Management Control Systems Quiz
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Questions and Answers

What is the primary advantage of concurrent controls?

  • They analyze the end results to avoid future mistakes.
  • They offer the lowest cost method of quality management.
  • They ensure that processes are perfectly planned from the start.
  • They are the only controls that can address unexpected events during operations. (correct)

Which of the following is a key characteristic of the decision-making process in concurrent control systems?

  • Decision making is not required with cybernetic control systems.
  • Decisions must be made on whether to continue, change, or stop an activity. (correct)
  • Decisions are only made after a project is complete.
  • Decisions are based on pre-existing rules and do not require analysis.

What is the main focus of feedback control?

  • Implementing preliminary steps for risk mitigation.
  • Analyzing the final results of a process. (correct)
  • Monitoring real time work in progress.
  • Deciding on staffing during a project.

Why is feedback control often described as providing 'historical results guide future actions'?

<p>It improves future activities by reviewing past outcomes. (B)</p> Signup and view all the answers

What is a primary limitation of using comparative standards for organizational control?

<p>They assume all organizations are fundamentally similar. (B)</p> Signup and view all the answers

Under what circumstance might feedback control be preferred over preliminary and concurrent control?

<p>When the costs of other types of controls are too high. (B)</p> Signup and view all the answers

Which of the following best describes the two types of errors managers should avoid when taking corrective actions?

<p>Taking action when it's not needed or not acting when it is. (C)</p> Signup and view all the answers

Which of these examples represents a form of concurrent control?

<p>On the job training (B)</p> Signup and view all the answers

Which of the following best describes a cybernetic control system?

<p>Automatically monitors and corrects processes after being setup (A)</p> Signup and view all the answers

What is the primary focus of preventive control?

<p>Regulating resources before they enter production. (A)</p> Signup and view all the answers

Which of the following is an example of a preventive control?

<p>Employee training programs. (B)</p> Signup and view all the answers

How does a cybernetic control system differ from a non-cybernetic control system?

<p>Cybernetic systems minimize human discretion through automation. (A)</p> Signup and view all the answers

What is the main purpose of the controlling function in an organization?

<p>To ensure activities align with planned goals (B)</p> Signup and view all the answers

Why is preventive control considered 'future oriented'?

<p>It tries to avoid problems in the future. (A)</p> Signup and view all the answers

Why is controlling considered essential for effective organizational management?

<p>It allows the organization to adapt to changes, limit errors, and monitor performance. (A)</p> Signup and view all the answers

What is the main objective of concurrent control?

<p>Monitoring activities during the transformation process. (B)</p> Signup and view all the answers

How does the controlling function help in adapting to changing conditions?

<p>By allowing managers to anticipate, monitor, and respond to changes. (C)</p> Signup and view all the answers

Which type of control is most likely used to detect deviations from standards during the actual process of production?

<p>Concurrent control. (D)</p> Signup and view all the answers

What can happen if small errors or mistakes are left uncorrected within an organization?

<p>They may be magnified, causing harm to the organization. (C)</p> Signup and view all the answers

Which of the following best describes the role of concurrent control in operations management?

<p>To ensure smooth operations during the actual transformation process. (D)</p> Signup and view all the answers

What is the relationship between planning and controlling?

<p>The controlling function builds on the planning function. (B)</p> Signup and view all the answers

In addition to planning, which other functions of management does controlling support?

<p>Organizing and leading. (B)</p> Signup and view all the answers

Which of these options is most accurately described as the controlling function?

<p>Comparing planned objectives to a company's current performance. (B)</p> Signup and view all the answers

According to the provided context, what is necessary, in addition to well-planned objectives, strong organization, direction, and motivation, for a high probability of success?

<p>An adequate system of control. (A)</p> Signup and view all the answers

What is the primary purpose of investigating performance that exceeds expectations?

<p>To determine if standards are set too low. (B)</p> Signup and view all the answers

When performance fails to meet expectations, what is the initial step managers should take?

<p>Re-evaluate the established standards and resources. (B)</p> Signup and view all the answers

According to the managerial principle of exception, where should managers focus their attention during performance control?

<p>On significant deviations from expected results. (C)</p> Signup and view all the answers

What action is typically recommended when performance meets or exceeds the standards?

<p>Positive performance should be acknowledged and evaluated. (A)</p> Signup and view all the answers

When is it acceptable for standards to be revised rather than taking corrective action to meet them?

<p>When standards are based on past performances which may no longer be applicable. (A)</p> Signup and view all the answers

What does the development of upper and lower performance limits help in control process?

<p>It defines the acceptable ranges beyond which deviations require further investigation. (B)</p> Signup and view all the answers

Why do managers sometimes need to personally check the standards and related performance measures?

<p>To ensure the standards remain realistic and relevant. (B)</p> Signup and view all the answers

How does focusing on exceptions help managers save time and effort?

<p>By directing attention only to significant deviations in performance. (D)</p> Signup and view all the answers

Which of the following best exemplifies a non-cybernetic control system?

<p>A project management process where decisions are based on team leads' judgement. (B)</p> Signup and view all the answers

Why is it essential for control systems to be future-oriented?

<p>To guide work towards objectives by highlighting opportunities. (A)</p> Signup and view all the answers

What does the principle of a 'multidimensional' control system refer to?

<p>A system that integrates several different types of data. (C)</p> Signup and view all the answers

Why is it crucial for a control system to be economically realistic?

<p>To ensure the benefits from the system outweigh its expenses. (B)</p> Signup and view all the answers

Why can inaccurate control data be detrimental to an organization?

<p>It can cause the organization to take corrective actions that are not necessary or ineffective. (B)</p> Signup and view all the answers

Why is acceptance from organization members critical for a control system to operate effectively?

<p>Because employees are more likely to undermine a system they don't accept. (C)</p> Signup and view all the answers

What is the primary concern regarding the 'timeliness' of data provided by a control system?

<p>The data should reflect the current state of a process or production cycle as of a specific point in time. (A)</p> Signup and view all the answers

Which is the most likely negative outcome of implementing too many, too few, or overly rigid controls?

<p>Reduced employee satisfaction and motivation. (A)</p> Signup and view all the answers

What is the primary reason a control system must provide information promptly to managers and employees?

<p>To allow for corrective action to be taken before serious consequences occur (C)</p> Signup and view all the answers

Which of the following describes the term 'validity' in the context of control systems?

<p>The system's ability to measure what it is intended to measure. (C)</p> Signup and view all the answers

What method can be used to monitor the effectiveness of a control system?

<p>By introducing a system defect and observing detection and communication. (C)</p> Signup and view all the answers

Why is it important that control systems are 'organizationally realistic'?

<p>To align with existing organizational structures and standards. (C)</p> Signup and view all the answers

What does it mean for a control system to be 'flexible'?

<p>It can be easily adapted to changes in the organization and environment. (D)</p> Signup and view all the answers

What should be the focus when determining 'critical control points'?

<p>Areas where failures would have the most significant negative impact. (A)</p> Signup and view all the answers

Why is it important for a control system to be easy to understand?

<p>To ensure easier interpretation and implementation of controls. (B)</p> Signup and view all the answers

What is the 'exception principle' in terms of a control system?

<p>Directing management's attention to deviations and errors only. (D)</p> Signup and view all the answers

Flashcards

Management by Exception

Involves focusing on significant deviations from expected outcomes or standards.

Red Flag

A standard that signifies a deviation or variation from the expected outcome.

Corrective Action

Actions taken to correct performance when it deviates from the set standards.

Positive Deviation

Performance exceeding expectations may indicate superior talent or inappropriate standards.

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Negative Deviation

Performance falling short of expectations may be due to inappropriate standards, poor talent, or inefficient resource utilization.

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Analyzing Favorable Deviations

A method for analyzing positive deviations to understand the reasons for success.

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Re-evaluating Standards

A process of re-evaluating standards when performance consistently fails to meet them.

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Using Past Data for Future Standards

Using historical data that may no longer be accurate to set performance standards.

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What is controlling (in management)?

The process by which managers ensure that actual activities align with planned activities.

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How does control work?

A consistent review of current performance against established goals and standards.

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Why is controlling important?

It helps ensure that the organization adapts to changing conditions, prevents small errors from escalating, and monitors overall performance.

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How does control help adapt to change?

Control systems allow managers to anticipate, monitor, and respond to changing circumstances in a dynamic business environment.

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How does control limit the magnification of errors?

Uncorrected errors can grow over time, potentially causing significant harm to the organization.

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How does control monitor performance?

Control provides a means to monitor individual, departmental, and organizational performance to ensure progress is on track.

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How is controlling connected to other management functions?

Controlling is closely connected to planning, organizing, and leading. It ensures that performance aligns with planned objectives, supports resource allocation, and helps direct efforts toward organizational goals.

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Why is a control system essential?

Effective planning, organization, leadership, and motivation are insufficient without a well-established system of control to ensure success.

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Preventive Control

A control type that focuses on preventing errors before they occur. Think of it as setting up barriers to prevent potential issues.

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Concurrent Control

A control type that monitors activities as they happen, allowing for real-time adjustments. It's like having a watchful eye on the process.

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Feedback Control

A control type that analyzes the final output of a process after it's completed. It helps identify areas for improvement in future activities.

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Non-cybernetic Control

A control system that relies on human judgment and intervention to make adjustments. It requires deliberate human action to monitor and correct deviations.

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Cybernetic Control

A control system that automatically monitors and makes necessary corrections without human intervention. It operates like a self-regulating mechanism.

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Contingencies & Concurrent Controls

Contingencies are unplanned events that can disrupt a process. Concurrent controls are crucial for handling these unexpected situations.

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Flexibility in Concurrent Control

The ability to adjust a process while it's ongoing, ensuring that it stays on track and meets desired standards.

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Control Timing: Preventive, Concurrent, Feedback

Control types are classified based on the timing of their application: before, during, or after the process. This helps categorize and apply controls effectively.

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Preventive/Steering/Preliminary/Input Control

A type of control that focuses on regulating inputs to ensure they meet standards before the transformation process begins. It aims to prevent problems before they arise.

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Concurrent/Screening/Yes-No/Checking Control

A type of control that involves regulating ongoing activities during the transformation process to ensure they conform to organizational standards. It aims to identify deviations from standards as they happen.

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Feedback/Post-Action/Output Control

A type of control that involves evaluating outputs after the transformation process is complete to ensure they meet organizational standards. It focuses on identifying causes of deviations and making adjustments for future activities.

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Controlling

The practice of identifying and addressing issues in a system to ensure it stays on track towards achieving its goals. It involves setting standards, measuring performance, and taking corrective actions.

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Performance Measurement

The practice of setting standards for performance and then measuring actual performance against these standards.

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Cost of Non-Conformance

The potential for negative consequences when a problem is not detected and addressed in a timely manner.

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Preventative Action

The practice of taking preventative measures to avoid the occurrence of problems in the first place.

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Non-Cybernetic System

A control system that relies on human judgement and decision-making as a key part of its process.

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Future Oriented Control

A control system that focuses on guiding future actions and outcomes rather than dwelling on past mistakes.

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Multidimensional Control

Control systems need to consider various aspects of performance, like quality, quantity, and cost.

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Economically Realistic/Cost Effective Control

The cost of implementing a control system should be less than or equal to the benefits it provides.

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Accurate Control

Accurate information is vital for effective control, as inaccurate data can lead to poor decisions.

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Acceptable Control

Control systems are most effective when accepted and used by the people they affect.

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Timely Control

Control systems need to provide timely information to guide decision-making and adjustments.

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Control Aids to Future Action

Control systems should be designed to assist managers in monitoring progress toward unit objectives and identifying opportunities.

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Prompt Response

Control systems should be able to detect and report problems quickly, allowing for timely corrective action before significant damage occurs.

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Reliability and Validity

Control systems must provide accurate and reliable information. They need to measure what they are supposed to measure.

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Monitorable

Control systems need to be regularly monitored to ensure they are working as expected.

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Organizationally Realistic

Control systems should be designed to fit the specific organization and its structure, taking into account different roles and expectations.

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Flexibility

Control systems should be adaptable and able to change as the organization and its environment evolve.

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Critical Control Points

Focus should be on the most critical areas of an organization's operations, where failures can have the biggest impact.

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Easy to Understand

Control systems should be easy to understand and use, minimizing complexity and confusion.

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Emphasis on Exception

Control systems should only highlight significant deviations from expected performance, rather than focusing on routine activities.

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Study Notes

Controlling Function

  • Controlling is the process of ensuring activities align with planned ones.
  • It's about regulating organizational activities to match standards and goals.
  • It involves checking current performance against predetermined plans.

Importance of Controlling

  • Crucial for effective organizational management.
  • Helps adapt to changing conditions.
  • Limits error magnification.
  • Monitors performance.

Controlling Process

  • Determine Areas to Control: Identify critical control points across all areas of operations. These include areas of significant impact or cost.

  • Establishing Standards: Define clear benchmarks for evaluating performance and related actions.

    • Standards should be specific, quantitative, and flexible to adapt to future changes.
    • They should also be challenging and focus on improvement.
    • Standards serve to guide employee behavior, identify job difficulties, and reduce goals incongruence.
    • Three Types: performance, corollary, and conduct
    • Examples: 800,000 units per year, 20% market share increase, 15% cost reduction, answering complaints in 24 hours

  • Measuring Actual Performance: Evaluate the actual results.

    • How to measure and how often
    • Base comparisons on reports (oral/written), observations (MBWA), etc

  • Comparing Performance to Standards: Assess differences between planned and actual performance.

    • Deviation can be positive (exceeding expectations), zero (meeting expectations), or negative (failing to meet expectations).

  • Taking Corrective Action: Addressing any performance gaps.

    • Focus on exceptions (deviations)
    • Proper action depends on the type of deviation (positive, negative, or zero).
    • Recognizing positive performance is important.
    • Address why the standards are not met.
    • Review if standards are still realistic in current conditions.

Types of Controlling

  • Preventive/Preliminary/Input Control: Ensures inputs meet standards (quality/quantity resources) before the process begins. It is future-oriented.
  • Concurrent/Screening/Yes-No Control: Ongoing monitoring of activities during the process. Identifies difficulties and allows for adjustments.
  • Feedback/Post-Action Control: Monitors the final results to ensure alignment with objectives.
    • Uses historical data for future improvement.

Effective Control System Characteristics

  • Future-Oriented: Focus on future outcomes, not just past issues
  • Multidimensional: Consider various performance factors
  • Economically Realistic: Cost-benefit analysis of the control system
  • Accurate: Precise data crucial for effective decision-making
  • Acceptable to Members: Must be accepted by those affected to be effective
  • Timely: Provides information promptly for corrective action
  • Reliable/Valid: Data must be trustworthy and measure what is intended
  • Monitorable: Assess system performance and identify issues
  • Organizationally Realistic: Fits with the structure and realities of the organization.
  • Flexible: Adapt readily to changing conditions
  • Focus on Critical Points: Target efforts towards key processes to prevent significant issues
  • Easy to Understand: Simple and clear controls are best understood.
  • Emphasis on Exception: Concentrate on significant deviations from expected results.

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Related Documents

Chapter 7: Controlling PDF

Description

Test your knowledge on concurrent, feedback, and preventive control systems in management. This quiz covers essential concepts such as the advantages of concurrent controls, types of errors in corrective actions, and characteristics of cybernetic control. Perfect for students studying organizational management or business administration.

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