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Chapter 16 Managerial Control Answer Key
True / False Questions
1.
Authority and profit are considered the conjoined twins of management.
2.
With bureaucratic control, business units are treated as profit centers, and their managers
are evaluated based on profit and loss.
3.
Performance standards can only be set with respect to quantity or quality.
4.
Point-of-sale terminals that send sales data from the store checkout line back
immediately to a retailer's headquarters is an example of how information technology has
improved concurrent control.
5.
Traditional methods of cost accounting tend to be inappropriate in today's business
environment because they are based on outdated methods of rigid hierarchical
organization.
6.
Three key categories of financial ratios are liquidity, leverage, and profitability.
7.
Because financial ratios usually are expressed in compressed time horizons, they often
cause management myopia.
8.
If an employee believes his or her control system is overly controlling, that employee is
likely to exhibit dysfunctional behavior.
9.
In large diversified companies, market controls are often used to regulate independent
business units.
10.
If bureaucratic and market mechanisms are insufficient for directing a company's
workforce in today's environment, it can turn to structural control.
Multiple Choice Questions
11.
One of the fundamental forces that keep an organization heading in the right direction is
_____.
12.
Control is defined as
13.
Gillian's company relies on rules, as set forth in the employee handbook, the authority of
managers, and regular employee reviews to guide performance. Gillian's company uses
_____ control.
14.
With market control, the activities of an organization are regulated through the use of
15.
The executives at Family Funstop Inc., a chain of restaurants that feature game rooms for
children, believe that the company's employees share the corporate goals of service,
quality, value, and "good clean fun." Because of this, corporate leadership believes that
employees are motivated to work for the common good without a lot of formal controls.
This is an example of _____ control.
16.
How does clan control differ from bureaucratic control and market control?
17.
Before you can measure performance, what must you do?
18.
What is the last step in the control process?
19.
Motivating employees and setting benchmarks are two of the reasons to _____.
20.
_____ involves going to the area where activities take place and watching what is
occurring.
21.
According to the principle of exception, which deviations from the expected standard
require corrective action?
22.
Amadi's company is about to start manufacturing a new product. Before beginning
operations, Amadi and several other managers develop procedures to ensure that the
planned activities are carried out properly. This is an example of _____ control.
23.
After Glennon's restaurant opened, she spent the first two weeks closely correcting any
flaws she found in the way the business operated. This is an example of _____ control.
24.
Lexie uses the results of customer surveys to point out ways that her cashiers can improve
their service. This is an example of _____ control.
25.
Which of the following statements about the six sigma approach to quality is true?
26.
Which of the following would be a likely target of an internal audit?
27.
While doing an external audit of a potential distribution partner, Darius uncovered some
serious legal problems that could cause trouble for his company if it goes through with the
deal. Darius's external audit provided essential _____ control.
28.
The _____ budget is thought of as a "budget of budgets."
29.
Brian is preparing a budget that shows the company's expected sales receipts and
expenditures for the year, a projection of how much cash will be available each month,
and the extent of outside financing the company might need. This is a _____ budget.
30.
In today's complex organizations, the budget process is most likely to be _____.
31.
Cara had to buy a lot of equipment to open her beauty salon. She bought most of it on
credit. The amounts of money that she owes her creditors are called _____.
32.
Which of the following is the most common type of tactical behavior that people use to try
to beat control systems?
33.
A balanced scorecard is a control system combining four sets of performance measures:
financial, customer satisfaction, business processes (quality and efficiency), and _____.
