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Week 5 Knowledge Check

Concepts

Mastery

Score: 17/17
Questions

Control Process

100%

Feedforward/Concurre
nt/Feedback Controls

100%

Financial Controls

100%

Balanced Scorecard

100%

10

11

12

Benchmarking

100%

14

15

16

17

13

Concept: Control Process


Concepts

Mastery

Control Process

100%

Questions
1

17

1.The control process assumes that ________.


A. employees require clear directions from
management
B. employees are underqualified and require
training
C. specific goals for performance were
already created during the planning
process
D. employee monitoring costs are part and
parcel of doing business
Correct!
The correct answer is: C. Because the control process
measures actual performance against standards, these

standards should already be in place when the control


process begins. If standards are not created during the
planning process, the control process will not have a goal
against which to measure actual performance.
2.An example of control criteria that can be used in any situation is
________.
A. number of calls taken per day
B. employee satisfaction
C. average time to process paperwork
D. client requests completed per hour

Correct!
The correct answer is: B. Because all managers have
employees, control criteria such as employee satisfaction,
turnover, or absenteeism can be used in most situations.
3.In reviewing the result of the control process, managers could
choose to avoid taking action when ________.
A. an employee fails to attain the standard
because of internal problems
B. the variance between actual performance
and the standard is acceptable
C. performance standards are acceptable,
though the employees have not attained it
D. the variance observed from the expected
performance is caused due to unrealistic
standards
Correct!
The correct answer is: B. Even if a variance between actual
performance and the standard exists, if it is acceptable given
the range of variation, a manager can avoid taking action.

Managers can also choose to do nothing if the standard is


being obtained.

17.If a manager rationalizes that he does not have time to investigate


the source of a problem and instead resorts to putting out fires, the
manager is missing the use of ________.
A. bureaucratic control
B. immediate corrective action
C. basic corrective action
D. concurrent control

Correct!
The correct answer is: C. Basic corrective action allows a
manager to find the source of a deviation. When using this
type of corrective action, a manager allows a deviation to
occur, and then investigates the how and why of the
deviation. While this generally takes longer, it can be more
effective in the long run.

Concept: Feedforward/Concurrent/Feedback Controls


Concepts

Mastery

Feedforward/Concu
rrent/Feedback
Controls

100%

Questions
4

4.Which of the following types of control prevents problems because


it takes place prior to the actual activity?
A. Feedforward control
B. Concurrent control
C. Feedback control
D. Management control

Correct!
The correct answer is: A. The key to feedforward controls is
taking action before a problem occurs; therefore, problems
can be prevented, and managers can be proactive in
handling issues.
5.Management by walking around is what type of control?
A. Feedforward control
B. Concurrent control
C. Feedback control
D. Reactive control

Correct!
The correct answer is: B. Management by walking around is

a type of concurrent control that involves direct supervision.


By using this type of control, a manager can see how his or
her employees are performing at that very moment in time,
and the manager can correct any issues.
6.What type of control gives employees information on how well they
performed, and therefore, can increase motivation?
A. Feedforward control
B. Concurrent control
C. Feedback control
D. Proactive control

Correct!
The correct answer is: C. While there are disadvantages to
using feedback controls, the fact that the work has already
occurred can give managers and employees valuable
insights into their performance. Receiving this information
can enhance motivation and increase future job performance.

Concept: Financial Controls


Concepts

Mastery

Financial Controls

100%

Questions
7

7.The current ratio and acid test are two examples of what type of
ratio?
A. Activity
B. Liquidity
C. Leverage
D. Profitability

Correct!
The correct answer is: B. Liquidity ratios express an
organizations level of ability to repay creditors who may have
a claim on the company. The higher the liquidity ratio, the
more an organization can meet its current debts.
8.Which of the following ratios measures an organizations ability to
meet financial obligations (debt) and allow someone to understand
the companys use of different methods of financing to pay interest?
A. Liquidity ratios
B. Leverage ratios
C. Profitability
D. Activity ratios

Correct!
The correct answer is: B. Leverage ratios examine the
organizations use of debt to finance its assets and its ability
to meet the interest payments. Common leverage ratios
include debt to assets and times interest earned.
9.If a firm wants to measure items related to sales and turnover, it
should use what type of ratio?
A. Liquidity
B. Leverage
C. Profitability
D. Activity

Correct!
The correct answer is: D. Activity ratios measure an
organizations ability to take different accounts on the firms
balance sheet and convert these accounts into cash or sales.
Ratios such as inventory turnover and total asset turnover
are common measures of activity ratios.

Concept: Balanced Scorecard


Concepts

Mastery

Balanced Scorecard

100%

Questions
10

11

12

13

10.Which of the following is a performance measurement tool that


looks at four areas that can help a company succeed?
A. Market value method
B. Economic value method
C. Balanced scorecard approach
D. Information control approach

Correct!
The correct answer is: C. A balanced scorecard evaluates
organizational performance using four different areas that
contribute to a companys performance: financial, customer,
internal processes, and people/innovation/growth assets.
This tool measures the difference between predetermined
standards and actual performance, and it allows managers to
complete gap analysis to refine the organizations
performance.

11.Suzys Packing Supplies is an organization that prides itself on


keeping its employees happy. In fact, most of Suzys performance
measures are based around the firms workers. If Suzy chooses to
measure the organizations performance using the balanced
scorecard tool, which one of the four factors will she focus on the
most?
A. Financial
B. Customer
C. Internal processes
D. People/innovation/growth strategies

Correct!
The correct answer is: D. In this example, Suzys Packing
Supplies prides itself on keeping its employees happy.
Therefore, the organization would probably first focus on
people/innovation/growth strategies to ensure the
organization is keeping its employees happy. Although an
organization may focus on one area more than another, all
areas of the scorecard should be considered when
performing gap analysis.
12.Which of the following options listed would be an example of a
measurement in the internal processes area of a balanced
scorecard?
A. Employee satisfaction
B. Customer satisfaction
C. Quarterly profits
D. Duplicate activities across functions

Correct!
The correct answer is: D. Duplicate activities across functions
are a measure of the duplication inherent in a specific part of
a firms processes. Because this would occur inside an
organization, it would be a measure of internal processes.
13.Which of the four areas of a balanced scorecard can help a firm
best answer the question, how do we look to shareholders?
A. Customer
B. Internal processes
C. People/innovation/growth assets
D. Financial

Correct!
The correct answer is: D. In for-profit firms, shareholders are
mainly concerned with whether an organization generates a
profit. Therefore, the question how do we look to
shareholders can be best answered by the measures in the
balanced scorecards financial section.

Concept: Benchmarking
Concepts

Mastery

Benchmarking

Questions

100%

14

15

16

14.________ is a method through which organizations compare


themselves to other firms to improve their processes and products.
A. Factor analysis
B. Total quality management
C. Market positioning
D. Benchmarking

Correct!
The correct answer is: D. Benchmarking is the search for the
best practices among competitors or noncompetitors that
lead to superior performance. Organizations use
benchmarking to see how they compare with the best firms in
the world, and to see how one firm can improve after learning
from others.
15.Firms can benchmark their performance against competitors, but
they can also benchmark against themselves. This is known as
_____.
A. self-analysis
B. planning
C. intra-organizational benchmarking
D. internal benchmarking

Correct!
The correct answer is: D. Internal benchmarking involves an
organization benchmarking its practices against itself; for
example, this could include benchmarking processes in one
department against the processes in another. Internal
benchmarking allows best practices in the firm to not go
ignored or unidentified.
16.Amys Waffle Hut is not performing well in inventory turnover
(products are sitting unused for too long, and some are spoiling). To
correct this, Amy walks across the street to speak to Sue, owner of
Sues Cinnamon Rolls, to see how she handles her inventory. Amy
is engaged in what process?
A. Competitor sabotage
B. Networking
C. Competitor analysis
D. Benchmarking

Correct!
The correct answer is: D. In this case, Amy is using
benchmarking. By seeing how Sue manages her inventory,
Amy can compare Sues processes against her own. If Sues
processes are better than Amys, Amy can adapt her
processes to become more efficient, and ultimately, more
successful.