CH 16 Flashcards
(17 cards)
Controlling
monitoring performance, comparing it with goals, and taking corrective action as needed
*PURPOSE: make sure that performance meets objectives
Six reasons why controls are needed in business
- to adapt to change and uncertainty
- to discover irregularities and errors
- to reduce costs, increase productivity, or add value
- to detect opportunities and increase innovation
- to provide performance feedback
- to decentralize decision making and facilitate teamwork
What are the 4 control process steps?
- establish standards
- measure performance
- compare performance to standards
- take corrective action, if necessary
*if yes, take corrective action; perhaps revise standards
*if no, continue work progress & recognize success
What are the 3 levels of control?
- strategic
- tactical
- operational
Strategic control
Monitoring performance to ensure that strategic plans— those at the divisional or departmental level—are being implemented
Tactical control
Monitoring performance to ensure that tactical plans— those at the divisional or departmental level—are being implemented
Operational control
Monitoring performance to ensure that operational plans —day-to-day goals—are being implemented and then taking corrective action as needed
What are the 6 areas a manager should control?
- structural
- cultural
- physical
- human resources
- informational
- financial
Structural control
Bureaucratic control
* An approach to organizational control that is
characterized by use of rules, regulations,
and formal authority to guide performance.
Decentralized control
* An approach to organizational control that is
characterized by informal and organic
structural arrangements.
Financial control
Budget
* 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.
Balanced scoreboard
Gives top managers a fast but comprehensive view
of the organization via four indicators:
1. Customer satisfaction.
2. Internal processes.
3. Innovation and improvement activities.
4. Financial measures.
- it establishes goals and performance measures
What is productivity
Outputs (goods + services)
_________
Inputs (labor + capital + materials + energy)
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 organization
Deming Management System
- Quality should be aimed at the needs of the consumer.
- Companies should aim at improving the system, not blaming workers.
- Improved quality leads to increased market share, increased company prospects, and increased employment.
- Quality can be improved on the basis of hard data, using the PDCA cycle
PDCA Cycle
- PLAN desired and important changes, based on observed data. Make pilot test, if necessary.
- DO implement the change or make a small-scale test.
- CHECK or observe what happened after the change or during the test.
* is a feedback step, in which performance is compared to goals - ACT on lessons learned, after study of results. Determine if predictions can be made as basis for new methods.
Total Quality Management (TQM)
A comprehensive approach—led by top management and supported throughout the organization—dedicated to continuous quality improvement, training, and customer satisfaction
Why is TQM important in the workplace?
TQM encourages organizations to empower employees and customers to work together to identify opportunities for quality improvements
