Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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Instructor Manual
Chapter 14: Managing Control Systems, Finances, and People
Work Application Sample Answers
Most of the answers are actual student answers or based on student answers. You may give
these answers as part of your lecture before, after, or in place of getting student answers.
14-1. Using Exhibit 14-1, identify the primary organizational inputs, transformation
process, outputs, and customers of a firm you work for or have worked for. Also,
identify the level of customer satisfaction.
Last summer, I worked for a company that made corrugated cardboard boxes. The input was
14-2. Building on Work Application 14-1, give examples of preliminary, concurrent,
rework, and damage controls for an organization you work for or have worked for.
As a preliminary control, we would have to clean our work area regularly and follow safety
14-3. Building on Work Applications 14-1 and 14-2 and using Exhibit 14-2, illustrate the
systems process for a department you work for or have worked for within an
organization. Be sure to give examples of preliminary, concurrent, rework, and damage
controls for your department.
Instructor Resource
Lussier, Management Fundamentals 8e
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14-4. Building on Work Applications 14-1 through 14-3, illustrate the systems process
you personally use within your department. Be sure to give examples of preliminary,
concurrent, rework, and damage controls you personally use.
My actual job was to catch the boxes as they came out of the cutter and to stack them. My input
14-5. Give an example of a standard from an organization you work for or have worked
for that has the five characteristics of a complete standard.
As a waiter, my standard is to wait on no less than five tables (quantity) per hour (time) without
14-6. Give an example of the critical success factors for a job you have or had. Be sure
to place them in priority order (most important first) and to explain why they are
critical.
The knife on the corrugater is the critical success factor. If it is not set up right, all the boxes
14-7. Identify a situation in which corrective action was needed to meet an
objective/standard. Describe the corrective action taken to meet the objective/standard.
Our objective was to finish an order by 5:00 p.m. The belt on the conveyor broke, and no one
Instructor Resource
Lussier, Management Fundamentals 8e
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14-8. Give an example of a constant, a periodic, and an occasional control method used
by an organization you work for or have worked for. Identify each by name and explain
why it is classified as such.
A constant control where I work is a standing plan that states that all purchases over $500 must
14-9. Identify the major source(s) of revenue and expenses where you work or have
worked.
The major source of revenue where I worked was the sale of boxes. The major expenses were
wages, the cost of material to make the boxes, machine repair, and shipping costs.
14-10. Identify the major capital asset expenditures invested in by your present or a
past organization.
The major capital assets are the plant building and equipment to make the boxes.
14-11. Does the company you work for or have worked for make its financial statements
available to the public? If it does, get copies and review them. Also, does the
organization develop operating, capital expenditures, and financial budgets? If it does,
try to get copies for review. If you are not sure, call or talk to your present or past boss
to find out.
I worked for McDonald’s, which makes its financial statements available because it has
14-12. How would you rate your present or past boss’s coaching ability? Explain your
answer using critical incidents.
On a scale of 1–10, my summer boss’s coaching ability was an 8. He took time to tell us what
we were doing wrong and right, and was always very polite.
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14-13. Identify a problem employee you observed on the job. Describe how the person
affected the department’s performance.
Joel works in my department. He has been having marital problems the last few months, and it
14-14. Review the discipline guidelines in Exhibit 14-11. Identify any guidelines your
present or past boss did not follow.
My supervisor did not always discipline in private when rules were broken. I do not think he
14-15. Identify a complaint you brought to a manager. State the complaint and identify
which steps in the complaint-handling model the manager did or did not follow. If you
have never complained, interview someone who has.
When I worked part time at the local supermarket, I was always scheduled for both weekend
14-16. Identify a complaint you brought to a business. State the complaint and identify
which steps in the customer-handling model the person did or did not follow. If you have
never complained, interview someone who has.
I pay my bills using online banking. Macy’s said I didn’t pay my bill, but I did. I had to call
Review Question Answers
14-1. Why is damage control important?
Damage control is action taken to minimize negative impacts on customers/stakeholders due
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Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
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14-2. Why should you focus on preliminary and concurrent types of control rather than
rework and damage control?
Preventing problems and catching them before they have negative effects on customers create
14-3. Who are the primary customers/stakeholders for the outputs of the operations,
marketing, human resources, finance, and information functional
areas/departments?
The marketing department is the primary stakeholder for the operations department outputs.
14-4. What are the five areas of performance that standards measure?
14-5. Why is measuring performance important to an organization?
By measuring its performance, an organization determines to what extent it is successful and
14-6. What is shown in a performance report?
14-7. What is the role of reinforcement in the control systems process?
Reinforcement lets employees know that they are meeting or have met objectives/standards
Instructor Resource
Lussier, Management Fundamentals 8e
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14-8. What are the three constant control methods, the three periodic control methods,
and the four occasional control methods?
Constant controls include self-control, clan control, and standing plans. Periodic controls
14-9. What are the three steps in the master budgeting process?
The three steps in the master budgeting process are to develop the (1) revenue and expenditure
14-10. Why is the capital expenditures budget the most important budget?
The capital expenditures budget is the most important budget because it is based on developing
14-11. What is the difference between financial statements and financial budgets?
The difference between financial budgets and financial statements is that financial statements
14-12. What is the objective of coaching?
14-13. How do managers commonly demotivate employees?
14-14. What is the performance formula, and how is it used with coaching?
14-15. What are the three activities of management by walking around, and what is
the role of facilitating?
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Lussier, Management Fundamentals 8e
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14-16. What are the differences among coaching, counseling, and disciplining?
14-17. Identify a complaint you brought to a manager. State the complaint and
identify which steps in the complaint-handling model the manager did or did not
follow. If you have never complained, interview someone who has.
When I worked part time at the local supermarket, I was always scheduled for both
Communication Skills Answers
14-1. Recall a personal event that you had to help conduct, such as a party, shower, or
wedding. Identify preliminary, concurrent, rework, and damage controls, as well as
feedback. What did you learn from the experience and the textbook discussion that can
help you to plan and control better in the future?
14-2. Apply the control systems process to your college education. What are your
major objectives and standards? How do you measure and compare performance to
your objectives and standards? What current and future corrective action have you
taken? Do you reinforce your performance when meeting goals? If yes, how?
14-3. Employees tend to resist control and sometimes break the rules. Give examples
of things you or others have done to resist controls.
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Lussier, Management Fundamentals 8e
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14-4. How does your professor in this course use controls to reduce and/or eliminate
cheating on tests and other assignments?
14-5. How confident are you in your ability to develop budgets and read financial
statements? What experience have you had in developing budgets and reading
financial statements?
14-6. Do you feel that managers should spend more time on coaching and MBWA
techniques? Explain.
14-7. Which of the eight discipline guidelines is most relevant to you personally?
14-8. Can the need for discipline be reduced? If so, how?
Applying the Concept Answers
Applying the Concept 14-1: Types of Control
Identify the type of control used or required as
A. Preliminary
1. Francis is ordering the food for the menu special for Friday night.
A. Preliminary. Francis is planning ahead.
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3. Richard, just got a new laptop computer, and one of the keys on the keyboard doesn’t
work.
D. Damage. The laptop most likely will be exchanged, or possibly fixed.
Applying the Concept 14-2: Frequency and Methods of Control
Identify the one primary method of control.
Constant
A. Self
Periodic
D. Regular meetings and reports
Occasional
G. Observation
6. June, the manager, is talking to an employee to find out why the project is behind
schedule.
I. Special reports. The employee was asked by the boss to explain the problem.
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7. Tyson, signs are posted stating that helmets must be worn in the construction site.
8. “Kenny, have you completed the monthly inventory for shortages?”
9. “Katniss, a team member, says we really need you to pick up the pace if we are going
to ship this order out on time today, Tim.”
10. “I didn’t break it, Jamal. The thing just jammed and stopped working.”
11. “Helen, this isn’t enough money to operate my department at full capacity.”
12. “Deondre, I’m putting you in charge of hiring and overseeing the IT consultant to
transfer our information system to the cloud.”
J. Project. IT systems change occasionally and are projects.
13. The manager Brianna’s desk is directly facing the employees.
14. The accountant Bonita is out of town with a client, and her assistant is working
alone in the office.
A. Self. The assistant is working alone without the boss to impose controls.
15. Tinna is at the monthly managers meeting.
Applying the Concept 14-3: Financial Statements
Instructor Resource
Lussier, Management Fundamentals 8e
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Identify the account on the financial statement in the following examples:
Income statement
A. Revenue
16. Boston Consulting Group (BCG) completed a one day consulting job.
A. Revenues. BCG earned revenue income by providing a consulting service.
17. BCG received a check for its one day consulting job
18. BCG paid its consultants their monthly pay
B. Expenses. Payroll is an expense that offsets consulting revenues on the income statement.
19. BCG sold some stock to Ford
20. BCG pay its office leasing fee to Trump Towers
21. BCG makes a payment on the car fleet it bought from Ford
Applying the Concept 14-4: Guidelines for Effective Discipline
Identify which guideline is being followed—or not being followed—in the following
statements. Use the guidelines in Exhibit 14-8 as the answers.
22. “Katrina gave me a written warning for talking back to her again. She even made
me sign it before putting it in my permanent record file.”
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23. “Sandy, as part of orientation, you need to learn the rules. The computer program
will teach them to you and give you a test to make sure you understand them.”
A. Communicate standing plans. Rules and regulations are standing plans.
26. “Tony, that’s enough. Come into my office so that we can discuss your behavior.”
F. Discipline in private. In the manager’s office, others will not hear the discipline.
27. “Did you see that? Chris really lost it and yelled at Erin.”
30. “You’re lucky Jill. Professor Davidson didn’t take attendance today so you weren’t
marked absent.”
D. Take consistent, impartial action when the rules are broken. The professor is being
inconsistent by not taking attendance very day.
Join the Discussion
Join the Discussion 14-1: Academic Grades
Recall Join the Discussion 11-1 about academic standards in Chapter 11. Successful
managers establish and maintain high expectations for all their employees. As Lou Holtz
said, we need to set a higher standard. While students are doing less work than in prior years,
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
grades continue to go up, a trend called grade inflation. At one time, most colleges used a set
grade point average (GPA) to determine honors. But today, because of grade inflation, most
colleges use a system of ranking GPAs.
1. Why are professors giving higher grades today than were given 5, 10, or 20 years
ago?
2. Are students who are putting in less time and getting higher grades being well
prepared for a career with high standards after graduation?
3. Is it ethical and socially responsible for professors to drop standards and for colleges
to award higher grades today than they did 5, 10, or 20 years ago?
4. Should colleges take action to raise standards? If so, what should they do?
5. An important part of a professor’s job is to evaluate student learning through
grading. Do you believe your learning is evaluated effectively? How could it improve?
6. Do you find consistency among your professors’ standards in terms of the work
required in their courses and the grades given, or do some professors require a lot more
work and some give lots of As and others lots of lower grades? Should colleges take
action to improve consistency among professors’ standards? If so, what should they do?
Join the Discussion 14-2: Expenses
PricewaterhouseCoopers (PwC) is a large global accounting firm. When its employees
traveled to and from clients’ facilities and for clients, PwC paid the cost and then charged
travel expenses to the client. PwC’s practice was to charge the regular rate, when in fact it
was getting discounts. Clients accused PwC of overcharging them for travel. PwC said there
was nothing wrong with this practice, but it agreed to a several-million-dollar settlement to
resolve an Arkansas lawsuit over travel rebates.
1. Is it ethical and socially responsible for PwC to charge the full rate for travel
expenses when it gets discounts?
Instructor Resource
Lussier, Management Fundamentals 8e
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2. If you worked for a company and knew it did this, would you say anything to anyone
about it? If yes, to whom would you speak, and what would you say?
Join the Discussion 14-3: Disciplining Ethical Behavior
Unfortunately, some employees are rewarded for being unethical, while others are disciplined
for being ethical. For example, some auto repair shops pay a commission for work done, so
mechanics are paid more if they get customers to buy parts and services they don’t need.
Mechanics who have a below-average number of repairs may be considered underachievers
and may be pressured, through discipline, to perform unneeded repair work. Similarly, those
in the medical field may push unnecessary tests or even treatments.
1. Have you ever been in or known of a situation in which people were rewarded for
being unethical and disciplined for being ethical? If so, describe the situation.
2. Is it ethical and socially responsible for firms to establish controls that reward
unethical behavior and discipline ethical behavior to make more money?