10 Questions
What is the purpose of the management control process components in an organization?
To facilitate the achievement of entity mission
Which of the following is NOT a component of the management control environment?
Leadership development programs
What is the primary function of incentives in the context of management control systems?
Encourage behavior aligned with the entity's mission
How does lack of clarity around decision rights impact organizations?
Hampers timely decision-making and compromises decision quality
Which type of decision-making involves conscious reasoning and explicit logical thinking?
System 2 thinking
What is the term for the tendency to be too certain of the accuracy of our judgments and make overly precise estimates?
Overestimation
Which cognitive bias involves making decisions based on ease-of-recall?
The availability heuristic
What is the term for the tendency to start decision-making based on the first piece of information presented?
The anchoring effect
Which trap involves estimating the likelihood of an event by comparing it to an existing prototype or mental image?
Representativeness heuristic
What is the term for the tendency to continue investing in a failing course of action despite contrary evidence?
Escalation of commitment
Test your knowledge of the components of the management control process, including economic, systems, and behavior considerations. Understand how managers communicate, motivate, and measure to facilitate the achievement of entity missions. Explore topics such as management control environment, informal controls, organizational structure, and decision rights.
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