MG302 Ch15 Control

Zero-based budgeting

is an approach to planning and decision making that requires a complete justification for every line item in a budget, instead of carrying forward a prior budget and applying a percentage change.

A responsibility center

is any organizational department or unit under the supervision of a single person who is responsible for its activity.

Organizational control

is the systematic process through which managers regulate organizational activities to meet planned goals and standards of performance.

Bottom-up budgeting

involves lower-level managers anticipating their department's budget needs and passing them up to top management for approval.

A quality circle

is a group of six to twelve volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work.

capital budget.

A budget that plans and reports investments in major assets to be depreciated over several years is called a

balanced scorecard

A comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes, and the organization's capacity for learning and growth.

You are the owner of Sevena's Stationery, a small business specializing in fine papers and pens. Last week, you found out that the owner of Written Wisdom is looking for a buyer for her business. Which of the following items would be included in Written Wisdom's liabilities? Check all that apply.

Bills due for heating and telephone services Money the owner owes to her mother for a short-term loan

In the budgeting process, if an organization's executives want input from lower-level managers about those managers' expectations and needs for the coming year, then which approach would be best?

Bottom-up budgeting

Sue has recently hired you as a manager and asks your advice. Choose the best answer to her question. Noting that the business environment has changed, Sue says in the video that customers expect more and the "level of our offerings has to match their expectations." She tells you that Bow Wow has been offering more grooming, training, and massage packages as well as smaller play groups for shy dogs and separate rooms for small dogs. "But how can I be sure these services are contributing to the bottom line?" she asks.

Calculating profitability ratios will indicate how much profit is generated from sales of different services.

Pfizer finds that the people of Morocco no longer suffer from blinding trachoma, indicating that Pfizer's donation of Zithromax® was effective in treating the disease.

Compare performance and standards

At the Franklin Steel Products Plant in Franklin, Kentucky, employees from the Dana Corporation's Perfect Circle Products unit manufacture as many as 3,500 different part numbers, primarily for automakers Ford, General Motors, and DaimlerChrysler, as well as thousands of after-market products. Despite the high-volume, high-mix environment, Dana Franklin has maintained a 99% on-time delivery rate to customers since 2001. The philosophy here is that with each unit produced, with each hour, with each day and each week, the plant gets just a little bit better.

Continuous Improvement

Managers believe employees will work hard when they feel commitment to the organization.

Decentralized Control

The structure of the organization is flat, and authority comes from expertise as much as formal position

Decentralized Control

Geometrica designs and builds domes and space frames for large buildings. While the company had developed quality standards over time to respond to different client problems and training needs, it lacked a unified quality system, and its global client base wanted assurance that Geometrica met an established international standard for quality. Which of the following was an appropriate step for this company to take?

Establish and document a quality management system to comply with ISO 9000

Pfizer commits to providing enough Zithromax® to eliminate blinding trachoma by 2020.

Establish standards

To determine how well the company is performing with respect to targets, managers use which of the following?

Financial, safety, and customer service measures

Carlynn gives her employees detailed rules to follow and reviews their work closely to make sure the rules were followed.

Hierarchical Control

top-down budgeting

Many companies use top-down budgeting, which means that the budgeted amounts for the coming year are literally imposed on middle- and lower-level managers.

profitability ratios

The profitability ratio describes the firm's profits relative to a source of profits, such as sales or assets.

Hierarchical control

involves monitoring and influencing employee behavior through extensive use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms.

When a defense company needed to create quality software, they brought representatives from the Quality Assurance (QA) group in to work with software and systems engineers. The QA group found that peer reviews were the best way to catch software bugs, and they shared their knowledge with the head of software engineering. Working together with the engineers, the QA group started a system of peer reviews and formal inspections, and together, the group decreased the number of problems in the software the company produced.

Quality Partnering

Which of the following factors is likely to have a negative impact on the success of a TQM program? Check all that apply.

Quality circle discussions do not include union leaders Managers expect to see dramatic innovations as a result of TQM.

If you were hired as a manager at Recology CleanScapes, which of the following would be parts of your job? Check all that apply.

Share financial measures such as revenues, expenses, and profits with your employees Help employees think like owners, taking responsibility for the financial success of the company

balance sheet

Shows the firm's financial position with respect to assets and liabilities at a specific point in time.

Wausau Window and Wall Systems started this process with a commitment from the CEO that he and all other managers in the company would be trained in program fundamentals. Using this problem-solving methodology, Wausau relentlessly pursued higher quality and lower costs at its window trim plant. Intensive analysis led to a redesigned workflow that improved productivity by 100%.

Six Sigma

income statement

The income statement, sometimes called a profit-and-loss statement or P&L for short, summarizes the firm's financial performance for a given time interval, usually one year.

The cash budget

estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations.

Bank of America's __ provides information such as its interest expense, or the interest the bank paid depositors, and its interest income, or the interest it earned by investing deposits over a period of time. This document also states the bank's other revenues and expenses for the time period.

income statement

Quality partnering

involves assigning dedicated personnel within a particular functional area of the business to identify opportunities for improvement throughout the work process.

When managers want to measure how well its salespeople and website are persuading people to buy products, they would calculate an _ , in this case purchases divided by customer contacts.

activity ratio

The organization's __ gives managers information about whether large investments, such as in buildings and expensive equipment, will overly drain resources or will pay for themselves.

capital budget

In order for the deal to go through, you need to compare the owner's _ and liabilities by looking at her _ . But because you also want to see the company's __ , or net income, for a one-year period, you also ask to see her _

current assets, balance sheet, bottom line, income statement

By building employees' commitment to the organization, providing intrinsic as well as extrinsic rewards, and allowing all employees to monitor product quality, managers are using ____

decentralized control

A revenue budget

lists forecasted and actual revenues of the organization.

The activity ratio

measures the organization's internal performance with respect to key activities defined by management.

Continuous improvement,

or kaizen, is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis.

An expense budget

outlines the anticipated and actual expenses for a responsibility center.

The U.S. Department of Labor has a Business Operations Center and within it are different departments, such as the Office of Worker Safety and Health and the Office of Small and Disadvantaged Business Utilization, each with its own manager. These organizational units are _

responsibility centers

Candace mentions that she needs to make more time "to really coach her team." Investing more time in this management activity is an example of _

taking corrective action

Another option for tracking quality is benchmarking,

the continuous process of measuring products, services, and practices against major competitors or industry leaders.

With decentralized control,

the organization fosters compliance with organizational goals through the use of organizational culture, group norms, and a focus on goals rather than rules and procedures.