Flashcards in Chapter 16 Notes Deck (66)
making something happen the way it was planned to happen
defined as monitoring performance, comparing it with goals, and taking corrective action as needed
setting goals and deciding how to achieve them
arranging tasks, people, and other resources to accomplish the work
motivating people to work hard to achieve the organization's goals
Control Process Steps:
Compare Performance to standards
Take Corrective action if necessary
the desired performance level for a given goal.
number of products sold, units produced, or cost per item sold.
mpare measured performance against the standards established
Compare performance to standards
a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards
Management by exception
monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed
monitoring performance to ensure that tactical plans—those at the divisional or departmental level—are being implemented and taking corrective action as needed
monitoring performance to ensure that operational plans—day-to-day goals—are being implemented and taking corrective action as needed
Six Areas of Control
physical, human, informational, financial, structural, and cultural.
the sequence of suppliers that contribute to creating and delivering a product, from raw materials to production to final buyers
an approach to organizational control that is characterized by use of rules, regulations, and formal authority to guide performance
an approach to organizational control that is characterized by informal and organic structural arrangements
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, and (4) financial measures.
a 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
a formal financial projection
forces each department to start from zero in projecting funding needs
zero-based budgeting (ZBB)
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
Forecasts all sources of cash income and cash expenditures for daily, weekly, or monthly period
Cash or cashflow budget
Anticipates investments in major assets such as land, buildings, and major equipment
Capital expenditures budget
Projects future sales, often by month, sales area, or product
Sales or revenue budget
Projects expenses (costs) for given activity for given period
Projects organization's source of cash and how it plans to spend it in the forthcoming period
Projects what an organization will create in goods or services, what financial resources are needed, and what income is expected
Deals with units other than dollars, such as hours of labor or office square footage
where resources are allocated on a single estimate of costs
Fixed or Static Budget
allows the allocation of resources to vary in proportion with various levels of activity.
summary of some aspect of an organization's financial status
two basic types of financial statements:
balance sheet and the income statement
summarizes an organization's overall financial worth—that is, assets and liabilities—at a specific point in time.
the resources that an organization controls
cash and other assets that are readily convertible to cash within one year's time
property, buildings, equipment, and the like that have a useful life that exceeds one year but that are usually harder to convert to cash
claims, or debts, by suppliers, lenders, and other nonowners of the organization against a company's assets.
summarizes an organization's financial results—revenues and expenses—over a specified period of time
assets resulting from the sale of goods and services
the costs required to produce those goods and services
represents the profits or losses incurred over the specified period of time
the practice of evaluating financial ratios—to determine an organization's financial health.
indicate how easily an organization's assets can be converted into cash (made liquid).
indicate the degree to which an organization can meet its long-term financial obligations.
indicate how effectively an organization is managing its assets, such as whether it has obsolete or excess inventory on hand
Asset Management Ratio
indicate how effective management is in generating a return, or profits, on its assets.
Return Ratio or Return on Investments (ROI)
formal verification's of an organization's financial and operational systems.
2 Types of Audits
External and Internal
a formal verification of an organization's financial accounts and statements by outside experts
a verification of an organization's financial accounts and statements by the organization's own professional staff.
proposed ideas for making organizations more responsive, more democratic, and less wasteful.
defined as a comprehensive approach—led by top management and supported throughout the organization—dedicated to continuous quality improvement, training, and customer satisfaction.
Total Quality Management
everyone involved with the organization should focus on delivering value to customers
everyone should work on continuously improving the work processes
to meet to solve a special or onetime problem
defined as ongoing small, incremental improvements in all parts of an organization
enables customers to rate the quality of a service along five dimensions—reliability, assurance, tangibles, empathy, and responsiveness
reduction in steps in a work process
Reduced Cycle time
consists of quality-control procedures companies must install—from purchasing to manufacturing to inventory to shipping—that can be audited by independent quality-control experts, or “registrars.”
ISO 9000 Series
xtends the concept, identifying standards for environmental performance
ISO 14000 Series
a statistical technique that uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability
Statistical Process Control
a rigorous statistical analysis process that reduces defects in manufacturing and service-related processes
focuses on problem solving and performance improvement—speed with excellence—of a well-defined project
Lean six sigma
What is Productivity?
Goods + Services/Labor+ + Capital + Material + Energy