CH 18 Q New

Fundamentals of Management, 10e, Global Edition (Robbins)
Chapter 14 Foundations of Control
1) The control management function ensures that ________ in an organization.

A) goals are set
B) goals are met
C) plans are made
D) plans are realistic
Answer: B
Explanation: The control function does not involve making plans or setting goals for the future.
Instead, control is involved with looking back after plans have been made and seeing that goals
have been successfully met, making "goals are met" the correct response.
Diff: 2
LO: 14.1: Explain the nature and importance of control.
2) A major part of the controlling function of management is to ________.

A) formulate strategies
B) set goals
C) correct performance problems
D) structure an organization
Answer: C
Explanation: In addition to making sure that goals have been met, a major function of
controlling is to correct performances that are not up to standards, making "correct performance
problems" the correct response. Both formulating strategies and setting goals fall primarily under
the planning function, while structuring an organization is part of the organizing function.
Diff: 2
3) The more a control system helps an organization ________, the more successful it is judged to
be.
A) meet government guidelines
B) help employees achieve job satisfaction
C) meet its goals
D) increase sales
Answer: C
Explanation: The purpose of a control system is first and foremost to help a company achieve its
goals, whatever they are, making "meet its goals" the correct response. Though increased sales,
legal compliance, and job satisfaction are all important to many organizations, they may not be
specific goals of a given organization, so they are not correct responses for this question.
Diff: 2
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4) A well-run company that has well-thought-out plans, motivated and productive workers, and
an efficient organizational structure ________.
A) always attains its goals
B) may not always attain its goals
C) rarely attains its goals
D) has no reason to monitor its performance
Answer: B
Explanation: Though it is likely that a well-run company will attain its goals, only monitoring an
organization's activities and comparing them to standards can confirm whether or not those goals
have been met. This rules out "rarely attains its goals," since most well-run companies do attain
goals, and it also rules out "always attains its goals" because a company may seem to do
everything right and still not attain its goals. "Has no reason to monitor its performance" is
incorrect because monitoring is the one way in which a company can determine for sure whether
it has achieved its goals. Since all other choices have been eliminated, "may not always attain its
goals" is the correct response since it correctly identifies the unlikely but still possible
eventuality that a company that does all the right things could still fail to attain its goals.
Diff: 3
AACSB: Analytical thinking
5) The value of the controlling function is seen in three specific areas: planning, ________.
A) organizing, and leading
B) protecting employees, and empowering the workplace
C) protecting employees, and protecting the workplace
D) empowering employees, and protecting the workplace
Answer: D
Explanation: The value of the controlling function is seen in planning, the empowering of
employees, and the protecting of the workplace, making "empowering employees, and protecting
the workplace" the correct response and ruling out all other responses.
Diff: 2
6) Controlling is the ________ in the management process.

A) first step
B) final step
C) most important step
D) least important step
Answer: B
Explanation: All four steps in the management process are more or less equal in importance,
making both choices regarding importance incorrect responses for this question. Controlling
comes after planning, organizing, and leading in the management process, so it is the final, not
the first, step in the management process, making "final step" the correct response.
Diff: 2
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7) Controlling compares ________ to see if goals are being achieved.
A) planned performance to standard performance
B) standard performance to ideal performance
C) actual performance to competitor performance
D) actual performance to planned performance
Answer: D
Explanation: Controlling compares how the organization actually performed to the goals and
plans that were set during the planning stage of the management process, making "actual
performance to planned performance" the correct response and ruling out all other responses. If
the actual performance matches what was planned, goals are considered met and the organization
in most cases can consider itself successful. However, if actual performance is judged to be
insufficient for some reason, then the organization will consider its performance to be inadequate
and take some kind of action to remedy the situation.
Diff: 2
8) Effective controlling can help managers ________.

A) empower their employees
B) set their goals
C) maximize risk
D) minimize employee empowerment
Answer: A
Explanation: Effective controlling gives managers a way to delegate authority but still make
sure that empowered employees are progressing effectively toward organizational goals, making
"empower their employees" the correct response and ruling out "minimize employee
empowerment" since controlling maximizes rather than minimizes empowerment. Setting goals
is not a correct response because controlling takes place long after goals have been set.
"Maximize risk" can be eliminated as a correct response because effective controlling would
serve to reduce, or minimize, risk, not maximize it.
Diff: 2
9) The controlling function helps managers protect an organization's ________.

A) reputation for honesty
B) assets
C) position in the community
D) good name
Answer: B
Explanation: While protecting an organization's good name, position in the community, and
reputation for honesty are all important, none of these functions requires explicit use of the
controlling function. Controlling does, however, explicitly protect organizational assets against
disruptions and harm of any kind, making "assets" the correct response.
Diff: 2
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10) Control is the process of monitoring and evaluating activities to ensure that they are being
accomplished as planned.
Answer: TRUE
Explanation: Managers can't know how successful operations are until they have been compared
to a standard.
Diff: 2
11) The criterion that determines the effectiveness of a control system is how well it reduces
unnecessary costs.
Answer: FALSE
Explanation: Goals, not costs, determine the effectiveness of a control system. The more a
control system helps the organization achieve its goals, the more effective and successful it is.
Diff: 2
12) Control is the managerial function that allows managers to make sure that organizational
goals are being met.
Answer: TRUE
Explanation: Plans can be carried out with motivated employees, but without monitoring there is
no way to be sure that goals are actually being met.
Diff: 2
13) The value of the control function lies in three areas: planning, organizing, and motivating.
Answer: FALSE
Explanation: The value of the control function is seen in three areas: planning, empowering
employees, and protecting the workplace.
Diff: 2
14) An effective control system can help managers delegate authority to employees with
confidence.
Answer: TRUE
Explanation: Empowering employees can be fraught with dangers unless proper control
measures are in place to make sure that work is being completed in an efficient, effective, and
timely manner.
Diff: 3
15) The control function is not intended to protect the organization from threats.
Answer: FALSE
Explanation: A major function of a control system is to protect the organization from threats that
might arise from disruptions, security breaches, unexpected financial events, and other similar
problems.
Diff: 2
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16) Motivation and leadership are two primary parts of the controlling function.
Answer: FALSE
Explanation: Motivation and leadership are part of the managerial function of leading, not the
controlling function.
Diff: 2
17) Controlling provides a critical link back to planning that compares actual outcomes to
planned outcomes.
Answer: TRUE
Explanation: Without the assessment that takes place during the controlling function, there is no
accurate way to determine whether or not planning goals have been carried out and met.
Diff: 2
18) In a short essay, define and describe the management function of control.
Answer: Control is the process of monitoring organizational activities and making sure that they
are being done correctly and successfully. The typical control process has managers evaluate
work performance and compare actual performance outputs to performance standards. These
standards are typically the goals set by management during the planning process.
If the actual performance measures up favorably to the standards, managers do little or nothing to
change the course of action. If performance fails to fall within acceptable standards, managers
take corrective action to make sure tasks are performed satisfactorily. The effectiveness of
control is seen in goals. The better the control function is, the more likely that organizational
goals will be successfully met.
Diff: 3
19) The first step in the control process is to ________.

A) take action
B) measure actual performance
C) compare performance against a standard
D) compare a standard against an ideal
Answer: B
Explanation: The first step in the control process is to find out how the organization went about
its business–that is, to measure the actual performance of the organization, making "measure
actual performance" the correct response. Comparing actual performance against a standard is
the second step of the control process, while taking action is the final step in the process.
Comparing the standard against an ideal is not a step in the control process, making that choice
an incorrect response.
Diff: 2
LO: 14.2: Describe the three steps in the control process.
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20) Managers always use these for performance standards during the control process.
A) goals created during the planning process
B) employee opinions
C) generic performance standards for the industry
D) standards developed by performance experts
Answer: A
Explanation: The performance standards to which the actual performance of the organization is
compared during the control process are simply the goals that were created during the planning
stage of organizational activity. This makes "goals created" the correct response and eliminates
generic or expert-developed standards as correct responses. Employee opinions may be used but
are not always part of the process.
Diff: 2
21) A manager measuring actual performance is like a teacher ________.

A) composing a test
B) grading a test
C) helping a student study for a test
D) making an assignment
Answer: B
Explanation: When a teacher composes a test, gives an assignment, or helps a student prepare
for a test, she is not actually assessing or measuring performance. Instead, she is creating the
tools for assessing performance. Only when a teacher evaluates the test is she measuring actual
performance, making "grading a test" the correct response.
Diff: 2
AACSB: Application of knowledge
22) This is the most informal form of performance measurement.

A) oral reports
B) written reports
C) statistical reports
D) personal observation
Answer: D
Explanation: Oral reports, statistical reports, and written reports all have specific formats and
conventions that are required, making them formal types of performance measurement. For
example, a statistical report must include statistical tables or graphs showing how the standard
categories of data compare. Personal observations, on the other hand, can take on a variety of
different forms and examine a variety of different characteristics and attributes of an
organization, making "personal observation" the correct response.
Diff: 2
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23) MBWA stands for management by ________.
A) work area
B) work action
C) written action
D) walking around
Answer: D
Explanation: MBWA is an informal examination of the workplace that the manager carries out
by "walking around," making "walking around" the correct answer and ruling out the other three
choices. MBWA allows the manager to get a feel for the work area and the moods and attitudes
of the people who work there.
Diff: 2
24) An advantage of management by walking around is ________.

A) perceptual biases
B) obtrusiveness
C) personal contact
D) objectivity
Answer: C
Explanation: Few would try to make the claim that MBWA does not usually suffer from
personal biases as one person's outstanding trait might go unnoticed by another observer.
Interfering in the daily activities of the workplace can also be the source of misconception in
MBWA, making "obtrusiveness" an incorrect response. MBWA is highly subjective rather than
objective, so "objectivity" is not correct. Finally, "personal contact" is the correct response
because MBWA involves a great deal of personal interaction, which gives managers a valuable
view of their workplace.
Diff: 2
25) For a baseball player, a statistical report would feature such things as ________.
A) a newspaper profile of the player
B) batting average and slugging percentage
C) filmed highlights of great plays
D) scouting reports on the player
Answer: B
Explanation: A newspaper article, highlight films, and scouting reports are all measurements of a
player's value, but they are not statistical measurements, so they are incorrect responses. Batting
average and slugging percentage are statistical measurements, so this choice is the correct
response.
Diff: 2
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26) A disadvantage of a statistical report is that it may leave out ________ measurements of
performance.
A) subjective
B) objective
C) positive
D) negative
Answer: A
Explanation: A statistical report is objective rather than subjective and is no more likely to leave
out positive or negative performance evaluations than any other form of assessment, making
"objective," "positive," and "negative" incorrect responses for this question. Since a statistical
report is objective, it tends to disregard subjective information, making "subjective" the correct
response.
Diff: 2
27) This type of performance measurement format would be most likely to include graphs,
tables, and computer outputs.
A) oral report
B) statistical report
C) MBWA
D) written report
Answer: B
Explanation: Since neither an oral report nor MBWA includes written material, neither would be
likely to feature charts and graphs, making those two choices incorrect responses. A written
report might include quantitative data, but quantitative data would not be an essential element of
the report as it would be in a statistical report. This makes "statistical report" the correct response
and eliminates "written report" as a correct response.
Diff: 2
28) This kind of performance measurement method is fast and is a good platform for feedback,
yet it can be private and scheduled for a single employee ahead of time.
A) written report
B) MBWA
C) oral report
D) statistical report
Answer: C
Explanation: Both statistical and written reports are slow and do not allow for immediate
feedback, so those two choices can be eliminated. MBWA and oral reports are both fast and
allow for feedback, but MBWA is not private and cannot be personally scheduled, making "oral
report" the correct response and ruling out "MBWA."
Diff: 2
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29) The most comprehensive form of performance measurement is this.
A) MBWA
B) oral report
C) graphs
D) written report
Answer: D
Explanation: The informality of MBWA and oral reports make them less complete and thorough
than statistical and written reports, making those two choices incorrect responses. Graphs and
written reports are both readable documents, but a written report is likely to be more
comprehensive since it could include both quantitative and qualitative information, while a graph
would be quantitative only (or primarily), making "written report" the correct response and
ruling out "statistical report."
Diff: 2
AACSB: Reflective thinking
30) Steve has a taped record of a one-on-one meeting with his boss.
A) a statistical report
B) an oral report
C) MBWA
D) a written report
Answer: B
Explanation: A one-on-one meeting is a personal interaction, not a written-out document, so
both a "statistical" and "written" report can be ruled out as correct responses since both are
characterized by written documents. Both oral reports and MBWA are personal interactions, but
MBWA is a group interaction rather than a one-on-one meeting, so "MBWA" cannot be a correct
response. An "oral report" is the correct response because it is a personal interaction and because
it was taped–a characteristic of an oral report but not MBWA.
Diff: 3
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31) Jessie's assigned work section consists of three work groups who were assessed by this
method of performance measurement and were informally judged to be "creative, innovative,
hard-working, and fun-loving."
A) MBWA
B) written report
C) statistical report
D) oral report
Answer: A
Explanation: The subjective, informal character of the assessment rules out both "written" and
"statistical" report as possible right answers for this question since written and statistical methods
tend to be formal. The assessment is more impressionistic than specific, more a sense of an entire
work area than an evaluation of an individual or a specific group, making "MBWA" the correct
response and ruling out "oral report."
Diff: 3
32) These forms of performance measurement provide the best and most immediate forms of
feedback.
A) oral report and written report
B) written report and statistical report
C) MBWA and oral report
D) statistical report and MBWA
Answer: C
Explanation: The three incorrect choices include written-document forms of measurement
(written and statistical reports), so they can be ruled out since the most effective forms of
feedback are generally verbal (including intonation, facial expressions, and body language) and
immediate. This makes "MBWA and oral report" the correct response since both MBWA and oral
reports are verbal forms of evaluation that allow evaluators and subjects to interact and exchange
feedback and other forms of information personally.
Diff: 2
33) What managers choose to measure is largely determined by

A) what an organization does well.
B) the organization's structure.
C) the company's image.
D) the leaders and leadership style of those in the organization.
Answer: A
Explanation: The choice of what managers measure in terms of performance largely determines
what the organization will try to excel at. While structure, leadership, and image can be affected
by choice of performance measurement, these items are not directly affected, so they are
incorrect responses.
Diff: 2
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34) A car company that puts more effort into measuring quality than total units sold most likely
wants to excel at ________.
A) customer satisfaction
B) efficiency
C) employee satisfaction
D) cost per unit
Answer: A
Explanation: The company is showing its priorities by what it chooses to measure. Since it is
concerned with quality, the company is clearly less interested in efficiency and unit cost than
how satisfied its customers are, making "customer satisfaction" the correct response. Employee
satisfaction is not directly related to measuring quality, so it is not a correct response.
Diff: 2
35) A software company that puts almost all of its performance measurement effort into
measuring the total number of units that the company and its competitors sell most likely wants
to excel at ________.
A) efficiency
B) market share
C) cost per unit
D) labor per unit
Answer: B
Explanation: The company is showing its priorities by what it chooses to measure. Since it is
concerned with the total sales of itself and its competitors, the company is clearly more interested
in market share than efficiency, cost per unit, or labor per unit.
Diff: 2
36) A state motor vehicles agency that is interested in serving the public might choose to measure
________.
A) total revenue rather than customer wait time
B) total customers rather than total revenue
C) customer wait time rather than total customers
D) employee turnover rather than customer wait time
Answer: C
Explanation: Since the agency is interested in serving the public, its priority should be
something that the public cares about–how long it needs to wait to be processed at the agency–
making "customer wait" the correct response. The number of customers and revenue they
generate are clearly secondary concerns for an organization whose primary aim is to serve the
public. Employee turnover rate does not involve customers, so it can also be ruled out as a
correct response.
Diff: 2
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37) Which of the following performance measurement categories must be measured subjectively
rather than in objective or quantifiable terms?
A) budget
B) absenteeism
C) efficiency
D) job satisfaction
Answer: D
Explanation: A budget, absentee data, and efficiency data can all be tallied and quantified using
objective numerical values. Job satisfaction, on the other hand, is a more subjective thing to rate
that often relies on feelings and impressions rather than quantifiable facts, making "job
satisfaction" the correct response.
Diff: 2
38) The second step in the control process is to ________.

A) compare a standard against an ideal
B) measure actual performance
C) compare performance against a standard
D) take action
Answer: C
its business–that is, to measure the actual performance of the organization. Comparing that actual
performance against a standard is the second step of the control process, making that choice the
correct response. Taking action is the final step in the process. Comparing the standard against an
ideal is not a step in the control process, making that choice an incorrect response.
Diff: 2
39) To carry out the second step of the control process, managers at an electric shaver company
need to compare the number of actual shavers sold to ________.
A) a competitor's sales totals
B) planning goals for sales totals
C) sales totals from last year
D) the number of possible shaver customers
Answer: B
Explanation: The second step of the control process compares actual performance to goals that
have been determined in the planning stage of the managerial process, making "planning goals"
the correct response. This means that while sales totals from last year, a competitor, and a
comparison with the total number of potential customers may be meaningful, they are not the
stated goals laid out in the planning process, so they are incorrect responses.
Diff: 2
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40) In the second step of the control process, actual performance can be considered acceptable as
long as the performance doesn't fall ________.
A) short of goals by more than 15 percent
B) short of goals by more than 30 percent
C) inside an acceptable range of variation
D) outside an acceptable range of variation
Answer: D
Explanation: There are no hard and fast rules with respect to deviation. One situation might
allow a 50 percent deviation, while a second might determine that a 5 percent deviation is too
high. Therefore, all that is required is that deviation fall within the individual manager's accepted
variation range, making "outside an acceptable range" the correct response and ruling out "inside
an acceptable range." The other two choices are not correct because they quantify performance
limits.
Diff: 2
41) In general, ________ that falls outside an acceptable range of variation must be dealt with by
a manager.
A) an overperformance
B) an underperformance
C) any deviation
D) a small overperformance or a large underperformance
Answer: C
Explanation: By definition, any deviation that lies outside an acceptable range of variation is
unacceptable, therefore, it must be dealt with. This means that "any deviation" is the correct
response and the other three choices are incorrect because they are too limited in scope. What
matters is that performance lies outside the acceptable range, not whether performance is above
or below that range.
Diff: 2
42) The third step in the control process is to ________.

A) measure actual performance
B) compare a standard against an ideal
C) take action
D) compare performance to a standard
Answer: C
its business–that is, to measure the actual performance of the organization. Comparing that actual
performance against a standard is the second step of the control process. Taking action is the
third and final step in the process, making "take action" the correct response. Comparing the
standard against an ideal is not a step in the control process, making that choice an incorrect
response.
Diff: 2
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43) When actual performance falls outside an acceptable range of variation, it is termed a(n)
________.
A) significant deviation
B) insignificant deviation
C) acceptable deviation
D) large deviation
Answer: A
Explanation: Any measure of actual performance that does not fall within the limits of what the
manager has termed an acceptable range of variation is termed a significant deviation, making
this choice the correct response and eliminating all other responses. Note that a significant
deviation is defined entirely by the situation and the manager. The same deviation in two
different situations, or when evaluated by two different managers, may be assessed differently.
Diff: 2
44) When should a manager's course of action be to do nothing?

A) when the cause of the variation has been identified
B) when the standard is acceptable
C) when the standard is not acceptable
D) when the variance is acceptable
Answer: D
Explanation: By definition, when the variance of performance is within an acceptable range, it
means that the manager finds that performance level to be functional or better, so there is no need
to take corrective action. This makes "acceptable variance" the correct response and rules out all
other responses.
Diff: 1
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45) Actual performance falls far short of planned goals, yet a manager takes no action. Assuming
this manager is a reasonable person and is not mistaken, what is the most likely cause of his
inaction?
A) He does not trust the data.
B) He does not consider the deviation significant.
C) He does not trust the goals that were set.
D) He does not believe in corrective action.
Answer: B
Explanation: The operative word here is reasonable–one assumes that the possibility of the
manager failing to believe in corrective action, failing to trust goals that were set, and failing to
believe performance data is fairly unreasonable–making "does not consider the deviation
significant" the only reasonable choice and, therefore, the correct answer. Why would a manager
fail to see a large deviation from a standard as significant? It could be anything–special
circumstances, new developments, etc. What matters here is that the manager expanded his range
of acceptable deviation for some legitimate reason and the performance fell within that expanded
range.
Diff: 2
46) Which of the following is NOT a recognized possible course of action for managers to take
when actual performance falls outside an acceptable range of variation?
A) take corrective action
B) change the standards
C) editing the performance data
D) do nothing
Answer: C
Explanation: Corrective action, doing nothing, and changing standards are recognized ways of
dealing with significant deviations. Editing the data is neither a recognized way of dealing with
deviations nor a responsible way for a manager to behave, making "editing the performance
data" the correct response.
Diff: 2
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47) If a manager of a tennis store sees sales totals for a particular racquet significantly exceeding
goals and deviating from acceptable range of variation, she might ________.
A) do nothing since sales exceeded goals
B) run a sale on the racquet
C) run a sale on other products
D) inquire about ordering more racquets
Answer: D
Explanation: Since the totals were outside an acceptable range of variation, the manager clearly
must do something, so "do nothing" can be ruled out. Running a sale on the racquet would
decrease profits, so that choice can also be ruled out. Running a sale on other products is
irrelevant since other products are not outside an acceptable range of deviation. The best thing
for the manager to do is find out about ordering more racquets–if demand increases, she may be
caught without enough supply in the months to come.
Diff: 3
48) After an extended period of unseasonably warm and sunny weather, revenues at an indoor
tennis club are down sharply during the month of November, but are in line with what managers
expected for the month. The best strategy for the club manager is to ________.
A) do nothing
B) run a sale on hourly rates
C) raise hourly rates to increase revenue
D) change her monthly goals for December
Answer: A
Explanation: The deviation in this case falls within an acceptable range. The drop in customers
had an explainable cause–unusually nice weather–that is not likely to become a chronic problem.
There is no reason to assume that December will be just as warm as November, so the manager
should not change her goals, run a sale, or raise rates. The best strategy is to sit tight and wait for
the customers to come in during December, making "do nothing" the correct response.
Diff: 3
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49) Due to a recent construction of an upscale housing community near a tennis club, customer
use has skyrocketed during the year and the club is operating at all-time high levels, far beyond
the goals set the previous year. The best strategy for the manager is to ________.
A) do nothing
B) run a sale to increase customers
C) advertise
D) change goals for the following year
Answer: D
Explanation: In this situation, advertising and running a sale are likely to increase customers
beyond what the club can handle, so those choices can be ruled out. Doing nothing may not harm
the situation, but a better response to increased demand is to change the club's goals so
performance and goals once again fall within an acceptable range of variation.
Diff: 2
50) Immediate corrective action is designed ________.

A) to get to the root cause of a problem
B) to get performance back on track
C) to shake up an organization
D) to punish employees for poor performance
Answer: B
Explanation: Immediate corrective action is the simplest corrective action a manager can take. It
solves the problem at hand quickly and effectively without necessarily getting at root causes or
shaking up the organization. While immediate corrective action may include punishment, it
would not necessarily require punishment, so that choice is not a correct response. These factors
make "get performance back on track" the correct response as it is the only choice that deals
purely with performance.
Diff: 2
51) For addressing the hardships accompanying unemployment, this is an example of immediate
corrective action.
A) a job training program
B) food stamps
C) a task force to see why jobs were lost
D) a job placement agency
Answer: B
Explanation: Immediate corrective action should directly remedy the problem at hand. While
training programs, task forces, and job agencies might help a person who lost a job in the long
term, over the short term, only food stamps address the problem at hand, which is the lack of
ability to feed one's family, making "food stamps" the correct response.
Diff: 2
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52) For addressing unemployment, this is an example of basic corrective action.
A) a task force to see why jobs were lost
B) food stamps
C) unemployment compensation
D) a job training program
Answer: A
Explanation: Basic corrective action gets at root causes of performance deviations. Food stamps,
unemployment compensation, and training programs do not identify root causes of
unemployment, they simply remedy unemployment. A task force can determine root causes of
unemployment, making that choice the correct response.
Diff: 2
53) In many cases, immediate corrective action rather than basic corrective action is taken by
managers because they ________.
A) want to be thorough
B) lack time
C) lack information
D) don't understand the situation
Answer: B
Explanation: Many managers occupy their time "putting out fires" and don't have the time to get
to the root causes of deviations, so they take immediate corrective action rather than basic
corrective action to solve problems. This makes "lack time" the correct answer and rules out
other choices.
Diff: 2
54) Which of the following would constitute basic corrective action for employees whose
production has dropped?
A) changing the pay scale
B) taking away employee privileges
C) looking for causes of the production drop
D) changing how the work is carried out
Answer: C
Explanation: The three incorrect choices are short-term immediate corrective actions that
address the problem but not the cause of the problem. Changing pay, removing privileges, and
changing work practices may increase production, but these acts may not get at the cause of the
production drop. Only "look for causes" gets at causes of the production drop, so it is the correct
response.
Diff: 2
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55) A law firm manager finds that one lawyer who consistently outperforms other lawyers at the
firm is threatening to leave. Which immediate corrective action should the manager take?
A) none
B) offer a bonus
C) disciplinary action
D) a study to see why she outperforms others
Answer: B
Explanation: Although no action might sound like a reasonable response, this performance is
recognized as a significant deviation, so some kind of corrective action is required. Disciplinary
action can be ruled out since it is a punishment rather than a reward, while a study is a basic
corrective action, not an immediate corrective action. The only action that makes sense is a
monetary reward, offering a bonus.
Diff: 2
56) A law firm manager finds that the firm loses too many of its civil cases while it wins an
inordinately high number of its criminal cases. Which basic corrective action can the manager
take?
A) pay criminal lawyers more
B) pay civil lawyers less
C) analyze civil and criminal cases
D) fire civil lawyers
Answer: C
Explanation: Paying lawyers more or less and firing lawyers are immediate corrective actions
that will not get at the root cause of the problem. Only an analysis of the situation, a basic
corrective action, might uncover the disparity in the two kinds of cases, making "analyze civil
and criminal cases" the correct response.
Diff: 2
57) When might a manager be justified in revising a standard rather than taking corrective action
to remedy a significant performance deviation?
A) when performance exceeds the standard
B) when performance falls slightly short of the standard
C) when performance falls far short of the standard
D) when the standard is unrealistic
Answer: D
Explanation: The only reason to revise standards is when they are proven to be unreasonable or
unrealistic for some reason, making that choice the correct response. Whether or not performance
measures up to the standard is a reason to take corrective action, not change standards, unless, of
course, those standards are flawed in some way.
Diff: 2
19
58) A professor gives a new test to an otherwise typical class and finds that only 10 percent of
the students get grades of C or above. What is the most appropriate and fair response?
A) do nothing
B) revise the grading curve downward
C) revise the grading curve upward
D) revise the test itself
Answer: D
Explanation: Doing nothing would leave most of the class with a poor grade, so that is an
unappealing and probably unfair response. Revising the curve upward is inappropriate since it
would mean even fewer students get acceptable grades. Revising the curve downward would
remedy the grading problem, but it would not be the best response because there is probably
something wrong with the test itself since a typical class performed so poorly. Thus, the best
response would be to change the test itself, making that choice the correct response.
Diff: 3
59) All of the following are dangers of revising production goals downward EXCEPT ________.
A) it destroys incentive to work harder
B) it increases incentive to work harder
C) it gives employees an excuse to be less productive
D) it gives employees something to blame for their lack of effort
Answer: B
Explanation: Destroying incentive and giving employees excuses or something to blame are
legitimate reasons not to revise production goals downward, so they are incorrect responses.
Revising goals downward does not increase incentive, so "it increases incentive" is the correct
response here since it is untrue.
Diff: 2
60) The control process is a two-step process that measures and compares.
Answer: FALSE
Explanation: The control process is a three-step, not a two-step, process that includes measuring
performance, comparing performance against a standard, and taking action, if necessary.
Diff: 2
61) The development or identification of objectives or standards must precede the control
process.
Answer: TRUE
Explanation: The measurement of performance during the control process must have some
standard to measure against. Usually the standard is set during the planning phase of the
operation being carried out, before the control process begins.
Diff: 2
62) Personal observation as a form of control measurement requires little time.
20
Answer: FALSE
Explanation: Personal observation, in fact, requires a great deal of time, so the statement is false.
Diff: 2
63) MBWA can pick up attitudes and factual omissions that other forms of measurement miss.
Answer: TRUE
Explanation: By virtue of it being a personal action, MBWA, or management by walking
around, can detect factual omissions, moods, attitudes, tones of voice, and other subjective and
emotional forms of information that other types of measurement miss.
Diff: 2
64) In the past, a major drawback of an oral report was that there is no way to store the
information in the report for later reference.
Answer: TRUE
Explanation: New technologies, such as videotaping oral reports, mean that documentation of an
oral report is no longer impossible to carry out.
Diff: 2
AACSB: Written and oral communication
65) What is measured in the control process is often less critical than how it is measured.
Answer: FALSE
Explanation: The opposite is true–what is measured is usually more, not less, important than
how it is measured. The criteria that managers choose to measure often defines how an
organization will operate.
Diff: 2
66) Some control criteria, such as employee satisfaction and absenteeism, are applicable to
almost any management situation.
Answer: TRUE
Explanation: In almost all situations, the success of managers is related to how satisfied
employees are and how dedicated they are to their jobs, so these criteria are fairly universal.
Diff: 1
67) A gap between actual performance and planned goals that falls within an acceptable range of
variation usually requires managerial action.
Answer: FALSE
Explanation: Only when the gap between actual performance and goals falls out of an
acceptable range of variation is action required.
Diff: 2
68) Henry Ford basing his assembly line on practices he viewed in Chicago slaughterhouses is an
21
example of benchmarking.
Answer: TRUE
Explanation: Benchmarking is the practice of adopting methods from other industries to
improve your own industry. Ford was indeed benchmarking when he took the division of labor
practices seen in slaughterhouses and adopted them in car-building.
Diff: 2
69) A single business cannot experience both underperformance and overperformance at the
same time.
Answer: FALSE
Explanation: As the example in the chapter reading shows, one part of a business can exceed
goals while another segment can underperform. Therefore, both phenomena can occur at the
same time.
Diff: 2
70) Immediate corrective action might include changing the way employees are paid for their
work.
Answer: TRUE
Explanation: Immediate corrective action includes any practice that can work to correct a
performance deviation, which could include extra training, stiff discipline, or a new pay scale
that, for example, pays employees by the piece rather than by the hour.
Diff: 2
71) Basic corrective action focuses on identifying the cause of a performance deviation.
Answer: TRUE
Explanation: Basic corrective action looks to find out how and why performance didn't meet
goals, not how to correct the situation.
Diff: 2
72) An example of revising a standard is a teacher who changes a grading scale because students
do poorly on an exam.
Answer: TRUE
Explanation: Rather than blame poor performance on the students themselves, the teacher in this
case assumes that the standard, the grading scale for the test, was too high and adjusts it
downward.
Diff: 2
22
73) In a short essay, explain why what managers choose to measure can be more important than
how they measure in the control process.
Answer: A premium coffee bean company, for example, may choose to measure total sales in a
given geographical region as a reflection of how well the company is doing. This company might
see rising sales of its product as a sign that it is highly successful in this geographical region.
However, the sales totals may not tell the whole story. If premium coffee in the geographical area
is a rapidly expanding market, the sales of all premium coffees would be expected to be rising. It
is possible that the company is actually losing market share to a competitor even as its total sales
rise impressively.
Thus, in this case, deciding what to measure–market share as opposed to total sales–may make a
huge difference in how the company evaluates its performance. If it measures total sales, it sees
its performance as good. If it measures market share, it may see its performance as worrisome.
Diff: 3
74) In a short essay, describe the first step in the control process.
Answer: The first step in the control process is measuring, or determining, the actual
performance of an individual or an organization. Basic job performance for most jobs can be
measured in simple, objective, and easily quantifiable terms. However, to get a deeper and more
meaningful analysis, managers frequently employ a variety of methods to gauge performance,
such as personal observation, statistical reports, oral reports, and written reports. For most
managers, using a combination of approaches increases the probability of getting meaningful and
reliable information.
Diff: 3
75) In a short essay, describe the second step in the control process.
Answer: Comparing is the second step in the control process. Comparing involves taking the
data from the measurement stage of the control process and comparing it to a standard. Typically,
the standard is a performance goal set during the planning process.
Variation between actual performance and the prespecified standard is to be expected. How much
variation is acceptable is what managers must determine by identifying an acceptable range of
variation. Performance outside this range is deemed unacceptable and merits a response or
corrective action of some type. Performance within the acceptable range of variation typically
requires no action at all on a manager's part.
Diff: 3
23
76) In a short essay, describe the third step in the control process.
Answer: The third step in the control process involves taking managerial action. When actual
performance falls outside an acceptable range of deviation, managers must somehow fix the
situation. Generally, managers can choose among three possible courses of action: do nothing,
correct the actual performance, and revise the standards.
Managers choose to do nothing when performance measures up favorably to standards.

Managers choose corrective action when performance does not measure up. Examples of
corrective actions might include changing strategy, structure, compensation plans, or training
programs; redesigning jobs; and firing employees.
Revising standards is an appropriate response if the variance was the result of unrealistic,
erroneous, or unreasonable expectations. Standards can be faulty, especially when the situation
changes. During boom times, managers sometimes adjust standards up. During times of trouble,
such as recessions, managers may revise standards downward.
Diff: 3
77) In a short essay, explain how managers determine what a significant deviation is.
Answer: Significant deviations from an acceptable range of variance are entirely up to the
manager, him- or herself to determine. In some cases, goals may be technically met, but a
manager will still feel that some kind of corrective action needs to be taken.
A manager of a gelato store, for example, might look at monthly sales totals and see that hazelnut
gelato performed well below its goal. The manager might greet this finding in more than one
way. She might decide to terminate the sale of this flavor and move on to develop a new flavor.
She might decide that hazelnut simply needs more time and exposure to the public and its sales
will pick up, eliciting a "sit tight" and do nothing response. Or, she might decide that hazelnut
simply needs some extra promotion to increase sales–posters, free samples, special prices, etc.
The point of the preceding shows that the interpretation of performance data lies entirely in the
eye of the manager who is observing it. One person's acceptable deviation might be another
person's unacceptable deviation.
Diff: 3
24
78) In a short essay, explain the difference between immediate corrective action and basic
corrective action.
Answer: Immediate corrective action is action that a manager takes to fix a problem in the short
term to get performance on track. An example of taking immediate corrective action would
include a building contractor hiring extra carpenters when the people he has on the job aren't
working fast enough.
Basic corrective action goes beyond fixing the problem at hand and attempts to find–and correct–
the underlying causes of the problem. For example, there might be a number of reasons why a
building project gets behind schedule: not enough labor, having to wait for materials, conflicts in
scheduling, inefficient workers or supervision, and so on. Getting to the bottom of the situation
can save managers time, trouble, and money. For example, rather than hire (expensive) extra
carpenters on a building project, a manager might learn that he simply needs to schedule the
current workers better and the problem will be solved.
Diff: 3
79) Which kind of control takes place before the actual work is carried out?
A) feedback
B) concurrent
C) recurrent
D) feedforward
Answer: D
Explanation: Feedforward control occurs prior to the actual activity taking place in an attempt to
prevent problems before they occur, making "feedforward" the correct response. Feedback
control occurs after the activity has taken place in an attempt to correct actions that have already
occurred and prevent future mistakes. Concurrent control occurs during an activity in an attempt
to get live input into the process itself. Recurrent control is not a recognized control term.
Diff: 2
LO: 14.3: Discuss the types of controls organizations and managers use.
80) A cell phone maker tests its new model with a sample audience when it is fully operational.
What kind of control is this?
A) pre-market control
B) feedback control
C) concurrent control
D) feedforward control
Answer: B
Explanation: Since the phone has already been created, the company is using feedback control
because the samplers are reporting on features that already exist. Concurrent control would have
samplers participate in the designing and manufacturing processes themselves. Feedforward
control would have samplers participate in the planning of the phone. Pre-market control is not a
recognized control term.
Diff: 2
25
81) Which kind of control takes place while the actual work is carried out?
A) feedback
B) concurrent
C) reverse
D) feedforward
Answer: B
Explanation: Feedforward control occurs prior to the actual activity taking place in an attempt to
prevent problems before they occur. Feedback control occurs after the activity has taken place in
an attempt to correct actions that have already occurred and prevent future mistakes. Concurrent
control occurs during the activity itself in an attempt to get live input into the process itself.
Reverse control is not a recognized control term.
Diff: 2
82) Direct supervision of employees is a form of ________ control.

A) concurrent
B) ineffective
C) feedback
D) feedforward
Answer: A
Explanation: The best-known form of concurrent control occurs when a manager directly
supervises an employee, telling him or her what to do while the work is being carried out. This
makes "concurrent" the correct response and rules out all other responses.
Diff: 2
83) An action show producer has a read-through of a half-written show in which actors, writers,
producers, and the director are free to make comments and changes before the show is filmed.
What kind of control is being used?
A) feedback control
B) concurrent control
C) spontaneous control
D) feedforward control
Answer: D
Explanation: Feedforward control is being used because the participants can make changes in
the show before it is filmed. Feedback control would have participants making comments about
the show after it was finished, while concurrent control would have participants talk about what
they would like to see in the show while it is the process of being filmed. Spontaneous control is
not a recognized control term.
Diff: 2
26
84) A fast-food restaurant is querying prospective customers about the features they would like to
see in a new panini sandwich. What kind of control is being used?
A) concurrent control
B) feedback control
C) feedforward control
D) anticipation control
Answer: C
Explanation: Since the company is asking for input before the actual product exists, feedforward
control is being used, making this choice the correct response. Feedback control would have
participants making comments about the sandwich after it was created, while concurrent control
would have customers participate in the actual creation of the sandwich. Anticipation control is
not a recognized control term.
Diff: 2
85) Which kind of control takes place after the actual work has been carried out?
A) feedback
B) forward
C) feedforward
D) concurrent
Answer: A
Explanation: Feedback control occurs after an activity has taken place in an attempt to correct
actions that have already occurred and prevent future mistakes, making "feedback" the correct
response. Feedforward control occurs prior to the actual activity taking place in an attempt to
prevent problems before they occur. Concurrent control occurs during the activity itself in an
attempt to get live input into the process itself. Forward control is not a recognized control term.
Diff: 2
86) A basketball coach showing players how to position themselves on the court during practice
is carrying out ________, a form of concurrent control.
A) unstructured supervision
B) direct supervision
C) indirect supervision
D) feedback supervision
Answer: B
Explanation: Coaching is a form of direct supervision since the coach is directing the actions of
individuals while the activity (playing basketball) is taking place, making "direct supervision"
the correct response. Coaching would not qualify as feedback since it occurs as the activity is
taking place, nor is coaching indirect or unstructured since the coach is directly interacting with
players in a highly formalized manner.
Diff: 2
27
87) One advantage of feedback control over other forms of control is that it lets managers focus
on ________.
A) what is about to take place
B) how on target their planning efforts were
C) how effective their organizing efforts were
D) the task as it is being carried out
Answer: B
Explanation: "What is about to take place" identifies feedforward rather than feedback control,
so it is incorrect. "The task as it is being carried out" identifies concurrent rather than feedback
control, so it is also incorrect. Feedback requires managers to compare actual performance to
goals. When goals and performance match closely, managers can conclude that their planning
efforts were on target. This makes "how on target their planning efforts were" the correct choice
and rules out "how effective their organizing efforts were" since it refers to the organizing, rather
than the planning, process.
Diff: 2
88) When feedback control shows that planning goals and actual performance were dramatically
different, the most likely conclusion is that ________.
A) planning was not on target
B) performance measurements were unreliable
C) planning was on target
D) goals do not need to be changed
Answer: A
Explanation: When goals and actual performance are wildly different, one can conclude that the
goals were off in some way, making "planning was not on target" the correct response and ruling
out that it was on target. Concluding that honest measurements were inaccurate is possible but
not a likely or reasonable assumption, so "performance measurements were unreliable" is not
correct. "Goals do not need to be changed" is incorrect because if anything, when goals and
performance are very different, goals do need to be changed.
Diff: 2
28
89) An advantage of feedback control is that it improves ________.
A) motivation
B) productivity
C) groupthink
D) employee-employee relations
Answer: A
Explanation: Though feedback control may marginally or indirectly improve productivity,
relations between employees, none of these effects has been identified as a primary benefit of
feedback control. Groupthink is a negative group dynamic and would not be improved by
feedback. Motivational improvements, on the other hand, have definitely been seen as the result
of feedback, making "motivation" the correct response. Feedback gives workers a view of how
well they are doing and what they need to do to improve, so it increases motivation to attain that
improvement.
Diff: 2
90) Managers exert financial control on an organization using ________ analysis.

A) activity
B) productivity
C) ratio and budget
D) productivity and resource
Answer: C
Explanation: Financial controls on organizations are applied using ratio and budget analyses,
making that choice the correct response and ruling out all other responses. Ratio analysis
includes the computation of such things as liquidity, leverage, and profitability.
Diff: 2
91) ________ is a measure of an organization's ability to meet its current debt obligations.
A) Leverage
B) Activity
C) Liquidity
D) Profitability
Answer: C
Explanation: Liquidity, the ratio of current assets to current liabilities, is a measure of an
organization's ability to meet its debt payments, making that the correct response. Leverage, the
ratio of total debt to total assets, is a measure of how much debt a company has to finance its
assets. Activity, the ratio of sales to inventory, is a measure of how well a company uses its
assets. Profitability, the ratio of net after-tax profits to total sales, is a measure of how good a
company is at using its assets to generate profits.
Diff: 2
29
A) Profitability
B) Activity
C) Leverage
D) Liquidity
Answer: B
Explanation: Activity, the ratio of sales to inventory, is a measure of how well a company uses
its assets, making that choice the correct response. Leverage, the ratio of total debt to total assets,
is a measure of how much debt a company acquires to finance its assets. Liquidity, the ratio of
current assets to current liabilities, is a measure of an organization's ability to meet its debt
payments. Profitability, the ratio of net after-tax profits to total sales, is a measure of how good a
company is at using its assets to generate profits.
Diff: 2
A) Profitability
B) Liquidity
C) Activity
D) Leverage
Answer: D
Explanation: Leverage, the ratio of total debt to total assets, is a measure of how much debt a
company acquires to finance its assets, making that choice the correct response. Profitability, the
ratio of net after-tax profits to total sales, is a measure of how good a company is at using its
assets to generate profits. Liquidity, the ratio of current assets to current liabilities, is a measure
of an organization's ability to meet its debt payments. Activity, the ratio of sales to inventory, is a
measure of how well a company uses its assets.
Diff: 2
94) ________ is a measure of how readily a company can use its assets to generate profits.
A) Profitability
B) Leverage
C) Liquidity
D) Activity
Answer: A
Explanation: Profitability, the ratio of net after-tax profits to total sales, is a measure of how
good a company is at using its assets to generate profits, making that choice the correct response.
Liquidity, the ratio of current assets to current liabilities, is a measure of an organization's ability
to meet its debt payments. Activity, the ratio of sales to inventory, is a measure of how well a
company uses its assets. Leverage, the ratio of total debt to total assets, is a measure of how
much debt a company acquires to finance its assets.
Diff: 2
30
95) A company looks at its expenses and finds that its payments to freelancers increased
significantly over the past few months, exceeding the budget by 25 percent. This is an example
of ________.
A) using a budget for planning
B) using data to confirm a budget
C) justifying expenses with a budget
D) using a budget for monitoring and controlling
Answer: D
Explanation: A budget can be used as a planning tool or as a monitoring and controlling tool. In
this example, actual expenses are compared to the amount reserved for expenses in the budget
and a discrepancy is found. This is an example of using a budget to monitor and control business
operations.
Diff: 2
96) A company looks at its expenses and finds that its payments to freelancers increased
significantly over the past few months, exceeding the budget by 25 percent. Which of the
following is the most reasonable action for the company to take?
A) revise the budget
B) fire the people who were responsible for the expenses
C) ignore the expenses as an aberration
D) see what the expenses were for
Answer: D
Explanation: Revising the budget, firing the people who were responsible for the expenses, and
ignoring the data are all hasty and foolish options. The only useful option would be to investigate
the expenses to see if they were legitimate.
Diff: 2
97) A company looks at its expenses and finds that its electricity costs have increased, exceeding
the budget by 20 percent. Which of the following would be most likely to require immediate
action on the part of the company?
A) Overall costs for electricity have gone up by 25 percent.
B) Overall utility costs have gone up by 15 percent.
C) Overall costs for electricity have gone down by 5 percent.
D) Overall utility costs have stayed steady.
Answer: C
Explanation: The fact that electricity costs have gone down but the company's electricity bill has
gone up indicates a situation that warrants further investigation and perhaps immediate action if
the increase cannot be somehow justified.
Diff: 2
31
98) When a budget is formulated, it is being used as a(n) ________ tool.
A) organizing
B) controlling
C) planning
D) leadership
Answer: C
Explanation: When first formulated, a budget functions as a planning tool because it is used to
estimate costs and allocate resources in the future. This makes "planning" the correct response
and eliminates the other three choices because they refer to management functions that occur
later in the sequence.
Diff: 2
99) When a budget is used for controlling, it provides ________ against which resource
consumption can be compared.
A) quantitative standards
B) qualitative standards
C) flexible standards
D) nonnumerical standards
Answer: A
Explanation: A budget provides definite, quantitative standards that can be used for comparison
with actual consumption data, making "quantitative standards" the correct response. Budgets
provide precise quantities that are clearly not nonnumerical, flexible, or qualitative.
Diff: 2
100) A household that cuts back on supermarket spending after going overbudget on its food
budget is using the budget as a(n) ________.
A) planning tool
B) controlling tool
C) organizing tool
D) leading tool
Answer: B
Explanation: In this case, the budget is being used as a controlling tool because the household is
adjusting its consumption as a result of exceeding its budget in a particular area. The budget is
providing a check on spending. This makes "controlling tool" the correct response. When the
budget was first formulated, it was being used as a planning tool. Later, when the budget was
used to guide spending, it was being used as a leadership tool. When the budget helped
determine who was going to buy what and when, it was being used as an organizing tool.
Diff: 2
32
101) A family that is using a computer program to create a formal household budget is using the
budget as a(n) ________.
A) planning tool
B) controlling tool
C) organizing tool
D) leading tool
Answer: A
Explanation: Here, the budget is being used as a planning tool because the family is creating a
household spending plan, making "planning tool" the correct response for this question. The
budget is not being used as a controlling tool because it is simply a plan at this stage; it is not
allowing family members to adjust their behavior, making "controlling tool" an incorrect
response. Later, if the budget gets used to guide spending, it will be used as a leadership tool.
Similarly, if the budget is referred to help determine who is going to buy what and when, it will
be used as an organizing tool.
Diff: 2
102) A management information system (MIS) provides managers with ________ data.
A) analyzed and processed
B) raw
C) unanalyzed
D) numerical
Answer: A
Explanation: An MIS is useful because it provides managers with organized, processed, useful
forms of data, not data that is raw or unanalyzed. "Numerical" is not correct because much of the
data that an MIS supplies will not be numerical.
Diff: 2
103) All of the following are important in efforts to protect information in an organization
EXCEPT ________.
A) firewalls
B) encryption
C) search engines
D) data backups
Answer: C
Explanation: Firewalls protect information by providing barriers that prevent hackers and other
unauthorized users from accessing organizational files. Encryption protects information by
encoding data into a form that can't be penetrated or accessed by unauthorized users. Data
backups protect information by saving valuable files that can get lost or damaged in a computer
system. Search engines are the one choice in this question that are not explicitly used for
protecting information, so this choice is the correct response.
Diff: 2
AACSB: Information technology
33
104) A balanced scorecard approach creates goals in four key performance areas and assesses
________.
A) whether the majority of them are met
B) whether all four goals are met
C) whether financial goals exceed the other goals
D) which goals are exceeded
Answer: B
Explanation: A balanced approach sets goals in four performance areas–financial, customer,
internal processes, and people/innovation/growth–and assesses how well balanced the company's
performance is, making "whether all four goals are met equally" the correct response and
eliminating all other responses.
Diff: 2
105) The key to feedforward controls is taking action while the problem is occurring.
Answer: FALSE
Explanation: The key to feedforward control is taking action before the problem occurs, not
while it occurs.
Diff: 2
106) A spell-checker that corrects words as you type in a word processing program is an example
of feedforward control.
Answer: FALSE
Explanation: A spell-checker that corrects words as they are being typed is making the
correction as the event occurs, so it is an example of concurrent control, not feedforward control.
Diff: 2
107) Direct supervision is the best-known form of concurrent control.

Answer: TRUE
Explanation: When managers directly watch over what workers are doing and make corrections
in real time they are using concurrent control.
Diff: 2
108) A GPS that tells you that you are making a wrong turn is an example of concurrent control.
Answer: TRUE
Explanation: The GPS is operating in real time and correcting the situation as the event is
occurring, making it a concurrent form of control.
Diff: 3
34
109) A major advantage of feedforward control is that it increases employee motivation.
Answer: FALSE
Explanation: Feedback control, not feedforward control, is best for motivation because it
provides information so employees can know exactly how their performance measures up.
Diff: 2
110) The major drawback of feedback control is that by the time the manager has the
information, the problem has already occurred.
Answer: TRUE
Explanation: Feedback always takes place after the fact. Therefore, a major drawback to
feedback control is that it cannot anticipate problems or deal with ongoing problems.
Diff: 2
111) Liquidity compares the total amount of debt a company has to its total assets.
Answer: FALSE
Explanation: Comparing the total amount of debt a company has to its total assets is a measure
of leverage, not liquidity.
Diff: 2
112) The acid test compares the difference between current assets and inventories to current
liabilities.
Answer: TRUE
Explanation: The acid test is used to test liquidity.
Diff: 2
113) Return on investment compares net profit after taxes to total sales.
Answer: FALSE
Explanation: Return on investment compares net profit after taxes to total assets, not total sales.
Diff: 2
114) Profitability ratios are a traditional way for a company to measure success.
Answer: TRUE
Explanation: Profitability ratio, identified as net profit after taxes over total sales or assets, is a
useful traditional way to measure how efficiently company assets produce profit.
Diff: 2
35
115) Budgets can be effective tools for both planning and controlling.
Answer: TRUE
Explanation: Budgets are highly effective planning tools. However, once created, budgets also
function as effective controlling tools since they can be used as standards for gauging monetary
activity.
Diff: 2
116) A management information system (MIS) focuses on providing managers with the raw data
that pertains to the organization.
Answer: FALSE
Explanation: The goal of an MIS is to give managers access to useful, processed data that has
been organized and interpreted, not raw data.
Diff: 2
117) Firewalls, data backup, and encryption help prevent security breaches in organizations.
Answer: TRUE
Explanation: These measures can prevent ordinary breaches for the most part. In rare cases, even
with these measures, compromising information can leak out into the world at large, so most
organizations need all of the security instruments they can get.
Diff: 2
118) A balanced scorecard with respect to organizational performance includes areas that are
customer-oriented and growth-oriented, not financially-oriented.
Answer: FALSE
Explanation: A balanced scorecard includes financial performance, as well as assets from
people, innovation, and growth.
Diff: 2
119) A scorecard with respect to organizational performance should always focus on all four
performance areas equally.
Answer: FALSE
Explanation: Many organizations choose not to use a balanced approach; instead, they focus
disproportionately on one (or more) particular area, such as customer relations, and de-
emphasize other areas.
Diff: 2
36
120) In a short essay, describe feedforward control and give an example of its use.
Answer: Feedforward control is the most desirable type of control because it heads off problems
before they actually occur. Feedforward control is any controlling activity that takes place before
problematic behaviors are likely to occur.
An example of feedforward control occurs when sports venues ban the sale of alcohol during
certain events that are likely to result in fighting or similar incidents. By eliminating a factor that
always exacerbates and is sometimes the primary cause of violence ahead of time, managers
avoid the trouble that violence brings.
Diff: 3
121) In a short essay, describe concurrent control and give an example of its use.
Answer: Concurrent control, as its name implies, takes place while an activity is in progress.
Direct supervision is the best-known form of concurrent control. A good example of a company
using concurrent control to increase profits is done by Google. Each time a user clicks on a
Google ad, the click is registered and reflected in the data that Google collects. If the ad is
unsuccessful, Google can report back to the sponsor quickly to change the ad's placement or
composition.
Diff: 3
122) In a short essay, describe feedback control and give an example of its use.
Answer: The most popular type of control relies on feedback. In feedback control, the control
takes place after the activity is done. Feedback control tells managers about the effectiveness of
their planning effort and can provide information that enhances employee motivation.
Any performance measurement for a company is an example of feedback control. Plans are made
and standards are set. Those standards are compared to actual sales totals. If sales totals and
standards generally agree, managers consider their plans accurate and their performance
successful. If standards and totals do not agree, managers can take action to remedy the situation.
Diff: 3
37
123) In a short essay, explain how global companies compare to domestic companies with
respect to controlling workers.
Answer: In general, in a global company, the greater the distance between the home country and
the local branch, the more the corporate office feels the need to use formal monitoring methods.
These formal monitoring methods may include requiring formal reports to be made and using
technological means to monitor employee behavior. For example, Seven and i Holdings, a
Japanese conglomerate, uses computer monitoring to do such things as measure sales, keep track
of inventory, and schedule tasks for workers.
Diff: 3
AACSB: Written and oral communication
124) In which country would highly centralized decision making be more likely to be prevalent?
A) Mexico
B) Scotland
C) Japan
D) Australia
Answer: A
Explanation: In less technologically advanced countries such as Mexico, direct supervision and
highly centralized decision making are more common than in advanced countries, where
computer technology takes care of many monitoring functions. This makes "Mexico" the correct
response for this question and rules out more technologically advanced countries like Scotland,
Japan, and Australia.
Diff: 2
AACSB: Diverse and multicultural work environments
LO: 14.4: Discuss contemporary issues in control.
125) Direct supervision as a basic means of control is much more common in ________
A) small countries
B) democracies
C) more technologically advanced countries
D) less technologically advanced countries
Answer: D
Explanation: In countries that are technologically advanced, computers often play an important
role in monitoring basic transactions. For example, supermarket bar codes monitor sales and
inventories in places where they are available. In less technologically advanced places, there is
no choice but for direct supervision and monitoring to be used instead of these electronic forms
of control, making "less technologically advanced" the correct response and ruling out "more
technologically advanced" as a correct response. Whether a country is small or a democracy has
no bearing on how technologically advanced it is, so these choices are not correct.
Diff: 2
38
126) When comparing Mexico to Scotland, you would expect Scottish workers to have
________.
A) lower labor cost per worker
B) higher labor cost per worker
C) more satisfaction
D) worse working conditions
Answer: B
Explanation: As a more technologically advanced country, you would expect a Scottish facility
to have higher labor costs. Level of satisfaction and working conditions could not be determined
based on culture alone.
Diff: 2
127) Which statement about employee privacy is correct?

A) Employers have a legal right to monitor on-the-job employee phone calls.
B) Employers have no legal right to monitor on-the-job employee phone calls.
C) Employers have the legal right to monitor all employee phone calls.
D) Employers do not have the right to monitor any employee phone calls.
Answer: A
Explanation: The correct statement is that employers have the right to monitor any workplace
activity, whether it is phone calls, computer use, or some other activity. This right makes the
choice indicating no legal right to monitor on-the-job phone calls an incorrect response. What
employers don't have is the right to intrude in employees' lives outside of the workplace, making
the choice indicating a legal right to monitor all phone calls an incorrect response. "Employers
do not have the right to monitor any phone calls" is not correct because it rules out all phone
calls, and clearly employers can monitor in-house workplace calls.
Diff: 2
AACSB: Ethical understanding and reasoning
128) Which of the following employer practices is NOT legal?

A) reading employee email
B) monitoring employees in a bathroom
C) tracking an employee's whereabouts in the workplace
D) monitoring an employee's personal home computer
Answer: D
Explanation: Surprisingly, employers can legally read email, monitor employees anywhere in
the workplace, including the bathroom, and track employees' whereabouts in the workplace.
What employers cannot do is monitor anything of a personal nature at home or away from the
workplace, making "monitoring an employee's personal home computer" the correct response.
Diff: 2
39
129) Of the following choices, this is the most common reason for companies firing employees.
A) misuse of office phones
B) inappropriate computer use
C) watching online video
D) leaking company secrets
Answer: B
Explanation: Though abuse of office telephones is a major concern for companies, it is small
compared to overall inappropriate computer use, which includes shopping, video, emailing, and
web surfing. "Watching online video" is incorrect because watching online video is part of
overall inappropriate computer use. "Leaking company secrets" is also a major problem, but
there are no statistics that show the problem is even remotely as widespread as computer abuses.
Diff: 2
130) This has proved to be very helpful in establishing culpability in sexual harassment cases.
A) monitoring phone calls
B) monitoring emails
C) monitoring employee whereabouts
D) monitoring Internet use
Answer: B
Explanation: Though the monitoring of phone calls might be marginally helpful in battling
sexual harassment, emails have proven to be a major way to find out what really happened in
these cases, making "monitoring emails" the correct response. A common way for alleged
harassers and victims to communicate is via email, so harassment cases almost always leave an
email trail. If companies keep email records, they can recreate events and often eliminate
ambiguity in these cases. Monitoring employee whereabouts and overall Internet use have no
real bearing on harassment cases, so they are not correct choices.
Diff: 2
131) What fraction of U.S. employees do personal website surfing every day?
A) less than one-quarter
B) slightly less than half
C) more than half
D) almost all
Answer: C
Explanation: A recent survey indicated that over 50 percent of employees did personal web
surfing on the Internet every day, making "more than half" the correct response.
Diff: 2
40
132) Annual losses from organizational theft and fraud amount to about ________ per worker.
A) $500
B) $2500
C) $4500
D) $6000
Answer: C
Explanation: Shockingly, the losses from workers taking equipment, software and supplies and
filing false expense reports come to about $4500 per person per year, making that choice the
correct response and ruling out all other responses. These abuses include everything from
loading company software on home computers to stealing a copy machine from a store room.
Diff: 2
133) An effective feedforward strategy for dealing with employee theft is ________.
A) screen workers before they are hired
B) openly state the real costs of stealing
C) have managers set good examples
D) hire professional investigators
Answer: A
Explanation: Though stating costs and setting good examples may be helpful, these are
concurrent, not feedforward, measures so they are incorrect responses. Hiring investigators is a
feedback response, so is an incorrect response. Of the choices given, only prescreening workers
is a feedforward strategy, so "screen workers before they are hired" is the correct response.
Diff: 2
134) An effective concurrent strategy for dealing with employee theft of supplies and equipment
is ________.
A) establish theft policies
B) redesign all control measures
C) "lock-out" options on electronic devices
D) video surveillance
Answer: D
Explanation: Though establishing theft policies and redesigning all control measures may be
helpful, these are not concurrent measures, so they are incorrect responses. "Lock-out" options
would work for electronic crimes, but not theft of material equipment, so this choice is not a
correct response. Of the choices given, only video surveillance would be a deterrent to stealing
tangible material equipment and supplies, so "video surveillance" is the correct response for this
question.
Diff: 2
41
135) All of the following are common rationalizations that workers use to justify workplace theft
EXCEPT ________.
A) "Everyone does it."
B) "They'll never miss it."
C) "I deserve this."
D) "I owe money from gambling."
Answer: D
Explanation: The three incorrect choices are commonly heard rationalizations that people use to
justify stealing from large organizations. They make sense and sound plausible, but they do not
in any way morally or legally justify theft. Owing gambling money, on the other hand, is not an
after-the-fact rationalization but rather an actual reason for stealing–the person needs the money–
making that choice the correct response. Note that though this choice provides a reason for
stealing, it still doesn't in any way justify stealing in a moral or legal sense.
Diff: 2
136) In any given week, about ________ workers are attacked by coworkers or former
coworkers and seriously injured in the United States.
A) 1 percent of all
B) 10
C) 25
D) 100
Answer: C
Explanation: Every year, about 1300 workers are assaulted by current or former coworkers and
seriously injured. This comes out to about 25 of these incidents per week, making "25" the
correct response and ruling out the other responses.
Diff: 2
137) Workplace violence is most likely to occur in ________.

A) open organic workplaces
B) functional workplaces
C) dysfunctional workplaces
D) both functional or dysfunctional workplaces–violence shows no pattern
Answer: C
Explanation: Functional and organic workplaces are unlikely sites for violence. Violence tends
to occur in rigid, high-pressure, abusive dysfunctional workplace atmospheres in which
employees are shown little respect and have little power over their own activities, making
"dysfunctional workplaces" the correct response. Note that "both functional or dysfunctional
workplaces" is incorrect because violence does have a greater probability in dysfunctional
locales.
Diff: 2
42
138) Management of a global company often relies on highly formalized reports as controls for
distant operations.
Answer: TRUE
Explanation: Without being able to observe a distant operation directly, managers of global
companies often need to rely on formal reports and other formal measures.
Diff: 2
139) Control measures in two different locations in different parts of the world are always
comparable.
Answer: FALSE
Explanation: In fact, control measures often are not comparable. Profit per worker, for example,
may be wildly different in Mexico than it is in France, so control measures must reflect these
differences.
Diff: 2
140) Employers have the legal right to read personal email of employees if it is sent on a
company computer.
Answer: TRUE
Explanation: Employers do have the right to monitor private correspondences that take place in
the workplace.
Diff: 2
141) Employee theft amounts to less than $450 annually per worker in the United States.
Answer: FALSE
Explanation: Estimates show that employee theft averages a loss of about $4500 annually per
worker, not $450.
Diff: 2
142) Workplace violence, in all its many forms, affects around 250,000 U.S. workers each year.
Answer: FALSE
Explanation: The U.S. National Institute of Occupational Safety and Health says that each year
some 2 million American workers are victims of some form of workplace violence, such as
verbal abuse, yelling at coworkers, purposeful damage of machines or furniture, or assaulting
coworkers.
Diff: 2
43
143) A rigid, militaristic, high-pressure workplace that includes intimidation is likely to be a
dysfunctional work environment.
Answer: TRUE
Explanation: Rigidity, pressure, and intimidation are key signs that a workplace is dysfunctional.
Diff: 2
144) In a short essay, describe workplace privacy concerns for managers today. What are
managers doing to control this issue?
Answer: Employers can (and do), among other things, read employee email, tap telephones, and
monitor computer use. This may sound like an illegal invasion of privacy, but in the workplace,
the employer in a sense "owns" the worker's time and has a right to make sure that it is not
wasted or abused.
Recreational on-the-job Web surfing is thought to cost billions of dollars in lost work
productivity annually, and employers have a right to try to minimize those losses. Employers also
monitor employee email to provide unambiguous evidence for discrimination and sexual
harassment cases. Finally, companies monitor computer use to ensure that company secrets aren't
being leaked either deliberately or inadvertently.
Although employees may think that it's unfair for a company to monitor their work
electronically, the courts have ruled that since the computer belongs to the company, managers
have a right to view everything on it. Because of all of the serious issues listed above, many
companies are developing and enforcing workplace monitoring policies. There should be a
balance between management's need to know and the effect employee monitoring may have on
employee morale.
Diff: 3
145) In a short essay, explain why employers feel the need to monitor employee behavior.
Answer: First and foremost, employers are concerned about the amount of time wasted by
employees using the Internet for their own private interests. These interests can range from a
quick check of a stock price to an employee watching a game or a movie during work hours. The
second reason that employers monitor is to avoid situations in which sexual harassment or a
hostile work environment arises through emails or blog and social network postings. Third,
employers monitor to make sure that company secrets aren't being leaked either deliberately or
inadvertently.
Diff: 3
44
146) In a short essay, describe one feedforward, one concurrent, and one feedback method for
controlling employee theft.
Answer: A feedforward method for controlling employee theft might be to spell out specific
policies for theft to make sure that employees don't mistake "helping themselves" to company
resources as acceptable. A concurrent method for controlling employee theft would be to install
video security cameras. A feedback method for controlling employee theft would be to broadly
publicize any theft incidents (without naming names) to make sure that all employees are aware
that the company is paying close attention to employee thefts.
Diff: 3
45

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Fundamentals of Management, 10e, Global Edition (Robbins)

Chapter 14 Foundations of Control

1) The control management function ensures that ________ in an organization.

2) A major part of the controlling function of management is to ________.

6) Controlling is the ________ in the management process.

8) Effective controlling can help managers ________.

9) The controlling function helps managers protect an organization's ________.

19) The first step in the control process is to ________.

21) A manager measuring actual performance is like a teacher ________.

22) This is the most informal form of performance measurement.

24) An advantage of management by walking around is ________.

33) What managers choose to measure is largely determined by

38) The second step in the control process is to ________.

42) The third step in the control process is to ________.

44) When should a manager's course of action be to do nothing?

50) Immediate corrective action is designed ________.

62) Personal observation as a form of control measurement requires little time.

Managers choose to do nothing when performance measures up favorably to standards.

82) Direct supervision of employees is a form of ________ control.

90) Managers exert financial control on an organization using ________ analysis.

107) Direct supervision is the best-known form of concurrent control.

127) Which statement about employee privacy is correct?

128) Which of the following employer practices is NOT legal?

137) Workplace violence is most likely to occur in ________.

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