Control

Management creates performance measures to see how the company is doing. Profit and revenue are typical measures. When management includes broader strategic measures such as quality, customer retention, and learning, then they have created

a balance scoreboard

According to Robert S. Kaplan from Harvard Business School, "The US Government in 1987 introduced the Malcolm Baldrige National Quality Award to promote quality awareness, recognize quality achievements, and publicize successful quality strategies. The initial set of Baldrige criteria included financial metrics (profits per employee), customer-perceived quality metrics (market cycle time, late deliveries), internal process metrics (defects, total manufacturing time, order entry time, supplier defects) and employee metrics (training per employee, morale)." The Baldrige award is an example of

a balanced scoreboard

Without a planned allocation of resources, there is the risk of spending too much money in one or a few areas, thereby not having enough for other areas. The plan governing spending is often called

budget

Ngozi is a new manager at Vallee Manufacturing and she found that the company has added $1 million in debt recently to their account. This debt total is troubling to Ngozi, and she's been hired to help reset the business. What should she do first?

calculate appropriate ratios and compare them to other manufacturing companies

McDonald's appeals to customers with low prices, Consumers rate McDonald's food the worst quality among the large fast food chains. In response, McDonald's has made a new commitment to quality. But McD's management must weigh quality against

cost

What is an example of a measure for the internal analysis area of the balanced scorecard?

customer retation

Donna runs a chain of barber shops. She cannot be everywhere at once or make every decision. She estimates revenue and gives each manager a budget for spending. This way, each manager can make the local decisions about staffing and supplies. Donna

delegates spending authority

There is a price to pay in using controls. What are examples of the price of controls being imposed?

financial cost

Altec Electronica Chihuahua is a Mexican producer of electronic products. The company's fragile electronics replacement parts were often damaged as they moved to customers. Altec designed a reusable packaging that protected the parts. Altec expects to see

lower product returns

Before it went bankrupt in 2008, Lehman Brothers was leveraged over 30 to 1, meaning they had more than $30 in assets to $1 in equity. It also meant that if their asset values declined 3.3%, the loss would wipe out their equity. Lehman Brothers' level of leverage was probably

normal for the industry

Mike's trading desk uses a delta-hedging strategy to reduce risk, which means they may need to adjust positions after larger rate market movements. Generally, traders arrive early, between 7 and 8 a.m., well ahead of economic announcements scheduled at 8:30 a.m. This isn't a formal rule. New traders gradually see the benefit and adjust their arrival time. This is an example of

normative control

________ is the process through which an organization influences its members and subunits to act in ways that lead to the realization of organizational goals and objectives.

organizational control

Financial control policies can

prevent fraud and errors

Managers determine what the various parts of the organization must do for the organization to be successful in the near future (one year or less). To manage implementation of short-term plans, management needs

tactical control

Greg is a bright student and generally tests well. But in his online Business Statistics class, he missed the first quiz because the dates were confusing. And he earned only 58% on the midterm because the format was unfamiliar. To do well in the course, Greg needs to

take corrective action and change his process

An example of a proactive feed-forward control is

taking your car in for oil changes

To improve quality, companies need to purchase new software and equipment, hire and train employees, conduct studies, and consult with experts. These activities add to

the cost of doing a business