Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Skill Building Portfolio
Terms to Define:
After-action review
Balance sheet
Balanced scorecard
Breakeven analysis
Breakeven point
Economic order quantity
External control
Feedback control
Feedforward control
Gantt chart
Improvement objectives
Income statement
Input standards
Internal control (self-control)
Inventory control
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
TestPrep 6: Multiple-Choice Questions
1. After objectives and standards are set,
what step comes next in the control
process?
2. When a soccer coach tells her players at
the end of a losing game, “You did good
in staying with the game plan,” she is
using a/an ____________ as a measure
of performance.
3. When an automobile manufacturer is
careful to purchase only the highest-
quality components for use in
(c) inventory
4. Management by exception means
____________.
5. A total quality management program is
most likely to be associated with
____________.
(c) return on equity
(d) breakeven analysis
(d) after-action
7. When MBO is done right, who does the
review of a team member’s performance
accomplishments?
and a lawyer
8. A good performance objective is written
in such a way that it ____________.
9. A team leader is not living up to the
____________.
(a) sets performance objectives for
subordinates
10. If an organization’s top management
establishes a target of increasing new
hires of minority and female candidates
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
11. When a supervisor works alongside of
an employee corrects him or her
immediately when a mistake is made,
12. When one team member advises another
team member that “your behavior is
crossing the line in terms of our
expectations for workplace civility,” she
is exercising a form of ________ control
over the other’s inappropriate behaviors
13. In CPM/PERT, “CPM” stands for
____________.
14. In a CPM/PERT analysis, the focus is on
____________ and the event
____________ that link them together
with the finished project.
the ____________.
(a) debt ratio
(b) net margin
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Short-Response Questions
16. What type of control is being exercised in the U.S. Army’s after-action review?
17. How could clan control be used in a TQM program?
One way to use clan control in a TQM context would be to set up small teams or task forces
called “Quality Circles” that bring together persons from various parts of the work place with
18. How can a just-in-time system reduce inventory costs?
The just-in-time inventory approach reduces the carrying costs of inventories. It does this by
trying to have materials arrive at a work station just in time to be used. When this concept
19. What four questions could be used to set up a balanced scorecard for a small business?
The four questions to ask when developing a balanced scorecard are: (1) Financial
Integration and Application Question
Integration and Application Question
20. Put yourself in the position of a management consultant who specializes in MBO. The local
Small Business Enterprise Association has asked you to be the speaker for its luncheon
next week. The president of the association says that the group would like to learn more
about the topic: “How to Use Management by Objectives for Better Planning and Control.”
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Questions: Your speech will last 15 to 20 minutes. What is the outline for your speech?
How will you explain the potential benefits of MBO to this group of small business owners?
I would begin the speech by describing MBO as an integrated planning and control
approach. I would also clarify that the key elements in MBO are objectives and
Self-Assessment 6: Internal/External Control
Instructions
Circle either a or b to indicate the item you most agree with in each pair of the following
statements.
1. (a) Promotions are earned through hard work and persistence.
(b) Making a lot of money is largely a matter of breaks.
2. (a) Many times the reactions of teachers seem haphazard to me.
3. (a) The number of divorces indicates that more and more people are not trying to make their
5. (a) Getting promoted is really a matter of being a little luckier than the next guy.
(b) In our society, an individual’s future earning power is dependent on his or her ability.
7. (a) In my case, the grades I make are the results of my own efforts; luck has little or nothing
8. (a) People such as I can change the course of world affairs if we make ourselves heard.
9. (a) Much of what happens to me is probably a matter of chance.
Scoring
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Team Project 6: After Meeting/Project Review
Instructions
1. Complete the following assessment after participating in a meeting or a group project.
1. How satisfied are you with the outcome of the meeting project?
2. How do you think other members of the meeting/project group would rate you in terms
of your influence on what took place?
3. In your opinion, how ethical was any decision that was reached?
4. To what extent did you feel “pushed into” going along with the decision?
5. How committed are you to the agreements reached?
5. Did you understand what was expected of you as a member of the meeting or project
group?
7. Were participants in the meeting/project group discussion listening to each other?
8. Were participants in the meeting/project group discussion honest and open in
communicating with one another?
9. Was the meeting/project completed efficiently?
10. Was the outcome of the meeting/project something that you felt proud to be a part of?
2. Make sure that everyone in your group completed this assessment for the same team project.
3. Each person in the group should then take the “mirror test.” They should ask: (a) What are my
thoughts about my team and my contributions to the team, now that the project is finished? (b)
What could I do in future situations to end up with a “perfect” score after a meeting or after a
project review?
4. Share results of both the assessment and mirror test with one another. Discuss their
5. Be prepared to share your team project results with the class as a whole.
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Practice Critical Thinking
Chipotle – Changing Fortunes
If controlling is the process of measuring performance and taking action to ensure desired
results, your next meal from Chipotle’s should be a good one. Since its humble beginnings in
Case discussion questions and suggested answers:
1. DISCUSSION
How did CEO Steve Ells use the control process to move Chipotle forward with success?
Explain your answer by using at least three examples based on the case. How can the control
process be used to move the company out of its current downturn?
a. Financial Ratios (measuring actual performance): Same-store or comparable store sales is
one way Chipotle determines profitability for each of its stores from year-to-year. Same-store
sales refers to the difference in revenue generated by a Chipotle store over a certain period,
e. Quality Control: Steve Ells takes pride in serving products using only high-quality, natural,
fresh, sustainable ingredients. Finding and sourcing the very best ingredients raised with
respect for the animal (without the use of antibiotics or added hormones), the environment,
and the farmers (supporting family farmers).
f. External Control: Chipotle has established systems to control long lunch and dinner lines.
Controls are utilized to measure number of customers served per hour and customer wait
times.
How can the control process be used to move the company out of its current downturn?
The latest outbreak in Sterling, VA was a result of an employee working while ill. Chipotle
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
2. DISCUSSION
A balanced scorecard helps top managers exercise strategic control. The scorecard includes
customer satisfaction and internal process improvement. What do you recommend that
Chipotle do to implement the scorecard approach and consistently score high in each
category?
Customer satisfaction:
• Chipotle would probably score high on customer satisfaction. The company is
very focused on the customer experience. They provide each customer with
Internal Process Improvement:
• Internal process improvement: New process improvement asks: “How well do our
activities and processes directly increase value provided to our customers and
clients?”
3. FURTHER RESEARCH Go online to find and analyze Chipotle’s most recent annual
report. Check and critique the company’s recent financial performance. Review reports from
three competitors — e.g., Rubio, Baja Fresh, Qdoba, or Moe’s Southwest Grill. How are they
doing, and what threats, if any, do they post to Chipotle? How about product extensions?
Was the move to close all of its Shop-House Asian Kitchen Restaurants a good move?
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Why?
Chipotle’s most recent financial performance: Chipotle has 2,198 stores, which is more
than its four competitors (listed below) combined. This year, the company plans to open 200
Implemented an improved, industry-leading food safety system and assembled a Food Safety
Advisory Council to fulfill our commitment to establishing Chipotle as a food safety leader
Made meaningful changes to our leadership structure to strengthen our culture, improve
governance, and sharpen our focus on the customer;
2. Simplified our restaurant operations with a return to “doing a few things extraordinarily
well;”
In the “competition” section of its most recent annual report, it reads:
• “We compete with national and regional fast-casual, quick–service and casual dining
restaurants. Our competition also includes a variety of locally owned restaurants and
the deli sections and in-store cafes of several major grocery store chains. The number,
size and strength of competitors vary by region, market and even restaurant.
• Rubio: known as a fast casual “Fresh Mex” or “New Mex,” there are close to 200
locations. Rubio’s is known for its delicious fish tacos.
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
• Moe’s Southwest Grill has over 500 locations. Many of the items on the Moe’s menu
draw their names from pop culture. “Art Vandalay“ and “Close Talker“ (both from the
television series Seinfeld).
• Threats to Chipotle: While Chipotle outnumbers its competitors, the trend of “Fresh
Mex” or “New Mex,” using fresh ingredients (think: Chevys), has created increased
• Could the model be copied with Indian or Caribbean food? Yes. The format of
sustainability raised ingredients cooked using classic methods in front of the customer
Suggested Team Exercise for Chapter 6
Break the class into pairs and be sure that at least one student has a calculator in each pair.
Calculate the breakeven costs for this hamburger restaurant:
The selling price for each hamburger is $ 2.00 each
The average cost per burger is
Meat .50
In addition, the cost per year for rent, insurance, property taxes, and utilities which are on all the
time is $75,000.
A) How many hamburgers does the restaurant need to sell to break-even?
B) How many do they need to sell to make a profit of $150,000 a year?
Schermerhorn & Bacharach Exploring Management 6th edition Instructor’s Manual
Calculations:
a) Unit costs are $1.25 per burger obtained by adding the costs above.
b) The goal is to make a profit of $150,000 after covering all costs. Since we already know the
BEP is 100,000 burgers and we know that we make $.75 per burger, then the restaurant needs to