14 - Control Flashcards
Enterprise Resource Planning (ERP)
Information systems for integrating virtually all aspects of a business
Controlling
Monitoring performance, comparing it with goals and taking corrective action as needed
Control process steps
These are 1) Establish standards 2) Measure performance 3) Compare performance to standards 4) take corrective action if necessary
Control standard (performance standard)
The desired performance level for a given goal
Management by exception
A control principle that states that managers should be informed of a situation only if data show a significant deviation from standards.
Strategic control processes
Monitoring performance to ensure that strategic plans are being implemented and corrective action is taken as needed.
Tactical control processes
Monitoring performance to ensure that tactical plans - those at the divisional or departmental level - are being implemented and taking corrective action as needed.
Operational control
Monitoring performance to ensure that operational plans - day-to-day goals - are being implemented and taking corrective action as needed.
Bureaucratic control
An approach to organisational control that is characterised by use of rules, regulations and formal authority to guide performance.
Decentralised control
an approach to organisational control that is characterised by informal and organic structural arrangements.
Balanced scorecard
Gives top managers a fast but comprehensive view of the organisation via four indicators: 1) customer satisfaction 2) internal processes
3) innovation and improvement activities 4) financial measures
Strategy map
Visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals so that everyone in the company can understand how their jobs are linked to the overall objectives of the organisation.
Budget
A formal financial projection.
Incremental budgeting
Allocates increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed.
Fixed budgets
Allocates resources on the basis of a single estimate of costs
Variable budgets
Allows the allocation of resources to vary in proportion with various levels of activity
Financial statements
A summary of some aspect of an organisation’s financial status
Balance sheet
Summarises an organisation’s overall financial worth that is - assets and liabilities at a specific point in time
Income statement
Summarises an organisation’s financial results - revenues and expenses - over a specific period of time.
Ratio analysis
The practice of evaluating financial ratios
Audits
Formal verifications of an organisation’s financial and operational system
External audit
A formal verification of an organisation’s financial accounts and statements by outside experts
Internal audit
A verification of an organisation’s financial accounts and statements by the organisation’s own professional staff
Deming Management
Proposed ideas for making organisations more responsive, more democratic and less wasteful
