Deck 20: Basic Elements of Control

Question 1

An operating budget is a budget that determines the number of units to be produced during the coming time period.

Answer 1

False

Question 2

A properly designed control system can help management anticipate,monitor,and respond to changing circumstances.

Answer 2

True

Question 3

The most common controls are screening controls.

Answer 3

True

Question 4

An after-action report is a screening control.

Question 5

The last step in the control process is to change the standard.

Question 6

Internal audits examine the efficiency and appropriateness of financial and accounting procedures.

Question 7

Strategic controls are concerned with how well the organization aligns itself with the environment.

Question 8

The responsibility for managing control rests on the CEO.

Question 9

As much as possible,standards established for control purposes should reflect the goals of the organization.

Question 10

One purpose of control is to simplify organizations.

Question 11

Control provides an organization with a mechanism for adjusting its course if performance falls outside of acceptable boundaries.

Question 12

Many contemporary organizations do not allow managers to participate in the budget process.

Question 13

Sources of cash include sales revenue,short- and long-term loans,the sale of assets,and the issuance of new stock.

Question 14

Reporters who verify stories with additional sources are using screening control.

Question 15

Operations controls monitor input,transformation,and output.

Question 16

An effective way to promote employee participation in the control process is to use screening controls.

Question 17

External audits examine the efficiency and appropriateness of financial and accounting procedures.

Question 18

Financial resource controls are interrelated with the control of all other organizational resources.

Question 19

Businesses must manage their finances so that revenues are sufficient to cover costs.Not-for-profit organizations such as universities do not have the same concerns.

Question 20

After comparing performance against control standards managers should never change the standard.

Question 21

The basic purpose of control is

A)to cope with organizational complexity.
B)to adapt to environmental changes.
C)to minimize costs.
D)to limit the accumulation of error.
E)All of these choices

Question 22

According to the text,what are the two broad schemes by which controls can be classified?

A)Level and cost
B)Cost and focus
C)Area and level
D)Level and complexity
E)Complexity and focus

Question 23

Toyota is designing a new car.At the same time it is planning the recycling abilities of the parts.Toyota is effectively integrating planning and control processes.

Question 24

Cody Kretsinger was charged with a computer breach at Sony Pictures Entertainment.User data was stolen.Hackers now threaten companies of all sizes and require constant security updates.This example illustrates how a control system can be used to

A)minimize costs.
B)limit the accumulation of errors.
C)adapt to the environmental change.
D)cope with wide spans of management.
E)All of these choices

Question 25

Strategic control in global organizations is the same as domestic organizations.

Question 26

The purpose of control is to

A)determine where the organization should be at some point in the future.
B)assess organizational performance relative to some desired goal.
C)determine how to structure the organization so as to carry out organizational plans.
D)get the organization's employees to work toward organizational goals.
E)verify that the organization's strategy is appropriate for its environment.

Question 27

Army helicopter pilots follow a preflight checklist because small things here and there can add up to disaster in the air later.This illustrates

A)organizational complexity.
B)how changing conditions are influenced by innovation.
C)why control is necessary to reduce the accumulation of errors.
D)how control helps organizations respond to changing standards.
E)how organizations cope with multiple control standards.

Question 28

Bureaucratic control focuses on enhanced performance that exceeds minimum acceptable standards.

Question 29

The Sarbanes-Oxley Act,passed after the fall of Enron and Arthur Andersen,requires accounting firms to separate the auditing function from the consulting function.This example illustrates

A)organizational complexity.
B)how changing conditions are influenced by innovation.
C)why control is necessary to reduce the accumulation of errors.
D)how control helps organizations respond to changing standards.
E)All of these choices

Question 30

The planning and controlling functions are interrelated.

Question 31

As the number of things being controlled by the organization increases,the likelihood that employees will resist those controls tends to decrease.

Question 32

Managers make a surprisingly large number of decisions based on inaccurate information.

Question 33

Income statements,balance sheets,and audits are examples of the control of

A)physical resources.
B)cybernetics.
C)human resources.
D)organizational complexity.
E)financial resources.

Question 34

Information systems are an essential element of strategic control.

Question 35

A properly designed control system is important to an organization because it can be used to

A)maximize costs.
B)anticipate, monitor, and respond to changing circumstances.
C)modify inappropriate organizational focus.
D)modify organizational standards.
E)reduce resistance to change.

Question 36

Decentralized control relies heavily on self-control by the organization's employees.

Question 37

Organizational control is

A)the regulation of management activities to increase leadership.
B)the regulation of organizational activities to facilitate goal attainment.
C)the system that monitors and manages via a self-regulating mechanism.
D)a mechanism for maintaining the status quo.
E)a device for determining where the organization should be at some future time.

Question 38

Internal audits are not as effective as external audits.

Question 39

If objective data are available,they will provide more useful information than will mere subjective impressions.

Question 40

Bureaucratic control is outdated and not effective any more.

Question 41

After evaluation,an appropriate decision may be to

A)raise standards.
B)do nothing.
C)correct the deviation.
D)lower standards.
E)Do any of these choices

Question 42

Apple iPhones are notorious for cracked screens.When a customer brings one in to an iStore,the employee checks the customer records and may replace the screen for free.Which step in the control process does this represent?

A)Taking corrective action
B)Measuring performance
C)Comparing performance to standards
D)Establishing performance standards
E)Setting goals

Question 43

Thousands of people audition each year to be contestants on American Idol.The audition is an example of a ____ control.

A)screening
B)preliminary
C)concurrent
D)postaction
E)feedback

Question 44

Google partnered with Nielsen Co.to poll users about ads on Google+.Nielsen then packaged the information for advertisers.This was a response to advertiser complaints about the effectiveness of ads on the social network.This indicates that Google is placing an emphasis on ____ controls.

A)structural
B)hierarchical
C)strategic
D)managerial
E)operations

Question 45

Standards used in organizational control are most like

A)policies.
B)strategies.
C)goals.
D)rules.
E)standing plans.

Question 46

Everyone working or volunteering for Girl Scouts has a background check before they can work with girls or handle money.What kind of operations control is this?

A)Preliminary
B)Feedback
C)Concurrent
D)Screening
E)Yes-no

Question 47

A college admissions board required students to have certain grade point averages and SAT scores to be accepted at the school.What form of operations control do these requirements represent?

A)Screening
B)Preliminary
C)Postaction
D)Cybernetic
E)Yes-no

Question 48

To what part of a system are preliminary controls applied?

A)Resources
B)Transformation processes
C)Outputs
D)Feedback elements
E)Subsystems

Question 49

Businesses that use H-form or M-form organizational design may have several ____ who are responsible for helping line managers with their control functions,for coordinating the organization's overall control system,and for gathering and assimilating relevant information.

A)ombudsmen
B)facilitators
C)change agents
D)controllers
E)control champions

Question 50

To the extent possible,standards used for control purposes should be derived from

A)historical data.
B)time-series data.
C)external data.
D)organizational goals.
E)production indices.

Question 51

The ____ at McDonald's fast-food restaurants is to fill each order within 90 seconds and to have no customer wait longer than 3.5 minutes.

A)structural goal
B)physical resource control
C)financial control
D)corrective strategy
E)control standard

Question 52

Cody Kretsinger was charged with a computer breach at Sony Pictures Entertainment.User data was stolen.Hackers now threaten companies of all sizes and require constant security updates.This is an example of the need for ____ control.

A)financial
B)information
C)physical
D)human
E)strategic

Question 53

Implementing the control process includes which of the following steps?

A)Establish standards
B)Determine the need for corrective action
C)Compare performance against standards
D)Measure performance
E)All of these choices

Question 54

The last step in the control process is to

A)establish standards.
B)determine the need for corrective action.
C)compare performance against standards.
D)measure performance.
E)maintain the status quo.

Question 55

Anu is comparing the performance of her small landscaping business against the standards she established.When she has finished her comparisons,any of the following actions may be appropriate EXCEPT

A)correct deviations as required.
B)maintain the status quo.
C)increase the control standards.
D)eliminate the control if things went as planned.
E)decrease the control standards.

Question 56

Secretary of Defense,Gates,shifted the pentagon's budget from expensive,high tech weapon systems to timely,responsive systems.Small defense contractors were more responsive to the change and won more contracts.In this case ____ control helped the small companies.

A)structural
B)hierarchical
C)strategic
D)managerial
E)operations

Question 57

During episodes of the Biggest Loser,contestants compete to lose weight and stay at the ranch,because someone leaves each week.This is an example of a ____ control.

A)screening
B)preliminary
C)postaction
D)cybernetic
E)yes-no

Question 58

McDonald's fast-food restaurants aim to fill each order within 90 seconds and to have no customer wait longer than 3.5 minutes.This is derived from the company's

A)historical data.
B)time-series data.
C)external data.
D)organizational goals.
E)production indices.

Question 59

The credit crisis and the Federal Reserve's response to it faced criticism from Congress.The Treasury Department requested a review of the central bank's structure and governance.There is now broad support for auditing the Fed using the Government Accountability Office.The change in the economic and political environment of the Fed means the Fed needs to adapt its ____ control.

A)structural
B)hierarchical
C)strategic
D)managerial
E)operations

Question 60

eBay partnered with Nielsen Co.to poll users about ads on eBay.Nielsen then packaged the information for advertisers.This was a response to advertiser complaints about the effectiveness of ads on the Internet.Verifying ad effectiveness of other companies before buying ad space on eBay is a ____ control for the businesses.

A)screening
B)preliminary
C)concurrent
D)postaction
E)feedback

Question 61

The University of Michigan develops a budget that shows its projected income from sources such as the state of Michigan,tuition and fees,alumni contributions,and research grants.This is an example of a(n)____ budget.

A)revenue
B)output
C)capital expenditures
D)balance sheet
E)cash-flow

Question 62

Which of the following is NOT a type of financial budget?

A)Cash-flow
B)Capital expenditure
C)Balance sheet
D)Cash
E)Profit

Question 63

Which of the following is NOT a major form of operations control discussed in the text?

A)Preliminary
B)Screening
C)Postaction
D)Functional
E)None of these choices

Question 64

Deirdre is a freelance editor.She knows how many chapters she needs to edit and approximately how long each chapter takes.She is calculating what she needs to do to meet her next deadline.She is making a ____ budget.

A)labor
B)production
C)space
D)balance sheet
E)capital expenditure

Question 65

Politicians transform information from many sources into decisions about policies for the area they govern.When politicians follow poll results after the passage of legislation,the politicians are using ____ control.

A)preliminary
B)screening
C)postaction
D)cybernetic
E)feedback

Question 66

Which of the following is a type of financial budget that deals with forecasting the organization's assets and liabilities in the event all other budgets are met?

A)Cash-flow
B)Liquidity
C)Capital expenditure
D)Balance sheet
E)Pro forma

Question 67

Once a year Boy Scout troops submit financial reports describing income and expenditures.This is an example of ____ control.

A)preliminary
B)screening
C)postaction
D)cybernetic
E)feedback

Question 68

As the product being produced becomes more complex,which of the following types of operations controls would logically become more important?

A)Preliminary
B)Screening
C)Postaction
D)Preliminary
E)Feedback

Question 69

The percentage of graduates who find a job within six months of graduation is a ____ control for colleges and universities.

A)preliminary
B)screening
C)postaction
D)cybernetic
E)feedback

Question 70

Budgets

A)help managers coordinate resources.
B)help define standards for control.
C)provide guidelines about resources.
D)enable the evaluation of the performance of managers.
E)All of these choices

Question 71

Which of the following statements does NOT describe a weakness associated with budgeting?

A)Some managers apply budgets too rigidly.
B)Developing budgets can be very time consuming.
C)Budgets link planning and controlling.
D)Budgets may limit innovation and change.
E)Budgets may make it impossible to procure funds to take advantage of an unexpected opportunity.

Question 72

Amazon asks customers to rate their experience with the product and service.This is an example of ____ control.

A)preliminary
B)screening
C)postaction
D)cybernetic
E)feedback

Question 73

Screening controls

A)take place during the transformation process.
B)involve interviewing potential employees.
C)are the same as preliminary control.
D)determine organizational flexibility.
E)determine accuracy of organizational standards.

Question 74

At the end of each fiscal year,managers report in their performance report if they are under budget.This is an example of a(n)____control.

A)labor
B)operations
C)information
D)finance
E)revenue

Question 75

Which of the following is NOT a type of operating budget?

A)Production
B)Sales
C)Expense
D)Profit
E)Revenue

Question 76

Politicians transform information from many sources into decisions about policies for the area they govern.When politicians "float an idea" by having a staff member leak it to the press to gauge reaction,the politician's staff is using ____ control.

A)screening
B)preliminary
C)postaction
D)cybernetic
E)yes-no

Question 77

Postaction control is most appropriate when the

A)time between goal setting and attainment is short.
B)product being produced is nonperishable.
C)product being produced is simple and routine.
D)production process is very complicated.
E)volume of product output is extremely large.

Question 78

A plant manager is told that she has 8,000 labor hours to allocate in a week.This is an example of a(n)____ budget.

A)operations
B)financial
C)nonmonetary
D)output
E)expense

Question 79

Politicians transform information from many sources into decisions about policies for the area they govern.When politicians follow poll results during legislative debate,the politicians are using ____ control.

A)preliminary
B)screening
C)postaction
D)cybernetic
E)feedback

Question 80

The ____ budgets are organizational budgets that outline quantities of product/service to be produced and what resources will be used.

A)operating
B)capital expenditure
C)revenue
D)cash-flow
E)nonmonetary