Organizational Change and Control Processes
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What is the first step in the organizational change process?

  • Compare pre-change performance with post-change performance
  • Recognize that there is a problem (correct)
  • Introduce and manage change
  • Decide on what the organization’s ideal future state would be

What role do corporate-level managers play in the goal-setting process?

  • They decide the methods of implementation for changes.
  • They evaluate the results of divisional performance.
  • They set specific goals for individual workers.
  • They establish divisional goals to align with corporate objectives. (correct)

Which of the following is a crucial consideration when implementing change in an organization?

  • Ignoring feedback from employees during the process
  • Determining whether change will occur from the top down or bottom up (correct)
  • Failing to assess the need for change
  • Setting overly ambitious goals without a plan for evaluation

What must managers balance to ensure effective organizational control?

<p>The need for improvement and the organization's adaptability to change (D)</p> Signup and view all the answers

In the organizational change process, what is involved in the evaluation step?

<p>Conducting benchmarking by comparing pre-change performance with post-change performance (A)</p> Signup and view all the answers

What is the primary function of organizational control?

<p>To monitor and regulate performance (A)</p> Signup and view all the answers

Which step in the control process involves setting performance standards?

<p>Establishing objectives (A)</p> Signup and view all the answers

What is a key advantage of output controls?

<p>They provide clear standards of performance (D)</p> Signup and view all the answers

What is a significant disadvantage of behavior controls?

<p>They require continuous oversight and monitoring (B)</p> Signup and view all the answers

How does organizational culture contribute to effective architecture?

<p>By fostering shared values and norms (D)</p> Signup and view all the answers

Why is managing change considered a vital management task?

<p>It ensures continuous improvement and adaptation (C)</p> Signup and view all the answers

What characteristic should a good control system possess?

<p>It should be flexible and timely in providing information (A)</p> Signup and view all the answers

What is necessary for managers to determine resource efficiency?

<p>Accurate measurement of input usage in production (D)</p> Signup and view all the answers

What is inventory turnover a measure of?

<p>The speed at which inventory is sold (A)</p> Signup and view all the answers

Which of the following characterizes effective output control?

<p>Realistic performance standards aligned with budget limits (B)</p> Signup and view all the answers

What does the return on investment (R.O.I) measure?

<p>The performance of an investment relative to its cost (A)</p> Signup and view all the answers

Which ratio indicates how efficiently an organization utilizes its resources?

<p>Operating Margin (B)</p> Signup and view all the answers

What is a potential problem with output control?

<p>Creating output standards that demotivate employees (D)</p> Signup and view all the answers

Which of these is NOT a component of effective output control?

<p>Budget flexibilities (C)</p> Signup and view all the answers

What does a higher current ratio indicate about an organization?

<p>It has strong short-term financial stability (A)</p> Signup and view all the answers

How do stretch goals function in organizational settings?

<p>They challenge managers but remain within reach (D)</p> Signup and view all the answers

Which ratio assesses the organization's ability to pay current liabilities without selling inventory?

<p>Quick Ratio (B)</p> Signup and view all the answers

The times-covered ratio is primarily focused on measuring what aspect?

<p>Ability to meet interest payments on debt (D)</p> Signup and view all the answers

What does the days sales outstanding measure in a managerial context?

<p>The efficiency of collecting receivables (D)</p> Signup and view all the answers

Which of the following ratios indicates the extent to which borrowed funds are used for investments?

<p>Debt-to-Asset Ratio (C)</p> Signup and view all the answers

What is the role of direct supervision in behavior control?

<p>To actively monitor and intervene as necessary (B)</p> Signup and view all the answers

Which of the following ratios would be least useful for assessing liquidity?

<p>Operating Margin (A)</p> Signup and view all the answers

Which aspect of budgeting is emphasized in effective management?

<p>Staying within budget while optimizing resource use (B)</p> Signup and view all the answers

The primary goal of objective financial measures in output control is to:

<p>Assess managerial efficiency accurately (B)</p> Signup and view all the answers

How is the operating margin calculated?

<p>Operating income divided by total revenue (D)</p> Signup and view all the answers

Which financial measure assesses the efficiency of asset usage to generate sales?

<p>Activity Ratio (D)</p> Signup and view all the answers

Effective organizational goals should be characterized by which of the following?

<p>Specific, challenging, but attainable (B)</p> Signup and view all the answers

Why is the quick ratio considered a more stringent measure than the current ratio?

<p>It excludes inventory from assets. (C)</p> Signup and view all the answers

What is the primary purpose of the 'Unfreezing' stage in Lewin's Force-Field Theory?

<p>To create an understanding of the need for change (B)</p> Signup and view all the answers

Which approach to change is characterized by quick decisions made by top managers?

<p>Top-Down Change (D)</p> Signup and view all the answers

In the context of organizational change, what is the first step in the change process?

<p>Assessing the Need for Change (C)</p> Signup and view all the answers

What type of control is employed during the conversion stage to address problems as they arise?

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

Which of the following describes 'Benchmarking' in the context of evaluating change?

<p>A comparison process to assess performance against others (D)</p> Signup and view all the answers

What is the final stage in Lewin's 3 stages of change?

<p>Refreezing (C)</p> Signup and view all the answers

What is identified in the second step of the organizational change process?

<p>Sources of resistance to change (D)</p> Signup and view all the answers

What is the focus of 'Assessing the Need for Change' in organizational learning?

<p>Increasing members' responsiveness to change (A)</p> Signup and view all the answers

What is one major problem associated with bureaucratic control?

<p>It creates bureaucratic 'red tape'. (A)</p> Signup and view all the answers

Which element is NOT part of the balanced scorecard approach?

<p>Employee satisfaction (C)</p> Signup and view all the answers

In a management by objectives (MBO) approach, who is primarily responsible for determining the subordinate's goals?

<p>The subordinate and the manager together (C)</p> Signup and view all the answers

What characterizes an adaptive culture within an organization?

<p>Values and norms that promote flexibility and growth. (C)</p> Signup and view all the answers

Which statement correctly describes clan control?

<p>It emphasizes shared values and behavioral standards. (C)</p> Signup and view all the answers

What is a common issue with an inert organizational culture?

<p>It can lead to stagnation and organizational failure. (B)</p> Signup and view all the answers

Which measure is NOT included in the balanced scorecard framework?

<p>Employee retention rates (C)</p> Signup and view all the answers

What is a key feature of organizational change?

<p>Enhancing efficiency and effectiveness over time. (B)</p> Signup and view all the answers

Flashcards

Performance Evaluation

Comparing actual performance to predetermined standards and taking corrective action if needed.

Organization-wide Goal Setting

A structured process for setting goals at different organizational levels, from corporate to individual employees.

Balancing Improvement and Change

The ability to manage both continuous improvement and adapt to unexpected changes effectively.

Organizational Change Process

The process of identifying, making, implementing, and evaluating changes in an organization.

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Benchmarking

Comparing the organization's performance to industry benchmarks or best practices.

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Organizational Control

The process of monitoring and regulating how effectively an organization and its members are performing activities to reach organizational goals.

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Control System

Formal systems that set targets, monitor performance, evaluate results, and provide feedback to managers about how well the organization's strategy and structure are working.

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Efficiency

Measured by how effectively resources (labor, materials, etc.) are used to produce a unit of output.

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Effectiveness

Measured by how well the organization is achieving its goals.

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Output Controls

These controls focus on outputs or results, often measured quantitatively.

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Behavior Controls

These controls focus on employee behaviors and actions, often measured qualitatively.

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Clan Control

A type of organizational control that emphasizes shared values, beliefs, and norms to guide employee behavior.

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Organizational Change

The ability to adapt and change in response to internal or external pressures to maintain effectiveness.

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Management By Objectives (MBO)

A management approach where managers and subordinates set specific goals, regularly review progress, and evaluate performance based on achieving those goals.

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Bureaucratic Control

A comprehensive system of rules and standard operating procedures that guide employee behavior and ensure consistent actions.

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Organizational Culture

The shared set of beliefs, expectations, values, norms, and work routines that influence how members of an organization interact and achieve goals.

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Adaptive Culture

A culture that fosters positive values and norms, helping an organization grow, adapt, and achieve its goals efficiently.

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Inert Culture

A culture characterized by values and norms that fail to motivate or inspire employees, leading to stagnation and potential failure.

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Balanced Scorecard

A framework that measures organizational performance across four key areas: financial, customer service, internal processes, and learning & growth.

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Operating Margin

A financial metric that measures how effectively an organization uses its resources. It is calculated by dividing operating profit by total sales.

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Activity Ratios

Measures how efficiently managers create value from assets, indicating how quickly inventory is sold and how long it takes to collect payments from customers.

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Liquidity Ratios

Measures the ability of an organization to meet its short-term debt obligations. Common measures are Current Ratio and Quick Ratio.

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Debt-to-asset Ratio

A measure of the amount of debt used to finance assets. It's calculated by dividing total debt by total assets.

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Current Ratio

A financial metric that reflects the business's ability to meet its short-term liabilities. It is calculated by dividing current assets by current liabilities.

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Return on Investment (ROI)

A measure of an organization's profitability, calculated by dividing net profit by the total investment cost of assets.

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Times-Covered ratio

Measures how well an organization can meet its interest obligations. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expense.

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Quick Ratio

A measure of an organization's ability to pay short-term liabilities without relying on its inventory. It is calculated by subtracting inventory from current assets and dividing by current liabilities.

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How do managers use debt and equity?

Leverage Ratios

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Inventory Turnover

How effectively managers are turning over inventory. Measured by dividing the cost of goods sold by the average inventory.

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Stretch Goal

A goal that challenges but is attainable, pushing managers to improve without being unrealistic.

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Operating Budget

A plan outlining resource allocation and usage to achieve organizational goals effectively and efficiently.

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Direct Supervision

Managers actively monitor and guide employee actions, providing instruction and taking corrective action as needed.

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Organizational Goals

Goals should be specific, difficult but attainable, pushing managers to their full potential.

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Days Sales Outstanding (DSO)

A measure of how efficiently managers collect revenue from customers to pay expenses. Calculated by dividing average accounts receivable by average daily sales.

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Effective Output Control

Three key components are essential for effective output control: objective financial measures, challenging goals and performance standards, and appropriate operating budgets.

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Problems with Output Control

Output control can encounter problems if standards are not motivating or lead to inappropriate behaviors to achieve goals.

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Organizational Learning

The process where managers try to improve employees' understanding and response to changing situations, ensuring they can make informed decisions about adapting to new challenges.

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Impetus for Change

The driving force behind any change within an organization. This force can come from internal or external sources like market pressures, technological advancements, or even internal conflicts.

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Lewin's Force-Field Theory

Lewin's theory suggests that two opposing forces - driving forces and restraining forces - influence change. When these forces are balanced, there's no change. Change occurs when driving forces are stronger, pushing for change, or when restraining forces are weakened, reducing resistance.

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Unfreezing (Lewin's Change Model)

This stage involves preparing the organization for change - getting people to understand the need for change. It might involve creating a sense of urgency, building a vision for the future, and overcoming resistance through communication and education.

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Changing (Lewin's Change Model)

The actual implementation of the change. This stage involves introducing the new practices, processes, or structures, and providing support to employees to help them adapt and adjust to the new way of working.

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Refreezing (Lewin's Change Model)

The final stage of change, where the new behaviors are integrated into the organization's culture and become the new norm. This involves reinforcing the change through rewards and recognition, making it sustainable.

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Top-Down Change

A fast, top-down management approach to change, where leaders identify the problem, design solutions, and swiftly implement the changes throughout the organization.

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Bottom-Up Change

A slower, more collaborative approach to change, where everyone, from top to bottom, works together to develop and implement change plans.

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