Question : 22) Executive compensation plans based both financial and nonfinancial performance : 1212025

22) Executive compensation plans are based on both financial and nonfinancial performance measures. Discuss

Objective 23.7

1) Which of the following is a difference between a diagnostic control system and an interactive control system?

A) A diagnostic control system focuses on meeting expectations, while an interactive control system focuses on standards of ethical behavior.

B) A diagnostic control system focuses on standards of ethical behavior while an interactive control system focus on meeting expectations.

C) A diagnostic control system focuses on meeting expectations, while an interactive control system focuses on organizational attention and learning on key strategic issues.

D) A diagnostic control system focuses on organizational attention and learning on key strategic issues, while an interactive control system focuses on meeting expectations.

2) Boundary systems ________.

A) describe standards of behavior and codes of conduct expected of all employees

B) articulate the mission, purpose, and core values of a company

C) are formal information systems managers use to focus the company’s attention and learning on key strategic issues

D) describe the geographic limits of a company and help organize its layout

3) Interactive control systems ________.

A) articulate the mission, purpose, and core values of a company

B) describe standards of behavior and codes of conduct expected of all employees and help in achieving the maximum benefit

C) are formal information systems managers use to focus the company’s attention and learning on key  strategic issues

D) describe the geographic limits of a company and help organize its layout

4) Belief system ________.

A) describe standards of behavior and codes of conduct expected of all executives and board of directors

B) articulate the mission, purpose, and core values of a company

C) are formal information systems managers use to focus the company’s attention and learning on key  strategic issues

D) describe standards of behavior and codes of conduct expected of all employees

5) Interactive control system ________.

A) ensure to adhere to legal or ethical accounting policies and procedures

B) ensure prompt and severe reprimand of unethical conduct, regardless of the benefits that might accrue to the company from unethical action

C) ensure employees’ intrinsic motivation, the desire to achieve self-satisfaction for performing well regardless of external rewards such as bonuses or promotion

D) ensure frequent face-to-face communications among managers and employees regarding the critical uncertainties

6) Managers use ________ to ensure employees’ intrinsic motivation, the desire to achieve self-satisfaction for performing well regardless of external rewards such as bonuses or promotion.

A) diagnostic control systems

B) boundary systems

C) belief systems

D) interactive control systems

7) “Levers of control,” in addition to a diagnostic control system, are needed in an organization because ________.

A) diagnostic controls have been found to lead to poor financial performance

B) diagnostic controls have no place in a balanced scorecard system

C) pressure to perform on diagnostic controls may lead to unethical behavior

D) they are mandated by the Financial Accounting Standards Board

8) “Cooking the books” means reporting of understated assets and overstated liabilities.