MGMT 339 // U3: Control

Which of the following is one of the factors on which performance standards can be set? a) market share b) employee happiness c) quality d) knowledge e) the principle of exception

*C) Quality*

Effective Control Systems

1. Establish effective performance standards/control systems 2. Provide adequate information to employees 3. Ensure acceptability to employees 4. Maintain open communication between managers and employees 5. Use multiple approaches

Downside of Bureaucratic Control

1. Rigid bureaucratic behavior 2. Tactical behavior 3. Resistance to control

Control Cycle

1. Setting performance standards. 2. Measuring performance. 3. Comparing performance against the standards and determining deviations. 4. Taking action to correct problems and reinforce successes.

with clan control, why is empowerment a necessary factor than managers must consider

1. employees jobs have changed and the nature of work is evolving 2. the nature of management has changed 3. the employment relationship has changed

Debt to Equity Ratio

A leverage ratio that indicates the company's ability to meet its long-term financial obligations.

Return on Investment (ROI)

A ratio of profit to capital used, or a rate of return from capital.

Balance sheet

A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equity. financial control

profit and loss statement

An itemized financial statement of the income and expenses of a company's operations. financial control

market control

Control based on the use of pricing mechanisms and economic information to regulate activities within organizations

feedback control

Control that focuses on the use of *information about results* to correct deviations from the acceptable standard after they arise *"Let's make sure we DID it right"*

management myopia

Focusing on short-term earnings and profits at the expense of longer-term strategic obligations.

budgetary control

The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences

bureaucratic control

The use of rules, regulations, and authority to guide performance

Current Ratio

a liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities

management audit

an evaluation of the effectiveness and efficiency of various systems within an organization. Includes internal and external audits

What is a control?

any process that directs the activities of individuals toward the achievement of organizational goals

The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences is referred to as

budgetary control

Dana's company relies on rules, as set forth in the employee handbook, the authority of managers, and regular employee reviews to guide performance. Dana's company uses _____ control.

bureaucratic

Types of Control

bureaucratic, market, clan

Which of the following is a symptom of an out-of-control company?

lack of periodic reviews

Evelyn had to buy a lot of equipment to open her beauty salon. She bought most of it on credit. The amounts of money that she owes her creditors are called

liabilities.

Control based on the use of pricing mechanisms and economic information to regulate activities within organizations is referred to as _____ control.

market

bureaucratic control systems are designed to do what?

measure progress toward set performance goals AND, if necessary, to apply corrective measures

market controls

price becomes an indicator of value of the good or service price competition has the effect of controlling productivity and performance

transfer price

price charged by one unit for a good or service provided to another unit within the organization business unit control

An itemized financial statement of the income and expenses of a company's operations is called the

profit and loss statement.

Types of Budgets

sales, production, cost, cash, capital, master

financial control

the use of monetary based statements to monitor the firm

Debt to Equity Ratio Formula

total liabilities/total stockholders equity

Current Ratio Formula

current assets - current liabilities

clan control

Control based on the cultural norms, values, shared goals, and trust among group members.

ROI formula

Net Operating Income / Average Operating Assets

Balanced Scorecard (BSC)

control system combining four sets of performance measures: financial, customer, business process, and learning/growth

Feed forward control

control that takes place before operations begin. It includes *policies, procedures, and rules* designed to ensure that planned activities are carried out properly *"Let's make sure we WILL do it right"*

concurrent control

control that takes place while plans are being carried out and includes *directing, monitoring, and fine-tuning* activities. *"Let's make sure we ARE doing it right"*

At what levels do market controls exist

corporate, business unit, and individual

At Key Agricultural Supply Co., all assembly workers must wear specialized gear to reduce possible injuries from minute particles in the manufacturing environment. This requirement best reflects _____ control.

feedforward

Which of the following controls is future oriented and aims to prevent problems before they arise?

feedforward control