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Control Flashcards

1
Q

Control meaning in the organizational context?

A

The process of establishing performance standards, monitoring performance, and taking corrective measures when necessary to ensure the achievement of the organization.

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2
Q

Types of control

A
  1. Preventive control
  2. Concurrent control
  3. Post control
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3
Q
  1. Preventive control (Inputs)
A

Mechanisms intended to reduce errors, proactively, thereby minimizing the need to take corrective measures.

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4
Q

Concurrent control (Transformation)

A

known as steering control which indicates control measures that monitor activities while they are taking place.

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5
Q

Post control( Outputs)

A

Mechanisms intended to reduce or eliminate unwanted behavior or results to meet the organization’s regulations and standards.

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6
Q

Sources of control

A

1.Stakeholder control
2. Organizational control
3. Group control
4. Individual self control

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7
Q

Stakeholder control

A

Pressure from outside sources on the organization to change its behaviors

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8
Q

Organizational control

A

Formal procedures and regulations for preventing or correcting deviations for achieving desired goals.

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9
Q

Group control

A

Norms and values that individuals share and maintain through rewards and punishment.

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10
Q

Individual self-control

A

Guiding mechanisms that operate both consciously and unconsciously within each person.

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11
Q

The control process

A
  1. Define subsystem and key characteristics
  2. Set performance standard
  3. Collect information and measure the actual performance
  4. Compare performance against set performance
  5. Evaluate and correct problems if required
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12
Q
  1. Define subsystem and identify key characteristics.
A

A formal subsystem can be created and monitored for an organization, employee, department or the entire organization.

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13
Q
  1. Set performance standards
A

Standards are criteria for measuring quantitative (measurable ) and qualitative (subject ) characteristics and should be set foe each characteristics used

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14
Q
  1. Collect information and measure the actual performance
A

Information related to each standard can be collected manually or automatically. Measurement should be reliable and have the results for the same circumstances over the long term.
Top Managers can create a special department or rely on regular departments to collect information by monitoring certain activities

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15
Q

4.Compare the performance against the set performance standard

A

Comparisons are better to determine whether what is happening is what should be happening

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16
Q

Evaluate and correct problems if required

A

Diagnosis includes assessing the types, numbers, and causes of deviations from set standards. Actions can be taken to eliminate these deviations and correct problems.

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17
Q

Creating effective controls

A

One way to create and measure the effectiveness of organizational control is to compare their cost and benefits

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18
Q

3 questions to address the cost-benefit analysis

A
  1. For what behavior and results should organizational controls be developed?
  2. What are the costs and benefits of the organizational control required to achieve desired results or behavior
  3. What are the costs and benefits of utilizing alternative organizational controls to obtain the desired behavior and results
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19
Q

Criteria for effective control

A

Objective
Timely
Acceptable
Objective
Economical

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20
Q

Performance management

A

The performance of the organization is a measure of how effectively and efficiently managers use available resources to satisfy the multiple needs of existing customers and thereby achieve organizational goals and objective..

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21
Q

effectiveness

A

How well does the organization pursue its goals and to what extent it achieve these set goals

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22
Q

Efficiency

A

How well the resources are used in process of achieving these goals

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23
Q

How can the organization be efficient

A

By minimizing inputs and maximizing outputs/ Maintaining inputs and increasing outputs

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24
Q

Outcomes of applying controls to measure efficiency and effectiveness

A
  1. High efficiency and high effectiveness
  2. Low efficiency and low effectiveness
  3. High efficiency, Low effectiveness
  4. Low efficiency, high effectiveness
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25
High efficiency and high effectiveness
The manager selected appropriate goals to achieve and optimally applied the resources to achieve the chosen goals
26
Low efficiency and low effectiveness
The manager did not select appropriate goals to pursue and did not optimally apply the resources to achieve the chosen goals
27
High efficiency, Low effectively
The manager did not select the appropriate goals to pursue but optimally applied resources to achieve the chosen goals
28
Low efficiency, high effectiveness
The managers selected the appropriate goals to pursue but did not optimally apply the resources to achieve the goals
29
Performance management allows employees and managers to?
1. Develop performance standards 2. Conduct observations 3. Provide feedback 4. Conduct appraisals
30
What does the factors do?
Allows individuals, teams, and management to achieve optimum results by managing employee performance
31
Market controls
The use of data to measure performance in terms of sales, prices, cost, and profits relating to products sold, market shares, and services rendered.
32
To be effective, market controls generally requires that?
1. Costs and resources used to produce products be measured monetarily 2. The value of goods and services produced be defined clearly and monetarily 3. The price of products and services produced be set competitively
33
Financial Controls
Include a wide range of techniques, methods, and procedures intended to prevent or correct the misallocation of resources.
34
Comparative financial analysis
Evaluation of an organization's financial condition for two or more time periods.
35
The most common method of analysis
Ratio analysis
36
Ratio anaylsis
Selecting two significant figures, and expressing their relationship as a proportion or fraction and comparing its values for two periods of time
37
Types of ratios
Profitability Liquidity Activity Leverage
38
Examples of ratios
Return on investment Current ratio Inventory ratio Debt ratio
39
Return on investment
The most important example of profitability ratio is because it indicates how effectively and efficiently the organization uses its resources. 1.0
40
Current ratio
Indicates the organization's ability to pay its account on time. should be 1.1
41
Inventory ratio
Indicates the average number of times the inventory is sold or restocked during the year
42
Debt ratio
Calculated to assess the organization's ability to meet its long-term financial commitments
43
Budgeting
The process of categorizing the proposed expenditures (cost items) and linking them to goals
44
3 purposes when managing performance
1. To help in planning work effectively 2. To assist in allocating resources 3. To assist in controlling and monitoring resource allocation during the budget period
45
Types of budget
Sales budget Material budget labor budget capital budget research and development budget cash budget
46
Sales budget
Forecasts of expected revenue (sales) stated generally by a product line on a monthly basis and revised annually
47
Material budget
Expected purchases are generally stated by specific categories
48
Capital budget
Targeted spending for major tangible assets
49
Cash budget
The expected flow of monetary receipts and expenses
50
Activity-based costing
ABC is a performance management system that focuses on activities as the fundamental cost centers of the organization. Activities become the focal point for the organizations
51
Activity
Any event that drives costs, including energy consumed, km driven, and shipments made.
52
Integrated strategic controls( The balanced score card)
The balanced scorecard is a format of describes the activities of an organization through a number of measures of each perspective
53
4 perspectives
Financial perspective Customer perspective Internal operations perspective A learning and innovation perspective
54
Financial perspective
Profitability, Increased value, Lower costs
55
Customer perspective
How customers view the organization. customer satisfaction
56
Internal operations perspective
What the organization must excel at
57
Learning and innovation perspective
Can the organization continue to improve and create value, can it be sustainable
58
Elements to focus on when managing financial performance ( Scorecard)
Financial performance performance in terms of customers Internal operations performance Learning and innovation performance
59
Financial performance
Organization consider how it is viewed by its stakeholders
60
Performance in terms of customers
Organizations consider how it is viewed by customers
61
Internal operations perfomance
Organization consider what it must excel at
62
Learning and innovation performance
Organizations consider whether it's able to improve continuously and create value
63
Proposed perspective
Financial perspective - Outcome Customer perspective - Stakeholder perspective Learning and innovation - Enables
64
Quality control approaches
Six Sigma Just in time Total quality management
65
Six sigma steps
Define Measure Analyze Improve Control
66
Total Quality Management
Much broader in scope than regular quality control The outcome is continuous improvement
66
Just in time( Stockless production)
The approach with the objective of producing the right part, at the right place and at the right time therefore the time just in time The objective is to minimize waste Aim to improve profits and ROI
67
4 Major principles of TQM
Focusing on delivering customer value Continually improving the processes and systems Focusing on managing the process rather than people Using teams to improve continually
68
Corporate governance
Patterns of control and relations between the stakeholders, the board of directions, and the top management of the organizations These relations and controls are defined by the corporate charter, by-laws, formal policy, governmental laws and regulations, and the courts
69
Successful business leaders of the future will be those who
Align internal organizations' controls with risk management Understand the financial data and value of financial control techniques Determine the appropriate areas in the organization where control should be focused
70
Difference between internal mechanism and external mechanism
An internal mechanism is used to monitor the activities of the organization and take corrective action if needed. The external mechanism is in control of those stakeholders outside the organization
71
Internal mechanism
Objectives include smooth operation, product offering, clearly defined reporting lines
71
External mechanism
Objectives include meeting industry standards, debt management, and legal compliance, and adhering to government regulations

EBUS (10 decks)

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