Deck 8: Control, Change, and Entrepreneurship

Question 1

The process by which managers monitor and regulate the organization in order to determine if the organization is operating efficiently and effectively is known as planning.

Answer 1

False
Explanation: Controlling is the process whereby managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals.

Question 2

The three main mechanisms that managers use to assess output or performance are financial measures,organizational goals,and operating budgets.

Answer 2

True
Explanation: The three main mechanisms that managers use to assess output or performance are financial measures, organizational goals, and operating budgets.

Question 3

A standard of performance that measures efficiency at the functional level is operating costs.

Answer 3

False
Explanation: At the corporate level, a standard of performance that measures efficiency is operating costs, the actual costs associated with producing goods and services, including all employee-related costs.

Question 4

At the output stage,managers use feedforward control to provide information about customers' reactions to goods.

Question 5

The times-covered ratio of an organization is determined by current assets divided by current liabilities.

Question 6

Controlling at some point lowers the level of innovation in an organization.

Question 7

The control function is limited to reacting to events in a business,after the events have already occurred.

Question 8

The most commonly used financial performance measure in organizations is the debt-to-equity ratio.

Question 9

Even an effective control system does not give managers enough time to respond to opportunities and threats.

Question 10

The first step in the control process is to evaluate results in terms of performance standards.

Question 11

Profit ratios measure the efficiency of the use of the organization's resources in generating profits.

Question 12

Managers use feedforward control to anticipate problems.

Question 13

Standard operating procedures are mechanisms for clan control.

Question 14

Using the controlling function,managers monitor and evaluate the organization's strategy to evaluate whether it is working as intended.

Question 15

An organization's net income before taxes divided by its total assets is known as operating profit.

Question 16

The inventory turnover ratio is an example of the activity ratio of an organization.

Question 17

Information on how efficiently managers are collecting revenue from customers to pay expenses is given by the quick ratio.

Question 18

During the input stage,the most common type of control procedure is concurrent control,which gives managers immediate feedback.

Question 19

Organizational control procedures can give managers feedback about the quantity,but not the quality,of products produced by the organization.

Question 20

The current ratio is an example of a leverage ratio of the organization.

Question 21

Output control methods are effective in motivating employees,but behavior control methods are not.

Question 22

An inert culture is one that controls employee behavior and attitudes through its strong and cohesive organizational culture.

Question 23

Clan control is an internally imposed system of constraints.

Question 24

The least powerful form of behavior control is direct supervision of a subordinate by a manager.

Question 25

Organizational change affects organizational structure but not organizational culture.

Question 26

The "objectivity" of financial measures of performance is a main reason why managers use these ratios to measure the efficiency and effectiveness of their organizations.

Question 27

Financial information by itself provides managers with all of the information that they need to measure the four building blocks of competitive advantage.

Question 28

Bureaucratic control is control by means of a comprehensive system of rules and standard operating procedures that shapes and regulates the behavior of divisions,functions,and individuals.

Question 29

Top-down change is more gradual and evolutionary than a bottom-up change.

Question 30

Organizational culture is an externally imposed system of constraints on the behavior of suppliers in an organization.

Question 31

In inert cultures,employees often receive rewards directly linked to their performance.

Question 32

Adaptive cultures are those whose values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective.

Question 33

If an organization's control systems are not designed correctly,an organization may not be able to adapt to a changing environment.

Question 34

Output control procedures are used at every management level of an organization.

Question 35

Top-down change can co-opt resistance to change from employees.

Question 36

An adaptive culture allows the use of organizational structures that empower employees to make decisions and motivate them to succeed.

Question 37

The use of bureaucratic control in an organization typically enhances creativity and learning.

Question 38

Seemingly trivial corporate-level changes can significantly affect how divisional and departmental managers behave.

Question 39

Organizational culture makes control possible in situations where managers cannot use behavior control.

Question 40

Participatory nature is an important characteristic of bureaucratic control.

Question 41

Hanover Insurance sets up a management information system (MIS)that gives its regional managers information about changes in the task environment that may affect the organization at some future time.Which of the following control systems is being used by Hanover Insurance?

A) Feedforward control
B) Concurrent control
C) Feedback control
D) Bureaucratic control
E) MBO control

Question 42

Brandon,the manager of Flipflop Footwear,checked the weekly records and discovered that the number of shoes produced in one week by 20 employees was 250 against the set target of 220 shoes.With reference to the control process,Brandon is:

A) establishing the standards of performance.
B) measuring the actual level of performance of employees.
C) comparing the actual performance against chosen standards of performance.
D) evaluating the result of the set standards.
E) initiating corrective actions.

Question 43

What type of control do managers use at the output stage?

A) MBO control
B) Concurrent control
C) Bureaucratic control
D) Feedforward control
E) Feedback control

Question 44

Entrepreneurship ends once a new business has been founded.

Question 45

Ben,the production manager of Pace Shoes,sets a production target of 220 shoes to be distributed among 20 employees in a week.In the context of the control process,Ben is:

A) establishing the standards of performance.
B) measuring the actual level of performance of employees.
C) comparing the actual performance against chosen standards of performance.
D) evaluating the result of the set standards.
E) initiating corrective actions.

Question 46

The managers of Foodex,a fast food restaurant,record outputs on a daily basis by counting how many customers their employees serve,the time each transaction takes,and how much money each customer spends every day.With reference to the control process,the managers of Foodex are:

A) establishing the standards of performance.
B) measuring the actual level of performance of employees.
C) comparing the actual performance against chosen standards of performance.
D) evaluating the result of the set standards.
E) initiating corrective actions.

Question 47

Danny,the manager of Wader Shoes,installed new machinery to speed up the production process after the assigned targets were not achieved for the third week of the month.With regard to the control process,Danny is:

A) establishing the standards of performance.
B) measuring the actual level of performance of employees.
C) comparing the actual performance against chosen standards of performance.
D) evaluating the result of the set standards.
E) initiating corrective actions.

Question 48

Which type of control do managers typically use in the input stage of the process of transforming raw materials into finished goods?

A) Feedforward control
B) Concurrent control
C) Feedback control
D) Bureaucratic control
E) MBO control

Question 49

Managers at Zeppel Construction Company set up a stringent job interview process by which applicants are carefully screened at different levels of the organization before they are hired,attempting to increase the chance that newly hired managers will have the knowledge and skills they need to be successful within the organization.Which of the following control systems is being used by Zeppel?

A) Concurrent control
B) Feedforward control
C) Feedback control
D) Bureaucratic control
E) MBO control

Question 50

Which of the following is the process by which managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals?

A) Planning
B) Organizing
C) Leading
D) Controlling
E) Coordinating

Question 51

Action Explosives gives specifications to its suppliers of raw materials in an attempt to improve the quality of those raw materials and to minimize and anticipate the problems they are likely to face in the conversion process.Which of the following control systems is being used by Action Explosives?

A) Concurrent control
B) Feedforward control
C) Feedback control
D) Bureaucratic control
E) MBO control

Question 52

The standard of performance that measures efficiency at the corporate level of the organization is known as:

A) cost of goods sold.
B) capital costs.
C) net sales.
D) operating costs.
E) net income after taxes.

Question 53

Which of the following types of control systems do managers use at the conversion stage of transforming raw materials into finished goods?

A) Feedforward control
B) Bureaucratic control
C) Concurrent control
D) Feedback control
E) MBO control

Question 54

The final step in the control process is to:

A) evaluate the results and initiate corrective action.
B) measure actual performance.
C) establish the standards of performance.
D) compare actual performance to the standards.
E) measure the standards of performance.

Question 55

Intrapreneurs engage in entrepreneurship within an existing company.

Question 56

Identify the control system MOST likely to be used in a garment plant to solve problems like substandard inputs,broken machine parts,or a worker's skill deficiency to produce a particular type of garment.

A) Feedforward control
B) MBO control
C) Feedback control
D) Concurrent control
E) Bureaucratic control

Question 57

Brennan Manufacturing monitors the number of customer returns for each product model to track when the organization is producing a large number of defective products.Which of the following control systems is being used by Brennan Manufacturing?

A) Feedforward control
B) Concurrent control
C) MBO control
D) Feedback control
E) Bureaucratic control

Question 58

At which of the step of the control process do managers evaluate whether the actual performance of the organization differs significantly from the standards of performance being used to assess the performance of the organization?

A) Measure actual performance
B) Compare actual performance to the standards
C) Establish the standards of performance
D) Initiate corrective action
E) Measure standards of performance

Question 59

Which of the following are formal target-setting,monitoring,evaluation,and feedback systems that provide managers with information about whether the organization's strategy and structure are working efficiently and effectively?

A) Operating systems
B) Organizational systems
C) Control systems
D) Recurrent systems
E) Concurrent systems

Question 60

Beswick Widget Ltd.sets up a system to monitor unit sales of its products to measure changes taking place in customer tastes and the possible resulting impact on future sales.Which of the following control systems is being used by Beswick Widget Ltd.?

A) Feedforward control
B) Feedback control
C) MBO control
D) Bureaucratic control
E) Concurrent control

Question 61

The manager of a fast-food restaurant,Triks Burgers,keeps track of the number of customers served at different periods of the day in an attempt to plan a schedule for workers that matches the demand for the restaurant's products.Which of the following control systems is being used by Triks Burgers?

A) Output control
B) Bureaucratic control
C) Input control
D) MBO control
E) Feedforward control

Question 62

The manager of a profit center is evaluated on the basis of the amount of sales that have been generated from the goods or services produced in his/her division.On the basis of which of the following budget approaches is the divisional manager being remunerated?

A) Expense budget approach
B) Cash flow budget approach
C) Revenue budget approach
D) Profit budget approach
E) Operating profit budget approach

Question 63

Which of the following ratios is computed by dividing the difference between current assets and inventory by current liabilities?

A) Inventory turnover ratio
B) Days sales outstanding ratio
C) Quick ratio
D) Current ratio
E) Debt-to-assets ratio

Question 64

Which type of financial ratio measures how well the managers of the organization are creating value from the organization's assets?

A) Leverage ratio
B) Liquidity ratio
C) Profit ratio
D) Current ratio
E) Activity ratio

Question 65

Which of the following types of financial ratios indicates the degree to which the organization uses debt or equity to finance its ongoing operations?

A) Leverage ratios
B) Liquidity ratios
C) Activity ratios
D) Profit ratios
E) Inventory turnover ratios

Question 66

Which of the following types of financial ratios measures the ability of the organization to pay its short-term debts?

A) Leverage ratios
B) Liquidity ratios
C) Activity ratios
D) Profit ratios
E) Inventory turnover ratios

Question 67

Before remuneration,a divisional manager is told to maximize the sales of his division.On the basis of which of the following budget approaches will the divisional manager be remunerated?

A) Profit budget approach
B) Revenue budget approach
C) Expense budget approach
D) Cash flow budget approach
E) Capital budget approach

Question 68

From the information given below,calculate the organization's return on investment (ROI). Total Liabilities = $300,000; Total Assets = $600,000; Gross Margin = $200,000; Net Income Before Taxes = $30,000; Total Expenses = $240,000

A) 50 percent
B) 5 percent
C) 10 percent
D) 12.5 percent
E) 15 percent

Question 69

Which of the following types of performance ratios measures the efficiency of the organization in terms of how well the resources of the organization have been used to generate profit?

A) Activity ratios
B) Leverage ratios
C) Profit ratios
D) Liquidity ratios
E) Inventory turnover ratios

Question 70

The manager of Inkman,a convenience store,keeps track of the average sale amount for each customer as a way of deciding on the product mix to be carried in the store.This is an example of:

A) bureaucratic control.
B) feedforward control.
C) output control.
D) input control.
E) MBO control.

Question 71

Calculate the return on investment (ROI)from the information given below. Net Income = $18,000; Advertising Expenses = $220,000; Total Liabilities = $120,000; Total Assets = $160,000; Gross Margin = $80,000; Taxes Paid = $2,000

A) 16.67 percent
B) 15 percent
C) 11.25 percent
D) 12.5 percent
E) 50 percent

Question 72

Which type of financial ratio indicates whether or not the organization is capable of paying off its short-term debts without having to sell its inventory?

A) Quick ratio
B) Current ratio
C) Days sales outstanding ratio
D) Inventory turnover ratio
E) Profit ratio

Question 73

Which of the following is the MOST commonly used financial performance measure that allows managers of one organization to compare performance with that of other organizations?

A) Gross profit margin
B) Debt-to-assets ratio
C) Days sales outstanding ratio
D) Inventory turnover ratio
E) Return on investment

Question 74

From the information given below,calculate the organization's current ratio. Total Liabilities = $750,000; Current Liabilities = $220,000; Total Assets = $700,000; Current Assets = $176,000

A) 0.25
B) 0.93
C) 0.29
D) 0.80
E) 1.25

Question 75

Which of the following is a mechanism of control for organizational culture?

A) Direct supervision
B) Management by objectives
C) Socialization
D) Organizational goals
E) Operating budgets

Question 76

Calculate the current ratio of the organization from the information given below. Sales = $200,000; Gross Profit = $40,000; Total Assets = $450,000; Current Assets = $250,000; Current Liabilities = $300,000

A) 0.44
B) 0.56
C) 0.67
D) 0.83
E) 1.2

Question 77

Management by objectives is a mechanism of control for which of the following types of organizational control systems?

A) Input control
B) Clan control
C) Organizational culture
D) Output control
E) Behavior control

Question 78

Which of the following results when an organization's net income before taxes is divided by the total assets of the organization?

A) Gross profit margin
B) Return on investment
C) Debt-to-assets ratio
D) Days sales outstanding
E) Inventory turnover ratio

Question 79

The managers of a division are given a fixed budget and are then evaluated on the basis of their ability to produce goods or services.Which of the following budget approaches is being implemented by the organization?

A) Expense budget approach
B) Profit budget approach
C) Operating profit budget approach
D) Cash flow budget approach
E) Revenue budget approach

Question 80

Which of the following types of financial ratios indicates how efficiently the managers of the organization are collecting the revenue due to the organization from the sale of its products or services?

A) Debt-to-assets ratio
B) Quick ratio
C) Current ratio
D) Days sales outstanding ratio
E) Profit ratio