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Exam 13: Foundations of Control

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Question 51

True/False

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Deviations outside the range of variation are significant and should receive management attention.

A) True
B) False

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Question 52

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Which of the following is not a step in the control process?

A) Measure actual performance.
B) Take appropriate action to correct any deviations.
C) Compare actual performance against the standard.
D) Develop the standard.

E) A) and C)
F) C) and D)

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Question 53

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Which of the following is a quality of an effective control system?

Which is not one of the entrepreneurial business valuation methods mentioned in the text?

Feedback controls do not enhance employee motivation.

Application of Qualities of Effective Control Systems Jared has been hired to establish a control system for SRP Inc. Jared knows several decisions must be made before the control system can be implemented. Several contingencies must also be considered. One of the first decisions that must be made is where to place the controls and what needs to be controlled. Jared also knows the organization is relatively small and will be for some time, and that management intends to decentralize extensively. Furthermore, management has indicated that if- then guidelines are to be implemented. Jared looks forward to designing a system that will work well for the company for years to come. -Since the organization is small, Jared should recommend that

Explain the control process.

Beta Corp. managers are allowed a great deal of autonomy and freedom, but they must stay within their budgets and follow corporate guidelines. Beta uses _____________control.

If organizational culture is threatening, formal externally imposed controls will be most appropriate.

What are some problems encountered with management by walking around (MBWA)?

Which of the following is characteristic of managerial control in less advanced countries?

Personal observation is a common source of information, that is frequently used to measure actual performance, even though it is time consuming and subject to perceptual biases.

Application of Designing a Control System Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms. -The organizational culture at Gina's company is very top down and threatening, what is the most likely form of control that will be adopted by the leaders of the company?

Very large organizations have_____________ controls.

Controls in organizations with more open and supportive the cultures are

Application of Types of Control Sam has not been receiving the information that he needs from his current control system. By the time Sam receives the information, the activity has occurred and there is nothing that can be done. Direct supervision is used extensively on the floor now, so some activities have been changed before they became costly mistakes. But Sam would like to do better. He would like to fix things before they break and anticipate more of the problems that occur. -Supervision is the best- known form of

A control system ought to both point out the problem and specify the solution.

Application of Types of Control Sam has not been receiving the information that he needs from his current control system. By the time Sam receives the information, the activity has occurred and there is nothing that can be done. Direct supervision is used extensively on the floor now, so some activities have been changed before they became costly mistakes. But Sam would like to do better. He would like to fix things before they break and anticipate more of the problems that occur. -Which form of control would Sam like to use?

An effective control system ensures that activities are completed in ways that

Application of Designing a Control System Gina realizes her unit needs to make some changes in its control system. However, she is uncertain which will work best for her organization. They are just one unit among five. She could base her unit's performance on their distinct product, and turn her unit into a profit center and evaluate against the company total. She could also use more heavily the rules, policies, regulations, and procedures already in place. She has not strictly enforced many of the regulations established by the home office. Part of the reason for this is that her unit is fairly self- regulating. The work groups set their goals and insure those goals are attained. Little latitude is allowed for a worker who does not meet the group norms. -What form of control is her unit currently using?