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Key_Multiple Choice Quiz_Chapter12 -...

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Multiple Choice Quiz (See related pages) Your Results: The correct answer for each question is indicated by a  Which of the following is  NOT  an advantage of decentralization? A) Faster response B) Better use of local knowledge C) Reduction of problems to manageable size D) Lower cost of monitoring and controlling the activities of local managers E) All of the above are advantages of decentralization Feedback: The major disadvantage of decentralization is that local managers can make decisions  that are not in the interest of the organization's top managers and the owners. Thus, decentralized  companies incur the costs of monitoring and controlling the activities of local managers. A (an) ________________ is designed to influence subordinates to act in the organization's interest. A) decentralized system B) management control system C) centralized system D) accounting system E) none of the above Feedback: A management control system is comprised of the structure and procedures that the  principals (owners) use to influence agents (managers) of the organization to implement the  organization's strategies. The study of how firms are structured and operated is called: A) management evaluation analysis B) corporate efficiency analysis C) organizational economics D) corporate environmental analysis E) none of the above Feedback: Organizational economics is the study of how firms are structured and operated. Management control systems consist of three elements. Which of the following is NOT one of those elements? A) Delegated decision authority B) Performance evaluation and measurement systems C) Compensation and reward decision D) Dysfunctional decision making E) None of the above 1/6
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Feedback: From the organizational economics literature, management control systems consist of  three elements: (1) delegated decision authority; (2) performance evaluation and measurement  systems; and (3) compensation and reward decision. Responsibility accounting classifies organization units into centers based on decision authority delegated to the  center's manager. Which of the following is NOT a type of center classification?
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