Please provide answers only, no explanation is necessary. Make sure answer go with question # and part (i.e. 1a, 1b, 1c, etc...). MAKE FORMAT EASY TO READ.

3.

Financial Control Besides budgets, managers use various kinds of financial statements to exercise financial control. While budgets are plans for the future, financial statements reflect the present state and past activity of the organization. Financial Statements Financial Audits A financial statement is a profile of some aspect of an organization's financial circumstances. Two kinds of financial statements are used by almost all organizations: 0 The balance sheet lists the assets and liabilities of the organization at a specific point in time. . The income statement summarizes financial performance over a period of time, usually one year. It presents a calculation of revenues less expenses to report net income (prot or loss). Information from the balance sheet and income statement is used to calculate certain financial ratios. Ratio analysis is the calculation of one or more financial ratios to assess some aspect of the nancial health of an organization. Examples include the following: 0 Liquidity ratios indicate how easily an organization could convert its assets into cash. Debt ratios reflect the organization's ability to meet long-term financial obligations (i.e., to pay creditors). - Return ratios show how much return the organization is generating relative to its assets. 0 Coverage ratios estimate the organization's ability to cover interest expenses on borrowed capital. Operating ratios indicate the effectiveness of specific functional areas of the organization. Financial Control Besides budgets, managers use various kinds of financial statements to exercise financial control. While budgets are plans for the future, financial statements reflect the present state and past activity of the organization. Financial Statements Financial Audits Audits are independent appraisals of an organization's accounting, financial, and operational systems. 0 External audits are financial appraisals conducted by experts (certified public accountants, or CPAs) who are not employees of the organization. These audits are typically concerned with determining for the shareholders and Internal Revenue Service (IRS) that the organization's accounting procedures and financial statements are compiled according to recognized standards. - Internal audits are handled by employees of the organization. In addition to verifying the accuracy of financial and accounting procedures used by the organization, internal audits examine the efficiency and appropriateness of financial and accounting procedures. Select the term that best completes the following sentence. If management orders V , the result will be an independent appraisal of the organization's accounting, financial, and operational systems. Select the terms that best complete the following sentences. A document that lists the assets and liabilities of the organization at a specific point in time is V . An audit that is conducted by an employee of the organization is an V audit; the scope often includes an examination of the organization's financial and accounting procedures. Below are descriptions of what several different ratios might tell managers. For each row in the table, indicate which ratio is being described. Example Liquidity Debt Return Coverage Operating Many of the organization's assets are in cash or could easily be converted to cash. 0 O O O O The organization will be able to meet interest payments on its loans for the upcoming O O O O 0 period. The organization is well situated to meet its longterm obligations to creditors. O O O O O Select the term that best completes the following sentence. If management orders screening control V , the result will be an independent appraisal of the organization's accounting, financial, and operational systems. screening control a ratio analysis Select the terms that b ing sentences. a control standard A document that lists t s of the organization at a specific point in time is V . an audit An audit that is conducted by an employee of the organization is an V audit; the scope often includes an examination of the organization's financial and accounting procedures. Below are descriptions of what several different ratios might tell managers. For each row in the table, indicate which ratio is being described. Example Liquidity Debt Return Coverage Operating Many of the organization's assets are in cash or could easily be converted to cash. 0 O O O O The organization will be able to meet interest payments on its loans for the upcoming O O O O 0 period. The organization is well situated to meet its longterm obligations to creditors. O O O O O Select the term that best completes the following sentence. If management orders screening control V , the result will be an independent appraisal of the organization's accounting, financial, and operational systems. Select the terms that best complete the following sentences. A document that lists the assets and liabilities of the organization at a specific point in time is V . an income statement An audit that is conducted by an employee of the organization is an xamination of the organization's a balance sheet financial and accounting procedures. Below are descriptions of what several different ratios might tell managers. For each row in the table, indicate which ratio is being described. Example Liquidity Debt Return Coverage Operating Many of the organization's assets are in cash or could easily be converted to cash. 0 O O O O The organization will be able to meet interest payments on its loans for the upcoming O O O O 0 period. The organization is well situated to meet its longterm obligations to creditors. O O O O O Select the term that best completes the following sentence. If management orders screening control V , the result will be an independent appraisal of the organization's accounting, financial, and operational systems. Select the terms that best complete the following sentences. A document that lists the assets and liabilities of the organization at a specific point in time is V . An audit that is conducted by an employee of the organization is an V audit; the scope often includes an examination of the organization's internal financial and accounting procedures. external Below are descriptions of what several different ratios might tell ma each row in the table, indicate which ratio is being described. Example Liquidity Debt Return Coverage Operating Many of the organization's assets are in cash or could easily be converted to cash. 0 O O O O The organization will be able to meet interest payments on its loans for the upcoming O O O O 0 period. The organization is well situated to meet its longterm obligations to creditors. O O O O O 5. Strategy and Control Strategic Control To achieve its strategic goals, an organization must implement its strategies effectively. However, numerous elements of the organization may become misaligned with its strategic direction. Strategic control seeks to detect such misalignments so they can be corrected. The Integration of Strategy and Control Strategic Control and the Global Organization The aim of strategic control is to ensure that the organization is maintaining an effective alignment with its environment and moving toward achieving its strategic goals. It tends to focus on five aspects of organizations that are important to implementing strategy successfully: - Stru ctu re Leadership Technology - Human resources Information and operational control systems If any of these aspects of the organization are not functioning effectively in support of its strategy, then the next step for managers is to consider what changes are needed, either to some aspect of the organization or to the strategy itself. 5. Strategy and Control Strategic Control To achieve its strategic goals, an organization must implement its strategies effectively. However, numerous elements of the organization may become misaligned with its strategic direction. Strategic control seeks to detect such misalignments so they can be corrected. The Integration of Strategy and Control Strategic Control and the Global Organization Because of the additional complexity of their environment, global organizations have special needs for strategic control. As with many other organization design issues, one question is whether to manage control as a centralized or decentralized function. 0 A centralized approach involves frequent reporting from local offices to corporate headquarters, and home office managers may visit local sites frequently. This approach allows corporate managers to stay well informed, compare performance metrics across business units, and coordinate any needed decisions. . A decentralized approach involves less frequent reports and fewer visits, or visits that do not focus on monitoring performance. This approach may facilitate innovation by different business units by allowing them more freedom. Select the correct responses to the following questions. If managers discover that aspects of the organization are not functioning in a way that supports the organization's strategy, what should the managers do next? 0 They should improve the organization's technology. 0 They should lower the performance standards. 0 They should evaluate what changes are needed to the organization or its strategy. 0 They should change the organization's strategy. An organization that operates internationally decides that local offices should report performance to corporate headquarters frequently. In addition, corporate managers will visit local offices regularly to evaluate performance against standards. Which approach to strategic control is this organization using? 0 Centralized approach 0 Decentralized approach 6. Managing Effective Control How Managers Exercise Effective Control To execute the control function effectively, managers should understand the characteristics of control that is working as intended. In addition, managers should be prepared for common barriers to effective control, such as the resistance of individuals and groups in the organization. Characteristics of Effective Control Resistance to Control Overcoming Resistance to Control Following are five characteristics of effective control systems: . Integration with planning: At the same time as they set goals and decide how to carry them out, managers should determine how they will know how well their plans are being executed. For example, if a human resource manager decides to reduce turnover by using a new selection tool, that manager should also decide how much turnover reduction is expected and make sure that reports measuring turnover will be generated at regular intervals. 0 Flexibility: Control systems should be easily adaptable as the details of implementation change. to continue the previous example, the organization might have 30 jobs when the plan is implemented but then acquire a different business and add 20 more jobs. Turnover data should then be monitored for those jobs, too. . Accuracy: The information that managers receive may be distorted for a number of reasons. Sometimes business systems simply don't capture the needed data or don't \"talk\" to each other so that related data can be considered together. In addition, sometimes humans in the organization lter the information they communicate upward based on how it will make them look. Managers should consider possible sources of bias before making decisions based on potentially incorrect information. . Timeliness: The control system should provide information when managers need it. A very stable product or operation may need to be monitored less frequently, while a volatile situation or new effort can necessitate ongoing control. The HR manager may need to look at data on jobs with a history of few vacancies once a quarter but track jobs with historically high turnover weekly. o Objectivity: Information should be as specific and unambiguous as possible. Getting reports from supervisors that \"More people seem to be sticking around longer" would be less useful than learning that \"Turnover in job A was 25% for employees hired before the new selection tool was implemented and 18% for employees hired using the tool.\" 6. Managing Effective Control How Managers Exercise Effective Control To execute the control function effectively, managers should understand the characteristics of control that is working as intended. In addition, managers should be prepared for common barriers to effective control, such as the resistance of individuals and groups in the organization. Characteristics of Effective Control Resistance to Control Overcoming Resistance to Control Despite the benets of control to the organization, employees may resist it. Following are some common reasons for this resistance: 0 They feel overcontrolled. The organization is attempting to regulate their behavior, especially personal behavior, to a degree that feels unreasonable. 0 They think the focus of control is inappropriate. An example might be if teachers are held accountable for student scores on a standardized test but no other measure of student growth. Teachers might resist by not teaching to the test at all (\"I don't believe in this, so I'm not going to do it\") or by directing all classroom activity toward the test (\"If this is what you want, then this is exactly what I'll do). . Control actually rewards inefficiency. For example, if employees' goals are set based on their previous level of performance, an employee who has done well may be \"rewarded\" by an impossible goal, while an employee who has done less well may get an easier goal. . They do not want to be held accountable. An employee who is struggling to meet the requirements of the job may be anxious about a system that allows management to see their underperformance. 6. Managing Effective Control How Managers Exercise Effective Control To execute the control function effectively, managers should understand the characteristics of control that is working as intended. In addition, managers should be prepared for common barriers to effective control, such as the resistance of individuals and groups in the organization. Characteristics of Effective Control Resistance to Control Overcoming Resistance to Control Managers can avoid a situation in which employees resist control by creating control systems that are reasonable on their face. If managers align control with the organization's plans and make control systems flexible, accurate, timely, and objective, they remove most reasons for employee resistance. Another way to avert employee resistance is to invite employees to participate in deciding and establishing controls. Employees are less likely to resent a system they helped to develop. A way to address resistance if it occurs is to use multiple standards and sources of information to arrive at fair and accurate evaluations. If an employee is failing to perform but there are extenuating circumstances, a robust control system will show that, and managers can address the underlying problem rather than punishing the employee. For example, a delivery person is making an unacceptably high percentage of late deliveries, but this is because the packages are not arriving at the pickup site on time. If managers have this information, they can thank the delivery person for doing their best and investigate the delays in getting packages to the pick-up site. Moreover, if asked, the delivery person might establish a standard that says 99 percent of packages must be delivered within 8 hours of arrival at the pickup sitea performance standard that is fair, holding the delivery person responsible only for what they can control. Select the correct response for the following question. Why might the information a manager uses for control be inaccurate? 0 Information may be distorted by subordinates acting in their selfinterest. 0 Multiple sources of information may conflict with each other. 0 The data may not relate to the performance the manager seeks to control. 0 Information may be reported more often than the manager needs. Select the correct responses to the following question. Which of the following are common reasons that employees resist control? Check all that apply. C] They do not want to be held accountable. [3 They feel overcontrolled. C] They believe the control is misguided. C] They dislike helping to design the system