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Exam 14: Managing Control

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Question 41

True/False

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Controlling by profit and loss is most commonly used for the entire enterprise.

A) True
B) False

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Question 42

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A company enforced a rule that employees were required to submit their cell phones for safekeeping before entering their work bay. Employees followed the rule in order to avoid getting into trouble with the management. As a result, many of them missed important phone calls from their clients/customers. This scenario is an example of:

A) market control.
B) management myopia.
C) dysfunctional behavior.
D) rigid bureaucratic behavior.
E) resistance to control.

F) All of the above
G) A) and D)

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Question 43

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Which of the following is a reason why employees resist control systems?

Which of the following budgets is used for areas of the organization that incur expenses but no revenue?

An evaluation of the effectiveness and efficiency of various systems within an organization is called a(n) :

Allowing people to initiate their own corrective action encourages self-control and reduces the need for outside supervision.

The level of expected performance for a given goal: a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed is referred to as a(n) :

Scenario A. Use the information given below to answer the following questions. Omega Inc. is a large corporation founded in the 1950s. They produce chemical concentrates for industrial cleaning. They follow a strict set of rules and regulations. They have the ability to track a large amount of data using statistical techniques. Mid Atlantic Health Corp. is a regional medical center. They tie pricing of services and profits to specific services in the medical center. -Based on the given description, which of the following control systems does Omega Inc. follow?

After individuals gain employment, market-based wages lose their importance.

Which of the following is the first step in a typical control system?

Summarizing balance sheet items over a long period of time uncovers important trends.

A liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities is referred to as the:

When supervisors monitor behavior, they are exercising feedback control.

Budgeting information is confined to finances.

_____ show the relative amount of funds in the business supplied by creditors and shareholders.

Scenario B. Use the information given below to answer the following questions. Your manager is speaking to a group of employees about a problem in your department. Employees are not complying with the rules regarding the hours of work done per day. The rules in this situation are very important as the salary is linked to the number of hours worked. There are three suggestions being considered to address this problem: 1. Employees will be monitored at the entrance during shift changes to make sure that everyone enters data correctly. 2. Reports containing data tracking the number of hours worked will be reviewed regularly. Employees violating the rules will be counseled to correct the problem. 3. A new procedure will be developed describing an easier procedure for employees to ensure that they work the required number of hours. Training will be conducted so that each employee knows the policy and the procedure before it is enforced. -Which approach to bureaucratic control is exemplified by the second option?

The lack of controls can frequently cause irreparable damage to organizations.

Control based on the use of pricing mechanisms and economic information is referred to as:

The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed is known as _____ control.

Which of the following is a use of external audits?