisional corporation like GE would tend to use what type of responsibility center?

Accepted Answer

A)  expense center 
B)  investment center 
C)  profit center 
D)  standard cost center 
E)  revenue center 
A)  expense center 
B)  investment center 
C)  profit center 
D)  standard cost center 
E)  revenue center

Question 5

Unlike ROI,managers cannot manipulate the numbers of EVA.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not considered an adequate measure by itself of corporate performance?

Accepted Answer

A)  ROI 
B)  EPS 
C)  ROE 
D)  operating cash flow 
E)  all of the above 
A)  ROI 
B)  EPS 
C)  ROE 
D)  operating cash flow 
E)  all of the above

Question 7

The balanced scorecard combines financial measures that tell the results of actions already taken with operational measures on customer satisfaction,internal processes,and the corporation's innovation and improvement activities.

Accepted Answer

A) True 
 B)False

Question 8

One example of a steering control used by retail stores is the inventory turnover ratio,which shows how hard an investment in inventory is working.

Accepted Answer

A) True 
 B)False

Question 9

The U.S.Navy quip,"What you inspect (or reward) is what you get" reflects

Accepted Answer

A)  behavior substitution. 
B)  suboptimization. 
C)  output control. 
D)  ERP. 
E)  none of the above 
A)  behavior substitution. 
B)  suboptimization. 
C)  output control. 
D)  ERP. 
E)  none of the above

Question 10

The long-term evaluation method encourages executives to look at developmental expenses as being different from expenses required for current operations.

Accepted Answer

A) True 
 B)False

Question 11

Suboptimization occurs when

Accepted Answer

A)  a division or functional unit views itself as a separate entity and refuses to cooperate with other divisions or units to the detriment of the organization as a whole. 
B)  there is a failure to produce at or near full capacity. 
C)  individuals are placed into positions not suited to their abilities. 
D)  managers tend to focus more of their attention on those aspects which are measurable than on those which are not. 
E)  managers concentrate too much on short-term performance objectives. 
A)  a division or functional unit views itself as a separate entity and refuses to cooperate with other divisions or units to the detriment of the organization as a whole. 
B)  there is a failure to produce at or near full capacity. 
C)  individuals are placed into positions not suited to their abilities. 
D)  managers tend to focus more of their attention on those aspects which are measurable than on those which are not. 
E)  managers concentrate too much on short-term performance objectives.

Question 12

Return on investment (ROI) is the most widely used measure of performance in what responsibility center?

Accepted Answer

A)  revenue center 
B)  expense center 
C)  investment center 
D)  profit center 
E)  standard cost center 
A)  revenue center 
B)  expense center 
C)  investment center 
D)  profit center 
E)  standard cost center

Question 13

Which of the following is not a guideline for proper control?

Accepted Answer

A)  Control should involve only a minimum amount of information. 
B)  Long-term as well as short-term controls should be used. 
C)  Controls should be timely so that corrective actions can be taken before it is too late. 
D)  Controls should measure all activities in order to be comprehensive. 
E)  Controls should emphasize the reward of meeting or exceeding standards rather than punishment for failing to meet standards. 
A)  Control should involve only a minimum amount of information. 
B)  Long-term as well as short-term controls should be used. 
C)  Controls should be timely so that corrective actions can be taken before it is too late. 
D)  Controls should measure all activities in order to be comprehensive. 
E)  Controls should emphasize the reward of meeting or exceeding standards rather than punishment for failing to meet standards.

Question 14

EVA may eventually replace ROI as the standard performance measure.

Accepted Answer

A) True 
 B)False

Question 15

The over-billing of customers in Sears's auto repair shops was an example of suboptimization.

Accepted Answer

A) True 
 B)False

Question 16

The long-term evaluation method encourages executives to analyze the long-term implications of present operations on the strategy they have adopted and the operational impact of a strategy on the corporate mission.

Accepted Answer

A) True 
 B)False

Question 17

According to the text,using a long-term performance evaluation system,a company executive might be promised incentives such as

Accepted Answer

A)  company cars. 
B)  company stock. 
C)  health insurance. 
D)  retirement plans. 
E)  vacations. 
A)  company cars. 
B)  company stock. 
C)  health insurance. 
D)  retirement plans. 
E)  vacations.

Question 18

One advantage of using ROI is that it is a single comprehensive figure that includes all revenues,costs,and expenses.

Accepted Answer

A) True 
 B)False

Question 19

Which method of matching rewards to the accomplishment of strategic objectives encourages executives to look at developmental expenses as being different from those expenses required for current operations?

Accepted Answer

A)  strategic-funds method 
B)  segmentation method 
C)  long-term evaluation method 
D)  individual evaluation method 
E)  weighted-factor method 
A)  strategic-funds method 
B)  segmentation method 
C)  long-term evaluation method 
D)  individual evaluation method 
E)  weighted-factor method

Question 20

One of the key reasons for the success of Walmart has been management's use of the company's sophisticated information system to control purchasing decisions.

Accepted Answer

A) True 
 B)False

Distinguish between behavior and output controls.Provide examples of each.

Corporations will emphasize all types of controls (output,input,and behavior) when they are following a strategy of

Some takeover specialists look at the amount of money a new owner can take out of the firm without harming the business.This is known as

A multidivisional corporation like GE would tend to use what type of responsibility center?

Unlike ROI,managers cannot manipulate the numbers of EVA.

Which of the following is not considered an adequate measure by itself of corporate performance?

The balanced scorecard combines financial measures that tell the results of actions already taken with operational measures on customer satisfaction,internal processes,and the corporation's innovation and improvement activities.

One example of a steering control used by retail stores is the inventory turnover ratio,which shows how hard an investment in inventory is working.

The U.S.Navy quip,"What you inspect (or reward) is what you get" reflects

The long-term evaluation method encourages executives to look at developmental expenses as being different from expenses required for current operations.

Suboptimization occurs when

Return on investment (ROI) is the most widely used measure of performance in what responsibility center?

Which of the following is not a guideline for proper control?

EVA may eventually replace ROI as the standard performance measure.

The over-billing of customers in Sears's auto repair shops was an example of suboptimization.

The long-term evaluation method encourages executives to analyze the long-term implications of present operations on the strategy they have adopted and the operational impact of a strategy on the corporate mission.

According to the text,using a long-term performance evaluation system,a company executive might be promised incentives such as

One advantage of using ROI is that it is a single comprehensive figure that includes all revenues,costs,and expenses.

Which method of matching rewards to the accomplishment of strategic objectives encourages executives to look at developmental expenses as being different from those expenses required for current operations?

One of the key reasons for the success of Walmart has been management's use of the company's sophisticated information system to control purchasing decisions.

Basic Concepts in Strategic Management

Corporate Governance

Social Responsibility and Ethics in Strategic Management

Environmental Scanning and Industry Analysis

Organizational Analysis and Competitive Advantage

Strategy Formulation: Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Global Strategy

Strategy Implementation: Organizing and Structure

Strategy Implementation: Staffing and Directing

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Exam 12: Evaluation and Control

Distinguish between behavior and output controls.Provide examples of each.

Corporations will emphasize all types of controls (output,input,and behavior) when they are following a strategy of

Some takeover specialists look at the amount of money a new owner can take out of the firm without harming the business.This is known as

A multidivisional corporation like GE would tend to use what type of responsibility center?

Unlike ROI,managers cannot manipulate the numbers of EVA.

Which of the following is not considered an adequate measure by itself of corporate performance?

The balanced scorecard combines financial measures that tell the results of actions already taken with operational measures on customer satisfaction,internal processes,and the corporation's innovation and improvement activities.

One example of a steering control used by retail stores is the inventory turnover ratio,which shows how hard an investment in inventory is working.

The U.S.Navy quip,"What you inspect (or reward) is what you get" reflects

The long-term evaluation method encourages executives to look at developmental expenses as being different from expenses required for current operations.

Suboptimization occurs when

Return on investment (ROI) is the most widely used measure of performance in what responsibility center?

Which of the following is not a guideline for proper control?

EVA may eventually replace ROI as the standard performance measure.

The over-billing of customers in Sears's auto repair shops was an example of suboptimization.

The long-term evaluation method encourages executives to analyze the long-term implications of present operations on the strategy they have adopted and the operational impact of a strategy on the corporate mission.

According to the text,using a long-term performance evaluation system,a company executive might be promised incentives such as

One advantage of using ROI is that it is a single comprehensive figure that includes all revenues,costs,and expenses.

Which method of matching rewards to the accomplishment of strategic objectives encourages executives to look at developmental expenses as being different from those expenses required for current operations?

One of the key reasons for the success of Walmart has been management's use of the company's sophisticated information system to control purchasing decisions.

Basic Concepts in Strategic Management

Corporate Governance

Social Responsibility and Ethics in Strategic Management

Environmental Scanning and Industry Analysis

Organizational Analysis and Competitive Advantage

Strategy Formulation: Business Strategy

Strategy Formulation: Corporate Strategy

Strategy Formulation: Functional Strategy and Strategic Choice

Strategy Implementation: Global Strategy

Strategy Implementation: Organizing and Structure

Strategy Implementation: Staffing and Directing

Suggestions for Case Analysis

Filters