Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
Chapter 14: Managing Control Systems, Finances, and
People
Test Bank
Multiple Choice
1. Control describes the process used to ______ progress to achieve objectives.
a. identify
b. monitor
c. vet
d. define
2. Actual measures of ______ is critical to the controlling process.
a. transformation processes
b. inputs
c. results
d. feedback
3. ______ is the process of monitoring progress and taking corrective action when
needed to ensure that objectives are achieved.
a. Strategic planning
b. Progress management
c. Controlling
d. Alignment
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Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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4. Preliminary control focuses on the ______ stage of the systems process.
a. inputs
b. outputs
c. transformation process
d. customer/stakeholder satisfaction
5. ______ is designed to anticipate and prevent possible problems.
a. Concurrent control
b. Preliminary control
c. Rework control
d. Damage control
6. Concurrent control focuses on the ______ stage of the systems process.
a. input
b. output
c. transformation process
d. customer/stakeholder satisfaction
7. ______ is action taken to fix an output.
a. Rework control
b. Damage control
c. Concurrent control
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
d. Preliminary control
8. Planning and organizing are the keys to ______.
a. rework control
b. damage control
c. concurrent control
d. preliminary control
9. Preventative maintenance is an example of ______.
a. damage control
b. preliminary control
c. concurrent control
d. rework control
10. Warranties are an example of ______.
a. concurrent control
b. rework control
c. damage control
d. preliminary control
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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11. Rework control focuses on the ______ stage of the systems process.
a. input
b. output
c. transformation process
d. customer/stakeholder satisfaction
12. Which of the following is NOT a functional area/department?
a. operations
b. human resources
c. funding
d. marketing
13. ______ is necessary when preliminary and concurrent controls have failed.
a. Salvage control
b. Feedforward control
c. Damage control
d. Rework control
14. Preliminary control is used to ______.
a. anticipate and prevent problems
b. ensure that standards are met
c. fix an output
d. minimize negative impacts on customers/stakeholders
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
15. An action taken to fix an output is ______.
a. damage control
b. rework control
c. warrantied control
d. feedback
16. XYZ Corp’s customer satisfaction is slowly declining. What part of the organizational
system are they most likely lacking in?
a. feedback
b. inputs
c. concurrent control
d. damage control
17. The products made by XYZ Corp during the last shift are all missing the bag of
screws that should be in each box. What system control needs to be used at this point?
a. concurrent control
b. preliminary control
c. rework control
d. damage control
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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18. Feedforward control is also known as ______.
a. preliminary control
b. rework control
c. damage control
d. concurrent control
19. Service industries should focus primarily on preliminary and ______ control.
a. damage
b. concurrent
c. feedforward
d. rework
20. Although in most organizations, the ______ department is the only functional area
that actually transforms the inputs into the outputs of goods and services that are sold to
customers, all functional departments use the systems process.
a. operations
b. marketing
c. human resources
d. finance
21. Which of the following is NOT a step in the control systems process?
a. correct or reinforce
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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b. feedback
c. measure performance
d. set objectives and standards
22. ______ measure performance levels in the areas of quantity, quality, time, cost, and
behavior.
a. Objectives
b. Metrics
c. Guidelines
d. Standards
23. Aadya, the manager at a large restaurant chain, was just given information from the
corporate office on how to increase sales in their region. She was given a list of goals
for the next quarter. She was the recipient of what step in the control systems process?
a. measure performance
b. correct or reinforce
c. set objectives and standards
d. compare performance to standards
24. Professor Lockhart signed a contract at the State University, where he has to teach
at least eight classes per year, for which he will be paid an annual salary. He now has to
follow which two standards?
a. quantity and time
b. behavior and time
c. quality and cost
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
d. behavior and cost
25. ______ are the limited number of areas in which satisfactory results will ensure
successful performance
a. Objective performance standards
b. Critical success factors
c. Productivity optimization keys.
d. Input/output determinants
26. Critical success factors are identified during what step of the control systems
process?
a. setting objectives and standard.
b. correcting or reinforcing
c. measuring performance
d. comparing performance to standards
27. Critical success factors in a retail store might include all of the following, EXCEPT
______.
a. maintaining the right product mix in each location
b. analyzing profit margins in that industry and setting correct prices
c. advertising the products in order to pull customers in
d. upgrading the point-of-sale system to PC-based registers
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Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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28. Comparing performance to standards is what step in the control systems process?
a. step 1
b. step 2
c. step 3
d. step 4
29. Which step of the control systems process produces a performance evaluation?
a. step 1
b. step 2
c. step 3
d. step 4
30. Which of the following is a constant control method?
a. budgeting
b. audits
c. reports
d. standing plans
31. A performance or variance report is a useful tool in what step of the control systems
process?
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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a. comparing performance to standards
b. setting objectives and standards
c. measuring performance
d. correcting or reinforcing
32. ______ standards dictate what an employee should do and should not do.
a. Behavior
b. Personality
c. Procedures
d. Culture
33. During the correct or reinforce step of the control systems process, after
performance is complete and it is too late to take corrective action to meet the standard,
the appropriate corrective actions are to do all of the following, EXCEPT ______.
a. analyzing why the standards were not met
b. using the information to develop preliminary control
c. developing sophisticated rework controls and overseeing their immediate
implementation
d. giving feedback so as to take corrective action necessary to meet the
objective/standard next time
34. Which of the following is the first step of the performance success cycle?
a. assess
b. talk
c. think
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
d. coach
35. Which of the following is the second step of the performance success cycle?
a. assess
b. talk
c. think
d. coach
36. Which of the following is the third step of the performance success cycle?
a. assess
b. talk
c. think
d. coach
37. Which of the following is the fourth step of the performance success cycle?
a. assess
b. talk
c. think
d. coach
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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38. ______ is the rate of repetition of measures taken to control performance.
a. Operations performance rate
b. Inquiry measurement period
c. Rework analysis cycle
d. Control frequency
39. All of the following are examples of standing plans, EXCEPT ______.
a. procedures
b. budgets
c. rules
d. policies
40. Clan or group control relies on which of the following?
a. culture and norms
b. standing plans
c. symbolic leadership
d. group cohesion
41. An example of an occasional control is which of the following?
a. budgeting
b. monthly meetings
c. self-control
d. observation
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
42. ______ analyzes the organization’s planning, organizing, leading, and controlling
functions to look for improvements.
a. Management audit
b. Strategic audit
c. Accounting audit
d. Functional audit
43. Self-control, clan control, and standing plans are measured in what control
frequency?
a. periodic
b. occasional
c. constant
d. each is a different control frequency
44. The preparation of a budget is what kind of control?
a. concurrent
b. damage
c. rework
d. preliminary
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
45. Dianne, an employee at the local hospital, notices a “No Smoking” sign outside the
building and around the exits. What primary level of control is being used?
a. standing plans
b. self-control
c. observation
d. clan control
46. A team working on a project has noticed that one of their members has been
working at too slow a pace, so other team members ask what the holdup is. What
primary level of control is used in this situation as they ask that question?
a. regular meetings
b. the exception rule
c. clan control
d. observation
47. Grant is running his usual weekly report in connection with this current project.
Today, he notices that the numbers are very different from their normal range. Because
variance in the numbers usually means there is some issue with cash flow, Grant takes
the report to his supervisor for assistance. Grant’s decision to involve his supervisor is
an example of ______.
a. observation
b. the exception principle
c. special reports
d. audits
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
48. You are working at a tax office that completes personal tax returns for a fee. Your
boss asks you to estimate how much your entire office will collect in fees for the coming
year. What will you create for your boss?
a. fee budget
b. revenue budget
c. expense budget
d. capital expenditures budget
49. You are working at a tax office that completes personal tax returns for a fee. Your
boss asks you to estimate how much it will cost your company to conduct tax returns in
the coming year. What will you create for your boss?
a. expense budget
b. revenue budget
c. fee budget
d. capital expenditures budget
50. Which of the following is the correct formula for determining profit margin?
a. current assets divided by current liabilities
b. net profits minus cost of goods sold
c. expenses divided by total revenue
d. net profits divided by revenues
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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51. You are working at a tax office that completes personal tax returns for a fee. Your
boss asks you to estimate how much it would cost to open a second office in response
to increased demand. What will you create for your boss?
a. fee budget
b. revenue budget
c. expense budget
d. capital expenditures budget
52. A(n) ______ is a planned quantitative allocation of resources for specific activities.
a. expense report
b. capital plan
c. budget
d. resource structure
53. Which of the following is NOT developed during the master budgeting process?
a. human resource spending plan
b. revenue and expenditure operating budgets
c. capital expenditures budget
d. financial budgeted cash flow, income statement, and balance sheet
54. The ______ is responsible for the budgeting process that results in a master budget
for the entire organization.
a. finance manager
b. finance controller
c. finance executive officer
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
d. finance coordinator
55. The revenue and expense budgets are often referred to as the ______.
a. financial statements
b. financial controls
c. operating budgets
d. operations directives
56. Venture capital is the term for what businesses use to do which of the following
activities?
a. acquire a business
b. expand a business
c. spin off a business
d. start a new business
57. The main difference between pro forma statements and actual statements is that
pro forma statements ______.
a. report past results
b. project future results
c. formalize financial data for easy comparison
d. combine past and future results
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
58. Who of the following is NOT a regular user of the financial statements in the vast
majority of privately owned companies?
a. all employees
b. external suppliers
c. creditors
d. investors
59. An investment banker trying to determine how much revenue and profit a
prospective company had for any given time period would look at the ______.
a. cash flow statement
b. balance sheet
c. manager’s prospectus
d. income statement
60. The Sign Garden purchased a large amount of photo paper on credit. The amount
of the loan that remains to be paid (the liability) could be found on which financial
statement?
a. income statement
b. balance sheet
c. cash flow statement
d. debt ledger