1. The systematic process of regulating organizational activities to make them consistent with the expectations in
plans, targets, and standards of performance refers to organizational control.
a. True
b. False
2. Effectively controlling an organization requires information about product standards and actual products, as well as
actions to correct any deviations from the standards.
a. True
b. False
3. Although work processes can be controlled and regulated, it is impossible to control and regulate employee
behavior.
a. True
b. False
4. Customer service, external business processes, financial performances, and the organization’s capacity for learning
and growth are the four major perspectives of the balanced scorecard.
a. True
b. False
5. The feedback control model is a comprehensive management control system that balances traditional financial
measures with measures of customer service, internal business processes, and the organization’s capacity for
learning and growth.
a. True
b. False
6. A standard for performance is included in an organization‘s overall strategic plan to compare organizational
activities against.
a. True
b. False
7. The final step of the feedback control model is to do nothing if performance is adequate or to take corrective action
if performance is inadequate.
a. True
b. False
8. In most companies, managers rely exclusively on qualitative measures to measure actual performance.
a. True
b. False
9. The fourth step in the control process is comparing actual activities to performance standards.
a. True
b. False
10. Effective management control involves subjective judgment and employee discussions, as well as objective analysis
of performance data.
a. True
b. False
11. An expense budget lists forecasted and actual revenues of the organization.
a. True
b. False
12. The level of funds flowing through the organization and the nature of cash disbursements is shown through the
capital budget.
a. True
b. False
13. A cash budget estimates receipts and expenditures of money on a daily or weekly basis..
a. True
b. False
14. Within the balanced scorecard, customer service indicators measure things such as employee retention and
satisfaction.
a. True
b. False
15. An expense budget lists forecasted and actual revenues of the organization.
a. True
b. False
16. The capital budget lists planned investments in major assets such as buildings, heavy machinery, or complex
information technology systems.
a. True
b. False
17. Zero–based budgeting requires a complete justification for every line item in a budget.
a. True
b. False
18. A balance sheet budget is a budget that plans and reports investments in major assets to be depreciated over
several years.
a. True
b. False
19. Bottom–up budgeting is a process in which lower level managers anticipate their department’s resource needs and
pass them up to top management for approval.
a. True
b. False
20. The balance sheet shows the firm’s financial position with respect to expenses and credits at a specific point in
time.
a. True
b. False
21. Liabilities are the firm’s debts, both current and long-term.
a. True
b. False
22. The income statement shows revenues coming into the organization from all sources and subtracts all expenses.
a. True
b. False
23. The system of governing an organization so that the interests of corporate owners are protected refers to corporate
governance.
a. True
b. False
24. Frequently calculated ratios typically pertain to activity, passivity, and profitability.
a. True
b. False
25. The liquidity ratio shows the company‘s ability to meet its current debt obligations and a measurement of the firm’s
margin of safety.
a. True
b. False
26. An activity ratio that measures how many times the inventory is turned over to meet the total sales figure is called
the inventory turnover.
a. True
b. False
27. The return on total assets (ROA) is an activity ratio that is the percentage returned to investors on total assets.
a. True
b. False
28. Under hierarchical control, employees are actively engaged and committed to their work.
a. True
b. False
29. The use of cultural values, traditions, shared beliefs and trust to increase compliance with goals refers to
decentralized control.
a. True
b. False
30. Companies today are increasingly shifting from a hierarchical control process to one that is more decentralized.
a. True
b. False
31. A process in which lower level managers anticipate their department’s resource needs and pass them to top
management for approval is called top–down budgeting.
a. True
b. False
32. Open–book management ties employee rewards to the company’s overall success.
a. True
b. False
33. The goal of open-book management is to get every employee thinking and acting like a business owner.
a. True
b. False
34. Closed-book management helps employees appreciate why efficiency is important to the organization’s success as
well as their own.
a. True
b. False
35. The Six Sigma approach is a comprehensive management control system that balances traditional financial
measures with operational measures relating to a company’s critical success factors.
a. True
b. False
36. A Six Sigma process will typically result in one defective package of product for every three truckloads shipped.
a. True
b. False
37. TQM tends to be most successful when it enriches jobs and improves employee motivation.
a. True
b. False
38. An organization–wide commitment to infusing quality into every activity through continuous improvement defines Six
Sigma.
a. True
b. False
39. A group of six to twelve volunteer employees who meet regularly to discuss and solve problems affecting their
common work activities refers to a quality team.
a. True
b. False
40. The implementation of total quality management involves the use of many techniques such as quality circles,
benchmarking, Six Sigma principles, reduced cycle time, and continuous improvement.
a. True
b. False
41. Benchmarking is the age-old practice of allowing the artisan to sign his name to the finished product.
a. True
b. False
42. Outsourcing is the continuous process of measuring products, services, and practices against the toughest
competitors or the industry leaders.
a. True
b. False
43. Continuous improvement is the implementation of a large number of small, incremental improvements in all areas of
the organization on an ongoing basis.
a. True
b. False
44. Very high expectations from senior management and a desire to share authority by middle managers are two of the
positive factors leading to success of TQM.
a. True
b. False
45. The certification based on a set of international standards for quality management, setting uniform guidelines for
processes to ensure that products conform to customer requirements is the ISO certification.
a. True
b. False
46. Which of the following is the systematic process through which managers regulate organizational activities?
a. Strategic planning
b. Organizational control
c. Organizational goal setting
d. Strategic regulation
e. Organizational leading
47. Ophelia, the new CEO at Odyssey Inc., plans to implement a highly effective systematic process of regulating
organizational activities to make them consistent with the expectations that are established by managers within the
company. This is referred to as control.
a. organizational
b. feedback
c. budgetary
d. systems
e. quality
48. Zachary, a manager at ExecuComp, receives quarterly reports, which track his department‘s production statistics.
However, these reports lack key information regarding reject rates. Which of the following components of the
control model need improvement?
a. Measuring actual performance
b. The planning and setting of performance standards
c. SWOT analysis
d. The ability to take corrective action when necessary
e. All of these
49. All of the following are key steps of setting up feedback control systems EXCEPT:
a. comparing performance to standards.
b. establishing standards.
c. getting employee opinions.
d. measuring performance.
e. making necessary corrections.
50. Which of the following is a comprehensive management control system that balances traditional financial measures
with operational measures relating to a company‘s critical success factors?
a. Economic value–added system
b. Activity–based costing system
c. Market value-added system
d. Balanced scorecard
e. Open–book management system
51. indicators focus on production and operating statistics.
a. Financial performance
b. Business process
c. Critical success
d. Potential for learning and growth
e. Performance measurement
52. All of the following are major perspectives of the Balanced Scorecard EXCEPT .
a. competitors
b. customers
c. learning and growth
d. financial
e. internal business processes
53. Kyle’s work group consistently exceeds the goals the members set for themselves some months ago. In an attempt
to better motivate the group, Kyle thought it would be a good idea to set new goals. This is an example of Kyle
exercising control by:
a. comparing performance to standards.
b. developing adequate measures of performance.
c. taking corrective action.
d. comparing performance to standards and developing adequate measures of performance only.
e. all of these.