Control System – PART-II

  1. An organization’s ______ is its envisioned future and reflects its core ideology. It spells out clearly what the organization intends to become in the future.




  1. The present day business world is characterized by change. Which of the following is/are the forms in which strategic change takes place in the business environment?

i.Changing competitor moves

ii.Changing technology conditions

iii.Changing supplier equations

iv.Changing competitor profiles

v.Changing customer value-price perceptions

a.Only i and iv

b.Only iii and v

c.Only i, ii and iv

d.i, ii, iii, iv and v

  1. The strategies that an organization adopts control its strategic positioning, which translate into ____.

a.customer perception of the organization’s products and services

b.the resources and strengths available with the organization

c.the strategic gaps existing in the marketplace play

d.the organization’s envisioned future and its core ideology

  1. An organization aims at leveraging on its resources or strength and aligning them with the environment in which it operates by addressing its critical success factors. Critical success factors (CSFs) are those which ______.

a.the organization cannot ignore and it has to control its performance to address the needs placed on it by them

b.reflect an organization’s core ideology and control the effort direction of the employees

c.reflect the performance of the organization or organizational unit with aspects which when improved upon lead to radical performance improvement and have an impact on all the key result areas of the organization

5.Which of the following statements is incorrect with respect to CSFs in an organization?

a.Each industry will have a different set of CSFs.

b.The number of CSFs selected should usually not be more than five or six.

c.CSFs are areas of activity that should receive constant and careful attention from management.

d.CSFs are of three types: performance indicators, key performance indicators and key result indicators.

6.____ deals with aspects of an organization which when improved upon lead to radical performance improvements that have an impact on most of the performance indicators.

a.Continuous improvement schemes

b.Critical success factors

c.Key performance indicators

d.Key results indicators

7.Key performance indicators are one of the three types of performance measures. They will vary from one organization to another depending on the ________ of the organization.

a.key result indicators

b.strategic positioning


d.organization structure and culture

8.Fine Dine, a middle tier restaurant chain, has identified the following CSFs: the acceptability of the menu offerings, location effectiveness, ambience acceptability and the quality of dining experience. Which key performance indicator (KPI) would probably reflect the restaurant’s ability to address these CSFs effectively and guide the decision on whether to open more outlets in the same city?

a.Number of repeat customers at the restaurant

b.Net profit before tax

c.Occupancy level at the restaurant

d.Customer satisfaction index

9.As a control tool, performance indicators describe what is to be done where, to achieve the desired results or outcomes. Among these indicators, ____ are the performance drivers while ____ are the outcome indicators.

a.lead indicators; lag indicators

b.lag indicators; lead indicators

c.key indicators; lag indicators

d.results indicators; lead indicators

  1. As a control tool, the performance indicators describe what is to be done where, to achieve the desired results or outcome. Which of the given statements correctly describe performance indicators?

i.Performance indicators can be either lead indicators or lag indicators.

ii.The key issues while identifying performance indicators are to identify the variable they are measuring and whether it is a single variable’s performance they are measuring or the performance of collective variables in a single indicator.

iii.Good performance indicators are Specific, Measurable, Attainable (Achievable), Realistic and have a Time perspective.

iv.With the emergence of concepts like Total Quality Management, the frequency of monitoring most of the performance indicators has shifted from a continuous or daily basis to periodic intervals.

a.Only i and ii

b.Only iii and iv

c.Only i, ii and iii

d.Only ii, iii and iv

  1. Investments in information systems and technology are today seen as mandatory to achieve control of operations. Which of the following factors does its significance depend on?

  2. Nature of operations and information intensity

  3. Extent of geographical spread

iii. Nature of industries

a.Only ii

b.Only i and ii

c.Only ii and iii

d.i, ii and iii

12._____ are those information systems applications that serve the top management’s needs for strategic performance control.

  1. Strategic information system
  2. Decision Support System
  3. What-if Analysis
  4. Computer Numeric Controls

13.The Balanced Scorecard (BSC) helps the organization in its strategic learning process. Which of the following is not a perspective(s) under which the BSC measures the performance of the organization?

i.Financial perspective

ii.Customer perspective

iii. Service perspective

iv.Learning and growth perspective

v.Internal business processes perspective

a.Only i and ii

b.Only iii

c.Only iv

d.Only iv and v

  1. Which of the given four perspectives of the Balanced Scorecard (BSC) talks about past performances of the organization and hence, has ‘lagging indicator’ measures?

a.Financial perspective

b.Customer perspective

c.Internal business process perspective

d.Innovation and learning perspective

15.The customer perspective of the Balanced Scorecard talks about how an organization wants itself and its products to be perceived by customers. According to the proponents of the BSC, which of the following is not a factor on which the customer’s perception about an organization is built?





16.Identify the correct sequence of steps in the implementation of the BSC in an organization.

i. Communicating and linking strategic objectives and measures

ii. Business planning

iii. Clarifying and translating the vision and strategy

iv. Measuring, monitoring and reporting





17.The implementation of the Balanced Scorecard in an organization facilitates ______.

a.only strategic performance control

b.only strategic feedback and learning

c.both strategic performance control and strategic learning

d.None of the above

18. _____, as a factor affecting the ethical behaviour of an employee, may be classified based on two dimensions: idealism and relativism.

a.Ethical philosophy

b.Individual’s value system

c.Ethical decision ideology

d. Ego strength

19. Identify the main organizational factors on which the ethical behavior of employees depends.

i.Ego strength


iii. Locus of control

iv.Ethical philosophy


vi.Performance measurement system

a.Only i and iii

b.Only ii and iv

c.Only i, iii and iv

d.Only ii, v and vi

20. There are three different ethical philosophies that individuals follow under different situations in an organizational set-up. Among these, ____ recommends that a course of action that achieves ‘the greatest good for the greatest number of people’ is ethical.

a.individual rights




21. Identify the ethical philosophy that says that individuals should be accountable only for factors which are under their control.


b.Individual rights

c. Utilitarianism

d. Idealism

22. Individuals who are ______, refer to universally accepted ethical principles for broad guidance rather than for strict adherence. They are open to making exceptions based on the situation.

a. situationists


c. subjectivists

d. absolutists

23. Soham is an individual who believes that behaving ethically ensures positive results. He also believes that moral values cannot be affected by circumstances and that they remain unchanged in all situations. Based on these two characteristics, Soham may be said to follow a/an ____ ethical decision ideology.





24. Which of the following is not one of the individual factors which determine the ethical behavior of an employee?

a.Age of the person

b.Ego strength

c.Position-related issues

d. Locus of control

25.Which of the following is not one of the organizational factors that influence the behavior of the employees?

a.Structure and culture

b.Ego strength

c.Performance measurement systems

d. Reward systems

26.Culture in an organization is influenced by the behavior of the managers or the top management and also by changes in organizational design or in the structure of the organization. The culture of an organization includes ________.



iii. belief systems

iv.reward systems

a.Only i

b.Only ii and iii

c.Only i, ii and iii

d.i, ii, iii and iv

27.Structure and culture constitute one of the organizational factors that influences the behaviour of the employees. Which of the given attributes does this factor include?

a.Performance measurement systems

b.Reward systems

c.Hierarchy of authority

d.Locus of control

28. The reward systems in an organization may be both monetary and non-monetary. ______ is an example of a monetary reward.

a.Membership of clubs


c.Employee stock option plans

d.All expenses paid vacations

29.The position of a job in the context of the overall function/department or the organization will impact ethical behavior. Which of the following is/are such position-related factors?

i.Peer pressure

ii.Extant of resources availability

iii. Ethical philosophy

iv. Superior-subordinate relationships

a.Only i

b.Only ii, iii and iv

c.Only i, ii and iv

d.Only iii and iv

30.Which of the following is not one of the external environmental factors affecting the behavior of the individuals in an organization?

a.Political and economic factors

b.Legal environment

c.Social factors

d.Ethical system

31. According to Edward Stead, Dan L. Worrell and Jean Garner Stead’s conceptual framework to explain why employees behave ethically or unethically, ______ factors and the ______ factors directly influence each other, and the _____ factors are in turn influenced by _____ factors.

a.individual; organizational/position-related; organizational; external environmental

b.organizational; external environmental; individual; external environmental

c.external environmental; position-related; organizational; external environmental

d. external environmental; individual; individual; organizational/position-related

32.______ is defined as a deliberate undervaluation of revenues and/or exaggeration of expenses in the budget to achieve pre-set budgetary objectives.

a.Budgetary valuation

b.Budgetary slack

c.Budgetary excesses

d. Self-seeking maximizer

33.If an organization requires managers to perform in accordance with ______ control systems, there are higher chances that the managers will resort to creating slack for _____ benefit.

a.out-put based; personal

b.action; organizational

c.behavioural; personal

d.behavioural; organizational

34.The incidence of earnings management is _____ in organizations that have _____ control systems due to which there is a lack of clear authority and proper auditing.

a.nil; well designed

b.higher; poorly designed

c.lower; poorly designed

d.higher; tightly designed

35. Distribution of samples and gifts in the pharma industry is an ethical issue which is mainly related to the ____ activity in an organization.



d.human resources

36.The quality of the product or service is the level to which the product or service satisfies the customer. Identify an attribute which quality does not encapsulate.





37.An organization’s _______ is a document which gives details about the expected relationship of the top management with the employees, the relationships of employees among themselves, bribery, disclosure of confidential information, customer relationships, accounting and legal and political actions.

a.Ethics Committee

b.Ethical decision ideology

c.Code of Ethics

d.Ethical philosophy

38.In order to regulate ethical conduct, one of the best practices followed by organizations is to constitute an Ethics Committee.

i.To ascertain that all employees are appropriately trained in the organization’s Code of Ethics

iiTo communicate the importance of the ethical values and ethical business practices

iii. To establish proper systems for monitoring the ethical implications of activities and performance, and penalizing unethical activities, if any

iv.To create avenues for employees to openly discuss the ethical issues that they face

v. To ensure that the Code of Ethics is never modified

a.Only i and iv

b.Only i, ii and iii

c.Only i, ii, iii and iv

d.i, ii, iii, iv and v

39.Identify the organizational issue which is not covered by the Code of Ethics of an organization.

i.Relationship of the top managers with the employees


iii. Relationships of the employees among themselves

iv.Relationships of customers with the organization

v. Disclosure of confidential information

a.Only i

b.Only ii and iii


d.None of the above

40.The activity whereby an employee of the organization informs the public or higher authorities about the unethical practices taking place in the organization is known as _______.

a.corporate governance

b.Code of ethics


d.ethics training

41.The process by which the ethical conduct and decision-making power of the employee is improved is known as ________.


b.ethics training

c.Code of ethics

d.corporate governance

42. It is through _______ that an organization tries to strike a balance between its own objectives and the well-being of society, as it clearly spells out the duties and rights of all the concerned people from employees to the stakeholders.

a.ethics training

b.budgetary slack

c.corporate governance

d.reward systems

43.According to the internal control framework proposed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which of the following is not one of the five components of management control?

a.Control environment

b.Information and communication

c.Corporate governance

d.Monitoring the control system

44. ______ refers(s) to the policies and procedures that are used in an organization to provide a reasonable assurance that the directions and instructions given by the management are being followed appropriately.

a.Control environment

b.Control activities

c.Management attributes

d.In formation and communication

45.Patrick Lancing recommends four different types of meetings which will serve different purpose. Match these types of meetings with the frequency with which they are usually conducted.

Types of meetings




iv.Off-site review






a.i/q, ii/p, iii/s, iv/r

b.i/p, ii/q, iii/r, iv/s

c.i/r, ii/p, iii/q, iv/s

d.i/s, ii/p, iii/q, iv/r

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