Ch. 10 Managerial Control

________ is an approach to designing control systems in which employee behaviors are regulated by the shared values, norms, traditions, rituals, beliefs, and other aspects of the organization's culture.

Clan control

________ is usually used by companies with constantly changing technology and by companies who prefer team work.

Clan control

Feedback control

Control that takes place after a work activity is done

Feedforward control

Control that takes place before a work activity is done

Concurrent control

Control that takes place while a work activity is in progress

You're a manager who's discovered that one of your employees is not attaining the standard of performance you expect. According to the control process, you should ________________.

Correct performance

Immediate corrective action

Corrective action that corrects problems at once to get performance back on track

Basic corrective action

Corrective action that looks at how and why performance deviated before correcting the source of deviation

Range of Variation

The acceptable parameters of variance between actual performance and the standard

Organizational performance

The accumulated results of all the organization's work activities

Productivity

The amount of goods or services produced divided by the inputs needed to generate that output

Market control is used by companies that face a lot of ________ in the market and whose products are ________.

competition, distinct

A control that occurs while an activity is in progress is the ________.

concurrent control

Measure of organizational performance

- ORGANIZATIONAL PRODUCTIVITY - ORGANIZATIONAL EFFECTIVENESS - INDUSTRY AND COMPANY RANKINGS

Why is controlling important:

1) If managers didn't control, they'd have no way of knowing whether their goals and plans were being achieved and what future actions to take. 2) The second reason controlling is important is because of employee empowerment. 3) The final reason that managers control is to protect the organization and its assets

Workplace Concerns:

1) WORKPLACE PRIVACY 2) EMPLOYEE THEFT

________ provide(s) managers with quantitative standards against which to measure and compare resource allocation.

A budget

Organizational effectiveness

A measure of how appropriate organizational goals are and how well those goals are being met

Balanced scorecard

A performance measurement tool that looks at more than just the financial perspective

Management Information System (MIS)

A system used to provide management with needed information on a regular basis

Management by walking around

A term used to describe when a manager is out in the work area interacting directly with employees

Control process

A three-step process of measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or inadequate standards Step 1. Measuring Actual Performance Step 2. Comparing Actual Performance Against the Standard Step 3. Taking Managerial Action

Employee theft

Any unauthorized taking of company property by employees for their personal use

________ is an approach that emphasizes organizational authority.

Bureaucratic control

________ is the accumulated results of all the work activities in the organization.

Organizational performance

Performance

The end result of an activity

Controlling

The process of monitoring, comparing, and correcting work performance

Benchmarking

The search for the best practices among competitors or noncompetitors that lead to their superior performance

Service profit chain

The service sequence from employees to customers to profit

Benchmark

The standard of excellence against which to measure and compare

Corporate governance

The system used to govern a corporation so that the interests of corporate owners are protected

A control that prevents anticipated problems is called the ________.

feedforward control

When should the manager's course of action be to revise the standard?

if the standard is not acceptable

When should a manager's course of action be to do nothing?

if the variance is acceptable

In order to increase the ratio of outputs to inputs, a manager would have to ________.

increase productivity

Which of the following ratios examines the organization's use of debt to finance its assets and its ability to meet the interest payments on the debt?

leverage ratios

Jan was in a big hurry. She had just been given the assignment of reporting on the financial health of her company to the new divisional vice president. Donna, the new vice president, had asked Jan to work up several calculations to help her gain an understanding of the company's financial shape. Jan was working hard and had a big order to fill, one that could make or break her reputation with Donna. She quickly pulled out her old financial management textbook and turned to the chapter on financial ratios to help her answer the questions. Donna was also interested in understanding the company's ability to meet short-term obligations, which meant that Jan had to calculate a(n) ________ ratio.

liquidity

A(n) _____ is defined as a system used to provide management with needed information on a regular basis.

management information system

Which of the following financial control measures adds a market dimension because it measures the stock market's estimate of the value of a firm's past and expected capital investment projects?

market value added

The balanced scorecard is an approach that looks at four areas—financial, customer, internal processes, and ________ that contribute to a company's performance.

people/innovation/growth assets

The value of the control function can be seen in three specific areas:

planning, empowering employees, and protecting the workplace

Market control is an approach that emphasizes the use of external market mechanisms to establish the ________ used in the control system.

standards

In some cases, ________ may be a result of an unrealistic standard. If the goal is too low or too high, the standard, not the performance, needs corrective action.

variance

If managers do not control, they have no way of knowing ________.

whether their goals and plans are being achieved and what future actions to take.