e.
organizational culture, values, and beliefs are strong
55. ____ control is associated with autonomous work groups.
a.
Objective
b.
Normative
c.
Behavior
d.
Concertive
e.
Output
56. Ironically, ____ control may lead to even more stress for workers to conform to expectations than
____ control.
a.
concertive; normative
b.
normative; concertive
c.
bureaucratic; concertive
d.
concertive; bureaucratic
e.
behavior; concertive
57. Instead of individual sales people calling on its business customers, Cedartree Tech uses sales teams
composed of marketing personnel, engineers, human resources personnel, and buyer-seller liaisons.
The sales team is given complete responsibility for developing long-term partnering relationships with
each customer. What kind of controls would the company‘s sales managers most likely approve?
a.
human resources control
b.
participative control
c.
self-control
d.
administrative control
e.
concertive control
58. Self-control is sometimes called:
a.
behavior control
b.
concurrent control
c.
self-management
d.
personal responsibility
e.
autonomy
59. __________ should be used when it is difficult to create good measures of worker behavior and
output, and workers are intrinsically motivated to do their jobs well and have self-leadership skills.
a.
Autonomy
b.
Normative control
c.
Concertive control
d.
Self-control
e.
Delegation
60. Rafe’s manager has instructed Rafe and his fellow workers to develop a daily theme such as patience,
empathy, and kindness. Each day, the workers are to try to emphasize the theme as they work with
customers, suppliers, and each other. What kind of a control system is Rafe’s manager using?
a.
self-control
b.
human resources control
c.
non-administrative control
d.
output control
e.
bureaucratic control
61. When it comes to finances, the balanced scorecard focuses on one simple question. That question is:
a.
How do we look to our shareholders?
b.
How do we look to our customers?
c.
Are we making a profit?
d.
What is the bottom line?
e.
Are we retaining enough earnings to allow for market growth?
62. The death toll from the 2005 blast at the British-based BP oil refinery in Texas City was 15. The U.S.
Chemical Safety and Hazard Investigation Board (CSB), one of several agencies that examined the
causes of the blast, said internal BP documents show that when BP acquired the refinery, it ordered an
immediate 25 percent cut in fixed costs at its refineries without specifying how the cuts were to be
made. Managers at the refinery let safety standards decline to meet this goal. A ______ approach to
control would have minimized the possibility of suboptimization.
a.
benchmarking
b.
customer churn
c.
balanced scorecard
d.
customer defection
e.
financial ratio analysis
63. ____ is a control method that encourages managers to look beyond traditional measures to evaluate
four different perspectives on company performance.
a.
Optimization
b.
Customer churn
c.
Balanced scorecard
d.
Customer defection
e.
Financial ratio analysis
64. Which of the following is NOT one of the four perspectives measured in the balanced scorecard
approach to control?
a.
financial perspective
b.
policies and procedures perspective
c.
customer perspective
d.
internal business perspective
e.
innovation and learning perspective
65. A provider of computer technical support that is using the balanced scorecard approach to control
would look at:
a.
the percentage of its employees that have received training during the last year
b.
customer defections
c.
its cash flow
d.
percentage of computer owners that requested support more than five times in a month
e.
all of these and more
66. A manufacturer of transmissions has traditionally used standard financial and accounting measures to
determine the company’s annual performance. Assuming it wants to improve its method of control,
the company should:
a.
use a balanced scorecard
b.
eliminate concern about its financial performance from its analysis
c.
only monitor its external environment
d.
institute a TQM approach
e.
do all of these
67. Which of the following statements about the balanced scorecard approach to control is true?
a.
The customer perspective is the most important in the control process.
b.
The company’s analysis of its controllable environment is most important to the company’s
success.
c.
The innovation and learning perspective is the most important in the control process.
d.
The company’s analysis of its noncontrollable environment is most important to the
company’s success.
e.
All of the perspectives examined by the balanced scorecard approach are of equal
importance to a company’s success.
68. ____ 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
69. In the grocery store segment, where profit margins are thin, competitors are aggressive, and customers
are price sensitive, controlling ______ is especially important.
a.
behavior
b.
group norms
c.
customers
d.
regulations
e.
cost
70. If you control for just one thing, then other dimensions:
a.
are likely to suffer.
b.
can be ignored.
c.
will be naturally improved as well.
d.
will become less important.
e.
will see lower output.
71. ____ occurs when performance improvement is attained in one part of an organization but only at the
expense of decreased performance in another part.
a.
Suboptimization
b.
Control loss
c.
Cybernetic infeasibility
d.
Feedforward control
e.
sacrificing
72. A large university library is concerned about possible pilferage of documents from its special
collection of Civil War memorabilia. It has decided to make it nearly impossible for all but the most
renowned Civil War experts to have access to the collection. The librarian in charge of the special
collection feels that this new policy will adversely influence the use of the collection in research on the
experiences of everyday people during the war. This is an example of the use of control creating:
a.
suboptimization
b.
control loss
c.
cybernetic infeasibility
d.
feedforward control
e.
sacrificing
73. One of the advantages the balanced scorecard has over traditional control processes that rely solely on
financial measures is that it:
a.
encourages control delegation
b.
eliminates problems with regulation costs
c.
minimizes the chances of suboptimization
d.
allows companies to determine the ideal control methods
e.
creates functional independence
74. The balanced scorecard approach to control:
a.
forces managers at each level of the company to set specific goals and measure
performance in each of four areas
b.
places greatest priority on the most important aspect of control, the financial perspective
c.
maximizes the chances of suboptimization
d.
only looks at factors within a company’s controllable environment
e.
has no real advantages over traditional control techniques
75. When implementing the financial perspective, managers would use:
a.
financial ratios
b.
customer defections
c.
employee turnover
d.
value analyses
e.
competitive audits
76. In the traditional control systems used at most companies, ____ measures are used to assess
performance.
a.
financial
b.
customer
c.
value/quality
d.
quality/profit
e.
optimization
77. Which of the following statements about economic value added (EVA) is true?
a.
EVA is one of the best ways to answer the question, “Are we providing our customers
with expected value?”
b.
EVA is the amount by which profits (after expenses) exceed the cost of capital in a given
year.
c.
EVA is only useful to top managers.
d.
The final step in calculating EVA is to compute the net operating profit after taxes.
e.
All of these statements about economic value added are true.
78. Which of the following statements about economic value added (EVA) is true?
a.
EVA is one of the best ways to answer the question, “How do we look to shareholders?”
b.
EVA is the amount by which profits (after expenses) exceed the cost of capital in a given
year.
c.
EVA is fairly easy for managers and workers to understand.
d.
The first step in calculating EVA is to compute the net operating profit after taxes.
e.
All of these statements about economic value added are true.
79. When it comes to finances, the balanced scorecard focuses on one simple question. That question is:
a.
How do we look for our shareholders?
b.
How do we look to our customers?
c.
Are we making a profit?
d.
What is the bottom line?
e.
Are we retaining enough earnings to allow for market growth?
80. Economic value added (EVA) is so important because it:
a.
demonstrates the importance of a business or subset of a business to customers
b.
makes managers at all levels pay much closer attention to how they run their segment of
the business
c.
causes managers and workers to maintain the status quo
d.
determines if a business or unit of a business is a star, question mark, cash cow, or dog and
the necessary action to follow
e.
is an improved form of the balanced scorecard approach to control
81. Economic value added (EVA) is so important to workers and managers because it:
a.
eliminates the need for quantitative motivation
b.
encourages the use of participative management techniques
c.
specifies what should be done to improve EVA performance
d.
creates strategic windows
e.
shows whether a business or subset of a business is really making a profit
82. The balanced scorecard measures organizational performance in all of the following areas EXCEPT:
a.
finances
b.
customers
c.
internal operations
d.
innovation and learning
e.
external operations
83. ______ show what has happened to an organization’s income, expenses, and net profit over a period of
time while ______ provide a snapshot of a company’s financial position at a particular time.
a.
Income statements; budgets
b.
Financial ratios; budgets
c.
Balance sheets; financial ratios
d.
Income statements; balance sheets
e.
Budgets; income statements
84. A reason that customer satisfaction surveys can be misleading is that:
a.
customer defections influence survey data
b.
surveys are often misleadingly negative
c.
sometimes even very satisfied customers will leave to do business with competitors
d.
customers often lie to maintain a good working relationship
e.
none of these
85. The traditional approach to controlling financial performance does NOT examine:
a.
financial ratios
b.
customer defections
c.
cash flow
d.
income statements
e.
budgets
86. __________ is a performance assessment in which companies identify which customers are leaving
and measure the rate at which customers are leaving.
a.
Customer subjectivity
b.
Customer satisfaction
c.
Customer defection
d.
Customer objectivity
e.
Customer benefitizing
87. Quality is typically defined and measured in three ways. They are:
a.
costs, profitability, and customer satisfaction
b.
value, customer satisfaction, and conformance to expectations
c.
profitability, reliability, and conformance
d.
excellence, value, and conformance to expectations
e.
performance, conformance, and reliability
88. Since 1874, the brand name Chris-Craft has been virtually synonymous with pleasure boating. After
a series of ill-advised expansions, buyouts, and mergers in the 1990s, Chris-Craft Industries has
returned to its area of expertise: building boats. What perspective of the balanced scorecard did the
boat manufacturer most likely use to determine where its success should lie?
a.
financial perspective
b.
policies and procedures perspective
c.
customer perspective
d.
internal perspective
e.
innovation and learning perspective
89. An article on public libraries contained the following statement: “The balanced scorecard helps
organize and run the library according to a specific strategic plan, while demonstrating the library’s
value to the community as a whole.” When dealing with the ____ area of the balanced scorecard, the
article advised librarians to ask, “At what activities must we excel?”
a.
financial perspective
b.
policies and procedures perspective
c.
customer perspective
d.
internal business perspective
e.
innovation and learning perspective
90. For the internal perspective of the balanced scorecard, managers ask the question:
a.
“At what must we excel?”
b.
“How do we provide value to our stakeholder?”
c.
“What is the bottom line?”
d.
“How important is customer satisfaction?”
e.
“What can we do to improve and create value?”
91. When a company emphasizes __________ as its quality goal, managers must simultaneously control
excellence, price, durability, or other features of a product or service that customers strongly associate
with it.
a.
excellence
b.
value
c.
conformance to expectations
d.
profitability
e.
performance
92. An article on public libraries contained the following statement: “The balanced scorecard helps
organize and run the library according to a specific strategic plan, while demonstrating the library’s
value to the community as a whole.” When dealing with the ____ area of the balanced scorecard, the
article advised librarians to ask, “How can the library continue to improve and create value?”
a.
financial perspective
b.
policies and procedures perspective
c.
customer perspective
d.
internal business perspective
e.
innovation and learning perspective
93. An article on public libraries contained the following statement: “The balanced scorecard helps
organize and run the library according to a specific strategic plan, while demonstrating the library’s
value to the community as a whole.” Standards suggested to use with the ____ area of the balanced
scorecard include how quickly and effectively a new service can be offered and how the training staff
responds to its introduction.
a.
financial perspective
b.
policies and procedures perspective
c.
customer perspective
d.
internal business perspective
e.
innovation and learning perspective
94. Jägermeister liqueur is the only product made by its manufacturer. The company is carefully
evaluating what it learned in becoming such a success to see if it could use the same strategy to expand
its international market. Which perspective of the balanced scorecard is the liqueur manufacturer
emphasizing?
a.
financial perspective
b.
policies and procedures perspective
c.
customer perspective
d.
internal business perspective
e.
innovation and learning perspective
95. Computer CPUs contain elements that are dangerous to our environment. It is imperative that older
computers be disposed of cautiously. At least two companies have been established that do nothing
else but recycle and reuse older computers. Organizations that want to address the __________
perspective of their balanced scorecard approach to control could contract with these companies to
make better use of discarded computers.
a.
inventory management
b.
waste management
c.
community
d.
innovation and learning
e.
financial
96. According to the text, which of the following levels of waste minimization produces the greatest
minimization of waste?
a.
waste prevention and reduction
b.
recycle and reuse
c.
waste treatment
d.
waste disposal
e.
waste remarketing
97. Several extended-stay hotel chains ask guests to hang their towels so they can be reused as a way to
help the environment. This request reflects which stage of waste minimization?
a.
waste prevention and reduction
b.
recycle and reuse
c.
waste treatment
d.
waste disposal
e.
waste remarketing
98. Process modification, material/product substitution, and ____ are the three strategies used for waste
prevention and reduction.
a.
collective reuse
b.
modification of organizational culture
c.
process diversification
d.
good housekeeping
e.
product innovation
C&K Brewing Company
C&K Brewing Company is a microbrewery in western Canada. It produces Maiden’s Honor brand ale,
a dark beer called Warrior’s Cry, and several seasonal beers under the brand name Hearthfire. Its
owners George Claiborne and Pete Kunard both believe the brewery’s competitive advantage comes
from the duo having hired an experienced German brewmaster to oversee the production of its beers.
The brewmaster checks all of the ingredients before they are mixed together to make sure that each
component is of the highest possible quality and rejects those that are not. After the beer has brewed,
the brewmaster runs several tests on the beer to check for taste and clarity and throws out barrels that
are cloudy and/or bitter.
99. Refer to C&K Brewing. The brewmaster is in charge of which classical management function?
a.
leading
b.
organizing
c.
motivating
d.
controlling
e.
planning
100. Refer to C&K Brewing. The brewmaster has ____, which he uses to determine the quality of the beer
by comparing its clarity to that of the finest beer.
a.
standards
b.
benchmarks
c.
motivational cues
d.
informational cues
e.
undefined heuristics
101. Refer to C&K Brewing. The brewmaster uses ____ control when he tests the raw materials.
a.
concurrent
b.
incipient
c.
feedforward
d.
introductory
e.
simultaneous
102. Refer to C&K Brewing. The brewmaster uses ____ control when he tests the beer to see how it tastes.
a.
simultaneous
b.
feedback
c.
concurrent
d.
reactive
e.
bureaucratic
103. Refer to C&K Brewing. To maintain the brewery’s and the brewmaster’s reputations, the company
typically destroys about 8 percent of its production because the beer is not of a high enough quality.
This would be an example of ____ control.
a.
objective
b.
concertive
c.
bureaucratic
d.
sacrificing
e.
administrative
104. Refer to C&K Brewing. The company is considering using the balanced scorecard to evaluate
performance. As an integrated system, the balanced scorecard will:
a.
maximize the possibility of suboptimization
b.
make only production managers responsible for making a positive impact on the scorecard
c.
measure five different perspectives of organizational performance
d.
examine performance from a financial perspective as well as other perspectives
e.
be used as a concurrent control with financial measures
105. Refer to C&K Brewing. Which of the following statements about the balanced scorecard is true?
a.
The innovation and learning perspective of the balanced scorecard examines such
activities as how quickly the brewery can get a new beer to market.
b.
The balanced scorecard does not examine the brewery’s financial performance.
c.
The stakeholder perspective of the balanced scorecard looks at the brewery’s code of
ethics.
d.
Like the income statement, the balanced scorecard simply provides a snapshot of the
brewery’s performance.
e.
One of the major advantages associated with the balanced scorecard is its ability to
remove uncertainty from the brewery’s environment.
Interpublic
Interpublic is the world’s third-biggest marketing services group. In 2005, the company informed the
SEC that it “had found accounting errors resulting from incompetence as well as falsified books and
records, violations of the laws and company policies, and inappropriate customer charges” that
required it to restate its earnings for every year in the decade. Interpublic is guilty of overstating both
its expenses and its revenues in its earning reports. Interpublic blames its faulty revenue reporting on
“inadequate procedures for review of customer contracts.” This fraudulent activity will more than
likely result in a default on the company’s debt and the loss of its stock market listing.
106. Refer to Interpublic. Which traditional management function was Interpublic not using effectively
prior to its discovery of fraudulent activities?
a.
implementation
b.
goal-setting
c.
control
d.
suboptimization
e.
benchmarking
107. Refer to Interpublic. Interpublic’s procedures for review of customer contracts would be an example of
inadequate:
a.
standards
b.
gap management
c.
autonomous goals
d.
degrees of centralization
e.
resource goals
108. Refer to Interpublic. It appears that the control method that Interpublic believed it should have used
was one that focused on whether rules and policies were being followed. This approach is called:
a.
bureaucratic control
b.
objective control
c.
suboptimal
d.
self-control
e.
concertive control
109. Refer to Interpublic. Why should Interpublic consider the implementation of the balanced scorecard?
a.
to eliminate the need for restructuring
b.
to maximize benchmarking opportunities
c.
to track internal and external environmental changes
d.
to minimize the chances of suboptimization
e.
for all of these reasons