MGT 3013 - Exam 2 Ch. 5,6,7,8
Questions with Complete Solutions
2026 Updated.
controlling - Answer Process when managers monitor and evaluate whether the
organization's strategy and structure are working as intended, how they could be improved, and
how they might be changed if they are not working.
control systems - Answer Formal target-setting, monitoring, evaluation, and feedback
systems that provide managers with information about how well the organization's strategy and
structure are working.
-should be flexible so managers can respond as needed
-should provide accurate information about the organizational performance.
-should provide information in a timely manner
feedforward control - Answer Control that allows managers to anticipate problems before
they arise.
concurrent control - Answer Control that gives managers immediate feedback on how
efficiently inputs are being transformed into outputs so that managers can correct problems as
they arise
feedback control - Answer Control that gives managers information about customers'
reactions to goods and services so that corrective action can be taken if necessary.
steps in organizational control - Answer (1) establish the standards of performance, goals, or
targets against which performance is to be evaluated
(2) measure actual performance
(3) compare actual performance against chosen standards of performance
(4) evaluate the result and initiate corrective action if the standard is not being achieved
return on investment - Answer =net profit before taxes/total assets
(measures how well managers are using the organizations resources to generate profits)
operating margin - Answer =total operating profit/sales revenues
(a measure of how much percentage profit a company is earning on sales; the higher the
percentage, the better a company is using its resources to make and sell the product)
,profit ratios - Answer measures how well managers are using the organization's resources to
generate profits. A meaure of the percentage profit a company is earning on sales; higher the
percentage better the use of resources.
-return on investment
-operating margin
liquidity ratios - Answer measures of how well managers protect resources to meet short
term debt
-current ratio
-quick ratio
current ratio - Answer =current assets/current liabilities
(do managers have resources available to meet claims of short-term creditors)
quick ratio - Answer =current assets-inventory/current liabilities
(can managers pay off claims of short-term creditors without selling inventory)
leverage ratios - Answer measures of how much debt or equity is used to finance operations
-debt-to-assets ratio
-times-covered ratio
debt-to-assets ratio - Answer =total debt/total assets
(to what extent have managers used borrowed funds to finance investments)
times-covered ratio - Answer =profit before interest and taxed/total interest charges
(measures how far profits can decline before managers cannot meet interest charges. if this
ratio declines to less than 1, the org is technically insolvent.)
activity ratios - Answer measures of how efficiently managers are creating value from assets
-inventory turnover
-days sales outstanding
inventory turnover - Answer =cost of good sold/inventory
(measures how efficiently managers are turning inventory over so that excess inventory is not
carried)
, days sales outstanding - Answer =current accounts receivable/sales for period divided by
days in period
(measures how efficiently managers are collecting revenues from customers to pay expenses)
organizationwide goal setting - Answer -corporate-level managers set goals for individual
divisions that will allow the org to achieve corporate goals
-divisional managers set goals for each function that will allow the division to achieve its goals
-functional managers set goals for each individual worker that will allow the function to achieve
its goals
operating budget - Answer A blueprint that states how managers intend to use
organizational resources to achieve organizational goals efficiently. Each division is evaluated on
its own budgets for cost, revenues or profit.
management by objectives (MBO) - Answer A goal-setting process in which a manager and
each of his or her subordinates negotiate specific goals and objectives for the subordinate to
achieve and then periodically evaluate their attainment.
bureaucratic control - Answer Control of behavior by means of a comprehensive system of
rules and standard operating procedures. Rules and SOPs guide behavior and specify what
employees are to do when they confront a problem that needs a solution. Standardized
behavior leads to standardized outputs.
organizational culture - Answer The shared set of beliefs, expectations, values, norms, and
work routines that influence the ways in which individuals, groups, and teams interact with one
another and cooperate to achieve organizational goals.
clan control - Answer The control exerted on individuals and groups in an organization by
shared values, norms, standards of behavior, and expectations.
organization change - Answer The movement of an organization away from its present state
and toward some desired future state to increase its efficiency and effectiveness.
top-down change - Answer A fast, revolutionary approach to change in which top managers
identify what needs to be changed and then move quickly to implement the changes
throughout the organization.
bottom-up change - Answer A gradual or evolutionary approach to change in which
managers at all levels work together to develop a detailed plan for change.
Questions with Complete Solutions
2026 Updated.
controlling - Answer Process when managers monitor and evaluate whether the
organization's strategy and structure are working as intended, how they could be improved, and
how they might be changed if they are not working.
control systems - Answer Formal target-setting, monitoring, evaluation, and feedback
systems that provide managers with information about how well the organization's strategy and
structure are working.
-should be flexible so managers can respond as needed
-should provide accurate information about the organizational performance.
-should provide information in a timely manner
feedforward control - Answer Control that allows managers to anticipate problems before
they arise.
concurrent control - Answer Control that gives managers immediate feedback on how
efficiently inputs are being transformed into outputs so that managers can correct problems as
they arise
feedback control - Answer Control that gives managers information about customers'
reactions to goods and services so that corrective action can be taken if necessary.
steps in organizational control - Answer (1) establish the standards of performance, goals, or
targets against which performance is to be evaluated
(2) measure actual performance
(3) compare actual performance against chosen standards of performance
(4) evaluate the result and initiate corrective action if the standard is not being achieved
return on investment - Answer =net profit before taxes/total assets
(measures how well managers are using the organizations resources to generate profits)
operating margin - Answer =total operating profit/sales revenues
(a measure of how much percentage profit a company is earning on sales; the higher the
percentage, the better a company is using its resources to make and sell the product)
,profit ratios - Answer measures how well managers are using the organization's resources to
generate profits. A meaure of the percentage profit a company is earning on sales; higher the
percentage better the use of resources.
-return on investment
-operating margin
liquidity ratios - Answer measures of how well managers protect resources to meet short
term debt
-current ratio
-quick ratio
current ratio - Answer =current assets/current liabilities
(do managers have resources available to meet claims of short-term creditors)
quick ratio - Answer =current assets-inventory/current liabilities
(can managers pay off claims of short-term creditors without selling inventory)
leverage ratios - Answer measures of how much debt or equity is used to finance operations
-debt-to-assets ratio
-times-covered ratio
debt-to-assets ratio - Answer =total debt/total assets
(to what extent have managers used borrowed funds to finance investments)
times-covered ratio - Answer =profit before interest and taxed/total interest charges
(measures how far profits can decline before managers cannot meet interest charges. if this
ratio declines to less than 1, the org is technically insolvent.)
activity ratios - Answer measures of how efficiently managers are creating value from assets
-inventory turnover
-days sales outstanding
inventory turnover - Answer =cost of good sold/inventory
(measures how efficiently managers are turning inventory over so that excess inventory is not
carried)
, days sales outstanding - Answer =current accounts receivable/sales for period divided by
days in period
(measures how efficiently managers are collecting revenues from customers to pay expenses)
organizationwide goal setting - Answer -corporate-level managers set goals for individual
divisions that will allow the org to achieve corporate goals
-divisional managers set goals for each function that will allow the division to achieve its goals
-functional managers set goals for each individual worker that will allow the function to achieve
its goals
operating budget - Answer A blueprint that states how managers intend to use
organizational resources to achieve organizational goals efficiently. Each division is evaluated on
its own budgets for cost, revenues or profit.
management by objectives (MBO) - Answer A goal-setting process in which a manager and
each of his or her subordinates negotiate specific goals and objectives for the subordinate to
achieve and then periodically evaluate their attainment.
bureaucratic control - Answer Control of behavior by means of a comprehensive system of
rules and standard operating procedures. Rules and SOPs guide behavior and specify what
employees are to do when they confront a problem that needs a solution. Standardized
behavior leads to standardized outputs.
organizational culture - Answer The shared set of beliefs, expectations, values, norms, and
work routines that influence the ways in which individuals, groups, and teams interact with one
another and cooperate to achieve organizational goals.
clan control - Answer The control exerted on individuals and groups in an organization by
shared values, norms, standards of behavior, and expectations.
organization change - Answer The movement of an organization away from its present state
and toward some desired future state to increase its efficiency and effectiveness.
top-down change - Answer A fast, revolutionary approach to change in which top managers
identify what needs to be changed and then move quickly to implement the changes
throughout the organization.
bottom-up change - Answer A gradual or evolutionary approach to change in which
managers at all levels work together to develop a detailed plan for change.
