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Exam 14: Managerial Control

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Question 31

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Market control

A) does not assume that the interests of the organization and individuals naturally diverge.
B) is based on the idea that employees may share the values, expectations, and goals of the organization and act in accordance with them.
C) includes such items as budgets, statistical reports, and performance appraisals.
D) uses prices, competition, and exchange relationships to regulate activities.
E) is the use of rules, standards, regulations, hierarchy and legitimate authority to guide performance.

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

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Question 32

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A(n) ________ is an evaluation conducted by one organization of another organization.

A) external audit
B) market control
C) clan control
D) budget
E) activity-based costing

F) C) and D)
G) B) and D)

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Question 33

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Sullivan said to his manager, "Theo, I need to tell you that I have received an unsolicited offer from a competitor. I've enjoyed my eight years at Smith Enterprises, and I'd like to stay. But the offered salary is 20 percent higher than my current salary. The other firm cited what I have learned this past year on the public works job as a particularly valuable skill." Sullivan is a highly valued employee, and Theo has been grooming him as his successor. If Theo were to consider market rates as an important indicator of worth in responding to Sullivan, Theo would most likely

"This is the third time that our business unit has been sold in the past five years," said Bobbi. "Each time, our managers lose their jobs, and workers like us have to learn to work under new managers and new systems. Our business unit has been just a minor piece of several large diversified companies, and our performance has been compared to other business units' performance in these companies. As a result, we have been repeatedly bought and sold based on market controls, and employees often ________ as a result."

"Well, no wonder our customers are leaving us!" said George Levy, CEO of Baldwin Sports. "For the past year, our control system has measured and reported the days between order receipt and order shipped, rather than the days between order receipt and date requested by our customers. What we are measuring may make us look and feel good, but we are measuring the wrong thing!" Baldwin Sports is committing the "deadly sin" of performance measurement known as

"With the rollout of this new ________, we will be able to get a much more accurate picture of how each division-and, in fact, each operations manager, each sales manager, and each sales professional-is performing. And we will be able to hold each manager and employee more accountable. As a result, do not be surprised when we receive a lot of resistance from across the organization," said Angie Summers, CFO of Blunt International.

"After a long and costly two weeks, I have lots of data, that I don't know how to analyze. I don't know what constitutes good performance as opposed to bad performance," said Mickey to his boss. His boss replied, "Mickey, it sounds as if you failed to first establish a(n) ________ by which to assess your data."

________ is the second stage of budgetary control.

A(n) ________ is an evaluation of the effectiveness and efficiency of various systems within an organization.

Clan control is necessary when members of an organization lack common values, goals, and trust.

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

"My business relationship with the Midwest sales rep has really deteriorated. We used to cooperate; now we ________," said the manager of the Southwest region. "And I blame our new control system. Every month, managers across the entire enterprise get profit and loss statements for all divisions and business units. We look at one another's performance and are less likely to help one another when we know that our business unit or division may suffer a loss in profitability as a result. After all, promotions, salary increases, and bonus pools are tied to our profitability."

"Frank, if our top-level management wants us to produce a new line of lawn tractors over the next ten years, we will need to invest in another factory assembly line. And that's going to cost big bucks," said Butch Linfield, factory manager for GreenLawn Inc. "Please start greasing the skids internally. I don't want the home-office executives to be surprised when they see high-dollar fixed assets in my ________ budget."

________ has become a necessary part of a manager's control repertoire.

The last step in a typical control system is

Describe the criteria that effective control systems should meet.

Suzanne has recently reviewed a number of indicators of financial control. The one that troubled her, the ________, indicated that the company could have trouble meeting its short-term financial obligations.

External audits are useful for preliminary control because they

Select the definition of control.

A company is said to lack control when there is a(n) ________, that is the firm's expectations are not established in writing.