Exam 15: Control

Rafe's manager has instructed Rafe and his fellow workers to develop a daily theme,such as patience,empathy,and kindness. Each day,the workers are to emphasize the theme as they work with customers,suppliers,and one another. Which kind of control system is Rafe's manager using?

Which type of control is a method of gathering information about performance deficiencies as they occur?

When the local fast-food restaurant manager caught an employee giving free food to his friends,she fired him on the spot. When an employee stayed late after work one night to help a woman start her car,the manager rewarded him. Which type of control did the restaurant manager use in these two instances?

What are the three ways that quality is typically defined and measured?

According to the textbook,which level of waste minimization produces the greatest minimization of waste?

Identify and briefly define the three basic control methods.

Describe the nature of the control process. Identify its basic steps,as well as the three basic methods of control. Explain how specific policies and procedures related to grading used at a college or university could be seen as an example of the control process,and specify which method(s)of control your example(s)represent.

Which type of control is a method of gathering information about performance deficiencies before they occur?

Narrative 15-2 The Alberta Motor Association (AMA)suffered significant losses due to fraud between January 2013 and June 2016. The organization's vice-president of information technology was charged with fraud for allegedly misappropriating as much as $8.2 million. AMA "has reviewed its financial processes and has put in place additional controls to prevent any future incidents of this type." The fraud was discovered when the alleged perpetrator advised AMA that he had hurt his leg,and needed to work more from home;unfortunately,he didn't attend required meetings,which triggered a meeting with the organization's chief operating officer and was placed on disability leave in June 2016. -Refer to Narrative 15-2. Which of the following best describes why AMA should consider the implementation of the balanced scorecard?

Narrative 15-3 Despite 30 straight years of increased revenues and profits,Walgreens found itself facing intense competition from Costco,Walmart,and CVS. However,the biggest and newest threat to Walgreens' business was mail-order prescription sales managed by pharmacy benefit managers (PBMs),who work closely with companies,insurers,and health maintenance organizations to reduce pharmaceutical costs,which have been increasing an average of 13 percent per year. With Costco's rock-bottom prices,Walmart's incredible volume-based purchasing power,and PBMs able to sell brand-name drugs and generic drugs 27 percent and 53 percent cheaper than traditional drug stores,according to a government study,Walgreens knew it had to tightly control its expenses to continue to be competitive. In terms of efficiency,it costs Walgreens less to fill a prescription order (i.e.,fulfillment costs)than any other retailer in the business. PBMs,however,can still fill a prescription for half as much as Walgreens. To get its fulfillment costs down,Walgreens reduced its pharmaceutical inventory supply from 68 days (that is,if Walgreens quit ordering pharmaceuticals,it would be able to fill prescriptions for 68 days before running out)to 41 days. This reduction saves the company nearly $2 billion a year. Other steps to reduce expenses include no longer accepting American Express cards at Walgreens stores. Every time a customer uses an American Express card to make a payment,the store pays American Express a fee of 2.05 percent. By contrast,Visa and MasterCard charge 1.55 percent. While the difference seems small,the savings amount to $50,000 on every $10 million of sales,which can add up quickly given Walgreens' $40 billion in annual sales. Finally,Walgreens keeps costs low in its stores with one of the best employee retention rates in the industry. Howard Davidowitz,chairman of Davidowitz & Associates,a retail consulting and investment banking firm,says,"Their pharmacists don't turn over,which increases consumer trust in the pharmacist. The retention rate of store and district managers is also high. This is such an advantage." Walgreens is also using technicians who are paid $16 an hour to fill more prescriptions. While pharmacists,who are paid $42 an hour,still review all filled prescriptions,using technicians who are paid $16 an hour to fill more prescriptions clearly reduces expenses. Walgreens started its "Advantage 90" program,which it now offers through its mail-order system and its stores. Walgreens believes that Advantage 90 will help it take sales away from other PBMs and from other retail pharmacies,which have higher fulfillment costs. Advantage 90 is now used by 150 companies,including Southwest Airlines,and Walgreens' CEO maintains that it is cheaper than mail-order PBMs. -Refer to Narrative 15-3. Which perspective of the balanced scorecard were Walgreens' managers affecting when they changed how much inventory the company holds at a time?

Which of the following is one of the four perspectives measured in the balanced scorecard approach to control?

Control loss usually has no effect on goal achievement.

Narrative 15-2 The Alberta Motor Association (AMA)suffered significant losses due to fraud between January 2013 and June 2016. The organization's vice-president of information technology was charged with fraud for allegedly misappropriating as much as $8.2 million. AMA "has reviewed its financial processes and has put in place additional controls to prevent any future incidents of this type." The fraud was discovered when the alleged perpetrator advised AMA that he had hurt his leg,and needed to work more from home;unfortunately,he didn't attend required meetings,which triggered a meeting with the organization's chief operating officer and was placed on disability leave in June 2016. -Refer to Narrative 15-2. Which of the following best describes the likely control mechanisms in place within AMA?

A flight accident in February 2017 killed two Mount Royal University flight instructors. Which type of control did the Transportation Safety Board and Mount Royal University use by gathering information about how the men died so as to prevent a recurrence?

Customer satisfaction surveys are an accurate and effective way to answer this balanced scorecard question: "How do customers see us?"

Some approaches to control tend to be more stressful for employees than others. Discuss how bureaucratic and concertive control influence workers.

A trucking company can gather data on how its competitors deal with total accidents,numbers of high-severity accidents by type,missed deliveries,spills,driver out-of-service by type,and vehicle out-of-service by type,and use this information to improve its own safety record. Which of the following allows a trucking company to not only compare its safety performance with that of other companies but also adopt those practices found to be superior?

What are the three basic control methods?

In which of the following situations should normative controls be used?

Theresa is comparing customer data between the previous three years and the current year to determine how many customers have left and the rate at which customers are leaving. What activity is Theresa engaged in?