Chapter 16: Control
TRUE/FALSE
1. Control is achieved when behavior and work procedures conform to standards, and company goals are
accomplished.
2. The control process begins when managers set goals.
3. When Boeing measured the performance of its 787 Dreamliner test models under extreme operating
conditions, it was taking part in the comparison to standards step.
4. Companies may determine standards by evaluating their capacity to enable goal achievement, by
listening to customers, by observing competitors, or by benchmarking other companies.
5. Benchmarking is the process of setting corporate norms.
6. Control is an intermittent activity that requires periodic attention from managers once or twice a
month.
7. Feedback control is a mechanism for gathering information about performance deficiencies before they
occur.
8. U.S. Steel Corporation filed a lawsuit challenging the European Commission’s 2006 decision to
restrict the carbon dioxide emissions in its Slovakia unit because it believed the plant already complied
with emission laws. The lawsuit is an example of feedback control.
9. Concurrent control seeks to prevent or minimize performance deficiencies before they occur.
10. Feedforward control provides information about performance deficiencies by monitoring inputs, not
outputs.
11. Sometimes the costs of control exceed its benefits.
12. Control loss usually has no effect on goal achievement.
13. Control loss occurs when behavior and work procedures merely meet minimal acceptable standards,
rather than exceeding those minimal standards.
14. Implementing controls is always worthwhile.
15. Cybernetic feasibility refers to the extent to which it is possible to implement each step in the control
process.
16. While the bureaucratic control model is designed to make companies more efficient, effective, and
fair, it frequently has the opposite effect.
17. According to Doing the Right Thing “Don’t Cheat on Travel Expense Reports,” trust is the basis for a
good working relationship
18. The objective control approach to managerial control manifests itself as either behavior control or
output control.
19. In the behavioral approach to managerial control, a company’s widely shared values and beliefs guide
workers’ behavior and decisions.
20. Concertive control produces less stress for workers than bureaucratic control.
21. When self-control is used, leaders and managers provide workers with clear boundaries within which
they may guide and control their own goals and behaviors.
22. The balanced scorecard approach to control emphasizes measurement of organizational performance in
three equally important areas. These areas are finances, internal operations, and innovation and
learning.
23. Generally, it does not matter which of the five approaches to managerial control an organization or
individual manager chooses to employ.
24. The balanced scorecard method of control minimizes the chance of suboptimization.
25. Budgets are used to project costs and revenues, to prioritize and control spending, and to ensure that
expenses don’t exceed available funds and revenues.
26. Cash flow analysis predicts how changes in a business will affect its ability to take in more cash than it
pays out.
27. Laurie Schmald Moncrieff, owner of Schmald Tool & Die in Michigan, has invested in the latest
quality-control equipment. But since her investment, the company’s sales have dropped by $1.5 million
because she can’t afford extensive marketing. In other words, her budget will not allow her to launch
a marketing plan.
28. Income statements predict how changes in a business will affect its ability to take in more cash than it
pays out.
29. Financial ratios are typically used to track a business’s liquidity (cash), efficiency, and profitability
over time.
30. The term excessive value appropriated (EVA) refers to the amount by which profits (after expenses)
exceed the cost of capital in a given year.
31. One significant advantage of economic value added (EVA) is that it clearly specifies what specific
actions managers should or should not take in order to improve financial performance.
32. EVA is not as influential a measure of financial success as it once was thought to be as it does include
the cost of capital.
33. Customer satisfaction surveys are an accurate and effective way to answer the balanced scorecard
question, “How do customers see us?”
34. A Manhattan federal judge ordered Visa USA to stop charging a special fee that penalized debit card
issuers for jumping to its smaller rival MasterCard Inc. Visa USA was using the fee to shore up its
internal perspective.
35. According to Management Trends “Dell’s Three C’s,” use of smaller packaging, greater amounts of
recycled materials in its packaging, and curbside recyclability programs all were key components of its
waste reduction efforts.
36. Quality is typically defined as the customer perception that the product provides an excellent value for
its price.
37. The innovation and learning perspective is concerned with continuous improvement in ongoing
products and services and relearning and redesigning the processes by which products and services are
created.
38. The three levels of waste minimization are waste disposal, waste reduction, and recycling.
39. In 1996, outdoor-clothing manufacturer Patagonia developed a method for almost endless recycling of
polyester, a method it still uses today. The development and use of this recycling method supports the
innovation and learning perspective.
40. The European Union is moving toward requiring consumers, not businesses, to be held responsible for
recycling the products companies manufacture.
MULTIPLE CHOICE
1. The basic control process begins with:
a.
either benchmarking or keystoning
b.
the establishment of clear standards of performance
c.
the comparison of actual performance to expected performance
d.
problem identification
e.
determining what corrective action will be if actual performance does not equal or exceed
expected performance
2. ____ is the regulatory process of establishing standards that will achieve organizational goals,
comparing actual performance to those standards, and then, if necessary, taking corrective action to
restore performance to those standards.
a.
Implementation
b.
Goal-setting
c.
Control
d.
Suboptimization
e.
Benchmarking
3. ____ are a basis of comparison for measuring the extent to which organizational performance is
satisfactory or unsatisfactory.
a.
Standards
b.
Potentials
c.
Autonomous goals
d.
Degrees of centralization
e.
Resource goals
4. The objective of the company that manufactures Jägermeister liqueur is to grow its international
business. It determines its success in the international market by comparing its 2005 annual exporting
data with the data gathered in 1998—the first year it had double digit growth in exports. For this
company, the 1998 exporting data provide a(n):
a.
autonomous measurement
b.
standard
c.
value ratio
d.
dependence measurement
e.
performance predictor
5. In October 2005 Cadbury Schweppes said higher commodity prices and the bankruptcy of one of its
U.S. bottling plants had increased its production costs and led it to scale back its financial projections
for the remainder of the year. These financial projections were ____ for the beverage company.
a.
autonomous measurements
b.
standards
c.
value ratios
d.
dependence measurements
e.
performance charts
6. Companies may determine standards by:
a.
benchmarking other companies
b.
implementing vertical loading
c.
using outsourcing
d.
taking corrective action
e.
doing all of these
7. Ford Motor has been attacked by its own sustainability committee for failing to do enough to cut
vehicular greenhouse gas emissions. According to the committee’s 2005 report, “Ford has failed to
define a goal for reducing global emissions from the company’s products.” The report called for the
company to set clear targets to improve fuel economy and to cut factory emissions. This committee
wants Ford to establish emission control:
a.
autonomous measurements
b.
standards
c.
value ratios
d.
dependence measurements
e.
performance predictors
8. Sergio Marchionne, CEO of the Fiat Group, says that his marketing inspirations come from outside the
automobile industry. “If you were to ask me today what the Toyota brand stands for, I couldn’t tell
you,” he says. “I grew up in North America, and I remember when Apple started manufacturing
computers. How much care Steve Jobs took in nurturing its place in the market is just phenomenal. We
[Fiat] need to learn how to do that.” Marchionne believes that Fiat should use _____ to understand
Apple’s effective marketing strategy.
a.
communication methods
b.
benchmarking
c.
a marketing paradigm
d.
a noncompetitive model
e.
an aping strategy
9. Benetton, the Italian clothing manufacturer, set as one of its _____ for 2007 to send fresh clothing and
display ideas to its various retailers every 15 days.
a.
standards
b.
potentials
c.
autonomous goals
d.
functional criteria
e.
resource goals
10. ____ allows a trucking company not only to compare its safety performance with other companies but
to also adopt those practices found to be superior. A trucking company can gather data on how its
competitors deal with total accidents per million miles, numbers of high severity accidents by type,
missed deliveries, spills, driver out–of-service by type, and vehicle out–of-service by type and use this
information to improve its own safety record.
a.
Benchmarking
b.
Data decentralization
c.
Information processing
d.
Mirroring
e.
Comparative criterion
11. When Marriott decided to improve the quality of service it offered its customers, it asked special
corporate guests to comment on the good and bad issues of their stay, and also to tell what the
competition is doing that is better than Marriott. The Marriott acted accordingly. In other words, it
used:
a.
benchmarking
b.
data decentralization
c.
information processing
d.
mirroring
e.
comparative criterion
12. A chain of specialty fashion stores has interviewed a sample of its female customers and learned that
on average a customer can be expected to visit the store every two weeks looking for new
merchandise. As a result, the chain has new merchandise delivered daily. If items have not been sold
after a month on display at the store, the items are removed from the store to either be sold at another
location or returned to the manufacturer. The chain of stores was able to set this standard through:
a.
evaluating the standard’s capacity to enable goal achievement
b.
benchmarking competitors
c.
listening to customers
d.
outsourcing
e.
value communications
13. In 2007, Symantec Corp., maker of Norton Antivirus software, filed lawsuits against eight companies
accusing them of distributing illegally copied Symantec software. Symantec alleged that the
companies engaged in trademark infringement, copyright infringement, fraud, unfair competition,
trafficking in counterfeit labels and documentation, and false advertising. In terms of the control
process, Symantec:
a.
set benchmarks
b.
suboptimized its feedback mechanisms
c.
implemented feedforward plans
d.
taken corrective action
e.
created cybernetic controls
14. Control is a(n) ____ process.
a.
standardized, periodic, and cybernetic
b.
flexible, intermittent, and automated
c.
standardized, periodic, and robotic
d.
continuous, flexible, and automated
e.
continuous, dynamic, and cybernetic
15. Control is a cybernetic process because it:
a.
has a feedback loop
b.
is an intermittent process
c.
is the first management function
d.
uses automated benchmarks
e.
can be a completely automated process
16. The three basic control methods are:
a.
feedback control, feedforward control, and symmetry control
b.
balance control, vertical control, and symmetry control
c.
concurrent control, feedback control, and feedforward control
d.
feedforward control, presumptive control, and stasis control
e.
stasis control, feedback control, and simultaneous control
17. A manufacturer of automatic locking devices for vehicles shipped 20,000 devices to a car
manufacturer that was unable to use them because of a design flaw. If the manufacturer of the devices
waited until the parts were returned before determining why it created unusable component parts, it
would be using ____ control.
a.
feedforward
b.
feedback
c.
balanced
d.
dynamic
e.
concurrent
18. An accident in November 2005 at a U.S. refinery operated by Valero killed two workers. By gathering
information about how the men died so as to prevent a recurrence, Valero used ____ control.
a.
concertive
b.
normative
c.
feedback
d.
concurrent
e.
bureaucratic
19. ____ control is a method of gathering information about performance deficiencies after they occur.
a.
Feedback
b.
Stasis
c.
Concurrent
d.
Feedforward
e.
Preemptive
20. ____ control is a method of gathering information about performance deficiencies as they occur.
a.
Feedback
b.
Simultaneous
c.
Concurrent
d.
Feedforward
e.
Stasis
21. _____ control is a mechanism of gathering information about performance deficiencies before they
occur.
a.
Feedback
b.
Stasis
c.
Preemptive
d.
Feedforward
e.
Concurrent
22. In terms of the basic methods of control, _____ control is an improvement over _____ control because
it attempts to eliminate or shorten the delay between performance and feedback about the performance.
a.
feedback; concurrent
b.
concurrent; feedback
c.
feedback; feedforward
d.
feedforward; feedback
e.
concurrent; stasis
23. In October 2004, Caterpillar announced plans to cut its predicted production of construction equipment
for 2005 due to forecasted increases in steel prices and growing concern about a tire shortage. By
discovering the problem with product inputs and letting customers know that its output will fall short,
Caterpillar used _____ controls.
a.
feedforward
b.
feedback
c.
concurrent
d.
stasis
e.
goal-based
24. A car manufacturer ordered 20,000 window assemblies from a supplier. To make sure the assemblies
were made to specifications, the supplier of the window assemblies shipped a sample to the car
manufacturer for testing. This is an example of __________ control.
a.
feedback
b.
contiguous
c.
suboptimal
d.
feedforward
e.
synergistic
25. Which approach to control monitors inputs rather than outputs?
a.
feedforward control
b.
feedback control
c.
concurrent control
d.
stasis control
e.
all of these
26. To use feedforward control, a manager must:
a.
create open channels of communications between the producer and the customer
b.
establish a mechanistic system
c.
collect data at monthly intervals
d.
must store all relevant information in an easy–to-use information storage system
e.
monitor inputs, not outputs
27. __________ occurs when behavior and work procedures do not conform to standards.
a.
Benchmark points
b.
Control loss
c.
Suboptimization
d.
Cybernetic infeasibility
e.
Satisficing
28. McDonald’s fast-food restaurants have a well-designed training program for all new employees. Each
new employee is supposed to learn how to perform standardized tasks required to maintain
McDonald’s service quality. Due to labor shortages in some areas, new employees begin work as soon
as they are hired and do not receive any off-the-job training. This nonconformity to standards creates:
a.
ambiguous group norms
b.
motivational grapevines
c.
negative benchmarks
d.
control loss
e.
monitoring valences
29. Which of the following factors can help managers to determine whether more or different control is
worthwhile?
a.
regulation costs
b.
customer flows
c.
channelization
d.
synergy
e.
subordinate empathy
30. ____ costs are the costs associated with implementing or monitoring control.
a.
Cybernetic
b.
Heuristic
c.
Regulation
d.
Benchmarked
e.
Targeted
31. To prevent illegal copying of its music CDs, Sony begun placing a software program called Rootkit on
its music CDs. When the CD was played in the computer, this program attached itself to the
computer’s memory and prevented any music from being illicitly copied. The ____ of this control
device was that the software was used by hackers to hide their own activities.
a.
outsourced corollary
b.
inadvertent significance
c.
involuntary result
d.
deliberate benchmarking
e.
unintended consequence
32. An often overlooked factor in determining the cost of control is:
a.
serendipitous consequences that accompany decreased supervision
b.
problems with trade barriers
c.
cybernetic feasibility
d.
quasi-control options
e.
unintended consequences that accompany increased control
33. Imagine a manufacturer that has a 99 percent error-free production rate and decides it wants 100
percent error-free production. Its management needs to examine ____ to determine if the costs of
increased controls outweigh the benefits of error-free production.
a.
cybernetic costs
b.
benchmarks
c.
financial ratios
d.
regulation costs
e.
feedback loops
34. ____ is the extent to which it is possible to implement each step in the control process.
a.
Control feasibility
b.
Cybernetic feasibility
c.
A quasi-control assessment
d.
A balanced scorecard assessment
e.
Information management
35. According to the text, which of the following factors can help managers to determine whether more
control is possible?
a.
task downsizing
b.
cybernetic feasibility
c.
outsourcing
d.
channelization
e.
synergistic intelligence
36. An accident in November 2005 at a U.S. refinery operated by Valero killed two workers who were in
the process of performing maintenance on a vat that contained nitrogen even though step–by-step
safety procedures were available that could have prevented the deaths. This incident demonstrates
how _____ can influence the control process.
a.
job downsizing
b.
cybernetic feasibility
c.
outsourcing
d.
channelization
e.
synergistic intelligence
37. Many public school systems have been establishing methods of controlling what students learn in the
classroom. One commonly used control device is testing at various grade levels. In a recent testing
situation, the company that produced the testing devices sent schools the wrong answer sheet on which
to code the test answers. These faulty answer sheets resulted in much lower test scores than expected.
The school system’s need to use the testing company reflects a control problem with:
a.
control synergy
b.
participative controls
c.
resource flow
d.
cybernetic feasibility
e.
autonomy
38. Which of the following is a method managers can use to achieve control in their organizations?
a.
bureaucratic
b.
self-control
c.
concertive
d.
normative
e.
all of these
39. ____ control is top-down control, in which managers try to influence employee behavior by rewarding
or punishing employees for compliance or noncompliance with organizational policies, rules, and
procedures.
a.
Bureaucratic
b.
Normative
c.
Concertive
d.
Objective
e.
Administrative
40. Sergio Marchionne is the new CEO of the Fiat Group, which produces Fiat and Alfa-Romeo
automobiles. When he took over, Marchionne learned that 2,000 Alfa Romeo customers had called the
company the year before and received no reply. He ordered employees to call the customers back
with personal apologies, warning that otherwise employees would lose their jobs. This action is an
example of _____ control.
a.
bureaucratic
b.
objective
c.
self-control
d.
autocratic
e.
connotative
41. Which of the following is NOT a method managers can use to achieve control in their organizations?
a.
bureaucratic
b.
objective
c.
suboptimal
d.
self-control
e.
concertive
42. Companies that rely on bureaucratic control tend to:
a.
have no contingency plans
b.
rely on group norms rather than formalized rules and regulations
c.
value their human resources above all others
d.
be extremely responsive to their customers’ needs
e.
be highly resistant to change
43. When the local fast-food restaurant manager caught one of her employees giving free food to his
friends, she fired him on the spot. When another employee stayed late after work one night to help a
woman start her car, the manager rewarded him. What type of control did the restaurant manager use
in these two instances?
a.
bureaucratic
b.
objective
c.
self-control
d.
autocratic
e.
connotative
44. An organization that relies heavily on ____ controls is likely to be highly resistant to change and slow
to respond to customers and competitors.
a.
behavior
b.
bureaucratic
c.
subjective
d.
normative
e.
output
45. __________ controls should be used when it is necessary to standardize operating procedures and
establish limits.
a.
Bureaucratic
b.
Normative
c.
Concertive
d.
Input
e.
Output
46. The two types of objective controls managers use are:
a.
output and input
b.
administrative and participative
c.
self-control and organizational control
d.
autonomous and individualized
e.
behavior and output
47. A sales manager requires each member of his sales force to make three calls per day on current
customers, to call on two potential customers every week, and to sell a minimum of $10,000 worth of
merchandise weekly. Which of the following control methods does this indicate the sales manager is
using?
a.
normative
b.
market-oriented
c.
industrial betterment
d.
objective
e.
administrative
48. In many companies, bureaucratic control has evolved into _____, which uses observable measures of
employee behavior or output to assess performance and influence behavior.
a.
centralized control
b.
objective control
c.
self-control
d.
autocratic control
e.
connotative control
49. What type of control would a hospital administrator be using if he gauged the performance of
emergency room staff by the number of insured patients admitted to the hospital for further care?
a.
bureaucratic
b.
objective
c.
self-control
d.
autocratic
e.
connotative
50. ____ control regulates workers’ actions and routines on the job, while ____ control measures the
results of their efforts.
a.
Input; behavior
b.
Motivation; output
c.
Concertive; normative
d.
Behavior; output
e.
Input; output
51. According to “Doing the Right Thing” box Don’t Cheat on Travel Expense Reports, which of the
following is the basis for a good working relationship?
a.
autonomy
b.
individualism
c.
trust
d.
doubt
e.
independence
52. __________ should be used when it is difficult to create good measures of worker behavior and
output, and when organizational culture, values, and beliefs are strong.
a.
Bureaucratic control
b.
Normative control
c.
Concertive control
d.
Self-control
e.
Input control
53. Which of the following statements about normative controls is true?
a.
Normative controls tend to create an organization that is highly resistant to change.
b.
With normative controls, managers focus on work behavior or outputs.
c.
Normative controls lead to an emphasis on very selective hiring.
d.
Normative controls arise when companies give autonomous work groups complete
responsibility for task completion.
e.
None of these statements about normative controls is true.
54. Normative controls should be used when:
a.
cause-and-effect relationships are clear
b.
workers have been taught self-control skills
c.
responsibility for task accomplishment is given to autonomous work groups
d.
it is necessary to standardize all operations