question

Control is one of the forces that keeps an organization heading in the right direction

answer

TRUE

question

Control is defined as any process that directs the activities of individuals toward the achievement of organizational goals

answer

TRUE

question

Authority and organizing are called the Siamese twins of management

answer

FASLE

question

Market control is the use of rules, regulations, and formal authority to guide performance

answer

FALSE

question

Market control is control based on the use of pricing mechanisms and economic information to regulate activities within organizations

answer

TRUE

question

With bureaucratic control, business units are treated as profit centers, and their managers are evaluated based on profit and loss

answer

FALSE

question

Clan control is control based on the norms, values, shared goals, and trust among group members

answer

TRUE

question

Clan control assumes that the interests of organizations and individuals naturally diverge

answer

FALSE

question

The first step in the control process is to set performance standards

answer

TRUE

question

The last step in the control process is to compare performance with standards

answer

FASLE

question

One of the reasons standards are established is to set performance expectations

answer

TRUE

question

Performance standards can only be set with respect to quantity or quality

answer

FALSE

question

The second step in a typical control process is comparing performance with the standard

answer

FALSE

question

Personal observation involves going to the area where activities take place and watching what is occurring

answer

TRUE

question

According to the principle of exception, even the smallest of deviations from the standard require corrective action

answer

FALSE

question

An example of feedforward control is managers monitoring their distributors

answer

FALSE

question

Concurrent control takes place while plans are being carried out

answer

TRUE

question

Point-of-sale terminals in store checkout lines sending sales data back immediately to a retailer's headquarters is an example of how information technology has improved concurrent control

answer

TRUE

question

When supervisors monitor employee behavior, they are exercising feedback control

answer

FALSE

question

As long as supervisors monitor behavior constantly, the feedback may be given at any point in time without consequence

answer

FALSE

question

Using the six sigma approach to quality does not always lead to improvements in the bottom line

answer

TRUE

question

By definition, management audits are internal, not external

answer

FALSE

question

External audits are often used for feedback control but can also be useful to prevent problems

answer

TRUE

question

Budgeting information is confined to finances

answer

FALSE

question

A master budget includes every major activity of a business

answer

TRUE

question

In today's complex organizations, the budget process is much more likely to be top-down

answer

FALSE

question

Traditional methods of cost accounting tend to be inappropriate in today's business environment because they are based on outdated methods of rigid hierarchical organization

answer

TRUE

question

Activity-based costing is a method of cost accounting designed to allocate costs across particular business processes according to the amount of time employees devote to particular activities

answer

TRUE

question

The balance sheet shows the financial picture of a company over time

answer

FALSE

question

Liabilities are the amounts accruing to the corporation's owners

answer

FALSE

question

The profit and loss statement is an itemized financial statement of the income and expenses of a company's operations

answer

TRUE

question

Three key categories of financial ratios are liquidity, leverage, and profitability

answer

TRUE

question

Liquidity ratios indicate a company's ability to meet its long-term financial obligations

answer

FASLE

question

Return on investment is a profitability ratio

answer

TRUE

question

Because financial ratios usually are expressed in compressed time horizons, they often cause management myopia

answer

TRUE

question

A control system cannot be effective without consideration of how people will react to it

answer

TRUE

question

The most common type of tactical behavior in control systems is to manipulate information or report false performance data

answer

TRUE

question

The most effective performance standards tend to be subjective rather than objective

answer

FALSE

question

If an employee believes his or her control system is overly controlling, that employee is likely to exhibit dysfunctional behavior

answer

TRUE

question

A balanced scorecard is a control system combining four sets of performance measures: technological, customer feedback, productivity, and strategy

answer

FALSE

question

Formal bureaucratic control systems continue to be the most effective in organizations

answer

FALSE

question

In contrast to market controls, bureaucratic controls involve the use of economic forces to regulate performance

answer

FALSE

question

In large diversified companies, market controls are often used to regulate independent business units

answer

TRUE

question

A transfer price is the price charged by one unit for a good or service provided to another unit within the organization

answer

TRUE

question

Ideally, a transfer price should be less than the price that the receiving business unit would have to pay for that product or service in the marketplace

answer

FALSE

question

If bureaucratic and market mechanisms are insufficient for directing a company's workforce in today's environment, it can turn to structural control

answer

FALSE

question

If managers create a strong culture of correct behavior, then clan control can be a very effective control tool

answer

TRUE

question

Which of the following is a symptom of an out-of-control company?

answer

Lack of periodic reviews

question

Control has been called one of the Siamese twins of management The other twin is ____.

answer

planning

question

The use of rules, regulations, and authority to guide performance is referred to as _____ control

answer

bureaucratic

question

Using budgeting, statistical reports, and performance appraisals to regulate behavior and results is considered a component of ____

answer

bureaucratic control

question

Control based on the use of pricing mechanisms and economic information to regulate activities within organizations is referred to as _____ control

answer

market

question

Control based on the norms, values, shared goals, and trust among group members is referred to as _____ control

answer

clan

question

Which of the following is the first major step in the formal control process?

answer

Setting standards

question

The final step in the control process is:

answer

taking corrective action.

question

A(n) _____ is the level of expected performance for a given goal; it is a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed

answer

standard

question

Which of the following is one of the factors based on which performance standards can be set?

answer

Time used

question

Which of the following is a commonly used source for obtaining performance data?

answer

Personal observation

question

A managerial principle stating that control is enhanced by concentrating on the significant deviations from the expected result or standard is referred to as the principle of ____

answer

exception

question

Jeremy is in charge of production at Tech Farm Equipment His job responsibilities include eliminating defects in the equipment parts the factory produces. However, he has advised his crew to alert him only when defects exceed 200 per million, which he considers a serious deviation from standards. In this case, Jeremy is using:

answer

the principle of exception.

question

Which of the following controls takes place before operations begin?

answer

Feedforward control

question

Which of the following controls is future oriented and aims to prevent problems before they arise?

answer

Feedforward control

question

At Performance Instruments, all assembly workers must wear specialized gear to reduce possible injuries from minute particles in the manufacturing environment This requirement best reflects _____ control.

answer

feedforward

question

The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed, is referred to as _____ control

answer

concurrent

question

Electronic monitoring of telemarketers' conversations with potential clients is an example of _____ control

answer

concurrent

Chapter 16 – Managerial Control MGMT 325 – Flashcards

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