1) Different measures will be required, and appropriate, for different businesses. What preliminary investigations will be required determining which measures are used in a particular case:

A. The objectives/mission of the organisation must be clearly formulated so that when the factors critical to the success of the mission have been identified they can be translated into performance indicators.

B. Measures must be relevant to the way the organisation operates. Managers themselves must believe the indicators are useful.

C. The costs and benefits of providing resources (people, equipment and time to collect and analyse information) to produce a performance indicator must be carefully weighed up.

D. All of the above

E. None of the abov

2) Which of the following is not one of the main parts of the balanced scorecard concept with respect to balancing:

A. financial and non financial measurements.

B. cash flows and non cash flows.

C. short term and long term measurements.

D. leading and lagging indicators.

E. None of the above

3) What best describes why tight control can be considered good control ?

A. Because it provides a high degree of certainty that people will act as the organization wishes (assuming away harmful side-effects)

B. Because it decreases the predictability of actions and reduces the amount of interorganizational information flows to achieve a coordinated effort

C. Because it involves rewarding individuals for generating good results (or punishing them for poor results)

D. All of the above

E. None of the above

4) Advantages of non-financial measures include:

A. More applicable to all areas of a business and easier to calculate

B. Could be easier to understand but is distorted by inflation

C. Specific identification of contribution to organization performance

D. All of the above

E. None of the above

5) The concept of redundancy in management control is generally defined as:

A. Holding employees accountable for the actions they take.

B. Scrutinizing of action plans, investment proposals and budgets.

C. Assigning more people (or machines) to a task than necessary.

D. All of the above

E. None of the above

6) Ratios are a useful way of measuring performance for a number of reasons. Identity which of the following is correct.

A. Ratios are often easier to understand than absolute measures of physical quantities or money values, as ratios relate one item to another.

B. It is easier to look at changes over time using a ratios of one time period with any other period in the past.

C. Ratios provide a way of summarising our organisation s results, and comparing them to any other company.

D. All of the above

E. None of the above

7) Regarding action accountability and results control, which statement is true?

A. As firms grow, their controls evolve usually towards decreased formalization of procedures.

B. As firms grow, their controls evolve usually towards less elaborate information ( accounting ) systems.

C. As firms grow, their controls evolve usually towards increased formalization of procedures.

D. All of the above

E. None of the above

8) Which of the following statement is correct with regard to the balanced scorecard?

A. It is an approach to the provision of information to management to assist strategic policy formulation and achievement.

B. It emphasizes the need to provide the user with a set of information which addresses all relevant issues of performance in an objective and unbiased fashion.

C. The information provided may include both financial and non-financial elements and cover areas such as profitability, customer satisfaction, internal efficiency and innovation.

D. All of the above

E. None of the above

9) Examples of controls which do not focus on measured performance are:

A. return on investment, return on equity and revenue generation

B. results control, action control and personnel control

C. direct supervision, employee profit sharing plan and codes of conduct

D. All of the above

E. None of the above

10) Identify examples of non-financial performance measures.

A. Service quality (Number of complaints, Repeat bookings revenue, Customer waiting time, On-time deliveries)

B. Personnel (Number of complaints received, Staff turnover, Days lost through absenteeism, Direct compensation costs)

C. Marketing effectiveness (Trend in market share, Sales volume growth, Customer visits per salesperson)

D. All of the above

E. None of the above

11) When measuring performance, firms are susceptible to various uncontrollable factors. One of these is economic factors, which can be described as:

A. Microeconomic effects such as loss of income due to a poor marketing campaign.

B. Act of natures, so called (forced majeure), i.e. for instance acts of man or government.

C. Business cycles, competitor actions, changing laws, or foreign exchange rate movements.

D. All of the above

E. None of the above

12) What is an example of gamesmanshift?

A. Creation of slack resources.

B. Lengthy review processes.

C. Negative attitudes.

D. All of the above

E. None of the above

12) A company's Strategy is defined as

A. defining how the company will intend to create value for the stakeholders.

B. defining the critical internal process needed to compete.

C. defining the organizational key capabilities needed to compete.

D. All of the above

E. None of the above

13) What are examples harmful side effects (costs of control) of a control system?

A. Behavioral displacement, gamesmanship and negative attitudes

B. Cost of cash bonuses, internal audit staff

C. Time spent on planning and budgeting activities, on pre-action re-views etc.

D. All of the above

E. None of the above

14) Disadvantages of non-financial measures include:

A. Easy to caclulate and require minimal resources

B. Subjectivity exists in design, interpretation and calculation

C. More is better and can be shared across departments

D. Requires no modifications or changes once setup

E. None of the above

15) Lack of goal congruence occur in organizations when:

A. Self-interested behavior is manifested in laziness.

B. Individual goals do not coincide with organizational goals.

C. Organizational strategies are not linked to organizational objectives.

D. All of the above

E. None of the above

16) A benefit of Results control is that:

A. Behavior can be influenced while allowing significant control over activities

B. It tends to lead to documentation of the accumulation of knowledge as to what works best

C. It is an efficient way of coordination, i.e. they increase the predictability of actions and reduce the amount of inter-organizational information flows to achieve a coordinated effort

D. All of the above

E. None of the above

17) From the case discussion on Fit Food in class, certain members of Fit Food s management used income smoothing. Is Income Smoothing valuable?

A. Any public company will be rewarded by the stock market through improved valuations.

B. For employee incentives based on income, employees appreciate consistent incentive compensation.

C. Income smoothing distorts the financial results in the company.

D. All of the above

E. None of the above

18) Management control can be described as:A. The process by which management is administers the payroll system

B. The process by which management is making use of accounting systems to generate financial reports such as income statements, balance sheets and cash flow statements

C. The process by which management encourages, enables, or, sometimes forces employees to act in the organization s best interests

D. All of the above

E. None of the above