78.
The process through which managers try to increase members’ abilities to understand and
appropriately respond to changing conditions is known as ________.
A.
clan control
B.
socialization
C.
organizational learning
D.
bureaucratic control
Organizational learning is the process through which managers try to increase
organizational members’ abilities to understand and appropriately respond to changing
conditions.
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: Organizational Change
79.
In assessing the need for organizational change, managers must ________.
A.
B.
plan how they are going to attain the organization’s ideal future state
C.
recognize that there is a problem and identify its source
D.
implement change from the top down or from the bottom up
Assessing the need for change calls for managers to perform two important activities: (1)
recognizing that there is a problem and (2) identifying its source.
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: Organizational Change
80.
The process of comparing one company’s performance on specific dimensions with the
performance of high-performing organizations, to decide how successful a change effort
has been, is known as ________.
A.
socialization
B.
diversification
C.
social facilitation
D.
benchmarking
Benchmarking is comparing one company’s performance on specific dimensions with the
performance of high-performing organizations, to decide how successful a change effort
has been.
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: Benchmarking
81.
Entrepreneurship is the mobilization of resources to ________.
A.
start a process that ends with the founding of a new business
B.
compare two companies on specific dimensions
C.
market an old product with a new twist
D.
provide customers with new or improved goods and services
Entrepreneurship is the mobilization of resources to take advantage of an opportunity to
provide customers with new or improved goods and services. Entrepreneurship does not
just end once a new business is founded.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 08-04 Explain how clan control or organizational culture creates an effective organizational
architecture.
Topic: Entrepreneurship
82.
Members of which of the following groups may be considered intrapreneurs?
A.
Employees of an organization who notice opportunities to develop new products
B.
Employees of an organization who have worked across various industries
C.
Managers who are responsible for two or more departments within a company
D.
Managers who ensure interdepartmental transfer of skills
Intrapreneurs are employees of existing organizations who notice opportunities to develop
new or improved products and better ways to make them.
AACSB: Analytical Thinking
Learning Objective: 08-04 Explain how clan control or organizational culture creates an effective organizational
architecture.
Topic: Intrapreneur
83.
Agave Pharma has opted for a top-down approach to changing how the company functions
so that efficiency is increased. What is the change likely to entail?
A.
A fast or revolutionary approach involving managers at all levels
B.
A gradual or evolutionary approach involving only the top managers
C.
A fast or revolutionary approach involving only the top managers
D.
A gradual or evolutionary approach involving managers at all levels
Top-down change is a fast, revolutionary approach to change in which top managers
identify what needs to be changed and then move quickly to implement the changes
throughout the organization.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 08-04 Explain how clan control or organizational culture creates an effective organizational
architecture.
Topic: Organizational Change
84.
Stag Plugs, Ltd., opts to take a bottom-up approach in order to draft a new attendance
policy. What will the approach entail?
A.
A fast or revolutionary approach involving managers at all levels
B.
A gradual or evolutionary approach involving only the top managers
C.
A fast or revolutionary approach involving only the top managers
D.
A gradual or evolutionary approach involving managers at all levels
Bottom-up change is a gradual or evolutionary approach to change in which managers at
all levels work together to develop a detailed plan for change.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 08-04 Explain how clan control or organizational culture creates an effective organizational
architecture.
Topic: Organizational Change
85.
Top managers at a food chain company consult with middle and first-line managers to
revise their marketing strategy. This approach will lead to ________.
A.
top-down changes that can be implemented quickly throughout the organization
B.
bottom-up changes to minimize resistance from employees and uncertainty
C.
bottom-up changes that can be implemented quickly throughout the organization
D.
top-down changes to minimize resistance from employees and uncertainty
Bottom-up change is a gradual or evolutionary approach to change in which managers at
all levels work together to develop a detailed plan for change.
Difficulty: 2 Medium
Learning Objective: 08-04 Explain how clan control or organizational culture creates an effective organizational
architecture.
Topic: Organizational Change
Essay Questions
86.
Define control systems and mention the three characteristics of an effective control
system.
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. An effective control system has the following
characteristics:
• It is flexible enough to allow managers to respond as necessary to unexpected events.
• It provides accurate information about organizational performance.
• It gives managers information in a timely manner because making decisions on the basis
of outdated information is a recipe for failure.
AACSB: Analytical Thinking
87.
What are the four steps in the control process?
The control process, whether at the input, conversion, or output stage, can be broken
down into four steps:
• Establish the standards of performance, goals, or targets against which performance is
to be evaluated.
• Measure actual performance.
• Compare actual performance against chosen standards of performance.
• Evaluate the result and initiate corrective if the standard is not being achieved.
Refer: Figure 8.2
AACSB: Analytical Thinking
Blooms: Understand
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
88.
Managers typically use three primary measures to assess the output performance of their
organizations. Write a brief note on these three types of measures.
The three main mechanisms that managers use to assess output or performance are
financial measures, organizational goals, and operating budgets.
• Financial measures of performance: Top managers are most concerned with overall
organizational performance and use various financial measures to evaluate it. The most
common are profit ratios, liquidity ratios, leverage ratios, and activity ratios.
• Organizational goals: Once top managers consult with lower-level managers and set the
organization’s overall goals, they establish performance standards for the divisions and
functions. These standards specify for divisional and functional managers the level at
which their units must perform if the organization is to achieve its overall goals.
• Operating budgets: Once managers at each level have been given a target to achieve, the
next step in developing an output control system is to establish operating budgets that
regulate how managers and workers attain their goals. An operating budget is a blueprint
that states how managers intend to use organizational resources to achieve organizational
89.
The top managers of an organization typically use a variety of financial indicators to
assess the performance of their organizations. Discuss the four major types of financial
measures.
Top managers are most concerned with overall organizational performance and use
various financial measures to evaluate it. The most common are profit ratios, liquidity
Blooms: Understand
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
90.
Behavior control is one way managers attempt to motivate workers. Discuss three ways
managers could use behavior control with subordinates.
Managers can attempt to control the behavior of subordinates by direct supervision, by
using management by objectives (MBO), and by the use of rules and standard operating
procedures.
• Direct supervision: The most immediate and potent form of behavior control is direct
supervision by managers who actively monitor and observe the behavior of their
subordinates, teach subordinates the behaviors that are appropriate and inappropriate,
and intervene to take corrective action as needed.
• Management by objectives: To provide a framework within which to evaluate
coordinating and motivating employees.
Topic: Control Systems
91.
Direct supervision is one of the best ways for managers to monitor the behavior of
subordinates, but this method of behavior control can create problems with subordinates.
Discuss the problems that can occur for managers when working with subordinates.
Some of the problems associated with direct supervision are the following:
• Expenses increase because a manager can personally manage only a relatively small
number of subordinates effectively, so more managers need to be employed.
• Direct supervision can demotivate subordinates. This occurs if employees feel they are
under such close scrutiny that they are not free to make their own decisions or if they feel
they are not being evaluated in an accurate and impartial way.
• For many jobs, personal control through direct supervision is simply not feasible. The
more complex a job is, the more difficult it is for a manager to evaluate how well a
subordinate is performing.
AACSB: Analytical Thinking
Blooms: Understand
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 Systems
92.
Management by objectives (MBO) is one way that managers can use to evaluate the
performance of subordinates. Discuss the steps involved in using this technique.
Management by objectives (MBO) involves three specific steps:
• Specific goals and objectives are established at each level of the organization: MBO
starts when top managers establish overall organizational objectives. Then objective
setting cascades down throughout the organization as managers at the divisional and
functional levels set their goals to achieve corporate objectives. Finally first-level
managers and employees jointly set goals that will contribute to achieving functional
objectives.
• Managers and their subordinates together determine the subordinates’ goals: An
important characteristic of MBO is its participatory nature. Managers at every level sit
down with each of the subordinate managers who report directly to them, and together
93.
All organizations make use of bureaucratic control methods in their dealings with the
employees of the organization. This type of control system can, however, create problems
for the subordinates. Discuss these types of problems and explain what an organization’s
managers can do to reduce these types of problems within the organization.
Problems associated with bureaucratic control that can reduce organizational
effectiveness are the following:
• Bureaucratic rules tend not to disappear, and since new rules are often added, the
organization may become sluggish and unresponsive.
• People may become so used to programmed decisions constrained by rules that they
lose their ability to think on their own.
Managers must therefore be sensitive about the way they use bureaucratic control. It is
most useful when organizational activities are routine and well understood and when
employees are making programmed decisions. Bureaucratic control is much less useful in
situations where nonprogrammed decisions have to be made and managers have to react
quickly to changes in the organizational environment.
AACSB: Analytical Thinking
Blooms: Understand
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.
94.
How does organizational culture help managers exert control over subordinates?
Organizational culture can help managers exert control in situations where output or
behavior control is not feasible, and a strong, positive set of organizational values and
norms can cause employees to focus on what is best for the company. Organizational
culture is not an externally imposed system of constraints, such as direct supervision or
rules and procedures. Rather, employees internalize organizational values and norms and
then let these values and norms guide their decisions and actions.
AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Organizational Culture
95.
Define adaptive culture and inert culture. Which is better for an organization and why?
Give at least two examples of what organizations with each of these do to develop their
cultures.
An adaptive culture is one that controls employee attitudes and behavior. By contrast, an
inert culture is one that leads to values and norms that fail to inspire employees, and lead
to stagnation and often failure over time.
Adaptive cultures are better because they are not only able to motivate and control
supervision and hierarchical authority, which result in a culture that makes it difficult to
adapt to a changing environment.
AACSB: Reflective Thinking
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 08-02 Describe the four steps in the control process and the way it operates over time.
Topic: Adaptive Culture
96.
Discuss the need to balance two opposing forces in the control process that influences the
way organizations change.
There is a fundamental tension or need to balance two opposing forces in the control
process that influences the way organizations change. Organizations and their managers
need to be able to control their activities and make their operations routine and
predictable. At the same time, however, organizations have to be responsive to the need to
change, and managers and employees have to “think on their feet” and realize when they
need to depart from routines to be responsive to unpredictable events. In other words,
even though adopting the right set of output and behavior controls is essential for
improving efficiency, because the environment is dynamic and uncertain, employees also
need to feel that they have the autonomy to depart from routines as necessary to increase
effectiveness.
AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
97.
Identify the steps in the organizational change process and describe what occurs in each
step.
The steps in the organizational change process are as follows:
(1) Assess the need for change: Assessing the need for change calls for two important
activities: recognizing that there is a problem and identifying its source. Managers need to
recognize that there is a problem that requires change. To discover the source of the
problem, managers need to look both inside and outside the organization.
(2) Decide on the change to make: During this step, managers must engage in planning
how they are going to attain the organization’s ideal future state. This step in the change
process includes identifying obstacles or sources of resistance to change. Managers must
analyze the factors that may prevent the company from reaching its ideal future state.
98.
Define entrepreneurs and intrapreneurs.
Entrepreneurs are people who notice opportunities and take responsibility for mobilizing
the resources necessary to produce new and improved goods and services. Intrapreneurs
are employees of existing organizations who notice opportunities for product or service
improvements and are responsible for managing the development process. They are
people who practice entrepreneurship inside existing organizations.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 08-04 Explain how clan control or organizational culture creates an effective organizational
architecture.
Topic: Entrepreneurship
99.
List the common problems entrepreneurs have in managing their organizations.
The following are the obstacles an entrepreneur faces while managing an organization:
• Lack of skills to control or change the business
• May not recognize the need to change
• Difficulty in delegating authority
• Overload and decline in decision–making quality
• Lack of knowledge of management systems and procedures
AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
100.
Describe evaluation, the fourth and final step in establishing organizational control.
The fourth step in organization change
Evaluate the result and initiate corrective action
(that is, make changes) if the standard is not being achieved.
The final step in the control process is to evaluate the results and bring about change as
appropriate. Whether or not performance standards have been met, managers can learn a
great deal during this step. If managers decide the level of performance is unacceptable,
they must try to change how work activities are performed to solve the problem.
Sometimes performance problems occur because the work standard was too high—for
example, a sales target was too optimistic and impossible to achieve. In this case,
adopting more realistic standards can reduce the gap between actual performance and
desired performance.
However, if managers determine that something in the situation is causing the problem,
then to raise performance they will need to change how resources are utilized or shared.
Perhaps the latest technology is not being used; perhaps workers lack the advanced
training needed to perform at a higher level; perhaps the organization needs to buy its
inputs or assemble its products abroad to compete against low-cost rivals; perhaps it
needs to restructure itself or reengineer its work processes to increase efficiency.