Deck 14: Basic Elements of Control

Question 1

An after-action report is a screening control.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

Debt ratios are measures of an organization's ability to convert debt into cash quickly.

Answer 3

False

Question 4

Physicalcontrol is concerned with the processes the organization uses to transform resources into products or services.

Question 5

An operating budget is a budget that allocates available machine hours to various products to be produced.

Question 6

Campus interviews of college students applying for jobs are a form of preliminary control for the hiring organization.

Question 7

The CEO is responsible for developing the budget and communicating it to managers.

Question 8

Screening controls should be used more frequently as the complexity of the product being produced increases.

Question 9

Every month,Beau balances his checkbook register.For the last six months,he has found a $25 unexplained difference between his calculation and the bank's calculation.Now his checkbook is $150 out of balance.Beau's control system fulfills its function of limiting the accumulation of error.

Question 10

Traditionally,managers have not been responsible for overseeing the wide array of control systems and concerns in organizations.

Question 11

Not-for-profit organizations such as universities do not have the same concerns as corporations,for their revenues covering operating expenses and overhead.

Question 12

Marketing is part of financial control.

Question 13

For a budget to be effective it needs to be strictly enforced

Question 14

Budgets provide yardsticks for measuring performance.

Question 15

The control process focuses on these four types of organizational resources: physical,human,information,and financial.

Question 16

The listing of an organization's assets and liabilities at a particular point in time can usually be found in its balance sheet.

Question 17

All U.S.companies are required by law to have regular external audits.

Question 18

A properly designed control system can help management cope with organizational complexity,minimize costs,and respond to changing circumstances.

Question 19

Buck's Barber Shop plans to earn 80 percent of its income from barbering services and 20 percent of its income from the sale of grooming products.This represents a nonmonetary budget.

Question 20

One purpose of control is to simplify organizations.

Question 21

Decentralized control is based on organic structural arrangements.

Question 22

The report issued about the space shuttle Columbia disaster showed a culture at NASA that did not listen when small safety issues were raised.Each issue by itself might not have caused the disaster.However,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)how organizations cope with multiple control standards.

Question 23

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)operation
B)human
C)strategic
D)financial
E)quality

Question 24

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

Question 25

Structural control can focus on any of the areas involved in implementation of organizational strategy.

Question 26

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)physical
B)human
C)information
D)financial
E)quality

Question 27

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 28

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)physical
B)information
C)structural
D)financial
E)strategic

Question 29

Sales forecasting,economic forecasting,and environmental analysis are examples of the control of

A)physical resources.
B)human resources.
C)information resources.
D)financial resources.
E)None of these.

Question 30

An organization with decentralized control has a goal of employee compliance.

Question 31

When classifying controls on the basis of the resources involved,we find that one class of resources is related to the control of all other resource classes as well.Which resource class overlaps all other classes?

A)Physical resources
B)Human resources
C)Financial resources
D)Information resources
E)None of these.

Question 32

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)decrease the control standards.
E)eliminate the control standards.

Question 33

A reward system directed at group performance would happen in bureaucratic control.

Question 34

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

Question 35

Carlos's division planned to design a more effective advertising campaign,but did not decide how effectiveness would be measured.This is correct,because if controls are to be effective they should be added later.

Question 36

Internal audits can be effective at disclosing problems before they become too big.

Question 37

Standards used in organizational control are most like

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

Question 38

An organization's structural control is either bureaucratic or decentralized.

Question 39

Control should be linked with planning.

Question 40

Performance appraisals are part of ____ control.

A)physical
B)human resource
C)information
D)financial
E)quality

Question 41

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

A)Postaction
B)Structural
C)Screening
D)Preliminary
E)Financial

Question 42

A(n)____ compares different elements of a balance sheet and / or an income statement to one another.

A)income statement
B)balance sheet
C)internal audit
D)operations budget
E)ratio analysis

Question 43

Which of the following financial documents shows a listing of all the organization's assets and liabilities at a given point in time?

A)Balance sheet
B)Balance sheet budget
C)Income statement
D)Revenue budget
E)Capital expenditures budget

Question 44

Which of the following is a characteristic of screening controls?

A)Take place during the transformation process
B)Involve interviewing potential employees
C)Are the same as preliminary controls
D)Determine organizational flexibility
E)Determine accuracy of organizational standards

Question 45

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)operations
B)capital expenditures
C)nonmonetary
D)output
E)revenue

Question 46

If Suzlon Energy Ltd.wants to focus on the strength of its wind-turbine division,it will use

A)liquidity ratios.
B)balance sheet ratios.
C)return on investments.
D)operating ratios.
E)debt ratios.

Question 47

Preliminary control can be used with ____ resources.

A)human
B)financial
C)physical
D)information
E)All of these.

Question 48

A company that carefully evaluates job applicants is using ____ control.

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

Question 49

Although many organizations have moved away from this practice,traditionally organization budgets were developed by

A)the controller acting alone.
B)the controller and top managers.
C)all managers.
D)all employees.
E)None of these.

Question 50

Everyone working or volunteering for Girl Scouts has a background check before they can work with girls or handle money.This is part of a

A)screening control.
B)preliminary control.
C)postaction control.
D)human resources control.
E)financial resources control.

Question 51

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)All of these are major forms of operations control.

Question 52

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

A)Taking corrective action
B)Measuring performance
C)Comparison of performance to standards
D)Setting performance standards
E)Goal setting

Question 53

Where would you expect to find the following information: "XYZ Corporation has $746 million in assets and $593 million in liabilities on October 1,2012?"

A)Balance sheet
B)Current liability
C)Fixed asset
D)Net income
E)Stockholder's equity

Question 54

Retained earnings are part of ____ control of an organization.

A)financial
B)structural
C)operating
D)interim
E)nonmonetary

Question 55

Postaction controls are applied to what part of a system?

A)Resources
B)Transformation processes
C)Subsystems
D)Controller
E)Outputs

Question 56

A plant manager is told that she has 15 workers,for 6 hours a day,five days a week.This is part of a(n)____ budget.

A)capital expenditure
B)master
C)space
D)labor
E)personnel

Question 57

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

A)human resources
B)financial
C)screening
D)postaction
E)preliminary

Question 58

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

A)Some manager 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 59

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

Question 60

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)postaction
C)screening
D)financial
E)structural

Question 61

FedEx focuses on top line - quality and customer satisfaction.UPS focuses on bottom line - efficiency and cost.They have differences in ____.

A)operational control
B)strategic control
C)financial control
D)bureaucratic control
E)environmental

Question 62

Which of the following are important elements of decentralized control?

A)Group norms
B)Employee responsibility
C)Tall organization structure
D)All of these.
E)Only group norms and employee responsibility.

Question 63

Johnson & Johnson does not require its various divisions to report in frequently.It believes in letting each manager have the authority to respond quickly to environmental changes.These changes do not have to be approved by Johnson & Johnson before they are implemented.Johnson & Johnson has ____ strategic control.

A)bureaucratic
B)inappropriate
C)decentralized
D)formalized
E)inflexible

Question 64

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

A)Limited employee participation
B)Rewards focused on individual performance
C)Tall structure
D)Reliance on group norms
E)Minimum levels of acceptable performance

Question 65

____ control is characterized by ____ rules and a(n)____ structural arrangement.

A)Decentralized; formal; organic
B)Decentralized; informal; organic
C)Bureaucratic; informal; mechanistic
D)Bureaucratic; formal; organic
E)None of these.

Question 66

John Hamann began his company making herb vinegars from a recipe his grandmother had given him.As demand grew,he had to buy a large commercial kitchen.Which of the following ratios would a banker have been most interested in before allowing Hamann to borrow $500,000?

A)Liquidity ratios
B)Balance sheet ratios
C)Return on investment
D)Operating ratios
E)Debt ratios

Question 67

GE is highly leveraged.Financial analysts look at its ____ ratio to determine if it can make interest payments.

A)coverage
B)operating
C)debt
D)return
E)None of these.

Question 68

Which of the following statements about financial audits is true?

A)They are independent appraisals.
B)They may be internal or external to the organization.
C)They may be used to monitor accounting,financial,and operation systems within an organization.
D)They may be conducted on a continual or an intermittent basis.
E)All of these.

Question 69

International firms,which use a ____ strategic control system keep ____ decision-making power in their headquarters,while firms that use a ____ strategic control system give ____ decision-making power to each local facility.

A)decentralized; more; centralized; more
B)decentralized; less; centralized; less
C)centralized; less; decentralized; less
D)centralized; more; decentralized; more
E)None of these.

Question 70

Two years after purchasing a home,Victor received a check in the mail from his attorney.An accountant had found a discrepancy.The accountant conducted a(n)

A)internal audit.
B)debt audit.
C)cash flow audit.
D)balance audit.
E)liquidity audit.

Question 71

Organizations make the decision to have a centralized or decentralized international control system when they are addressing issues of ____ control.

A)operational
B)strategic
C)financial
D)bureaucratic
E)None of these.

Question 72

Which of the following is the most common means of financial control within organizations?

A)Financial statements
B)Ratio analysis
C)Budgets
D)Financial audits
E)Benchmarking

Question 73

Which of the following is NOT characteristic of the bureaucratic approach to organizational control?

A)Rewards focused on individual performance
B)Tall organizational structure
C)Limited employee participation
D)Reliance on rules and a rigid hierarchy
E)Reliance on group norms

Question 74

According to your text,strategic control is especially critical for which type of organizations?

A)Conglomerate
B)Small
C)Entrepreneurial
D)International
E)None of these.

Question 75

The ratios that assess the ease with which the assets of the organization can be converted into cash are

A)liquidity ratios.
B)profitability ratios.
C)debt ratios.
D)operating ratios.
E)None of these.

Question 76

Which type of financial statement summarizes the organization's revenues and expenses over the previous year?

A)Balance sheet
B)Liquidity statement
C)Cash flow statement
D)Income statement
E)Debt statement

Question 77

Which of the following would be viewed as a measure of the firm's ability to meet its long-term financial obligations?

A)Debt ratio
B)Balance sheet ratio
C)Return on investment
D)Operating ratio
E)Liquidity ratio

Question 78

One way managers can improve the effectiveness of the control system is to

A)change the performance standards.
B)control as many things in the organization as possible.
C)computerize the system.
D)integrate control with planning.
E)correct all deviations from standards.

Question 79

The ____ explicit and the ____ precise the link between planning and control,the ____ effective the control system.

A)less; less; less
B)more; more; less
C)more; less; less
D)less; more; less
E)None of these.

Question 80

The purpose of bureaucratic control is to

A)enhance employee participation in the control function.
B)produce performance above minimum acceptable standards.
C)get employee compliance.
D)increase group performance.
E)increase employee self-control.