8-1
Chapter 08 Control, Change, and Entrepreneurship Answer Key
True / False Questions
1.
Using the controlling function, managers monitor and evaluate the organization’s strategy
to evaluate whether it is working as intended.
TRUE
In controlling, managers monitor and evaluate whether the organization’s strategy and
structure are working as intended, how they could be improved, and how they might be
changed if they are not working.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Control Systems
2.
Organizational control procedures can give managers feedback about the quantity, but not
the quality, of products produced by the organization.
FALSE
Organizational control helps managers obtain superior efficiency, quality, responsiveness
to customers, and innovation—the four building blocks of competitive advantage.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Control Systems
3.
Managers use feedforward control to anticipate problems.
TRUE
Managers use feedforward control to anticipate problems before they arise so problems
do not occur later during the conversion process.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedforward Control
4.
During the input stage, the most common type of control procedure is concurrent control,
which gives managers immediate feedback.
FALSE
At the conversion stage, concurrent control gives managers immediate feedback on how
efficiently inputs are being transformed into outputs so managers can correct problems as
they arise.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Concurrent Control
5.
At the output stage, managers use feedforward control to provide information about
customers’ reactions to goods.
TRUE
At the output stage, managers use feedback control to provide information about
customers’ reactions to goods and services so corrective action can be taken if necessary.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedforward Control
6.
The first step in the control process is to evaluate results in terms of performance
standards.
FALSE
The first step in the control process is to establish the standards of performance, goals, or
targets against which performance is to be evaluated.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Control Process Steps
7.
A standard of performance that measures efficiency at the functional level is operating
costs.
FALSE
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.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Control Process Steps
8.
Standard operating procedures are mechanisms for clan control.
FALSE
Standard operating procedures are mechanisms for behavior control.
Refer: Figure 8.3
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Clan Control
9.
The most commonly used financial performance measure in organizations is the debt–to–
equity ratio.
FALSE
Return on investment (ROI), an organization’s net income before taxes divided by its total
assets, is the most commonly used financial performance measure because it allows
managers of one organization to compare performance with that of other organizations.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-03 Identify the main output controls, and discuss their advantages and disadvantages as means of
coordinating and motivating employees.
Topic: Control Process Steps
10.
The inventory turnover ratio is an example of the activity ratio of an organization.
TRUE
Activity ratios show how well managers are creating value from organizational assets.
Inventory turnover ratio is an example of the activity ratio that measures how efficiently
managers are turning inventory over so excess inventory is not carried.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 08-03 Identify the main output controls, and discuss their advantages and disadvantages as means of
coordinating and motivating employees.
Topic: Control Process Steps
11.
Output control procedures are used at every management level of an organization.
TRUE
Output control is used at every level of the organization, and it is vital that the goals set at
each level harmonize with the goals set at other levels so managers and other employees
throughout the organization work together to attain the corporate goals that top managers
have set.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-03 Identify the main output controls, and discuss their advantages and disadvantages as means of
coordinating and motivating employees.
Topic: Control Process Steps
12.
Control by means of a comprehensive system of rules and standard operating procedures
that shape and regulate the behavior of divisions, functions, and individuals is known as
bureaucratic control.
TRUE
Bureaucratic control is control by means of a comprehensive system of rules and standard
operating procedures (SOPs) that shapes and regulates the behavior of divisions,
functions, and individuals.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-03 Identify the main output controls, and discuss their advantages and disadvantages as means of
coordinating and motivating employees.
Topic: Bureaucratic Control
13.
Organizational culture makes control possible in situations where managers cannot use
behavior control.
TRUE
Organizational culture makes control possible in situations where managers cannot use
output or behavior control.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Organizational Culture
14.
An inert culture is one that controls employee behavior and attitudes through its strong
and cohesive organizational culture.
FALSE
An adaptive culture is one that controls employee behavior and attitudes through its
strong and cohesive organizational culture.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Adaptive Culture
15.
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.
TRUE
An adaptive culture is one that controls employee behavior and attitudes through its
strong and cohesive organizational culture. Adaptive cultures are cultures whose values
and norms help an organization to build momentum and to grow and change as needed to
achieve its goals and be effective.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Adaptive Culture
Multiple Choice Questions
16.
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 is known as _______.
A.
organizing
B.
leading
C.
D.
coordinating
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. Controlling helps managers monitor and evaluate whether
the organization’s strategy and structure are working as intended, how they could be
improved, and how they might be changed if they are not working.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Control Systems
17.
The 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 are known as ________ systems.
A.
operating
B.
organizational
C.
control
D.
recurrent
Control systems 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. Effective control systems alert managers
when something is going wrong and give them time to respond to opportunities and
threats.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Control Systems
18.
The type of control that managers typically use in the input stage of the process of
transforming raw materials into finished goods is ________ control.
A.
feedforward
B.
concurrent
C.
feedback
D.
bureaucratic
At the input stage, managers use feedforward control to anticipate problems before they
arise so that problems do not occur later, during the conversion process.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedforward Control
19.
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. This is an example of ________ control.
A.
concurrent
B.
feedforward
C.
feedback
D.
bureaucratic
Feedforward control is used to anticipate problems before they arise so problems do not
occur later during the conversion process.
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedforward Control
20.
Managers at Zeppel Construction Company set up a stringent job interview process by
which management 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. By using
this process, Zeppel is using ________ control.
A.
concurrent
B.
feedforward
C.
feedback
D.
MBO
Managers can use feedforward control while screening job applicants, often by viewing
their résumés electronically, and using several interviews to select the most highly skilled
people, which can lessen the chance that they will hire people who lack the necessary
skills or experience to perform effectively.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedforward Control
21.
Hanover Insurance set up a management information system that gives its regional
managers information about changes in the task environment that may affect the
organization at some future time. By using this system, Hanover is utilizing ________
control.
A.
feedforward
B.
feedback
C.
bureaucratic
D.
MBO
Managers use feedforward control to anticipate problems before they arise so that
problems do not occur later. The development of management information systems
promotes feedforward control that gives managers timely information about changes in
the task and general environments that may impact their organization later on.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedforward Control
22.
The control system that managers use at the conversion stage of transforming raw
materials into finished goods is ________ control.
A.
feedforward
B.
bureaucratic
C.
concurrent
D.
feedback
At the conversion stage, concurrent control gives managers immediate feedback on how
efficiently inputs are being transformed into outputs so that managers can correct
problems as they arise.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Concurrent Control
23.
The control system that is typically 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 is ________ control.
A.
feedforward
B.
MBO
C.
feedback
D.
concurrent
At the conversion stage, concurrent control gives managers immediate feedback on how
efficiently inputs are being transformed into outputs so that managers can correct
problems as they arise, be it a defective batch of inputs, a machine that is out of
alignment, or a worker who lacks the skills necessary to perform a task efficiently.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Concurrent Control
24.
At the output stage, managers usually utilize ________ control.
A.
MBO
B.
bureaucratic
C.
feedforward
D.
feedback
At the output stage, managers use feedback control to provide information about
customers’ reactions to goods and services so that corrective action can be taken if
necessary.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedback Control
25.
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. In this
case, Brennan Manufacturing is using ________ control.
A.
feedforward
B.
concurrent
C.
MBO
D.
feedback
At the output stage, managers use feedback control to provide information about
customers’ reactions to goods and services so that corrective action can be taken if
necessary. A feedback control system that monitors the number of customer returns alerts
managers when defective products are being produced.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedback Control
26.
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.
With this system, Beswick is using ________ control.
A.
feedforward
B.
feedback
C.
MBO
D.
bureaucratic
Beswick is attempting to learn about changes in customers’ tastes so that it can increase
or decrease production of products as necessary. Thus, this is feedback control. Feedback
control is used to provide information about customers’ reactions to goods and services so
corrective action can be taken if necessary.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 08-01 Define organizational control, and explain how it increases organizational effectiveness.
Topic: Feedback Control
27.
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
At step 1 in the control process, managers decide on the standards of performance, goals,
or targets that they will use in the future to evaluate the performance of the entire
organization or part of it.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Control Process Steps