MGMT 371 Sample QuestionsChapter 191. What info is needed to effectively control an organization?- Info about org’s performance standards and actual performance and what actions to tae to fix any deviations from the standards.2. What are 4 components of the Balanced Scoreboard and what do they track?- Financial: use net income, ROI, etc- Customer service: how customer views org; retention; satisfaction- Internal business process: production and operating statistics- Potential to Learn and Grow: how well resources and human capital are being managed for company’s future (ex: employee retenetion, new product info)3. What are 4 Steps of setting up a Feedback control system?- Establish Performance Standards (define clearly)- Measure Actual Performance (measurements should be related to standards set in Step 1)- Compare Performance to Standards (compute the variance)- If Adequate- do nothing or provide reinforcement. If Inadequate- Take Corrective Action.4. When establishing performance standards, what should the standards focus on?- Inputs (feed forward control)- Anticipate problems. Ex: Hiring based on tests and qualifications, Inspecting raw materials, inspecting parts from suppliers- Ongoing activities (concurrent)- solve problems as they happen. Ex: assessing daily operations, employee participation systems, turning a room over in a hotel- Outputs (feedback)- Solving problems after they occur. Ex: analyze sales/employee, final quality inspection, survey customers after they used product or service. 5. What does the Total Quality Management Movement focus on when setting standards of performance and why?- Inputs and Ongoing activities because of its proactive approach. 6. When measuring standards, which is a better measurement tool to use and why, ratios or absolute values?- Ratios because they are easier to compare and a better indication if you are you actually doing better7. Does deviation in either direction warrant attention?- YES because if it’s too good…it could be too good to be true (distortion) or if some unit is doing really well, find out about it and replicate it. There may be unusual risks involved with the huge increase. The acceptable range of a standard includes the lower acceptable limit, the standard, and the upper acceptable limit. 8. How much deviation is substantial? - Depends on the organization’s risk of being out of control (if it is a substantial risk, lower levels of deviation are allowed and therefore there’s a narrow acceptable range. Vice versaif being out of control is a small risk, there can be a wide acceptance range of deviation.)9. How much control should be exercised? - Controls must justify themselves in terms of the amount saved. Controls that take more money than the amount saved are not ok. People react negatively to too much or too little control.10. What is one of the most commonly used methods of managerial control?- Budgetary control11. What are 4 typically used budgets that managers use in the budget control system?- Expense budget- Revenue budget- Cash budget- Capital budget12. What happens when there is a difference between actual and budgeted expenses?- Actual > Budgeted: identify possible problems and take action if needed; also could be inefficiency or expenses are higher- Actual < Budgeted: exceptional efficiency or possibly the failure to meet some standards- Shows the need for further investigation either way13. What happens when there is a difference between actual and budgeted revenues?- Actual >Budgeted: can organization obtain necessary resources to meet the higher-than-expected demand for its products or services- Actual <Budgeted: Investigate whether the organization can improve revenues14. What are the two major financial statements?- Balance sheet- Income statement15. What is the most common measurement used in financial analysis and the most common types?- Ratios- Common types: liquidity, activity, profitability, leverage16. Which control process do companies use more, hierarchal or decentralized, and why?- Decentralized because of movement toward employee participation and empowerment. 17. What is the goal of Open-book Management?- To get every employee thinking and acting like a business owner and help them to appreciate why efficiency is important to firm’s success as well as their own by providing them with same info owner’s have18. How can organizations implement TQM?- By encouraging managers and employees to collaborate across departments and functions as well as with customers and suppliers, to identify areas for improvement, and to work on all of these things daily.19. What are some TQM techniques and what do they entail?- Quality Circles: group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work. They are free to collect data and take surveys. These push decision making to an organizational level at which recommendationscan be made by the people who do the job and know it better than anyone else.- Benchmarking: the continuous process of measuring products, services, and practices against the toughest competitors or these companies recognized as industry leaders to identify areas for improvement. The key lies in analysis of current procedures and determining areas of improvement.- Six Sigma: a highly ambitious quality standard that specifies a goal of no more than 3.4 defects per million parts. It means taking nothing for granted, emphasizes a disciplined, relentless pursuit of higher quality and lower costs. 5 step methodology referred to as DMAIC- Define, Measure, Analyze, Improve, Control, all of which help companies approach and solve problems.- Reduced Cycle Time: refers to the steps taken to complete a company process, such as making an airline reservation, processing an online order, or opening a retirement fund. - Continuous Improvement aka Kaizen: implementation of large number of small, incremental improvements in all areas of the organization on an ongoing basis.20. Which TQM technique has the highest probability of success?- Continuous Improvement or Kaizen because it strives to improve things a little bit at a time, all the time21. Since TQM does not always work, what are some factors that contribute to its success?- It’s successful if it enriches jobs and improves employee motivation- Has greater chance of success in corporate culture that values quality and stresses continuous improvement as a