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| 1 | |
Benefits of decentralisation include all of the following except: |
| | A) | managers of the organisation’s sub-unit have better local information about their particular markets and operations that enables them to manage their area effectively |
| | B) | allowing managers to have the responsibility of autonomous decision making provides managerial training for future higher-level managers |
| | C) | managers with decision-making authority may have greater motivation than do those who merely execute the decisions of others |
| | D) | managers in a decentralised organisation may focus narrowly on their own sub-unit’s performance, rather than on the attainment of the organisation’s overall goals |
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| 2 | |
The biggest challenge in making a decentralised organisation function effectively is to obtain goal congruence among the organisation’s autonomous managers. Goal congruence refers to: |
| | A) | the goals of the organisation being consistent with the goals of its customers |
| | B) | the goals of the suppliers being consistent with the goals of the organisation |
| | C) | the goals of the sub-unit managers being consistent with the goals of the organisation |
| | D) | the goals of the organisation being consistent with the goals of the shareholders |
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| 3 | |
Zahara Ahmed is the manager of a small retail accessories store located in a large suburban shopping mall. The accessories shop is a member of a 30-store chain operating in shopping centres on the eastern seaboard of Australia. Zahara’s store is considered a profit centre for assessment of financial performance. In order to promote goal congruence, Zahara’s performance would be best evaluated using: |
| | A) | some measure of profit |
| | B) | detailed cost variances |
| | C) | revenues |
| | D) | return on investment |
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| 4 | |
The treasury division of a large multinational company operating within Australia has been set up to provide high-level expertise in treasury/finance services to the entire Australian operation. Which of the following is not a characteristic of a shared service? |
| | A) | The location (physical, organisational, time zone, etc.) is chosen to best serve internal customers. |
| | B) | The focus is on the needs of internal customers such as business units and divisions. |
| | C) | It is structured as a cost centre, reporting to head office managers. |
| | D) | The units have full responsibility for both the cost and the quality of services delivered. |
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| 5 | |
The human resources division of the Galaxy Corporation has been organised on the basis of a number of self-managed work teams where the provision of human resource services, such as recruitment, industrial relations, payroll processing, training and planning, is the responsibility of the team for a specific business unit or group of business units. Benefits of self-managed work teams include: |
| | A) | improved response time to client delivery needs |
| | B) | increased goal congruence among team members |
| | C) | increased opportunities for team members to directly improve the quality of operations |
| | D) | all of the given answers |
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| 6 | |
The treasury division of a large multinational company operating within Australia has been set up to provide high-level expertise in treasury/finance services to the entire Australian operation. Shared services are usually organised as: |
| | A) | investment centres |
| | B) | profit centres |
| | C) | revenue centres |
| | D) | cost centres |
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| 7 | |
A large divisionalised company with a multitude of subsidiary companies employs the head office corporate accounting team to prepare the consolidated corporate financial reports. The common costs of this employment should be allocated on what basis? |
| | A) | Hours of work (percentage of budgeted total hours of work). |
| | B) | Occupancy (percentage of total budgeted square metres of office space occupied). |
| | C) | Number of staff employed (percentage of total budgeted number of staff employed). |
| | D) | Common costs should not be allocated, as highly arbitrary cost allocations can result in misleading and distorted profit information for the subsidiary companies. |
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| 8 | |
The difference between the profit margin controllable by the segment manager and the profit margin attributable to the segment is: |
| | A) | variable operating expenses |
| | B) | fixed expenses controllable by the segment manager |
| | C) | common fixed costs |
| | D) | fixed expenses attributable to the segment but controllable by others |
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| 9 | |
Consider the following statements about goal congruence: i. Goal congruence is obtained when sub-unit managers throughout the organisation strive to achieve top management’s goals.
ii. Realising goal congruence in most organisations is relatively straightforward.
iii. Managers are often more concerned about the performance of their own sub-units rather than the performance of the entire organisation.
Which of the above statements is (are) false? |
| | A) | i. |
| | B) | ii. |
| | C) | i and ii. |
| | D) | ii and iii. |
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| 10 | |
An objective of a transfer pricing system is: |
| | A) | to maximise the transfer price |
| | B) | to minimise the transfer price |
| | C) | to use market-based transfer prices |
| | D) | to encourage goal-congruent behaviour |
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