Chapter 19--Managing Quality and Performance Student: ___________________________________________________________________________
1.
The systemat systematic ic process process of regulating regulating organiza organizational tional activities activities to make them them consiste consistent nt ith ith the e!pectations in plans" targets" and standards of performance refers to organizational control. True
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%ffective %ffectively ly controlli controlling ng an organizat organization ion re&uires re&uires informati information on a'out product product standards standards and and actual products" as ell as actions to correct any deviations from the standards. standards. True
(.
#alse
Managers Managers focus focus on the various various elements elements of the scorecar scorecard d to set set target targets" s" evaluate evaluate perform performance" ance" and and guide discussion a'out hat further actions need to 'e taken. True
9.
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0enchm 0enchmark ark cont control rol focus focuses es on the the &uanti &uantity ty of an an end produc productt or serv service ice.. True
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The feed'ack feed'ack control control model model is a comprehens comprehensive ive managemen managementt control control system system that that 'alances 'alances tradit traditional ional financial measures ith measures of customer service" internal 'usiness processes" and the organization,s capacity for learning and groth. True
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Customer Customer service" service" e!ternal e!ternal 'usiness 'usiness processes" processes" financi financial al performan performances" ces" and the organizat organization,s ion,s capacity capacity for learning and groth are the four maor perspectives of the 'alanced scorecard. True
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Managers Managers are are increasin increasingly gly recognizi recognizing ng the need to to measure measure intangi' intangi'le le aspects aspects of of performa performance nce such such as customer service. True
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)lthough )lthough ork ork processes processes can 'e controlled controlled and regulate regulated" d" it is impossi impossi'le 'le to to control control and regulat regulatee employee 'ehavior 'ehav ior.. True
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) standard standard for performance performance is is included included in an an organizati organization,s on,s overall overall strate strategic gic plan plan to compare compare organizational activities against. True
#alse
1
12 .
The final step of the feed'ack control model is to do nothing if performance is ade&uate or to take corrective action if performance is inade&uate. True
11 .
3n most companies" managers rely e!clusively on &u alitative measures to measure actual performance. True
1$ .
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The level of funds floing through the organization and the nature of cash dis'ursements is shon through the capital 'udget. True
1 .
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)n e!pense 'udget lists forecasted and actual revenues of the organization. True
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%ffective management control involves su'ective udgment and employee d iscussions" as ell as o'ective analysis of performance data. True
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The fourth step in the control process is comparing actual activities to performance standards. True
1( .
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) cash 'udget estimates receipts and e!penditures of money on a daily or eekly 'asis.. True
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1/ 4ithin 4ithin the 'alanced scorecard" customer service indicators measure things such as employee retention . and satisfaction. True 1 .
)n e!pense 'udget lists forecasted and actual revenues of the organization. True
19 .
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The capital 'udget lists planned investments in maor assets such as 'uildings" heavy machinery" or comple! information technology systems. True
$2 .
#alse
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5ero-'ased 'udgeting re&uires a complete ustification for every line item in a 'udget. True
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$1 ) 'alance sheet 'udget is a 'udget that plans and reports investments in maor assets to 'e depreciated . over several years. True
#alse $
$$ .
0ottom-up 'udgeting is a process in hich loer level managers anticipate their department,s resource needs and pass them up to top management for approval. True
#alse
$( The 'alance sheet shos the firm,s financial position ith respect to e! penses and credits at a specific . point in time. True $* .
#alse
6ia'ilities are the firm,s de'ts" 'oth current and long-term. True
#alse
$+ The income statement shos revenues coming into the organization from all sources and su'tracts all . e!penses. True
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$ ) responsi'ility responsi'ility center involves the coordination of mulitple managers from various departments to . carry out an activity. activity. True $/ .
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The system of governing an organization so that the interests of corporate oners are protected refers to corporate governance. True
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$ #re&uently calculated ratios typically pertain to activity" passivity" passivity" and profita'ility. profita'ility. . True #alse $9 The li&uidity ratio shos the company,s a'ility to meet its current de't o'ligations and a measurement . of the firm,s margin of safety. True
#alse
(2 )n activity ratio that measures ho many times the inven tory is turned over to meet the total sales . figure is called the inventory turnover. True
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(1 The return on total assets 78): is an activity ratio that is the pe rcentage returned to investors on total . assets. True ($ .
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;nder hierarchical control" employees are actively engaged and committed to their ork. True
#alse
(
(( .
The use of cultural values" traditions" shared 'eliefs and trust to increase compliance ith goals refers to decentralized control. True
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(* Companies today are increasingly shifting from a hierarchical control process to one that is more . decentralized. True (+ .
) process in hich loer level managers anticipate their department,s resource needs and pass them to top management for approval is called top-don 'udgeting. True
( .
#alse
#alse
pen-'ook management ties employee reards to the company,s overall success. True
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(/ The goal of open-'ook management is to get every employee thinking and acting like a 'usiness . oner. True ( .
Closed-'ook management helps employees appreciate hy efficiency is important to the organization,s success as ell as their on. True
(9 .
#alse
#alse
The
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*2 )
TQM tends to 'e most successful hen it enriches o's an d improves employee motivation. True
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)n organization-ide commitment to infusing &uality into every activity through continuous improvement defines
*( .
#alse
#alse
) group of si! to telve volunteer employees ho meet regularly to discuss and solve pro'lems affecting their common ork activities refers to a &uality team. True
#alse *
** .
The implementation of total &uality management involves the use of many techni&ues such as &uality circles" 'enchmarking"
*+ .
0enchmarking is the age-old practice of alloing the artisan to sign his name to the finished product. True
* .
#alse
The certification 'ased on a set of international standards for &uality management" setting uniform guidelines for processes to ensure that products conform to customer re&uirements is the 3< certification. True
+1.
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>ery high e!pectations from senior management and a desire to share authority 'y middle managers are to of the positive factors leading to success of TQM. True
+2 .
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Continuous improvement is the implementation of a large num'er of small" incremental improvements in all areas of the organization on an ongoing 'asis. True
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utsourcing is the continuous process of measuring products" services" and practices against the toughest competitors or the industry leaders. True
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#alse 4hich of the folloing is the systematic process through hich managers regulate organizational activities? ).
+
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phelia" the ne C% at dyssey 3nc." plans to implement a highly effective systematic process of regulating organizational activities to make them consistent ith the e!pectations that are esta'lished 'y managers ithin the company. company. This is referred to as AAAAA control. ).
or ga niz ati on al 0 feed' . ack C 'udg . etary
@ . % . +(.
syste ms &uali ty
#or control" this type of measure is an important part of achieving higher performance. ).
@%mplo yee conflic t % Mark . et
+*.
)ccording to M)B)%8,<
emplo yee self promo tion 0 emotional . development
C . @ .
selfleadership emotional hueristics
% auto. analytics ++.
5achary" a manager at %!ecuComp" receives &uarterly reports" hich track his department,s production statistics. Doever" Doever" these reports lack key information regarding reect rates. 4hich of the folloing components of the control model need improvement? ).
Meas uring actua l perfo rman ce
The planning and setting of performanc e standards C <4T . analysis The a'ility to take corrective action hen necessary % )ll of . these /
+.
4hich of the folloing is a control system that measures performance in terms of after-ta! profits minus the cost of capital invested in tangi'le assets? ).
pen 'ook mana geme nt 0%conomic value-added system C )ctivity. 'ased costing @3nappropriate control system % Bone of . these +/.
)ll of the folloing are key steps of setting up feed'ack control systems %FC%PTG ).
comparing performance to standards. esta'lishing standards.
0 . C getting employee opinions. . @ measuring performance. . % making necessary . corrections. +.
4hich of the folloing is a comprehensive management control system that 'alances traditional financial measures ith operational measures relating to a company,s critical success factors? ).
%conomic value-added system 0 )ctivity-'ased costing . system C Market value-added system . @. 0alanced scorecard % pen-'ook management . system
+9.
AAAAA indicators focus on production and operating statistics. ).
#inancial performance 0. 0usiness process C. Critical success @ Potential for learning . and groth % Performance . measurement
2.
)ll of the folloing are maor perspectives of the 0alanced
1.
Mistletoe Corporation has a detailed set of organizational goals and management information system that delivers timely and accurate information. Mistletoe still has control pro'lems" hoever" 'ecause its managers refuse to act on the information they receive. Mistletoe,s control process has flas in hich of the folloing areas? ).
3ts perfor mance standa rds
03ts management information systems C3ts a'ilit a' ility y to take corrective action hen necessary @3ts measuremen t systems % Bone of . these 9
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Hour department has a'senteeism standards" a ay to measure a'senteeism" and" 'ased on your investigation" you have concluded that your department has an e!cessive a'senteeism rate. 4hat should your ne!t step 'e? ).
Eyle,s ork group consistently e!ceeds the goals the mem'ers set for themselves some months ago. 3n an attempt to 'etter motivate the group" Eyle thought it ould 'e a good idea to set ne goals. This is an e!ample of Eyle e!ercising control 'yG ). comparing perf 0. developing ade&uate measures of performance. C. taking corrective action. @. all of these. % comparing performance to standards and developing ade&uat . only.
12
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3n the process of implementing the 'alanced scorecard approach at his company compan y" operations manager
+ .
3n a TQM program" hat is 'enchmarking?
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@iscuss the positive and negative factors that can influence the success of a TQM program.
11
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)ll ell-designed control systems involve the use of AAAAA to determine hether performance meets esta'lished standards. ).
opi nio ns 0 advic . e C consult . ants @ 'ench . marks % feed'a . ck
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4hat is the first step in the feed'ack control system? ).
%sta'lishing strategic o'ectives 0 %sta'lishing standards of . performance C. Taking corrective action @ Comparing performance to . standard % Measuring previous . performance
9.
Cy'erChasers Corporation sends a post-purchase &uestionnaire to all consumers ho 'uy their products. They are interested in gathering data on product &uality" &uality" customer service orientation" and customer satisfaction. This is an e!ample of aG ).
0 . C . @ . % .
1$
concurre nt control. feed'ack control. feedforard control. preliminary control. preventive control.
/2.
Eendra is a manager at eorge,s oodies. n a regular 'asis Eendra and her su'ordinates set individual and organizational goals. This process is similar to hich component of the control model? ).
Takin g correc tive action hen necess ary
0 )n . information system C%sta'lishing performance standards @%ngaging strategic analysis % Bone of . these /1.
)ccording to the control model" after esta'lishing standards of performance the manager shouldG ).
compar e perform ance to standard s. get the standards approved 'y the supervisors and su'ordinates. C measure actual . performance.
@ . % .
1(
take corrective action. provide feed'ack.
/$.
Tiffany recently discovered that the reect rate for her department has e!ceeded the standard for performance in this area. 4hat should Tiffany Tiffany do to e!ercise effective control? ).
/(.
AAAAA is any organizational department or unit under the supervision of a single person ho is responsi'le for its activity. activity. ).
3ndepen dent center 8esponsi'ility center )nalysis center Control center
0 . C . @ . % 0udgeting . center 1*
/*.
AAAAA control is the process of setting targets for an organizations e!penditures. ).
Quali ty 0. 3ncome C 0udgetary . @.
4hich of the folloing includes anticipated and actual e!penses for a responsi'ility center? ).
8evenu e 'udget 0. Cash 'udget C Capital 'udget . @ %!pense . 'udget % perating . 'udget
/.
4hich of these is a financial 'udget that estimates cash flos on a daily 'asis or eekly 'asis to ensure that the company can meet its o'ligations? ).
Capit al e!pen diture 'udge t 0 0alance . sheet 'udget C Cash . 'udget @ 8evenue . 'udget % Profit . 'udget
1+
//.
Madison has 'een assigned to ork on the development of a 'udget that plans future investments in maor assets such as 'uildings and heavy machinery. Madison is orking on a7n: AAAAA 'udget. ). 0 . C . @ . % .
/.
cas h capit al reven ue operat ing e!pen se
The AAAAA plans future investments in maor assets to 'e depreciated over several years. ).
capita l 'udge t 0 'alance . sheet 'udget C cash . 'udget @ revenue . 'udget % profit . 'udget
/9.
8on meets ith his company=s accountant to discuss the 'udget of anticipated and actual e!penses for each segment of the organization. This involves revie of hich type of 'udget? ).
%!pense 'udget 8evenue 'udget
0 . C. Cash 'udget @ Capital 'udget . % Bonfinancial . 'udget
1
2.
3ncome stateme nt )ctivity ratio
0 . C. TQM report @ 0alance sheet . % 0alance . scorecard 1.
4hich financial control system measures the stock market=s market=s estimate of the value of a company=s past and proected capital investment proects? ).
Market valueadded 0 %conomic value. added C
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0rad is a department manager at Dome Theater" 3nc. Dis sole role in the 'udget process is to implement the 'udget that is developed for him. This is an e!ample ofG ).
0 . C . @ .
strategic 'udgeting . operational 'udgeting. top-don 'udgeting. management 'y o'ectives.
% 'ottom-up . 'udgeting. 1/
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Pauline is an area manager at 3ronman ym.
topdon 'udge ting. 0 strategic . 'udgeting. C revenue . 'udgeting.
@ 'ottom-up . 'udgeting. % none of . these.
1
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)n advantage of the 'ottom-up 'udgeting process isG ).
its emp hasis on 'ure aucra tic contr ol. 0loer managers are more involved. Ctop managers control the information flo. top managers are often not committed to achieving 'udget targets. % all of . these.
+.
The firm,s financial position ith respect to assets and lia'ilities at a specific point in time is shon 'y itsG ).
activit y ratio. 0 profita'ility . ratio. C income . statement.
@ . % .
19
li&uidity ratio. 'alance sheet.
.
AAAAA provide the 'asic information used for financial control of an organization. ).
n ers e& uit y 03ncome statem ents C#inanci al positio n @Missio n
AAAAA refer7s: to the difference 'eteen assets and lia'ilities and is the company,s net orth in stock and retained earnings. ). 0 . C . @ .
)ss ets Current de't Bet profit ners, e&uity
% 6ia'iliti . es
$2
.
The AAAAA ratio refers to the a'ility of the organization to meet its current de't o'ligation. ).
act ivi ty 0 li&ui . dity C profit . a'ilit y @ conve . rsion % gro . th
9.
The conversion ratio is considered to 'e a7n: AAAAA ratio. ) .
a ct i v it y 0 li& . uid ity Cprof ita' ility @ lev . era ge % ca . sh
$1
92.
4hich of the folloing is a ratio that measures the firm,s internal performance ith respect to key activities defined 'y management? ).
0 . C . @. % . 91.
) li&uidity ratio )n activity ratio 8eturn on total assets ) current curren t ratio Profit margin on sales
The AAAAA is purchase orders divided 'y customer in&uiries. ).
curre nt ratio 0 invent inventory ory turnover ratio C conversion . ratio @ profit . margin on sales % none of . these
9$.
Tammy is a production manager at %agle,s Best" 3nc..
curren t ratio. 0 invento inventory ry turnover ratio. C conversion . ratio. @ profita'ility . ratio. % leverage . ratio.
$$
9(.
Bet income divided 'y sales is the correct formula for calculatingG ).
return on total assets. 0. a current ratio. C. a li&uidity ratio. @ profit margin on . sales. % a corporate . evaluation.
9*.
4hich of the folloing refers to funding activities ith 'orroed money? ).
8 ) 0 6ever . age C 6i&ui . dity @ Profita . 'ility % )ctivi . ty
9+.
AAAAA is a control system that identifies the various activities needed to produce a product and determines the cost of those activities. ).
pen 'ook mana geme nt 0)n economic value-added system C )ctivity. 'ased costing @)n inappropriate control system % Bone of . these
$(
9.
4hich of the folloing is considered a leverage ratio? ). 0 . C . @ . % .
9/.
@e't ratio 8eturn on total assets Profit margin on sales Conversion ratio 3nventory turnover
The 'asic philosophy of control at Butrients-#orHou" 3nc. is 'ased on the policies found in the employee hand'ook" as ell as a strict hierarchy of authority. authority. This philosophy is consistent ithG ).
clan control. 0 'ottom-up control. . C hierarchical . control. @ culture control. . % decentralized . control.
9.
)t 60E 3ndustries" responsi'ility for &uality control rests ith a team of &uality control inspectors and supervisors rather than ith employees. 60E uses hat type of organizational control? ). 0 . C .
Matri! control Dierarchical control @ecentralized control
@ . % .
0ottom-up control 0alanced control
$*
99.
@ecentralized control is usually implemented in all of the folloing areas %FC%PTG ). self-control. 0. peer group. C. corporate culture. @ employee selection and . socialization. % the &uality control . department.
122.
)t 843 @istilleries" rules and procedures are used only hen necessary. necessary. 3nstead" shared goals and values guide employee 'ehavior. 843 843 uses hat type of organizational control? ).
121.
0 . C .
Centrali zed control Dierarchical control @ecentralized control
@ . % .
Top-don control 0alanced control
4hich of the folloing allos employees to see for themselves the financial condition of the company? ).
pen-'ook management 0 )n economic value-added . system C )ctivity-'ased costing . @ )n inappropriate control . system % Market value-added . system
$+
12$.
The control IsystemI at #resh#ood Corporation is 'ased on the culture of the organization and norms that develop in the individual ork teams. This is an e!ample ofG ).
'urea ucrati c contro l. 0 decentralize . d control. C organization . al control.
@ . % . 12(.
feed'ack control. none of these.
The goal of AAAAA is to get every employee thinking and acting like a 'usiness oner. ).
management 'y-alking around closed-'ook management
0 . C. M0 @ open-'ook management . % ust-in-time inventory . systems 12*.
0alanced scorecard
12+.
Total &uality managementG ).
is 'ased on the ideas of #reder ick Taylor .
gives managers total responsi'ility for achieving &uality goals. gives all employees the responsi'ility for achieving &uality goals. as first successfully implemented in the ;nited
4hich of the folloing is a philosophy of organization-ide commitment to continuous improvement" focusing on teamork" customer satisfaction" and loering costs? ).
%ng inee ring 0Total &uality manage ment C utsou . rcing @ . % .
$/
Cultur e @iversi ty
12/.
Charlie" a manager at a te!tile company" is 'othered 'y a lack in &uality of products manufactured 'y his company. Charlie hopes to to infuse &uality into the company through continuous improvement 'y involving everyone ho orks there. This descri'es hich control philosophy? ). 0. C . @ . % .
12.
) &uality circle is a group of AAAAA volunteer employees. ).
0 . C . @ . % . 129.
0alanced scorecard
$ to * to 1$ 12 to $2 1+ to $+ (2 to +2
) group of to 1$ volunteer employees ho meet regularly to discuss and solve pro'lems affecting their common ork activities is a AAAAA. ).
0 . C . @ . % .
$
feedfo rard contro l group ork team &uality circle committee pro'lem team
112.
Deather 'elongs to an informal group at ork that meets tice a month to discuss common issues and pro'lems in the orkplace. 8ecently" 8ecently" this group has 'een focusing on ays to improve safety in the orkplace. This group is an e!ample ofG ).
0 . C .
a safety group. a &uality circle. an ad-hoc committee.
@ . % .
a pro'lem team. none of these.
$9
111.
Quality circles are 'ased on the assumption7s: thatG ).
the peop le ho do the o' kno it 'ette r than anyo ne else. &uality can 'e increased 'y increasing the size of the organizatio n. &uality can 'e increased 'y talking more a'out it. the more employees talk" the more satisfied they ill 'e. % all of . these.
(2
11$.
4hat is the key to successful 'enchmarking? ).
)p plic atio n 0 3mplem . entation
C . @ . % . 11(.
4hich of the folloing is the process of measuring your organizational process against the 'est in the industry? ). 0 . C . @. % .
11*.
)naly sis
utsourcing Continuous improvement %nvironmental analysis 0enchmarking Competitive measurement
4hich of the folloing is a &uality control approach that emphasizes a relentless pursuit of higher &uality and loer costs? ).
0 . C . @ . % .
(1
Contin uous impro vemen t Cycle time Quality circles
11+.
4hich &uality control techni&ue uses a five-step methodology to define" measure" analyze" improve" and control processes" otherise referred to as @M)3C? ).
Quality circles 0.
To reduce the organization,s cycle time is to reduce the num'er ofG ).
of comm ittees in the organi zation . 0 layers of . management . Csteps in an organizationa l process. @staff employees in the organization. % none of . these.
($
11/.
AAAAA refers to the steps taken to complete a company process. ).
0 . C . @. % . 11.
Contin uous impro vemen t Cycle time Quality circles
3t seems that once a year the managers of
'ench marki ng. 0 continuous continuous improvement . C unity of . direction.
@ top-don . control. % none of . these. 119.
AAAAA is7are: most 'eneficial hen employees have challenging o's. ). 0 . C. @. % . ((
1$2.
Contingency factors that can influence the success of a TQM program in a positive ay include all of the folloing %FC%PTG ).
tasks make high skill demands on employees. 0 TQM serves to enrich o's and motivate . employees. C pro'lem-solving skills are improved for all . employees. @ participation and teamork are used to . tackle significant pro'lems. % managers ait for 'ig" dramatic . innovations.
1$1.
AAAAA standards represent an international standard for &uality management. ). 3< 9222 0.
1$$.
) contingency factor that can influence the success of a TQM program in a negative ay is thatG ).
continuous improvement is a ay of life. 0 TQM serves to enrich o's and motivate . employees. C pro'lem-solving skills are improved for all . employees. @ participation and teamork are used to . tackle significant pro'lems. % union leaders are left out of QC . discussions.
(*
1$(.
Contingency factors that can influence the success of a TQM program in a negative ay a y include all of the folloing %FC%PTG ).
0 . C .
tasks make high skill demands on employees. management e!pectations are unrealistically high. middle managers are dissatisfied a'out loss of authority.
@ orkers are dissatisfied ith other aspects . of organizational life. % managers ait for 'ig" dramatic . innovations. 1$*.
4hich of these is 'ased on a set of international standards for &uality? ). 0 . C . @ .
Quality circle Corporate governance 3< certification pen-'ook management
% 0alance . scorecard 1$+.
4hich of the folloing refers to the system of governing an organization so that the interests of corporate oners are protected? ). 0 . C . @ .
Quality circle Corporate governance 3< certification pen-'ook management
% 0alance . scorecard
(+
1$.
3n today=s tough economy" companies are predominantly looking for employees ith hat types of skills? ).
)ccountin g skills Conceptual skills
0 . C 8esearching skills . @ Technical skills . % ) diverse set of . skills 1$/.
Scenario - Katrina Aldridge
The yearly auditing revie of Pilgrim 3ndustries is scheduled for ne!t month. Eatrina )ldridge is preparing for that audit and is also preparing her 'udget for the coming year. year. 4hich of these 'udgets ill provide Eatrina information a'out planned investments in maor assets like 'uildings and heavy machinery? a. '. c. d. e.
(
Cash 'udget 8evenue 'udget Capital 'udget %!pense 0u 0udget 0alance-
1$.
Scenario - Katrina Aldridge
The yearly auditing revie of Pilgrim 3ndustries is scheduled for ne!t month. Eatrina )ldridge is preparing for that audit and is also preparing her 'udget for the coming year. year. 3n planning and 'udgeting for the ne!t 1$ months" Eatrina is participating in a 'udgeting process in hich loer-level manager,s 'udget their department,s resource needs and pass them up to top management for approval. This 'udget process is an e!ample ofG a. '. c. d. e.
(/
zero-'ased 'ud 'ottom-up 'udgeting. top-don 'udgeting. 'alance sheet 'udge dgeting. none of these.
1$9.
Scenario - Katrina Aldridge
The yearly auditing revie of Pilgrim 3ndustries is scheduled for ne!t month. Eatrina )ldridge is preparing for that audit and is also preparing her 'udget for the coming year. year. Eatrina has also re&uested that the financial ratios 'e calculated and analyzed for her. 4hich 4hich of the folloing ratios ill give her the 'est information for evaluating li&uidity? a. '. c. d. e.
1( 2.
Profit margin o Current ratio Conversion ratio 8eturn on assets Bone of these.
The systematic process through hich managers regulate organizational activities is knon as AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1( AAAAA focuses on hether performance meets esta'lished standards. 1. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA 1( $.
4hen AAAAA deviates from a7n: AAAAA" managers must interpret the deviation. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1( )7n: AAAAA is defined as any organizational o rganizational department or unit under the supervision of a single p erson (. ho is responsi'le for its activity. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA 1( )7n: AAAAA includes anticipated and actual actua l e!penses for each responsi'ility center and for the total *. organization. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA 1( +.
)7n: AAAAA lists forecasted and actual revenues of the organization. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA (
1( .
The AAAAA estimates receipts and e!penditures of mone y on a daily or eekly 'asis to ensure that an organization has sufficient cash to meet its o'ligations. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1( /.
The AAAAA lists planned investments in maor assets such as 'uildings" trucks" and heavy machinery" often involving e!penditures over more than a year. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1( 3n a traditional AAAAA approach" 'udgeted amounts for the coming year are imposed on middle- and . loer-level managers. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA 1( 9.
) 'udgeting process in hich middle and loer-level managers set departmental 'udget targets in accordance ith overall company revenues and e!penditures specified 'y top management is called AAAAA 'udgeting. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1* 2.
) 'udgeting process in hich loer-level managers 'udget their departments, resource needs and pass them up to top management for approval is called AAAAA 'udgeting. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1* 1.
The AAAAA provides three types of informationG assets" lia'ilities" and oners, e&uity. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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The firm,s financial performance for a given time period is shon on the AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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)7n: AAAAA ratio indicates an organization,s a'ility to meet its current de't o 'ligations. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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)7n: AAAAA ratio measures internal performance ith respect to ke y activities defined 'y management. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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The percentage representing hat a company earned from its assets is called AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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) control system that identifies the various activities needed to provide a product and determines the cost of those activities is called AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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1* AAAAA involves monitoring and influencing employee 'ehavior through e!tensive use of rules" policies" /. hierarchy of authority" ritten documentation" reard systems" and other formal mechanisms. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA 1* AAAAA control uses cultural values" traditions" shared 'eliefs" and trust to generate compliance ith . organizational goals. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA 1* 9.
) control system that measures performance in terms of after-ta! profits minus the cost of capital invested in tangi'le assets is called the AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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)n organization ide commitment to infusing &uality into every activity through continuous improvement is called AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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) group of to 1$ volunteer employees ho meet regularly to discuss and solve pro'lems affecting their common ork activities is knon as a7n: AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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The continuous process of measuring products" services" and p ractices against maor competitors or industry leaders is called AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1+ AAAAA refers to the num'er of steps taken to complete a company process. *. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA 1+ +.
The implementation of a large num'er of small" incremental improvements in all areas o f the organization on an ongoing 'asis is referred to as AAAAA. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
1+ AAAAA refers to the system of governing an organization so that the interests interests of corporate oners are . protected. AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAA
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6ist the four steps in the feed'ack control model.
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6ist the four maor perspectives of a 'alanced scorecard.
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3dentify and 'riefly descri'e the four steps of the feed'ack control model.
1 @iscuss the evolution of the 'alanced scorecard from a system that places e&ual emphasis on 2. performance management categories to one that emphasizes cause and effect.
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@escri'e the difference 'eteen a 'alance sheet a nd an income statement.
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3dentify and 'riefly descri'e each of the common financial ratios addressed in your te!t.
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Compare hierarchical control ith decentralized control.
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@iscuss open-'ook management and the 'alanced scorecard.
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Chapter 19--Managing Quality and Performance Eey 1. T8;% $. #)6<% (. #)6<% *. T8;% +. #)6<% . #)6<% /. #)6<% . T8;% 9. T8;% 12. T8;% 11. #)6<% 1$. #)6<% 1(. T8;% 1*. #)6<% 1+. #)6<% 1. T8;% 1/. #)6<% 1. #)6<% 19. T8;% $2. T8;% $1. #)6<% $$. T8;% $(. #)6<% $*. T8;% $+. T8;% $. #)6<% $/. T8;% $. #)6<% $9. T8;% (2. T8;%
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+. 0enchmarking is the continuous process of measuring products" services" and practices against the toughest competitors or the industry leaders. The key to 'enchmarking lies in analysis and in the selection of the comparison company. . 8efer to %!hi'it 19.9 in the te!t for positive and negative factors associated associated ith TQM. /. % . 0 9. 0 /2. C /1. C /$. @ /(. 0 /*. C /+. @ /. C //. 0 /. ) /9. ) 2. @ 1. ) $. C (. @ *. 0 +. % . 0 /. @ . 0 9. ) 92. 0 91. C 9$. 0 9(. @ 9*. 0 9+. C 9. ) 9/. C
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1($. performanceJ standard 1((. responsi'ility center 1(*. e!pense 'udget 1(+. revenue 'udget 1(. cash 'udget 1(/. capital 'udget 1(. top-don 'udgeting 1(9. top-don 1*2. 'ottom-up 1*1. 'alance sheet 1*$. income statement 1*(. li&uidity 1**. activity 1*+. return on assets or 8) 1*. activity-'ased costing or )0C 1*/. Dierarchical control 1*. @ecentralized 1*9. economic value added s ystem or %>) system 1+2. open-'ook 1+1. total &uality management or TQM 1+$. &uality circle 1+(. 'enchmarking 1+*. Cycle time 1++. continuous improvement 1+. Corporate governance 1+/. The four steps are 71: esta'lish standards of performance" 7$: measure actual performance" 7(: compare performance to standards" and 7*: take corrective action. 1+. 71: #inancial performance" 7$: customer service" 7(: internal 'usiness processes" and 7*: the organization,s capacity for learning and groth. 1+9. The four steps are 1: esta'lish standards of performance" $: measure actual performance" (: compare performance to standards" and *: take corrective action. Please refer to e!hi'it 19.$ in the te!t. 12. This process is illustrated in %!hi'it 19.1 on page +*+. This adapted approach to the scorecard indicates that financial results are the final outcome of other pro cesses ithin the company. The foundation of high financial performance is learning and groth" hich reflects that it is an organization,s people and culture that cause e!cellent 'usiness processes. %!cellent 'usiness processes in turn cause customers to 'e satisfied. )nd happy customers lead to financial success. Thus" the components of the scorecard can 'e organized into a p yramid" indicating that each level reinforces the level a'ove it. Thus" high financial performance is an outgroth of success in other areas" starting ith a firm commitment to developing human capital and internal 'usiness processes.
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11. ) 'alance sheet shos the firm,s financial position ith respect to assets and lia'ilities at a specific point in time. 3t pro vides three types of informationG assets" lia'ilities" lia'ilities" and oners, e&uity. e&uity. )n income statement is different from a 'alance sheet in the sense that it shos revenues coming into the organization from all sources and su'tracts all e!penses" indicating the firm,s net income. 1$. The maor categories addressed in the te!t are li&uidity ratios" activity ratios" profita'ility ratios" and leverage ratios. Please refer to %!hi'it 19.+ in the te!t. 1(. 0ureaucratic control uses rules" policies" hierarchy of authority" authority" reard systems" and other formal devices to influence employee 'ehavior and assess performance. 3n contrast" decentralized control uses cultural values" traditions" shared 'eliefs" and trust to generate compliance ith organizational goals. 0ureaucratic control generates employee compliance ith rules hile decentralized control generates employee commitment to &uality. 1*. pen-'ook management allos employees to see for themselves the financial condition of the company" ho each individual,s o' fits into the 'ig picture and the company,s financial future" and it ties ties employee reards to to the company,s overall overall success. The 'alanced scorecard scorecard is a comprehensive management control system that 'alances traditional financial measures ith operational measures relating to a company,s critical success factors. 3t contains four perspectivesG financial performance" performance" customer service" internal 'usiness processes" and the organization,s organization,s capacity for learning and groth.
*
