Ch11 Organizational Control and Change Exam Prep

Contemporary Management, 11e (Jones)

Chapter 11 Organizational Control and Change

1) Control helps managers build competitive advantage.

2) A control system must to be flexible in order to be effective.

3) In a highly programmed work environment, it is more challenging for managers to measure outputs or behavior.

4) Behaviors are generally easier to measure than outputs because they are more tangible and objective.

5) Leverage ratios measure organizational performance based on how well managers borrow money or use equity to finance operations.

6) An organization is said to be highly leveraged if it uses more debt than equity to finance its ongoing operations.

7) Financial information provides managers with sufficient information to measure the four building blocks of competitive advantage.

8) A comprehensive system of rules and SOPs encourages employees to think for themselves.

9) Clan control relies on values and norms to keep organization members goal-directed.

10) Art's organization just announced that, effective immediately, an entirely new product division will be formed, seeded with functional resources from each existing division. This is an example of evolutionary change.

11) ________ is the process by which managers monitor and regulate the efficiency and effectiveness of workers in performing activities necessary to achieve organizational goals.

A) Planning

B) Organizing

C) Leading

D) Controlling

E) Coordinating

12) ________ systems are the formal monitoring, evaluation, and feedback systems that allow managers to determine if the organization's strategy and structure are working according to plan.

A) Cultural

B) Routine

C) Control

D) Nonprogrammed

E) Organizing

13) In order to anticipate problems before they arise, managers should develop a system for ________ control.

A) feedforward

B) concurrent

C) behavior

D) bureaucratic

E) clan

14) When working with suppliers, TechCo provides detailed product specifications to help control the quality of inputs it will receive. This is an example of ________ control.

A) conversion

B) concurrent

C) output

D) feedforward

E) feedback

15) To ensure the right clerk is selected for an opening, a law firm reviews all résumés electronically and assesses candidates through several interviews. This is an example of ________ control.

A) concurrent

B) feedforward

C) output

D) bureaucratic

E) clan

16) A manufacturing company that produces bolts and washers decides to use a new steel supplier. The manufacturing company wants to ensure that the materials from the supplier are delivered on time and within the specifications needed to meet the manufacturing company's product goals. What form of control system could the manufacturing company implement to ensure its needs are met?

A) concurrent

B) feedforward

C) output

D) bureaucratic

E) clan

17) During the conversion stage, managers use ________ control to recognize when problems are arising.

A) feedforward

B) bureaucratic

C) concurrent

D) input

E) clan

18) In concert with quality management programs, ________ controls help monitor the quality of goods or services at each step in the production process to alert managers to problems.

A) feedforward

B) concurrent

C) feedback

D) bureaucratic

E) clan

19) A coffee shop uses an online system to engage customers. After each transaction, customers receive a text asking them to rate their experience with either a smiley, neutral, or sad face emoji. This practice is an example of ________ control.

A) behavioral

B) concurrent

C) bureaucratic

D) feedforward

E) feedback

20) An online clothing retailer discovered that the majority of the returns it received were the result of incorrect sizing. The retailer then worked with the clothing manufacturing company to improve the accuracy of its sizing patterns. This demonstrates the use of ________ control.

A) feedforward

B) concurrent

C) input

D) feedback

E) bureaucratic

21) A control process begins with

A) measuring actual performance.

B) comparing actual performance against chosen standards.

C) implementing feedback measures.

D) establishing performance standards.

E) initiating corrective action.

22) A customer service team identifies a goal of three business days for addressing all customer concerns. In the context of a control process, this goal is

A) measuring actual performance.

B) comparing actual performance against chosen standards.

C) implementing a feedback measure.

D) establishing a standard of performance.

E) initiating corrective action.

23) Organizational performance can be hindered when managers

A) adopt performance standards geared toward employee behavior.

B) set stretch goals for employees.

C) establish operating budgets that regulate how goals are attained.

D) take corrective action on all performance outputs.

E) focus on only one performance standard instead of many different standards.

24) School attendance records in the context of a control process are an example of

A) evaluating performance.

B) initiating corrective action.

C) measuring actual performance.

D) comparing results.

E) revising performance standards.

25) What is true regarding measuring actual performance?

A) Managers only evaluate outputs, as behaviors are intrinsically complex.

B) Outputs and behaviors are both important and easily measured.

C) It is easier to measure the outputs and behaviors of nonroutine activities.

D) Outputs are generally easier to measure than behaviors because they are more tangible and objective.

E) Managers typically measure behaviors first and then outputs.

26) Which of these performance standards would managers find the most difficult to measure?

A) the creativity of a research engineer

B) an employee's ability to meet deadlines

C) the success of a product

D) an employee's adherence to rules

E) the money spent on organizational resources

27) Once managers have measured actual performance, they should

A) revise accepted standards.

B) compare actual performance to the standards.

C) establish the standards of performance.

D) initiate corrective action.

E) develop goals and objectives.

28) After evaluating measures of performance, managers must

A) decide whether to take corrective action.

B) define acceptable standards in detail.

C) measure outputs and behaviors.

D) define detailed corrective action.

E) compare standards to results.

29) The managers at a research company interview members of an underperforming team. They determine the team's office is too distracting, so they decide to build a dedicated lab environment to enable the team to meet its deadlines. This is an example of

A) initiating corrective action.

B) measuring actual performance.

C) establishing the standards of performance.

D) comparing actual performance to the standards.

E) measuring employee behaviors.

30) The company's top executives meet quarterly to review its performance. They focus on the results of several measures regarding efficiency, quality, customer responsiveness, and innovation compared to previously established goals. Based on these results, the leadership team decides on the next steps for addressing performance gaps. This activity reflects a

A) clan control strategy.

B) management by objectives strategy.

C) bureaucratic system.

D) control system.

E) feedforward process.

31) Why is return on investment (ROI) the most commonly used financial performance measure?

A) It predicts whether profits will cover fixed costs.

B) It helps monitors the level of debt an organization is carrying in order to maintain a good credit rating.

C) It shows whether organizations can pay creditors without selling assets.

D) It measures how efficiently managers are turning inventory over.

E) It allows managers of one organization to compare performance with that of other organizations in its industry.

32) ________ is a company's operating profit divided by its sales revenues.

A) Gross profit margin

B) Return on investment

C) Net profit margin

D) Operating margin

E) Return on sales

33) Why would a company calculate its operating margin?

A) to evaluate how well resources are being used to generate profits

B) to determine how efficiently it is using resources to make and sell products

C) to assess if it has the resources to meet the claims of short-term creditors

D) to evaluate how efficiently managers are turning inventory over

E) to monitor if managers are collecting revenue from customers

34) ________ ratios measure the ability of an organization to pay its short-term debts.

A) Leverage

B) Liquidity

C) Activity

D) Profit

E) Inventory turnover

35) You are a CEO who wants to determine whether the company has sufficient resources available to address loan and interest payments that are due to some short-term creditors. Which measure would you find most useful?

A) days sales outstanding ratio

B) operating margin

C) return on investment

D) current ratio

E) debt-to-assets ratio

36) A(n) ________ calculation helps managers assess a firm's ability to meet payments to short-term creditors without impacting inventory levels.

A) quick ratio

B) current ratio

C) days sales outstanding ratio

D) inventory turnover ratio

E) profit ratio

37) The times-covered ratio, which measures the degree to which managers use debt or equity to finance ongoing operations, is a type of ________ ratio.

A) current

B) liquidity

C) leverage

D) activity

E) profit

38) To measure how well the managers of an equipment rental service are converting the company's assets into value, ________ ratios would be used.

A) leverage

B) liquidity

C) profit

D) current

E) activity

39) To establish stretch goals for an organization, managers should

A) set goals optimized for each team and independent of the goals in other teams.

B) let subordinates set goals for themselves.

C) set specific and challenging goals that are within reach.

D) define easy to achieve goals not previously attempted.

E) set visionary goals that might not be unattainable but are directionally correct.

40) What is an operating budget?

A) a measure of how much profit a company is earning on sales

B) the actual cost of running the business for a specified time period

C) the amount an organization has left after all the costs of making the product and running the business have been deducted

D) the amount of money the business's owners are willing to spend during a fiscal year

E) a blueprint that states how managers intend to use organizational resources to achieve organizational goals efficiently

41) As a regional manager, Maria's performance is evaluated on the difference between her region's sales revenues and the cost of making the goods and services sold. Maria is being evaluated using a(n) ________ budget approach.

A) profit

B) revenue

C) cash flow

D) cost

E) expense

42) Each fiscal year, Dwayne is allocated an operating budget and then evaluated based on the amount of goods produced by his organization. Dwayne's performance is evaluated on a(n) ________ budget approach.

A) revenue

B) cash flow

C) expense

D) profit

E) capital

43) When evaluating performance based on a revenue budget approach, on what would you advise managers to focus?

A) whether the organization sells more product than other organizations

B) the organization's efficiency in generating sales

C) how well the organization generates earnings from goods and services sold

D) how much profit the organization can make with a fixed cost structure

E) whether the organization manages inventory well relative to sales

44) ________ is a technique used to control behavior.

A) Clan control

B) Direct supervision

C) Output control

D) Force-field theory

E) Organizational change

45) What is the most instantaneous and powerful form of behavior control?

A) SOPs

B) an MBO system

C) rules

D) direct supervision

E) bureaucracy

46) Mitchell regularly walks through the manufacturing floor, checking each station and guiding workers on his team. This is an example of

A) clan control.

B) an MBO system.

C) bureaucratic control.

D) output control.

E) direct supervision.

47) As a behavior control technique, direct supervision is

A) expensive and requires more managers.

B) less effective than other techniques.

C) best suited to complex jobs.

D) highly motivating to employees.

E) preferred over output control.

48) Jared is considering using a direct supervision technique to influence his subordinates' behavior. What is a potential outcome of this choice?

A) Jared will be able to minimize his personal time spent managing the team.

B) Jared's subordinates may feel scrutinized and become less motivated to work.

C) Jared will see some, but minimal, positive results as this is not a highly effective technique.

D) Jared will spend more time developing standardize operating procedures for his subordinates to follow.

E) Jared's subordinates will appreciate having their behaviors standardized.

49) ________ is a behavior control technique that provides a framework to monitor progress toward the achievement of goals.

A) Management by objectives

B) Direct supervision

C) Clan control

D) Top-down change

E) Bureaucratic control

50) Each year, employees of a real estate agency meet with their direct manager to set individual sales targets based on the agency's overall goals. Each employee reviews his or her progress with his or her manager quarterly and is awarded a relative bonus. This is an example of

A) bureaucratic control.

B) an operating standard.

C) management by objectives.

D) total quality management.

E) clan control.

51) MBO starts when top managers

A) determine subordinates' goals.

B) review subordinates' progress toward meeting goals.

C) implement direct supervision.

D) establish overall organizational objectives.

E) link performance evaluations to rewards.

52) Why is it advantageous to have subordinates participate in goal setting?

A) It strengthens subordinates' commitment to achieving goals and meeting budgets.

B) It centralizes the responsibility of setting goals and achieving those goals.

C) It enables direct supervision and scrutiny of employees.

D) It permits complete evaluation of employees over relatively short periods.

E) It allows managers to set goals that are slightly above an employee's reach.

53) ________ is control through a comprehensive system of rules and standard operating procedures (SOPs).

A) Bureaucratic control

B) Management by objective

C) Direct supervision

D) Clan control

E) Behavior control

54) When faced with problems, ________ can help regulate employee behavior.

A) rules and SOPs

B) output controls

C) feedback controls

D) decentralized authority

E) management by objective

55) A ________ control technique accomplishes standardized behavior and work outputs.

A) direct supervision

B) bureaucratic

C) management by objectives

D) feedforward

E) clan

56) What is a potential downside of using a bureaucratic approach to control behavior?

A) Increasing standardization requires greater investment in organizational learning.

B) Bureaucratic control is only useful for routine, well-understood organizational activities.

C) Too many rules can stop employees from thinking for themselves.

D) Bureaucratic control leads to the production of goods and services with inconsistent quality.

E) Rules and SOPs increase misunderstandings over responsibility and the use of power.

57) The values, norms, and expectations of behavior that control how workers interact with one another within an organization represent the organization's

A) objectives.

B) culture.

C) output controls.

D) SOPs.

E) feedback controls.

58) An online footwear company advertises that for every pair of shoes sold, a pair will be donated to someone in need. Employees at the company can multiply those donations by meeting specific sales and customer-service goals. The company is using ________ to influence employee behavior.

A) feedback

B) clan control

C) management by objectives

D) feedforward control

E) bureaucratic control

59) Clan control

A) is independent of organizational culture.

B) has decreased in organizations over the past few years.

C) standardizes behavior and leads people to behave in predictable ways.

D) helps keep organization members goal-directed while remaining open to new opportunities.

E) does not apply to many of the most significant organizational activities.

60) ________ is the movement of an organization away from its present state toward some preferred future state to increase its efficiency and effectiveness.

A) Benchmarking

B) Management by objectives

C) Evolutionary change

D) Bureaucratic control

E) Organizational change

61) According to the force-field theory,

A) change occurs when factors forcing change balance with factors contributing to resistance.

B) a wide variety of forces arises from the way an organization operates that make organizations resistant to change.

C) forces that support clan control are significantly different from the forces that form the foundation of organizational culture.

D) the forces of evolutionary change and revolutionary change are equal and complement each other.

E) an organization is in a state of inertia when it reduces the forces for change and increases resistance to change.

62) A state of inertia occurs when

A) an organization increases the forces for change.

B) an organization reduces resistance to change.

C) the forces for change and the resistance to change are evenly balanced.

D) the forces for change decrease, while the resistance to change decreases.

E) the forces for change decreases, while the resistance to change increases.

63) As the leader of a company, you want to see your company reach a higher level of sales performance. According to the Lewin's force-field theory, what must you do?

A) increase the forces for change and resistance to change

B) decrease the forces for change and resistance to change

C) increase the forces for change and reduce resistance to change

D) increase the resistance to change

E) decrease the forces for change

64) To achieve compliance with a new industry standard, a company develops a five-year plan in which goals are set for each year with incremental organizational changes focusing on one area of the new standard. This is an example of

A) revolutionary change.

B) managed change.

C) structural change.

D) cultural change.

E) evolutionary change.

65) A key characteristic of evolutionary change is that it is

A) widespread.

B) unexpected.

C) short-lived.

D) dramatic.

E) narrowly focused.

66) When arriving at work Monday, Melissa learns that her entire organization is now reporting to a newly formed business unit focused on breaking into international markets. Her company is going through a(n) ________ change.

A) cultural

B) top-down

C) bottom-up

D) revolutionary

E) evolutionary

67) A key characteristic of revolutionary change is that it is

A) gradual.

B) incremental.

C) narrowly focused.

D) a continuous attempt to improve.

E) unexpected.

68) When deciding what change to make to address a problem, an organization must also consider

A) why the change is needed.

B) the source of the problem.

C) obstacles associated with the change.

D) how to introduce and manage the change.

E) how to evaluate the change.

69) To continuously improve efficiency and effectiveness, an organization must first

A) evaluate the potential of change.

B) decide on what change to make.

C) implement desirable change.

D) assess the need for change.

E) identify obstacles to change.

70) A ________ change is gradual, and managers at all levels work together to develop a detailed plan for change.

A) top-down

B) revolutionary

C) bottom-up

D) controlled

E) restructuring

71) What is the purpose of benchmarking?

A) to help introduce and manage change

B) to assess the need for change

C) to decide on which change to make

D) to get buy-in on a proposed change

E) to evaluate the success of a change

72) ________ control allows managers to get immediate feedback on how efficiently inputs are being transformed into outputs.

A) Clan

B) Bureaucratic

C) Feedforward

D) Feedback

E) Concurrent

73) One of Sanjay's work responsibilities is to check inspection stations periodically to monitor the quality of the products throughout the production process. This is an example of ________ control.

A) concurrent

B) clan

C) feedback

D) feedforward

E) bureaucratic

74) After measuring and evaluating the manufacturing performance of a new product, a manager raises the performance standard for the next production cycle. For what reason might a manager decide to raise the standard?

A) The quality of the product did not meet the original standards.

B) The manager wants to challenge subordinates.

C) The actual performance was lower than expected.

D) The performance standards were not precise.

E) Managers must constantly raise performance standards.

75) To monitor financial performance, a(n) ________ ratio is used to assess cost of goods sold relative to inventory levels.

A) profit

B) operating

C) activity

D) leverage

E) liquidity

76) The owner of a food truck monitors employee efficiency by counting the number of customers served and the cost of goods sold. This is an example of ________ control.

A) feedforward

B) bureaucratic

C) concurrent

D) behavior

E) output

77) ________ control tends to be the first type of control that managers at all levels use to evaluate performance.

A) Bureaucratic

B) Feedforward

C) Feedback

D) Clan

E) Output

78) ________ is most likely to cause organizational costs to increase.

A) Direct supervision

B) Management by objectives (MBO)

C) Output control

D) Bureaucratic control

E) Clan control

79) Management by objectives (MOB) is a mechanism of

A) direct supervision.

B) top-down control.

C) behavior control.

D) output control.

E) bureaucratic control.

80) The CEO of a large corporation mandates that new goals be implemented immediately. This is an example of

A) evolutionary change.

B) revolutionary change.

C) bottom-up change.

D) concurrent control.

E) management by objectives (MBO).

81) The managers at a theme park are comparing the number of annual passes they sold last year with the number of annual passes sold by other high-performing parks. This is an example of

A) concurrent control.

B) management by objectives.

C) feedback control.

D) benchmarking.

E) financial performance measurement.

82) A restaurant manager routinely measures the number of customer complaints and how often customers leave negative reviews on its social media page. These controls help the restaurant improve its

A) efficiency.

B) quality.

C) innovation.

D) liquidity.

E) competitiveness.

83) Rentals Plus recently implemented a customer relationship management (CRM) system that tracks wait times and end-of-call evaluations for customer service representatives. This is an example of a control that helps manage

A) efficiency.

B) quality.

C) technology.

D) customer responsiveness.

E) innovation.

84) An executive report lists divisional goals with related operating budget status and measures of financial performance. This report demonstrates

A) concurrent control.

B) management by objectives.

C) behavior control.

D) benchmarking.

E) output control.

85) At the output stage of a production process, ________ is used to detect problems and trigger management action.

A) feedback control

B) management by objectives

C) concurrent control

D) benchmarking

E) financial performance measurement

86) For each of the four building blocks of competitive advantage, explain how organizational control can help achieve success.

87) For each stage in the process of transforming inputs into finished goods or services, identify the type of control managers use to measure performance. Provide an example for each control type.

88) Define the four steps in the control process.

89) For an organization focused on profit, define two commonly used financial measures and explain what they indicate about performance.

90) Explain how goal-setting relates across different levels of an organization. What characteristics do effective goals possess?

91) Define three techniques for managing employee behavior and describe how they help an organization progress toward meeting goals.

92) Describe the steps an organization would take to manage by objectives.

93) Explain the consequences of having too many rules or forcing too much standardization in an organization.

94) Describe Lewin's force-field theory. What causes an organization to stagnate? What needs to happen for an organization to change?

95) Distinguish between evolutionary change and revolutionary change. Provide an example where managers might implement each type of change.

96) How have advancements in information technology affected organizational control systems?

97) Compare the operation of a vehicle cruise control system to the control process of an organization.

98) Indira was recently promoted to a functional manager position. What challenge will Indira face in setting goals for her new subordinates?

99) Explain how a bureaucratic control approach can reduce the effort required by managers to monitor outputs.

100) Explain the relationship between organizational control and organizational change.