42. Which of the following is considered a leverage ratio?
a.
Debt ratio
b.
Return on total assets
c.
Profit margin on sales
d.
Conversion ratio
e.
Inventory turnover
43. The basic philosophy of control at Nutrients-For-You, Inc. is based on the policies found in the
employee handbook, as well as a strict hierarchy of authority. This philosophy is consistent with:
a.
clan control.
b.
bottom-up control.
c.
hierarchical control.
d.
culture control.
e.
decentralized control.
44. At LBK Industries, responsibility for quality control rests with a team of quality control inspectors and
supervisors rather than with employees. LBK uses what type of organizational control?
a.
Matrix control
b.
Hierarchical control
c.
Decentralized control
d.
Bottom-up control
e.
Balanced control
45. Decentralized control is usually implemented in all of the following areas EXCEPT:
a.
self-control.
b.
peer group.
c.
corporate culture.
d.
employee selection and socialization.
e.
the quality control department.
46. At RWI Distilleries, rules and procedures are used only when necessary. Instead, shared goals and
values guide employee behavior. RWI uses what type of organizational control?
a.
Centralized control
b.
Hierarchical control
c.
Decentralized control
d.
Top-down control
e.
Balanced control
47. Which of the following allows employees to see for themselves the financial condition of the
company?
a.
Open-book management
b.
An economic value-added system
c.
Activity-based costing
d.
An inappropriate control system
e.
Market value-added system
48. The control “system” at FreshFood Corporation is based on the culture of the organization and norms
that develop in the individual work teams. This is an example of:
a.
bureaucratic control.
b.
decentralized control.
c.
organizational control.
d.
feedback control.
e.
none of these.
49. The goal of _____ is to get every employee thinking and acting like a business owner.
a.
management-by-walking around
b.
closed-book management
c.
MBO
d.
open-book management
e.
just-in-time inventory systems
50. Silver n’ Gold Inc. recently introduced a new control philosophy where all employees have access to
the same information that owners have, such as what money is coming in and where it is going. This
is an example of which control philosophy?
a.
Balanced scorecard
b.
Six Sigma
c.
Continuous improvement
d.
Total quality management
e.
Open-book management
51. Total quality management:
a.
is based on the ideas of Frederick Taylor.
b.
gives managers total responsibility for achieving quality goals.
c.
gives all employees the responsibility for achieving quality goals.
d.
was first successfully implemented in the United States.
e.
is all of these.
52. Which of the following is a philosophy of organization-wide commitment to continuous improvement,
focusing on teamwork, customer satisfaction, and lowering costs?
a.
Engineering
b.
Total quality management
c.
Outsourcing
d.
Culture
e.
Diversity
53. Charlie, a manager at a textile company, is bothered by a lack in quality of products manufactured by
his company. Charlie hopes to infuse quality into the company through continuous improvement by
involving everyone who works there. This describes which control philosophy?
a.
Balanced scorecard
b.
Six Sigma
c.
Continuous improvement
d.
Total quality management
e.
Open-book management
54. A quality circle is a group of _____ volunteer employees.
a.
2 to 4
b.
6 to 12
c.
10 to 20
d.
15 to 25
e.
30 to 50
55. A group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting
their common work activities is a _____.
a.
feedforward control group
b.
work team
c.
quality circle
d.
committee
e.
problem team
56. Heather belongs to an informal group at work that meets twice a month to discuss common issues and
problems in the workplace. Recently, this group has been focusing on ways to improve safety in the
workplace. This group is an example of:
a.
a safety group.
b.
a quality circle.
c.
an ad-hoc committee.
d.
a problem team.
e.
none of these.
57. Quality circles are based on the assumption(s) that:
a.
the people who do the job know it better than anyone else.
b.
quality can be increased by increasing the size of the organization.
c.
quality can be increased by talking more about it.
d.
the more employees talk, the more satisfied they will be.
e.
all of these.
58. Which of the following is the process of measuring your organizational process against the best in the
industry?
a.
Outsourcing
b.
Continuous improvement
c.
Environmental analysis
d.
Benchmarking
e.
Competitive measurement
59. Which of the following is a quality control approach that emphasizes a relentless pursuit of higher
quality and lower costs?
a.
Continuous improvement
b.
Cycle time
c.
Quality circles
d.
Six Sigma
e.
Benchmarking
60. Which quality control technique uses a five-step methodology to define, measure, analyze, improve,
and control processes, otherwise referred to as DMAIC?
a.
Quality circles
b.
Six Sigma
c.
Benchmarking
d.
Balanced scorecard
e.
Continuous improvement
61. It seems that once a year the managers of Stone Construction, Inc. attempt a major organization
intervention, such as management-by-objectives. They never seem to be satisfied with the performance
of Stone Construction and, sure enough, 12 months later, along comes another major intervention. By
implementing organizational change in this way, Stone Construction’s management may well be
violating the principle of:
a.
benchmarking.
b.
continuous improvement.
c.
unity of direction.
d.
top-down control.
e.
none of these.
62. _____ is(are) most beneficial when employees have challenging jobs.
a.
Six Sigma
b.
Total Quality Management
c.
Kaizen
d.
Quality circles
e.
Continuous improvement
63. Contingency factors that can influence the success of a TQM program in a positive way include all of
the following EXCEPT:
a.
tasks make high skill demands on employees.
b.
TQM serves to enrich jobs and motivate employees.
c.
problem-solving skills are improved for all employees.
d.
participation and teamwork are used to tackle significant problems.
e.
managers wait for big, dramatic innovations.
64. _____ standards represent an international standard for quality management.
a.
ISO 9000
b.
Six Sigma
c.
TQM
d.
Kiazan
e.
Foreign Economy Index
65. A contingency factor that can influence the success of a TQM program in a negative way is that:
a.
continuous improvement is a way of life.
b.
TQM serves to enrich jobs and motivate employees.
c.
problem-solving skills are improved for all employees.
d.
participation and teamwork are used to tackle significant problems.
e.
union leaders are left out of QC discussions.
66. Contingency factors that can influence the success of a TQM program in a negative way include all of
the following EXCEPT:
a.
tasks make high skill demands on employees.
b.
management expectations are unrealistically high.
c.
middle managers are dissatisfied about loss of authority.
d.
workers are dissatisfied with other aspects of organizational life.
e.
managers wait for big, dramatic innovations.
67. Which of these is based on a set of international standards for quality?
a.
Quality circle
b.
Corporate governance
c.
ISO certification
d.
Open-book management
e.
Balance scorecard
68. Which of the following refers to the system of governing an organization so that the interests of
corporate owners are protected?
a.
Quality circle
b.
Corporate governance
c.
ISO certification
d.
Open-book management
e.
Balance scorecard
CASE
Scenario – Katrina Aldridge
The yearly auditing review of Pilgrim Industries is scheduled for next month. Katrina Aldridge is
preparing for that audit and is also preparing her budget for the coming year.
1. Which of these budgets will provide Katrina information about planned investments in major assets
like buildings and heavy machinery?
a.
Cash budget
b.
Revenue budget
c.
Capital budget
d.
Expense Budget
e.
Balance-Sheet budget
2. In planning and budgeting for the next 12 months, Katrina is participating in a budgeting process in
which lower-level manager’s budget their department’s resource needs and pass them up to top
management for approval. This budget process is an example of:
a.
zero-based budgeting.
b.
bottom-up budgeting.
c.
top-down budgeting.
d.
balance sheet budgeting.
e.
none of these.
3. Katrina has also requested that the financial ratios be calculated and analyzed for her. Which of the
following ratios will give her the best information for evaluating liquidity?
a.
Profit margin on sales
b.
Current ratio
c.
Conversion ratio
d.
Return on assets
e.
None of these.
COMPLETION
1. The systematic process through which managers regulate organizational activities is known as _____.
2. _____ focuses on whether performance meets established standards.
3. When _____ deviates from a(n) _____, managers must interpret the deviation.
4. A(n) _____ is defined as any organizational department or unit under the supervision of a single
person who is responsible for its activity.
5. A(n) _____ includes anticipated and actual expenses for each responsibility center and for the total
organization.
6. A(n) _____ lists forecasted and actual revenues of the organization.
7. The _____ estimates receipts and expenditures of money on a daily or weekly basis to ensure that an
organization has sufficient cash to meet its obligations.
8. The _____ lists planned investments in major assets such as buildings, trucks, and heavy machinery,
often involving expenditures over more than a year.
9. In a traditional _____ approach, budgeted amounts for the coming year are imposed on middle– and
lower-level managers.
10. A budgeting process in which middle and lower-level managers set departmental budget targets in
accordance with overall company revenues and expenditures specified by top management is called
_____ budgeting.
11. A budgeting process in which lower-level managers budget their departments’ resource needs and pass
them up to top management for approval is called _____ budgeting.
12. The _____ provides three types of information: assets, liabilities, and owners’ equity.
13. The firm’s financial performance for a given time period is shown on the _____.
14. A(n) _____ ratio indicates an organization‘s ability to meet its current debt obligations.
15. A(n) _____ ratio measures internal performance with respect to key activities defined by management.
16. The percentage representing what a company earned from its assets is called _____.
17. _____ involves monitoring and influencing employee behavior through extensive use of rules,
policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms.
18. _____ control uses cultural values, traditions, shared beliefs, and trust to generate compliance with
organizational goals.
19. Sharing financial information and results with all employees in the organization is called _____
management.
20. An organization wide commitment to infusing quality into every activity through continuous
improvement is called _____.
21. A group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting
their common work activities is known as a(n) _____.
22. The continuous process of measuring products, services, and practices against major competitors or
industry leaders is called _____.
23. The implementation of a large number of small, incremental improvements in all areas of the
organization on an ongoing basis is referred to as _____.
24. _____ refers to the system of governing an organization so that the interests of corporate owners are
protected.
SHORT ANSWER
1. List the four steps in the feedback control model.
2. List the four major perspectives of a balanced scorecard.
ESSAY
1. Identify and briefly describe the four steps of the feedback control model.
2. Discuss the evolution of the balanced scorecard from a system that places equal emphasis on
performance management categories to one that emphasizes cause and effect.
3. Describe the difference between a balance sheet and an income statement.
4. Identify and briefly describe each of the common financial ratios addressed in your text.
5. Compare hierarchical control with decentralized control.
6. Discuss open-book management and the balanced scorecard.
7. In a TQM program, what is benchmarking?
8. Discuss the positive and negative factors that can influence the success of a TQM program.
