Chapter 10 Flashcards
(25 cards)
What is control defined as in organizations?
Control procedures ensure progress towards goals and proper resource usage.
Control is linked to the overall management process.
What is the primary purpose of control?
Control is linked with planning, organising, and leading.
What is the first step in the control process?
Establish standards.
What are examples of performance standards?
- Profit standards
- Market-share standards
- Productivity standards
- Staff-development standards
What is the second step in the control process?
Measure actual performance.
What principle is applied in the measurement of performance?
Control by exception.
What does the third step in the control process involve?
Evaluate deviations.
What must be determined when evaluating deviations?
- Whether disparities are genuine
- If deviations are large enough to justify investigation
- Identify reasons and activities responsible for deviations
What are the three possible actions if actual achievements do not match performance standards?
- Improve actual performance
- Revise strategies
- Adjust performance standards
What are the areas of control in an organization?
- Physical resources
- Human resources
- Information sources
- Financial resources
What does inventory control entail?
Management of resources held to produce products and services.
What is economic order quantity (EOQ)?
A method of ordering the most economic quantity of inventory.
What is the disadvantage of the EOQ control system?
Storage costs.
What is the materials-requirements planning (MRP) system designed to do?
Eliminate shortcomings of the EOQ control system.
What is the just-in-time (JIT) system?
A refinement of the MRP system that aligns orders for finished goods with raw materials.
What does total quality management (TQM) imply?
Quality is the responsibility of everyone in the organization.
What aspects are concerned with the control of financial resources?
- Resources entering the organization
- Financial resources held by the organization
- Financial resources flowing out
What is a budget?
A formal financial plan indicating resource allocation.
What contributions does a budget make to financial control?
- Supports management coordination
- Provides resource application guidelines
- Sets standards for control
- Enables resource allocation evaluation
What is essential for effective management functions?
Accurate, relevant, and timely information.
What is the main instrument used to control human resources?
Performance measurement.
What are characteristics of an effective control system?
- Integration
- Flexibility
- Accuracy
- Timeliness
- Simplicity
How should an effective control system be integrated?
With planning, being flexible, accurate, objective, timely, and simple.
What should timely control data not be obtained by?
Hasty, makeshift measurement.
