Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness Answer Key
True / False Questions
1.
One way to improve productivity is to offer less flextime.
2.
The four management functions are planning, organizing, leading, and motivating.
3.
Productivity is defined by the formula of outputs divided by inputs for a specified period of
time.
4.
If a manager decreases the efficiency of labor and makes no improvements to the efficiency of
capital, an increase in productivity will result.
5.
Lumber mills that sell sawdust and wood chips are increasing their efficiency of materials
input.
6.
Increasing gross domestic product in the United States depends on raising productivity, as
well as on a growing workforce.
7.
Paying attention to the feedback is important because of its dynamic nature while progressing
through the steps in the control process.
8.
Recent productivity growth is likely the result of organizations’ huge investment in information
technology like computers, the Internet, other telecommunications advances, and computer–
guided production line improvements.
9.
Planning is seeing that the right things happen at the right time in the right way.
10.
The purpose of planning is to make sure that performance meets objectives.
11.
Organizing is arranging tasks, people, and other resources to accomplish the work.
12.
All four management functions affect one another and in turn affect an organization’s
productivity.
13.
Control systems cannot help managers anticipate, monitor, and react to environmental
changes and uncertainties.
14.
American-produced cars were perceived as better built than Japanese-produced cars which
used American quality controls.
15.
A markdown on certain grocery store items that results in a rush of customer demand for
those products is an example of the use of control systems to detect opportunities, such as
reducing prices for similar items.
16.
Controls allow top management to decentralize decision-making at lower levels within the
organization.
17.
The control process begins with establishing standards.
18.
A control standard, or performance standard (or simply standard), is the desired performance
level for a given goal.
19.
Standards can be set for almost anything and be narrow or broad.
20.
Performance measures can be obtained through oral reports.
21.
The acceptable deviation depends on the range of variation built into the standards when they
were set.
22.
Corrective action is a control principle that states that managers should be informed of a
situation only if data show a significant deviation from standards.
23.
When performance exceeds the standards set in the control systems, managers should give
rewards.
24.
The three levels of control are strategic, tactical, and corrective.
25.
Strategic control is monitoring performance to ensure that strategic plans are being
implemented and taking corrective action as needed.
26.
Tactical control is monitoring performance to ensure that strategic plans are being
implemented and taking corrective action as needed.
27.
Supervisors are responsible for operational control.
28.
The physical area of organizational control includes buildings, equipment, and tangible
products.
29.
Drug tests at hiring are an example of the physical area of organizational control.
30.
Decentralized control is characterized by the use of rules, regulations, and formal authority to
guide performance.
31.
Bureaucratic control is most appropriate for an organization in which the tasks are explicit and
certain.
32.
Except for in rare instances, employees at George’s Pro Painting take responsibility for their
own work and how it is done, rather than being governed by a rigid set of rules. George’s Pro
Painting is using decentralized control.
33.
Customer satisfaction and financial measures are two of four indicators of the balanced
scorecard.
34.
Internal process is one of the four indicators used in the balanced scorecard.
35.
Traditional financial measures improve customer satisfaction, quality, and employee
motivation.
36.
The internal business perspective, including business processes such as quality, employee
skills, and productivity, is what the company must do internally to meet its customers‘
expectations.
37.
A strategy map is a visual representation of the organizational flowchart.
38.
Strategy maps show the cause–and-effect links by which specific improvements create desired
outcomes, such as objectives for revenue growth, targeted customer markets, the role of
excellence and innovation in products.
39.
Six primary performance areas for measurement management include financial performance,
operating efficiency, customer satisfaction, employee performance, innovation/change, and
community/environment.
40.
One of the reasons that measurement-managed firms succeed is due to strong teamwork and
cooperation among the management team and more willingness to take risks.
41.
The point of an audit is to provide a yardstick against which managers can measure
performance and make comparisons as with other departments or previous years.
42.
A formal financial projection is known as an external audit.
43.
Incremental budgeting allocates increased or decreased funds to a department by using the
last budget period as a reference point; only incremental changes in the budget request are
reviewed.
44.
Only incremental changes in the budget request are reviewed in incremental budgeting.
45.
One advantage with incremental budgets is that they are flexible in meeting environmental
demands.
46.
A capital expenditures budget anticipates investments in major assets such as land, buildings,
and major equipment.
47.
A variable budget can be adjusted over time to accommodate pertinent changes in the
environment.
48.
A variable budget does not allow the allocation of resources to vary in proportion with various
levels of activity.
49.
A balance sheet summarizes an organization’s overall financial worth, or its assets and
liabilities, at a specific point in time.
50.
An income statement summarizes an organization’s financial results over a specified period of
time, such as a quarter or a year.
51.
Ratio analysis is the practice of evaluating financial ratios to determine an organization’s
financial health.
52.
The singular task of internal auditors is to verify that the organization, in preparing its financial
statements, followed generally accepted accounting principles.
53.
An external audit is a verification of an organization’s financial accounts and statements by the
organization’s own professional staff.
54.
A principle of Deming management is that quality should be aimed at meeting the needs and
expectations of the ultimate user.
55.
In Deming’s PDCA cycle, “D” stands for “do,” which means to implement the change or make
a small-scale test.
56.
The two core principles of TQM are people orientation and productivity orientation.
57.
TQM assumes that, if given empowerment, employees will focus on quality.
58.
TQM assumes that continuous improvement must be an everyday matter and that no
improvement is too small.
59.
The RATER scale enables customers to rate the quality of service along five dimensions.
60.
On her first visit to a new doctor’s office, Candace noted the fine furniture in the pristine lobby
and the crisp white coats that each of the staff wore. Candace was judging the tangibles
dimension of the RATER scale.
61.
Twice daily, factory workers at Mountain CopperWorks select random samples from the
production runs and test them for quality, rejecting runs if too many samples fall outside a
standard range of acceptability. These workers are engaged in statistical process control.
62.
Reduced cycle time means an increase in steps in a work process.
63.
GlobalSatellite, applying TQM, restructured its service call procedures and eliminated some
steps involved so that employees can finish each call faster. This is an example of reduced
cycle time.