BUSN271 16&17 1. Which of the following is a symptom of an outofcontrol company? A. Flexible work hours for employees B. Highly challenging organizational goals C. Lack of periodic reviews D. Highly rigid work culture E. Lack of new employees 2. Control has been called one of the Siamese twins of management. The other twin is ____. A. planning B. organizing C. leading D. directing E. empowerment 3. Using budgeting, statistical reports, and performance appraisals to regulate behavior and results is considered a component of ____. A. clan control B. market control C. bureaucratic control D. financial audits E. management audits 4. Control based on the use of pricing mechanisms and economic information to regulate activities within organizations is referred to as _____ control. A. clan B. feedback C. market D. feedforward E. bureaucratic 5. A(n) _____ is the level of expected performance for a given goal; it is a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed. A. goal B. objective C. standard D. control process E. audit 6. Which of the following is one of the factors based on which performance standards can be set? A. Efficiency B. Knowledge C. Market share D. Employee satisfaction E. Time used 7. Which of the following is a commonly used source for obtaining performance data? A. Competitors B. Human resource department C. Personal observation D. Upper management E. Technical analysts from outside the company 8. A managerial principle stating that control is enhanced by concentrating on the significant deviations from the expected result or standard is referred to as the principle of ____. A. control B. concentration C. progression D. exception E. standardization 9. Jeremy is in charge of production at Tech Farm Equipment. His job responsibilities include eliminating defects in the equipment parts the factory produces. However, he has advised his crew to alert him only when defects exceed 200 per million, which he considers a serious deviation from standards. In this case, Jeremy is using: A. a management audit. B. the principle of deviation. C. clan control. D. the principle of exception. E. behavioral standards. 10. Which of the following controls takes place before operations begin? A. Feedback control B. Clan control C. Initial control D. Feedforward control E. Concurrent control 11. Which of the following controls is future oriented and aims to prevent problems before they arise? A. Feedback control B. Proactive control C. Feedforward control D. Reactive control E. Concurrent control 12. Electronic monitoring of telemarketers' conversations with potential clients is an example of _____ control. A. feedback B. concurrent C. preliminary D. clan E. feedforward 13. An evaluation of the effectiveness and efficiency of various systems within an organization is called a(n) _____ audit. A. human resource B. management C. activitybased D. budget E. sixsigma 14. An evaluation conducted by one organization on another organization is referred to as a(n) _____ audit. A. external B. competitive C. comparative D. intrinsic E. parallel 15. External audits are generally used for: A. assessing what the company has done for itself. B. evaluating production efficiency. C. evaluating sales effectiveness. D. investigating possible targets for mergers or acquisitions. E. assessing what the company has done for its customers. 16. Periodically assessing a company's own planning, organizing, leading, and controlling efforts is the essential function of ____. A. strategic audits B. feedforward control C. feedback control D. competitive audits E. internal audits 17. The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences is referred to as ____. A. activitybased costing B. budgetary auditing C. budgeting D. financial audits E. budget planning 18. The _____ budget is used for areas of an organization that incur expenses but no revenue, such as human resources and other support departments. A. sales B. production C. cost D. cash E. capital 19. Kate is a financial manager at Nature Feeds, a manufacturer of cattle feed. She makes a budget that shows the anticipated receipts and expenses of the company. The budget also shows her the amount of working capital available and whether the company will need loans. This is the last budget that Kate creates for the upcoming year. Which of the following types of budget is exemplified in this scenario? A. Master budget B. Cash budget C. Cost production budget D. Production budget E. Sales budget 20. _____ budget is used for the cost of fixed assets, such as plants and equipment, that are usually treated not as regular expenses but as investments. A. Master B. Cash C. Capital D. Production E. Sales 21. _____ budget is commonly expressed in physical units, and it can be prepared with information including types and capacities of machines, economic quantity, and availability of materials. A. Master B. Cash C. Capital D. Production E. Sales 22. Procedures used to verify accounting reports and statements are referred to as ____. A. lean accounting B. accounting audits C. activitybased costing D. accounting reforms E. budget audits 23. The activitybased costing system: A. is more appropriate method of cost accounting for rigid hierarchical organizations. B. effectively departmentalizes an organization based on its core functions such as human resources, purchasing, and maintenance. C. provides a more accurate picture of how costs should be charged to products and services. D. assumes that organizations are bureaucratic "machines" that can be separated into component functions. E. fails to allocate costs across business processes and is less effective than traditional methods of cost accounting. 24. Core Rentals has begun a new system of allocating costs according to the tasks their employees perform and the amount of time they spend on the particular tasks. This practice adopted by Core Rentals is referred to as ____. A. unitbased accounting B. timebased auditing C. task accounting D. activitybased costing E. allocation costing 25. A company's balance sheet shows its: A. areas of improvement. B. projected profit. C. strengths, weaknesses, and threats. D. financial picture at a given time. E. performance over time. 26. A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equity is referred to as a(n) ____. A. profit and loss statement B. balance sheet C. expense report D. income statement E. budget report 27. On the balance sheet, the values of the various items a corporation owns are referred to as ____. A. liabilities B. debts C. budgets D. assets E. savings 28. On the balance sheet, the amount accruing to a corporation's owners is referred to as ____. A. a liability B. transfer price C. an asset D. stockholders' equity E. return on investment 29. Which of the following can be drawn tentatively and used as a goal against which actual performance can be measured? A. Statement of cash flow B. Profit and loss statement C. Balance sheet D. External audit E. Capital budget 30. Liquidity ratios indicate a company's: A. ability to pay shortterm debts. B. ability to generate a financial return on sales. C. relative amounts of funds supplied by creditors. D. ability to meet its longterm financial obligations. E. profitability and leverage ratios. 31. The debtequity ratio is an example of a _____ ratio. A. net working capital B. profitability C. leverage D. current E. liquidity 32. Which of the following best describes the use of profitability ratios? A. It shows the relative amount of funds in the business supplied by creditors and shareholders. B. It indicates a company's ability to pay shortterm debts. C. It indicates management's ability to generate a financial return on sales or investment. D. It shows the profit margins for the last six months. E. It indicates the future profits from the current customer base. 33. Management myopia occurs when managers: A. lack motivation to reach their performance targets and in turn find it difficult to motivate subordinates. B. limit their focus to shortterm profits at the expense of longerterm strategic obligations. C. find themselves unable to rise beyond a certain level in the organizational hierarchy. D. are promoted beyond their level of competence. E. find it hard to progress within an organization due to corporate downsizing or paring of middle management layers. 34. In order to gain employee acceptance of a control system, managers should: A. set performance standards that employees view as possible to achieve. B. tell employees that they need not necessarily use the standards. C. focus on controlling negative behavior than enforcing positive behavior. D. set standards low enough that all employees can easily meet them. E. make their own decisions while setting performance standards. 35. In contrast to bureaucratic controls, market controls involve the use of: A. rules and regulations. B. economic forces. C. authority. D. autocratic power. E. norms. 36. Which of the following is the most pertinent argument against market control mechanisms? A. They rely too heavily on rules and procedures. B. Economic measures do not adequately reflect the complete value of an organization. C. They are too dependent on organization culture. D. Hierarchical structure is the only valid way to determine the future success of an organization. E. Decision making and power are too centralized when they are in use. 37. The price charged by one unit for a good or service provided to another unit within the organization is referred to as a(n) _____ price. A. substitute B. transfer C. department D. organizational E. budget 38. The increasing need for clan control is caused by the: A. changes in the employment relationship. B. unchanging nature of management. C. changes in the economic environment. D. changes in government regulations. E. unchanging nature of employees' jobs. 39. Empowerment is important in organizations today because: A. the nature of management has changed. B. employees' jobs have become less challenging. C. employees are more concerned about pay. D. labor unions are growing. E. of the increasing role of technology. 40. The effective use of clan control is associated with employee ____. A. bureaucracy B. manipulation C. empowerment D. dissatisfaction E. unionization 41. _____ control involves creating relationships based on mutual respect and encouraging each individual to take responsibility for his or her actions. A. Autocratic B. Centralized C. Bureaucratic D. Cultural E. Clan Scenario A. Carlos is doing some management consulting for three companies. Powertech is a large corporation that was established in the 1950s. It produces chemical concentrates for industrial cleaning. The organization uses a strict set of rules and regulations with its workforce and tracks a large amount of data using statistical techniques. MidAtlantic Health is a network of regional medical centers that was started 15 years ago. Its management uses a control system that ties salaries to prevailing salary standards, and the center directors are evaluated on the basis of the profitability of their centers. Resources are moved between centers on the basis of transfer prices. Purple Lotus is a software company. Its control process is very future oriented. It likes to prevent problems before they arise, using policies, procedures, and rules. 42. Which of the following control systems does Powertech utilize? A. Bureaucratic control B. Market control C. Clan control D. Democratic control E. Standard control 43. Which of the following control systems does Purple Lotus utilize? A. Feedback control B. Market control C. Clan control D. Feedforward control E. Concurrent control Scenario B. A manager is having problems with employees not complying with the rules about clocking in and clocking out each day. If the employees fail to follow these rules, their pay would be affected. There are three suggestions being considered to address this problem. 1. There would be supervision at the entrance so that employees comply with the rules during shift changes. 2. Reports on employees not complying with the rules will be generated and such employees will be asked to take corrective measures. 3. A new procedure will be implemented that is easier for the employees to follow. Training will be conducted so that each employee knows the policy and the procedure before it is enacted. 44. Which of the following approaches to bureaucratic control is described in option 3? A. Feedback B. Feedforward C. Concurrent D. Market E. Clan Scenario C. ZTech is an organization that has undergone a dramatic transformation over the last few years. Earlier, employees were managed using a wide array of rules, regulations, and procedures. Offending employees were punished for their violations. Today, employees are encouraged to make decisions and come up with innovative solutions to problems they encounter. Most employees are much more satisfied under the new scenario. The group is much more cohesive and is committed not only to the overall success of the organization but also to its standards and reputation. 45. Which of the following types of control systems does the organization currently use? A. Clan B. Market C. Bureaucratic D. Concurrent E. Feedforward Scenario D. Matthew's organization has called a meeting regarding control systems. The top managers of the organization believe that the most important control system is one that is strict and focuses on the authority of top management. Additionally, they want to focus on budget control. Some of the middlelevel managers support a control system that focuses on business units. They also want to outsource some of the company's finance processes to a different company. Finally, Matthew suggests that the company should empower its employees, create relationships based on mutual respect, and focus on the satisfaction of customers. 46. On which of the following control systems do the top managers want to focus? A. Clan B. Market C. Bureaucratic D. Democratic E. Informal 47. On which of the following control systems do the middlelevel managers want to focus? A. Clan B. Market C. Bureaucratic D. Concurrent E. Feedforward 48. On which of the following control systems does Matthew want the organization to focus? A. Clan B. Market C. Bureaucratic D. Concurrent E. Feedforward Scenario E. Phil is the finance manager of Yellow Bus Inc., a communication and information technology corporation. His department is at present working on enforcing some financial controls on the organization. Phil assigns different tasks to his team members. Linda's task is to give him a present financial picture of the company. Eric's task is to give him the values of various items the company owns. Mark's task is to give him a report on the amount the company owes to various creditors. And finally, Lisa's task is to prepare a report on the amount accruing to the corporation's owners. 49. On which of the following will Mark be working? A. Balance sheet B. Assets C. Liabilities D. Stockholders' equity E. Profit and loss statement 50. On which of the following will Lisa be working? A. Balance sheet B. Assets C. Liabilities D. Stockholders' equity E. Profit and loss statement 51. The systematic application of scientific knowledge to a new product, process, or service is called ____. A. instrumentality B. benchmarking C. technology D. collaboration E. job enrichment 52. _____ is a change in method or technology; it is a useful departure from previous ways of doing things. A. Innovation B. Integration C. Reinforcement D. Diffusion E. Arbitration 53. Quadra Tech. was the first company to utilize a new device developed by Intech Corp. that enabled Quadra to find flaws in its cars using sound waves. Quadra Tech. tested the device and provided a testimonial to other organizations about the product. However, the other organizations were hesitant and decided to wait until the product was proven reliable. In this case, Quadra Tech. can be classified as: A. an innovator. B. a late adopter. C. part of the early majority. D. part of the late majority. E. a laggard. 54. Which of the following groups of adopters of a new technology includes wellrespected opinion leaders or organizations to which others look for ideas and uptodate technological information? A. Early adopters B. Late majority C. Innovators D. Early majority E. Laggards 55. Early adopters of new technologies tend to be: A. isolated and highly conservative in their views. B. extremely suspicious of innovation and change. C. less educated and unable to cope with uncertainty and abstraction. D. critical to the success of a new technology. E. the most adventurous and willing to take risks. 56. Who among the following adopters of a new technology are extremely suspicious of innovation and change? A. Laggards B. Early adopters C. Innovators D. Early majority E. Early minority 57. An innovation will spread faster if it: A. is similar to its predecessor. B. is compatible with existing systems and procedures. C. has more rather than less complexity. D. requires a significant commitment to try or test. E. is difficult to copy. 58. QTech Corp. uses a new technology that allows it to produce standard goods in an economical way. In contrast, its competitors strive for uniqueness and use technologies that offer unique products for which customers are willing to pay a premium price. In this case, QTech has an advantage over its competitors as it has adopted a _____ strategy. A. vertical integration B. differentiation C. lowcost D. premium pricing E. predatory pricing 59. Which of the following is a disadvantage of technology leadership? A. Lower profit margins B. Intense competition C. Loss of brand image D. Higher costs E. Establishment of entry barriers 60. Daddy's Girl is an exclusive online store started recently. The store's target market includes fathers who would wish to buy gifts for their daughters. The website has rapidly gained market, learning from a leading website's experience and avoiding costly mistakes. In this case, Daddy's Girl is an example of a(n): A. corporate entrepreneur. B. product champion. C. executive champion. D. intrapreneur. E. technology follower. 61. A _____ helps clarify the key technologies upon which an organization depends, often in terms of their competitive value. A. product champion B. technology audit C. situational analysis D. technical innovator E. technological record 62. Categorizing technologies as base, key, pacing, or emerging is an effort to: A. persuade early adopters. B. measure competitive value. C. speed up the adoption process. D. regulate patent rights. E. provide a basis for licensing. 63. Which of the following types of technologies is still under development and thus unproved? A. Base technologies B. Emerging technologies C. Key technologies D. Initial technologies E. Pacing technologies 64. _____ technologies have proved effective, but they also provide a strategic advantage because not everyone uses them. A. Base B. Emerging C. Key D. Elevated E. Pacing 65. Iris Corp. is developing a new retina scanner locking system that is still under development and is yet to be approved. In this case, Iris Corp.'s product is an example of a(n) _____ technology. A. base B. key C. emerging D. improved E. pacing 66. _____ technologies are those that are commonplace in the industry; everyone must have them to be able to operate. A. Base B. Emerging C. Strategic D. Key E. Pacing 67. Crystal Corp. has introduced a voice recognition machine system that enables machines to recognize the workers' voice and respond to commands. The company is yet to prove the full value of this product. However, organizations that have used the product appropriately have found that it efficiently speeds up various processes. Crystal Corp.'s voice recognition machine system is an example of a(n) _____ technology. A. base B. emerging C. elevated D. strategic E. pacing 68. Base technologies are those that: A. are not used by everyone. B. are commonplace in the industry. C. provide significant competitive advantage. D. have not been proved useful. E. are not known to everyone. 69. The process of comparing an organization's practices and technologies to those of other companies is known as: A. benchmarking. B. scanning. C. situational analysis. D. technological auditing. E. strategic maneuvering. 70. _____ help executives decide if there is a good financial incentive for attempting a technological innovation. A. Technological feasibility B. Market receptiveness C. Economic viability D. Organizational suitability E. Competence development 71. For years, Helia Corp. wanted to develop a face recognition system with which organizations could improve their security features. However, it failed to successfully achieve its objective. The key factor while taking technology decisions that Helia Corp. failed to analyze in the example is technological ____. A. reliability B. ambidexterity C. variability D. feasibility E. agility 72. _____ firms' strategies are focused more on deepening their capacity base through complementary technologies that extend rather than replace their current ones. A. Defender B. Laggard C. Prospector D. Contingent E. Analyzer 73. The question an organization asks itself about whether to acquire new technology from an outside source or develop it itself is referred to as a: A. tradeoff decision. B. licensing decision. C. makeorbuy decision. D. SWOT analysis. E. benchmark analysis. 74. ZTech Scans is in the process of deciding whether to develop a new scanning machine with advanced features or to get it from another company that specializes in that area. This is an example of a: A. makeorbuy decision. B. licensing decision. C. tradeoff decision. D. SWOT analysis. E. benchmark analysis. 75. One advantage of developing technology within one's own company is: A. the optimal utilization of the company's resources. B. cost effectiveness. C. keeping the technology exclusive to the organization. D. the reduced requirement to hire additional staff. E. the ability to take plenty of time to develop a product right. 76. In most situations, the simplest, easiest, and most costeffective way to acquire new technology is to: A. purchase it. B. develop it internally. C. license it for a fee. D. develop it through research partnerships. E. purchase the owner of the technology. 77. Natalie has developed and patented a new process for recycling discarded tires. A multinational corporation has expressed an interest in buying her company in order to gain access to the technology and keep it exclusively for itself. Should Natalie sell her company, the buyer will have acquired technology via: A. acquisition of the technology owner. B. a joint venture. C. a licensing agreement. D. contracted development. E. purchase. 78. The executive in charge of information technology strategy and development is the: A. executive champion. B. information resource officer. C. strategic champion. D. technology innovator. E. chief information officer. 79. A(n) _____ develops a new technology or has the key skills to install and operate the technology. A. chief technology officer B. executive champion C. product champion D. technical innovator E. chief information officer 80. Which of the following is the role of technical innovators? A. They provide financial resources to support the project. B. They promote an idea throughout the organization. C. They develop and operate a new technology. D. They coordinate the technological efforts of various business units. E. They assess technological implications. 81. A product champion is a person who: A. has the status, authority, and resources to support an innovation. B. promotes a new technology throughout the organization. C. develops a new technology. D. coordinates the technological efforts of various business units. E. assesses technological implications. 82. Max worked at the Quadz Mining Company as a technician. Max developed a device that improved the mining process. The section supervisor, Dean, thought that Max's device was so clever that the company should make it widely available for all technicians. Dean convinced a number of other managers to have their employees try Max's innovation. Dean's role in developing the new device is that of a(n): A. chief information officer. B. technical innovator. C. executive champion. D. product champion. E. technology officer. 83. An individual who supports a new technology and protects the product champion is referred to as a(n): A. technical innovator. B. executive liaison. C. executive champion. D. personnel champion. E. technology officer. 84. Which of the following best describes the role of executive champions? A. They provide financial resources to support the project. B. They promote the new technology throughout the organization. C. They develop and operate the new technology. D. They coordinate the technological efforts of various business units. E. They assess technological implications. 85. Which of the following is considered an enemy of innovation? A. Flexibility B. Cohesiveness C. Bureaucracy D. Diversified workforce E. Intrapreneurship 86. A focused organizational effort to create a new product or process via technological advances is called: A. a development project. B. a sociotechnical system. C. benchmarking. D. strategic positioning. E. vertical integration. 87. An approach to job design that attempts to redesign tasks to optimize operation of a new technology while preserving employees' interpersonal relationships and other human aspects of the work is called a(n): A. technology audit. B. development project. C. sociotechnical system. D. sociological innovation. E. ergonomic approach. 88. Seniority rewards in a traditional factory and skillbased pay rewards in integrated manufacturing are examples of _____ compensation. A. marketcontingent B. jobcontingent C. personcontingent D. culturecontingent E. performancecontingent 89. Roy, a senior member in an organization, received a pay raise when the company implemented some changes in response to a new technology that it had adopted. This is an example of a _____ compensation. A. marketcontingent B. jobcontingent C. personcontingent D. culturecontingent E. performancecontingent 90. Compensation practices of an integrated manufacturing firm usually include: A. individual incentives. B. hourly wages. C. seniority pay. D. job classifications. E. skillbased pay. Scenario A. Bubble Inc. has come up with a new technology to make organizational processes easier and promotes it to other organizations. StarLight Corp. is an adventurous organization which is willing to try Bubbles' new technology. CloudNine Inc. feels that it is nothing but a money making scheme and that there is no need for it to adopt a new technology. Lightning Corp. has been going through a difficult period and therefore adopts the technology out of pressure of an economic necessity. Bubble Inc. is more concerned about SilverTech Corp.'s opinion on the new technology, as SilverTech is a leading organization to which others look for ideas and technological information. 91. Which of the following groups of adopters of a new technology is exemplified by CloudNine? A. Innovators B. Early adopters C. Early majority D. Early minority E. Laggards 92. SilverTech Corp. is an example of: A. a laggard. B. an intrapreneur. C. the late minority. D. an early adopter. E. the late majority. Scenario B. Caramel Inc. found a new solar mobile phone technology, which is still being developed and is yet to be proved functional. Creole Inc. has developed a mobile phone technology that is completely voice activated and is yet to prove its full value. RoyalEagle Corp. has found a system that updates in real time the amount of work done per worker on the machine and the overall work done in the industry. The system is proved useful although not utilized by everybody. 93. Carmel Inc.'s new solar mobile phone technology is the best example of a(n) _____ technology. A. key B. pacing C. emerging D. base E. initial Scenario C. Presto Inc. is currently in need of a new technology to improve efficiency. The question is whether it should acquire the technology from an outside source or develop it itself. The CEO of Presto Inc. is focused on comparing the company's current technology with that of other organizations. However, the company's CIO is concentrating more on what can be done in the future as well as on the new technologies being developed. 94. The CEO of Presto Inc. is focused on comparing the company's current technology with that of other organizations. This is known as: A. scanning. B. a situational analysis. C. licensing. D. benchmarking. E. technology trading. 95. The CIO of Presto Inc. is concentrating more on what can be done in the future and on the new technologies being developed. This is known as ____. A. licensing B. benchmarking C. scanning D. contract development E. technology trading 96. Presto Inc. is questioning whether it should acquire the needed technology from an outside source or develop it itself. In this case, the company is involved in a ____. A. licensing decision B. psychological contract C. makeorbuy decision D. SWOT analysis E. tradeoff decision Scenario D. Revved Up Nutrition develops foods and beverages aimed at boosting the energy levels of athletic and active individuals. In a product development meeting, Bob suggests that Revved Up acquire a newly developed technology for infusing vitamin and mineral blends into food, created by PharmCo. Bob believes that it would be the easiest and fastest way to acquire the technology straight from PharmCo. Gary, although supportive of the infusing idea, feels that the methodology behind the next generation of Revved Up bars should be kept exclusive. Gary knows it may take longer to produce the technology and the bars, but he feels that the competitive advantage and exclusivity are worth the wait. Finally, Joy likes Bob's idea of incorporating the PharmCo technology but feels that Revved Up does not possess sufficient financial resources to buy the technology outright. She suggests that they should opt for something more economical. 97. Which of the following methods of acquiring technology does Gary support? A. Internal development B. Licensing C. Contracted development D. Purchase E. Research partnership Scenario E. John has developed a new technology for his organization Green Corp. Mike, his colleague, has been promoting the idea of the new technology in the organization at his own risk. Henry, their boss, supports John's idea and helps protect Mike from getting into trouble and provides financial help toward the project as well. 98. In Scenario E, Mike can be referred to as a(n) ____. A. product champion B. technical innovator C. executive champion D. entrepreneur E. intrapreneur 99. From Scenario E, it can be inferred that Henry plays the role of a(n) ____. A. product champion B. technical innovator C. executive champion D. entrepreneur E. chief information officer 100. In Scenario E, John best exemplifies a(n) _____. A. product champion B. technical innovator C. executive champion D. entrepreneur E. technolo