AFM280 Lecture Notes - Lecture 11: Nominal Group Technique, Production Blocking, Process Gain

Q1. Members are most likely to experience role conflict and divided loyalties in:
a. a cross-functional project team
b. a self-managed operational team
c. a traditional work team
d. an executive team

Q2. Which of the following was not mentioned as a primary determinant of performance for a functional team?
a. how long the current leader has been in that position
b. trust and cooperation among the team members
c. the organization and coordination of activities
d. member agreement about objectives and strategies

Q3. Which is not likely to improve the effectiveness of a self-managed team?
a. let members share in financial gains from improved performance
b. change the membership frequently to give the team fresh ideas
c. provide accurate, timely information relevant to team activities
d. give members training in interpersonal and problem solving skills

Q4. Which process is most likely to occur in an after-activity review?
a. determination of responsibility for errors and mistakes
b. recognition of members for their contributions to the team
c. analysis of what was done well and what needs to be changed
d. selection of the most qualified team leader for the next activity

Q5. Which type of activity is least likely to be delegated to a self-managed team?
a. evaluating each team member's task performance
b. firing a team member who has unsatisfactory performance
c. determining the work procedures to be used by the team
d. determining which team member will carry out each task

Q6. The primary responsibility of the leader of a decision group is to:
a. suggest good ideas for solving the problem
b. ensure that everybody has equal influence
c. encourage group members to reach an agreement quickly
d. structure the discussion in a systematic manner

Q7. The primary purpose of a dialogue session is to:
a. debate competing proposals and identify the best one for the team
b. help members learn more about each other's interests and aspirations
c. encourage members to express their dissatisfaction with each other openly
d. increase understanding of implicit assumptions and mental models

Q8. What was found in research on the effectiveness of self-managed teams?
a. productivity and quality improved substantially
b. organizational commitment usually increased
c. turnover and absenteeism were lower
d. the results were inconsistent across studies

Q9. Which condition is least important for the success of a new strategy?
a. it is based on the core competencies of the organization
b. it is compatible with significant changes in the external environment
c. it has a few clear themes relevant to the shared values of the members
d. it is similar to a strategy that was previously successful

Q10. Which of the following actions by the CEO is not likely to improve the effectiveness of an executive team?
a. clearly define objectives consistent with shared values of team members
b. talk with individuals whenever possible to reduce time in meetings
c. give the team considerable discretion but specify limits of team authority
d. rely more on advice from members with the most expertise

Q11. Which statement about institutionalization in organizations is most accurate?
a. it describes how subunits with expertise gain power in organizations
b. it makes it easier for organizations to adapt to a changing environment
c. it describes how people use power to gain more power
d. it demonstrates why political tactics are unnecessary to maintain power

Q12. What is the best summary of findings in research on leadership succession?
a. chief executives have little influence on organization performance due to the overwhelming influence of economic and market conditions
b. chief executives have a strong impact on organization performance and are the primary determinant of whether the organization prospers or declines
c. chief executives have a moderate impact on organizational performance when measured over a period of several years
d. chief executives influence stock prices but have little or no influence on the firm's actual economic performance

Q13. What pattern of behavior is least likely during the first few months on the job for the new CEO in an organization that is prosperous?
a. the CEO will quickly select a new strategy and make major changes in the organization to look like a confident and dynamic leader
b. the CEO will make changes in the functional areas in which he or she has the most prior experience
c. the CEO will attempt to demonstrate some small successes in dealing with immediate problems to build a favorable image and gain more discretion
d. the CEO will gather and analyze information about the organization and environment in order to determine an appropriate strategy

Q14. Which of the following was not given as a guideline for external monitoring?
a. examine a wide range of developments and trends in the environment
b. make an extra effort to learn what clients and customers want and need
c. identify both the strengths and weaknesses of competing products
d. rely primarily on your own intuition to analyze the environment

Q15. In what situation are executive teams least likely to be useful?
a. the organization includes several business units with diverse products
b. there is intense competition among executives to become the next CEO
c. the organization has a complex and turbulent environment
d. the executives in the team have very diverse backgrounds and perspectives

Q16. Which is not a core performance determinant in the flexible leadership theory?
a. process reliability and efficiency
b. leader experience and technical skills
c. human resources and relations
d. innovation and adaptation

Q17. Research at CCL indicates that the least amount of learning occurred for managers who had:
a. assignments for which they were well prepared
b. challenges they had to face alone
c. opportunities to make mistakes
d. diverse experiences with different types of challenges

Q18. Which statement about leadership development in organizations is least likely to be accurate:
a. leadership development should be consistent with organization strategy
b. developmental activities should be coordinated with formal training
c. self development activities should be maximized to reduce costs
d. leadership development should be integrated with succession planning

Q19. Which of the following usually includes a mix of formal training and learning from experience working on management projects?
a. mentoring
b. job rotation programs
c. action learning
d. behavior modeling

Q20. Which developmental method is most useful for helping managers to understand their inner feelings and values?
a. outdoor challenge programs
b. personal growth programs
c. mentoring programs
d. multisource feedback workshops

Q21. Which approach is used most often for improving leadership?
a. multi-source feedback workshops
b. formal mentoring programs
c. job rotation programs
d. formal training programs

Q22. What two methods are most useful for improving conceptual skills?
a. case analysis and behavior role modeling
b. feedback workshops and simulations
c. simulations and case analysis
d. behavior role modeling and feedback workshops

Q23. In most feedback workshops for management development, the primary source of information about a manager's behavior is:
a. other managers in the workshop who fill out a checklist
b. observers who record the person's behavior during a simulation
c. observation of a videotape taken of the manager doing regular work
d. questionnaires filled out by people with whom the manager works

Q24. Training programs to enhance leadership skills:
a. are widely used for managers in organizations
b. are seldom used for effective managers
c. are used mostly for department supervisors
d. are used mostly for top executives in large organizations

Q25. Which is least likely to be a reason for the "glass ceiling" in large organizations?
a. differences in leadership behavior displayed by men and women
b. implicit theories about the attributes required for effective leadership
c. popular stereotypes about the skills and traits of men and women
d. less encouragement and developmental opportunities for women

Advanced Management Accounting Case:

In Early October, Priscilla Musso, general manager of theSpecialty Products Division (SPD) of Consolidated Furniture Corp.(CFC), was studying the division's third quarter financial reports.Sales were running significantly below plan, and it became quiteclear to Priscilla that SPD would need strong performance in thelast quarter of the year in order to reach its annual profittarget. Meeting budget was very important to Priscilla and hermanagement team because they were included in CFC's lucrativeexecutive bonus program, and they would lose all of their bonusopportunities if SPD did not achieve the profit targets.

To brainstorm for ideas, Priscilla called her management teamtogether. At first the managers on the team expressed onlydiscouragement. Everybody had been working hard, but the market wassoftening, and competitors were being very aggressive.

Then, after some delay with nobody else suggesting any options,Jonathan Robbins, SPD’s manager of sales and marketing, suggestedthat the division could implement a new sales program to pull somesales that might ordinarily be made net year into the current year.Any customers who accepted delivery in the fourth quarter would nothave to pay their invoice for six months. (Normally payment in theindustry were to be made within 30 days.)

Priscilla’s first reaction was favorable; this program might,indeed, achieve the desired result. But she asked the members ofher tea for their reactions.

Shirley Covey, manager of human resources noted that if thisprogram was successful, it would probably cause SPD’s employees tohave to work overtime at the end of the year, and that wassomething they traditionally did not want during the holidayseason. But Priscilla reminded Shirley that the employees would bepaid time-and-a-half for all the overtime hours that theyworked.

Priscilla asked Bill Bennett, SPD’s controller, if this programwould violate any accounting rules. Bill said there would be noproblem recording the sales as long as the items were shipped andbilled before December 31. The accounting would be consistent withGAAP. But Bill cautioned that this program was probably onlyproviding a short-term, cosmetic profit improvement. While it mightwell make the current year look better, it would probably causesignificantly lower sales to be recorded in the first quarter ofnext year. So next year the division would start in a deep hole.They would be scrambling all year to trying to dig themselves outof that hole, with no guarantees that they could pull it off. Itwas just postponing the problem. In addition, Bill reminded theteam that this program would be very expensive. On top of theovertime expense that would have to be incurred in the productionareas, the program would greatly increase SPD’s accountsreceivable. CFC was currently paying about 12% on its lines ofcredit, so this increase in working capital would be quiteexpensive for the corporation.

But Priscilla cut Bill short. She reminded him that CFC did notallocate interest expenses to SPD, so she was not particularlyconcerned about the corporation’s increased borrowing costs. Shewas more worried with her superiors’ negative reactions if she didnot make this year’s profit plan than she was about their reactionsto her allowing the receivables’ balance to increase in the earlypart of the year. And while she acknowledged that they might becreating a problem for next year, she suggested it would be best toworry about that problem when, and if, it became real.

With no other options on the table to solve the current year’sbudget problem, the SPD managers decided, unanimously, to implementwhat they called the “Sales Acceleration Program.”

1. Identify the ethical dilemma--Identify and analyze primaryand secondary issues related to this ethical dilemma and impact onvarious stakeholders.

2. Analyze the ethical alternatives--Analyze alternativeresolutions to this ethical dilemma, the impact on variousstakeholders, and the reasons specific stakeholders prefer eachalternative.

3. Resolution of the ethical dilemma--Use an ethical frameworkto determine the most appropriate resolution of this ethicaldilemma. Use one of the ethical frameworks.

Tax Strategies for Business Planning andInvestment

Tax Planning Case II: Entity Selection

We’ve received an inquiry from a client and we’d like you todraft a memorandum indicating how we should respond to these clientinquiries. The inquiry concerns the formation of a business and ouranalysis of the impact various entity types might have on thebusiness.

Please format your memorandum to Identify significant tax andnontax issues or concerns that may differ across entity types anddiscuss how they are relevant to the choice of entity decision forthe client’s business. Include a brief summary of the inquiry, youranalysis of the inquiry, the issues posed, any relevantcomputations and your recommendations. Please include yourcomputations directly in your memorandum and do not attach them ina separate Excel spreadsheet.

Please format the memorandum as follows:

MEMORANDUM

To: Eugene Kilo, Smith TaxConsultants

From: [Team members, provide your own titles]

Re: Various Tax Matters

Date: [Applicable Date]

Martha Taylor is currently employed by the Maryland Chamber ofCommerce. While she enjoys the relatively short workweeks, sheeventually would like to work for herself rather than for anemployer. In her current position, she deals with a lot ofsuccessful entrepreneurs who have become role models for her.Martha has also developed an extensive list of contacts that shouldserve her well when she starts her own business.

It has taken a while but Martha believes she has finallydeveloped a viable new business idea. Her idea is to design andmanufacture cookware that remains cool to the touch when in use.She has had several friends try out her prototype cookware and theyhave consistently given the cookware rave reviews. With thisencouragement, Martha started giving serious thoughts to making“Cool Touch Cookware” (CTC) a moneymaking enterprise.

Martha had enough business background to realize that she isembarking on a risky path, but one, she hopes, with significantpotential rewards down the road. After creating some initial incomeprojections, Martha realized that it will take a few years for thebusiness to become profitable. After that, she hopes the sky’s thelimit. She would like to grow her business and perhaps at somepoint “go public” or sell the business to a large retailer. Thiscould be her ticket to the rich and famous.

Martha, who is single, decided to quit her job with the stateChamber of Commerce so that she could focus all of her efforts onthe new business. Martha had some savings to support her for awhile but she did not have any other source of income. Martha wasable to recruit Linda and Mike to join her as initial equityinvestors in CTC. Linda has an MBA and a law degree. She wasemployed as a business consultant when she decided to leave thatjob and work with Martha and Mike. Linda’s husband earns around$300,000 a year as an engineer (employee). Mike owns avery profitable used car business. Because buying andselling used cars takes all his time, he is interested in becomingonly a passive investor in CTC. He wanted to get in on the groundfloor because he really likes the product and believes CTC will bewildly successful. While CTC originally has three investors, Marthaand Linda have plans to grow the business and seek more owners andcapital in the future.

The three owners agreed that Martha would contribute land andcash for a 30 percent interest in CTC, Linda would contributeservices (legal and business advisory) for the first two years fora 30 percent interest, and Mike would contribute cash for a 40percent interest. The plan called for Martha and Linda to beactively involved in managing the business while Mike would notbe.

The three equity owners’ contributions are summarized asfollows:

Working together, Martha and Linda made the following five-yearincome and loss projections for CTC. They anticipate the businesswill be profitable and that it will continue to grow after thefirst five years.

With plans for Martha and Linda to spend a considerable amountof their time working for and managing CTC, the owners would liketo develop a compensation plan that works for all parties. Down theroad, they plan to have two business locations (in differentcities). Martha would take responsibility for the activities of onelocation and Linda would take responsibility for the other.Finally, they would like to arrange for some performance-basedfinancial incentives for each location.

To get the business activities started, Martha and Lindadetermined CTC would need to borrow $800,000 to purchase a buildingto house its manufacturing facilities and its administrativeoffices (at least for now). Also in need of additional cash, Marthaand Linda arranged to have CTC borrow $300,000 from a local bankand to borrow $200,000 cash from Mike. CTC would pay Mike a marketrate of interest on the loan but there was no fixed date forprincipal repayment.